At the Delhi Sustainable Development Summit, Prime Minister Manmohan Singh introduced a much-needed corrective to the GDP-focused development debate by underscoring the problem of replacing environmental resources consumed at a rapid pace. His reference to the depletion of freshwater in particular, and the likelihood of alarming scarcities arising from a demand-supply mismatch in the future should give pause to stakeholders who are mindlessly extracting it. What he should also have emphasised is the need for users, especially industries, to meet the actual cost of mitigating the pollution that is degrading this precious asset. Given its life-sustaining role, and its importance to agriculture, water should be treated as a vital part of the commons and protected from pollution through a strong legal approach. A model Bill has been circulated to the States to regulate groundwater, and it should help end the ineffectual approach of pollution control authorities towards the issue. The broader discussion on development, however, goes well beyond water and needs to encompass the idea of sustainability in its entirety.
The definition of sustainability is far from settled, and economists and environmentalists have not achieved convergence on the metrics to be included. What is important, however, is to recognise that progress has been made in narrowing down metrics that are important to assess future well-being. Forward-looking economists have argued that a credible measurement of sustainability should include not just natural resources, such as wetlands, forests, coastlines, mountains and their biodiversity, but other components. These should provide future generations a set of opportunities as large as the one available to the present. It is critical, therefore, to also factor in human capital and account for public expenditures on education and health as productive rather than consumptive. India has visibly failed on these counts. While the country is consuming scarce resources rapidly, it is investing little in real terms in the key social areas. Now that the Prime Minister has acknowledged the need to adopt green accounting, it would be good to start the exercise of creating baseline knowledge on the contribution of the environment to many sectors of the economy. Natural systems, after all, represent the GDP of the poor. This can lead to greater legal protection, and help arrive at the real prices that commercial sectors must pay for these resources. The unfortunate reality is that in the absence of any attempt at monetary quantification, nature is often seen by industry as inherently worthless. A more enlightened approach should set the balance right.