Green growth is necessary and affordable for India: World Bank

NEW DELHI: Stating that environmental degradation is costing 5.7 per cent of GDP annually, World Bank today said India can make green growth a reality by putting in place plans to lower environmental degradation at minimal cost of 0.02-0.04 per cent of gross domestic product.

“Like in many other countries, the debate over growth versus environment is also active in India. This report suggests there are low-cost options that could significantly bring down environmental damage without compromising long-term growth objectives,” said Onno Ruhl, World Bankcountry director.

“The costs of doing this are not only affordable in the long-term but would also be offset by the significant health and productivity benefits,” he said.

Failure to act now could also constrain long-term productivity and hence India’s economic growth prospects, said the report titled ‘Diagnostic Assessment of Select Environmental Challenges in India’.

This will allow India to maintain a high pace of economic growth without jeopardising future environmental sustainability, it said.

Grow now and clean up later will not be environmentally sustainable for India in the long run, said Muthukumara S Mani, the lead author of the report.

“We believe that a low-emission, resource-efficient greening of the economy is possible at a very low cost in terms of GDP growth,” Mani said.

The report analyses the physical and monetary losses of environmental health and natural resources; the trade offs between economic growth and environmental sustainability; and provides a valuation for biodiversity and ecosystem services.

According to the assessment done, the annual cost of environmental degradation in India amounts to about Rs 3.75 trillion (USD 80 billion) equivalent to 5.7 per cent of GDP.

It focusses on particle pollution from the burning of fossil fuels, which has serious health consequences amounting to up to 3 per cent of India’s GDP along with losses due to lack of access to clean water supply, sanitation and hygiene and natural resources depletion.

Based on conservative estimates, it amounts to about 3 per cent to 5 per cent of GDP.

“Conventional measures of growth do not adequately capture the environmental costs, which have been found to be particularly severe at the current rapid growth rates. There are also tools available now to estimate the significant contribution of natural capital in the form of ecosystem services,” Mani said.

Therefore, he said, it is imperative to calculate green Gross Domestic Product (green GDP) as an index of economic growth with the environmental costs and services factored in.

Original article from The Economic Times here