Greening of business
06 Jan 2000
Chartered Financial Analyst 5(5)
There is actually no conflict between environmental protection and development. For thousands of years human society has been deeply responsible in ensuring its welfare while at the same time protecting the environment. However, the advent of the industrial revolution in the countries of the northern hemisphere somehow lost sight of the damage that industrial production and consumption of newer and larger quantities of goods and services would do to the environment. The implications of damage to the environment really started dawning on the industrial world in the 1950s and 1960s, the result of which has been an unprecedented effort in at least protecting the local environment in these countries. The global environment, unfortunately, continues with the consequent danger of climate change. Unfortunately, the developing countries have followed the same path somewhat blindly, and it is only now that consciousness is growing on the need for building environmental concerns into development plans. The biggest concern we face today includes the over-exploitation of our natural resources including water, forest, clean air and healthy soil. Countries like ours would also suffer the harmful impacts of climate change, even though historically we have not responsible for this problem. Essentially, the world has to define and pursue a totally different path of development that enables us to protect and preserve our natural resources. India should be at the forefront of this effort. The major conflict that can be seen in the trend of globalization lies not so much on account of global forces but mainly on account of weaknesses in local institutions to ensure environmental protection. Globalization as such does not pose any special threats in this regard. These perceived threats also arise out of the impacts of local production of goods and services and their consumption. One factor however, which could affect economic growth in the developing countries is the possibility of the developed countries bringing environmental restrictions relating to exports from developing countries. The next round of WTO negotiations would have critical importance in this regard. There are several factors, both hidden and not so hidden which would have a profound impact on the quality of the environment in future. The rise of environmental movements is a healthy trend, because it would help sensitize the public on the dangers in specific actions and projects as they would impact on the environment. At the same time environmental movements need to take a balanced and enlightened approach which does not make an enemy of all developmental activities. Basically, environmental decisions have to be integrated with mainstream economic decision-making. In the same vein it can be said that environmental awareness would also have a major effect on the quality of human life. Indeed, one of the major reasons for poverty lies in the depletion of natural resources and the degradation of the environment. It is only through good quality air, water and other natural resources that the quality of human life can improve. The first step in bringing about change is the creation of adequate awareness in this field. Green technologies would have a profound effect on human life in the 21st century. It is technological options that would provide human society with the means to consume goods and services and enjoy a standard of living in keeping with universal aspirations while not damaging the environment. Several examples of this trend are in evidence all over the world today. For instance major cities in the developed world do not have unacceptable levels of air pollution, largely because automobile and fuel technology has changed substantially. So also in the high efficiency of power plants and technology to remove pollution from them. But green technologies also respond to market signals and regulatory measures. This is where forward-looking policies and institutional change becomes an important determinant of how technologies will be developed and used in future.