A methane gas extraction plant in Lake Kivu
The impressive growth rates achieved by India, China and many other Asian countries in the last two decades have inspired great hopes as well as fears. On the one hand, they have opened up the very real prospect that Asia will finally succeed in freeing itself from the shackles of mass poverty within the next few decades. A few Asian states have already achieved this status and, by the latter half of this century, virtually all Asian countries will hopefully be able to provide their citizens with the basic requirements of food, shelter, healthcare and education. There may still be destitute individuals but, for the first time in the long history of these countries, mass poverty will cease to exist.
On the other hand, fears have been expressed that Asia’s headlong economic expansion may lead to critical global shortages of natural resources such as petroleum and natural gas. There are also apprehensions that rapid economic development may cause massive pollution, leading to an environmental disaster. We need to answer two questions. Are we running out of energy and other natural resources? Is there an inherent conflict between development and the environment?
Such concerns are not new. The 1950s and 1960s saw high growth rates in postwar Europe and Japan. This led to mounting apprehensions in the 1960s of an emerging scarcity of resources. The group of eminent personalities constituting the Club of Rome famously warned that the planet was running out of resources and that an economic crisis might be expected in the 1970s. The dire forecast proved to be groundless. The global economy has continued to grow. Technology provided the key to the solution, unlocking new resources for the economy.
History occasionally does repeat itself. The rapid development of many Asian countries in the past two decades has once again given rise to concerns about sustainability. Books with alarming titles like Rising Powers, Shrinking Planet became bestsellers. Paul Roberts, a leading international authority on the petroleum industry, wrote a celebrated book entitled The End of Oil, predicting that oil production would shortly reach a peak, falling behind rapidly increasing demand. The International Energy Agency devoted its 2007 annual survey to the grim implications of the rising energy demands of China and India.
These dire forecasts are once again turning out to be wrong. Once again, technology is coming up with new solutions to problems of resource scarcity. Advances in drilling technologies for oil and natural gas have opened up the prospect of a production boom, particularly in shale gas and offshore oil. The International Energy Agency has radically revised its earlier estimates and is now projecting an imminent ‘golden age’ of gas as well as a major expansion of oil production.
These developments provide grounds for optimism about the future availability of natural resources that are traded in global markets. Market forces tend to encourage breakthroughs in technology so as to increase production of scarce resources, improve efficiency in their utilization and provide effective substitutes. The world is not going to run out of resources because poor countries seek inclusive development.
However, market forces operate only in the case of traded commodities. Some of the most important resources provided by nature — the quality of air, water, soil and climatic conditions — are not traded commodities. We cannot depend on the laws of the market to protect these environmental resources. How do we address the concerns that have been voiced about the impact of rapid economic development on the environment — on the quality of air, soil, water and the atmosphere?
Economic development — in particular, industrialization — does, indeed, generate increased pollution and impose additional stresses on the environment. Fortunately, however, development also provides the financial and technological resources needed to implement remedial or compensatory measures. It even enables us, in many cases, to actually improve the quality of the local environment. However, market forces alone will not achieve these objectives. We need to enforce environmental regulations and introduce incentives and disincentives in order to guide market forces. We must ensure that some of the resources generated by development are applied to remedy or compensate for environmental damage. With these measures, development enables us to protect and enhance the environment and to build up our capacity to cope with the impacts of climate change.
This is amply vindicated by global experience. When we look around us, we see that developed countries generally have cleaner water supplies, superior sanitation and waste disposal systems and better urban air quality than poorer countries. Industrialized countries generally have higher environmental standards than developing countries because they possess the resources needed to tackle pollution effectively. Developing countries lack adequate resources to protect and enhance the environment.
Some environmental activists take a narrow view of conservation, opposing any major human interference with ‘nature’. This romantic view presupposes the existence of an idyllic age when nature was ‘unspoiled’, existing in all its pristine glory. The reality, of course, is that the environment has been in a state of continuous evolution ever since the planet came into existence. Natural forces were responsible for the cyclical onset and retreat of an Ice Age, bringing in its wake sweeping changes in the earth’s environment.
Human activities have also played a role in shaping our environment. Every step in the advance of civilization has had an impact on the environment. The invention of fire led to the rotational clearing of forests associated with shifting cultivation. Diversion of river waters through dams and canals modified the environment and provided the basis for settled agriculture. The invention of iron enabled human beings to permanently clear large tracts of forests for farming and livestock breeding. Expansion of trade led to the migration of many varieties of edible plants and other species. The environmental impact of the Industrial Revolution in its early stages is widely lamented in 19th-century European literature.
Not all the changes wrought by man have been beneficial for the environment; but on balance, the changes have undoubtedly been for the better. Men and women live longer and healthier lives than in any previous age. The environment is more conducive to human life and well-being than in any imaginary ‘unspoiled’ age in the past. Historically speaking, there can be no question that, on the whole, economic development has benefited the environment in the long run.
This was possible because developed countries have generally ploughed back a part of the returns from economic growth into protecting the environment. There is an interdependent relationship between development and the environment. If we squander our environmental heritage, we will certainly imperil the prospects of long-term development and, at the same time, if we fail to achieve rapid development, we will fail to protect the environment for lack of adequate resources. In planning major development projects, we should conduct environmental impact assessments and take environmental costs into account. An appropriate part of the profits generated by the project should be employed to remedy or offset any environmental damage. It will not always be possible to fully reverse the changes wrought to the environment. In such cases, compensatory or offset measures should be taken to enhance environmental quality in other directions. The objective should be to ensure that there is no overall depletion of environmental capital.
Far from being in conflict with each other, economic development and protection of the environment are mutually interdependent goals. Development generates the financial means required to protect and enhance the environment. Inventions and innovations in technology provide answers to depletion of natural resources. In combination with sensible environmental impact assessments, regulations and accounting of environmental assets, development enables us to protect and improve our environment.