Visions of the Future Revisited

1. Visions of the Future Revisited We are mankind because we survive.

2. We have come full circle. • During our various inquiries we got useful insights about individual environmental & natural resource problems • Now, let us combine those insights and assess the two visions

3. Addressing the Issue • Issue of growth in a finite environment – focus on 3 issues: • How is the problem correctly conceptualised? • Can our political & economic institutions respond in time democratically to the challenges presented? • Can the needs of the present generation be met without compromising the ability of the future generations to meet their needs?

4. In the beginning : if demand is  & supply is finite  resources will exhaust & society will collapse • Price is not the only factor that retards demand growth – ↓ population plays a significant role too • Characterising resource base as finite is harsh – ignores existence of renewable resources, focuses attention to wrong issues – supports ill-conceived attempts to measure size of resource base

5. Resource base is not finite - “There is energy everywhere. Choose the renewable one. Mother earth’s resources will never get over, as long as you do your bit.” – wind, solar & wave energy • Prices are going down but technology is improving – competition ↑ and we can afford to sell at lower prices • Historically, very little evidence supports a fear of impeding scarcity of minerals – extraction costs ↓ • How long will this continue?

6. Errors made by both – those who understate adequacy of resources & those who point to abundance • The problem is not finiteness but it is the way they are managed • Either pessimistic or optimistic views are wrong – improper incentives & inadequate information are serious – considering unlimited resources is equally wrong • Plenty are available if we are ready to pay  price – need to transition to renewable / recyclable resources has already begun

7. Institutional Responses • Markets have responded quickly to deal with scarcity & showing  prices • Substitution encouraged – recycling growing – consumers’ habits changing • Government intervention needed to ensure that the firm which neglects environmental damage in their operating decisions do not gain a competitive edge • Each problem to be treated case by case

8. Market may automatically choose a dynamically efficient or sustainable path for future – imperfections in the market make sustainable development difficult • Left to itself market will over-exploit free access resources – thus reducing the benefits of the future generations • Sustainability guarantee with falling depletable resources requires compensation from present to future generations – financial payments can’t adequately compensate future generations

9. Government intervention – in controlling pollution – firms may underprice their goods that add to pollution – intervention to ensure that firms that neglect environmental damage in their operating decisions do not gain a competitive edge • Unreasonably tough legislations are almost impossible to enforce • With price controls, incentives for supply reduced and the time profile of consumption is tilted towards present – water supply at subsidized rate • Price control – key role in hunger problem – undervalue agriculture – in LR imports when foreign exchange is scarce – in developed countries price decontrol

10. Sustainable Development • Economic growth in individual nations is due to  in inputs & technological progress – labour may not ↑ in future at same rate – limits to tech progress - growth  stationary state  ultimately zero • Empirical evidence shows that •  Environmental control – no large impact on the economy as a whole • Environmental policy has contributed more jobs than it has cost • Has triggered just a little  in the rate of inflation & mild reduction in growth ∴ environment & healthy economy are compatible

11. Respecting environment is incompatible with healthy economy is demonstrably wrong – economies transformed: ↑ in population & ↑ in importance of information • ‘All people automatically benefit by growth’ is naïve - ↑ leisure, longer life expectancy, ↑ goods & services – ecological foot-prints • New forms of development will be necessary • Economic incentive approach to environment – incentives changed by fees or charges, by liability laws or transferable permits

12. Public policy & sustainable development should support each other – govt should send right signals through markets • Global problems – creative policies • A good partnership between public & private sectors • Current NI accounting system is wrong as doesn’t measure welfare – not considering damage done to natural resources that is irreversible

13. Concluding comments • United responsibility • Cannot catch every offender – high degree of voluntary compliance is necessary for smooth working of system • Producers – safety of their products • understand our responsibility as consumers – purchases to reflect environmental values in such away that market moves in right direction

14. We are at the end of an era and also at the beginning of the other • Future holds transformation in many ways • Obstacles will be there as they are today too, but we are making progress, for sure!!