Shyam Saran: Sustainable strategies
http://www.business-standard.com/article/opinion/shyam-saran-sustainable-strategies-110011600005_1.html
We must think beyond fiscal stimuli in a resource-scarce world
When history is written of the ongoing global financial and
economic crisis, will it be categorised as a temporary blip on the
onward march of capitalism? Or is it likely to be seen, in retrospect,
as one of those game-changing churnings in history which transformed the
global landscape and the way we perceive that landscape? I believe that
it is more likely to be the latter.
Consider the fundamental disequilibrium in the global economy, which
lies at the heart of the current crisis. The massive economic and
financial stimuli which have been thrown at the crisis, to prevent a
collapse of the global economy, are actually moving in a direction quite
the reverse of what is required to correct the original disequilibrium —
a disequilibrium caused by the accumulation of massive surpluses in a
handful of countries and an extended and long-standing deficit in the
world’s largest economy.
It is important to look beyond the immediate and anticipate the
contours of the world that is likely to emerge once the dust settles
down (if it indeed does). Much of the social and economic terrain that
we have been accustomed to will have been transformed. We will need new
intellectual tools and fresh business strategies to deal with an
unfamiliar terrain. A new wave of creative entrepreneurship and
technological innovation would be required to face new and unfamiliar
challenges, positioning India to emerge as a front-ranking power in this century.
I see two broad long-term trends that are already emerging:
First, the world is at the cusp of an energy revolution.
Thanks to concerns about global warming and climate change, and the
related challenge of energy security, the global economy must make, and
is already making, a strategic shift from reliance on carbon-based
fossil fuels to the progressively greater utilisation of renewable
energy sources. This is a revolutionary shift since it seeks to change a
pattern of economic activity and development that has remained largely
unaltered since the industrial revolution began over two centuries ago.
It is this pattern of development which has led to the cumulative
accumulation of greenhouse gases in the earth’s planetary atmosphere and
which is responsible for climate change. It is also becoming apparent
that current trends of growth of the global economy, in particular the
growth of India and
China, cannot be sustained while the accelerated depletion of fossil
fuels continues unabated. If energy is not to become a constraint on our
growth, then a relatively rapid and significant shift to renewable and
non-conventional energy sources becomes inevitable. Both climate change
action and energy security dictate this.
Second, the world is moving away from the linear growth models that
we have been accustomed to, without much regard to the finite limits of
resource endowments in general. While we have grasped the importance and
urgency of energy security, we need to extend the concept to encompass
resource security. Energy is indispensable to development, but we need a
diverse variety of resources as well, including land, water and mineral
resources among others. Patterns of growth prevalent so far have been
based on extractive processes, on the assumption that there are ample
reserves worldwide for the foreseeable future. It has also been assumed
that market forces will deliver better extractive processes as well as
more efficient utilisation of existing resources.
A once-through production process, which is the norm today, will
eventually result in a severe depletion of resource endowments. The
uneven distribution of natural resources will create the same kind of
security concerns tomorrow that we have today with respect to energy.
Therefore, resource security demands two radically different but related
responses in our production and consumption processes. On the
production side, recycling must become an integral part of the business
model of the future. We need to put in place technologies and facilities
that enable the efficient and cost-effective recycling of an ever
larger proportion of our depleting supplies of minerals. For example, in
India a
very large proportion of our aluminium and steel is recycled and put
back into the production chain. Some of this is in the organised sector.
Most of it is in the unorganised sector.
We must also take cognisance of the fact that consumption patterns
which have developed and have, in fact, been encouraged by governments
and business alike, are already witnessing a change under the impact of
the global financial and economic crisis.
In product development, disposability has, until now, been given a
higher value than durability; novelty has been rated higher than
reliability.
A value system based on use and discard has created an economic model
that encourages waste, devalues thrift and sets conspicuous consumption
as the standard by which to judge success. This may be beginning to
change and across the globe, the values of modern economy are being
questioned.
Some may see in this a lamentable loss of a dynamic socio-economic environment. I see this as an opportunity for India to
position itself to meet the demands of a new age and a new humanity
that values sustainability over excess. It means focussing consciously
on technological innovation and product development that conform to the
emerging value system. It means developing and producing goods that meet
new standards of durability and reliability. It means more products
that are reusable, not disposable and if reuse is not possible, then are
recyclable.
We must set the standards for a new age of sustainability, propagate
concepts such as zero-discharge from chemical plants, water-positive
processes in all water-consuming industries, energy-positive processes
wherever possible through reuse of heat from production and the
generation of power from waste. The ideal should be to create a world in
which production and consumption processes are closed cycles with zero
waste.
This will take time and may never be achieved fully, but it is a
laudable ideal to aspire for. Concepts of linear growth must yield to
concepts of sustainable growth.
In India, traditional culture places a high value on sustainability,
enjoining upon all human beings to look upon Nature as a source of
nurture, not a force to be conquered, subdued and ravaged. The world is
currently living on a resource overdraft, not very different from the
excesses that triggered the economic and financial crisis. Deleveraging
our claims on Nature is as important as deleveraging financial
overstretch. India has the intellectual and entrepreneurial resources to lead this newly-emerging world, if we so choose.
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