Environment may be a new federal faultline - Hindustan Times
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Environment may be a new federal faultline

May 29, 2023 08:39 PM IST

The burden of protecting India’s environmental resources is bound to be unequal across states and regions

When we think of India’s key federal faultlines, we usually think of issues such as inter-state migration, language wars, tax sharing, and political representation. A new faultline may be added to this list now: Environmental protection.

If farmers are to be protected against erratic rains, and slum dwellers in India’s poorly designed cities against torrid heat waves, efforts to conserve forests and other natural resources must be redoubled(HT File) PREMIUM
If farmers are to be protected against erratic rains, and slum dwellers in India’s poorly designed cities against torrid heat waves, efforts to conserve forests and other natural resources must be redoubled(HT File)

Several decades of rapid economic growth have lifted economic aspirations in all parts of the country, including in ecologically sensitive regions. People in these regions want economic opportunities on par with the rest of the country. But they have to give up some of their aspirations to protect the country’s and the planet’s natural heritage. If farmers are to be protected against erratic rains, and slum dwellers in India’s poorly designed cities against torrid heat waves, efforts to conserve forests and other natural resources must be redoubled. This means that the Himalayan states must be prevented from pursuing the industrialisation strategies of a Maharashtra or a Tamil Nadu. Or else, the damage to the entire Indian subcontinent will be irreversible.

The burden of protecting India’s environmental resources is bound to be unequal across states and regions. Hence, regions that add to India’s stock of natural capital and provide ecosystem services to the rest of the country must receive adequate federal compensation. Ecosystem services such as carbon storage, natural air and water filtration mechanisms, and flood protection are invisible. But they cannot be taken for granted any longer.

This argument applies on a global scale as well. The renowned environmental economist Partha Dasgupta has suggested a new multilateral organisation that will pay countries such as Brazil to preserve the Amazon rainforest. Such a body could levy charges on cross-country freight, Dasgupta has argued. This would, of course, require significant global coordination, which might not be easy to achieve in these fractious times.

Within India, there is already an established mechanism for federal transfers in the form of the Finance Commission. The 12th Finance Commission headed by C Rangarajan identified the need for green compensation for the first time, and awarded a small grant of 1,000 crore to states, distributed among them in accordance with their share in the total forested acreage. The 13th Finance Commission headed by Vijay Kelkar raised the amount of grant to 5,000 crore, arguing that states need to be incentivised to protect forests and biodiversity. The 14th Finance Commission headed by YV Reddy raised the stakes further. For the first time, the share of forested area in each state was included in the devolution formula for distributing tax proceeds among states. It assigned a 7.5% weightage to the forest criteria. The 15th Finance Commission headed by NK Singh raised the weightage on forests to 10%. All of these bodies acknowledged the trade-off between the need to conserve natural resources and the requirement of rapid economic growth. The use of successively higher forest-based grants is a partial attempt at tilting the scales in favour of natural capital.

A more comprehensive approach to address this issue will require holistic data and new mechanisms for federal coordination. To ensure that all key ecosystem services and the opportunity costs of preserving them are evaluated correctly, India needs to invest in a robust green accounting framework. India’s statistics ministry has begun compiling data on the stock of some key constituents of India’s natural capital. But these estimates are still quite rudimentary, and largely dependent on satellite imagery. Field surveys to validate the results of satellite imagery are missing in most cases.

Such ground-truthing is also missing in the case of the forest data which the Finance Commission uses in its devolution formula. If you go by the official data, most states have witnessed a rise in forest cover over the past two decades. But if you look at alternative estimates, such as those provided by Global Forest Watch, you will find that almost all states have witnessed deforestation over this period.

Beyond investments in environmental statistics, we also need investments in new federal institutions that allow policymakers to take both economic and environmental considerations into account while framing development strategies. The 14th Finance Commission had recommended that the Inter-State Council be revamped to play this role. “...In order to address these common concerns and issues that arise from the management of natural resources, global concerns on climate change, and the issue of sustainable development, we are of the view that the Union and the States need to become partners in addressing the challenges of development in a manner that is sustainable and preserves the ecological balance,” the 14th Finance Commission report said. “A consultative mechanism at the highest level will be able to address many of the apprehensions and concerns of stakeholders and provide policy thrust cutting across several line ministries and agencies… The new institutional arrangement should also become the forum for integrating economic and environmental concerns in decision making.”

The past few years have seen growing friction between the Union and some state governments on a number of issues, leading to calls for an institutionalised mechanism for negotiating solutions to such conflicts. The challenge of green federalism can be addressed effectively if such a mechanism is established, either through the Inter-State Council, or by setting up a permanent Finance Commission.

Pramit Bhattacharya is a Chennai-based journalist The views expressed are personal

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