Green growth is indeed possible

CHANDRAJIT BANERJEE | Updated on March 12, 2018 Published on June 04, 2014

Shooting upwardWe’re waiting for just that SERGEY NIVENS/SHUTTERSTOCK.COM

Industry’s willing. It now depends on fiscal incentives and the nature of environmental regulation

On World Environment Day, industry should take stock of the growth opportunities to be had by working for a strong and viable environment. These relate to areas such as green products, renewable energy, sustainable buildings, and energy and water-use efficiency.

Simultaneously, industry also takes stock of its responsibilities towards conservation, mitigation and protection of the environment and evolves appropriate industrial practices.

Many larger corporates have inculcated sustainable development strongly into their day-to-day management practices. We should not, however, confuse the imperative of sustainability with environmental regulation. Recently stalled projects have had a significant impact on the economy, constraining capacity, demand and investments. The cascading impact of this is felt in distressed bank assets, economic inefficiency, high incremental capital-output ratio and moderation in GDP growth.

The clearance ladder

Lengthy and complicated administrative processes for environmental clearances are widely cited among the reasons for stranded projects. Such clearances involve an elaborate procedure, which includes application to the relevant authorities, environmental impact assessment and project appraisal. The process extends over almost eight months.

For forest clearance, there is an eight-step procedure. Including the sub-steps, there are almost 40 processes required from Central and state governments for final approval. Also, wildlife clearance is a pre-requisite for forest clearance and that takes its own time.

Towards efficiency

There are several ways to proceed towards a more efficient administrative set-up. One, an integrated online system with online applications and defined timelines could be made accessible to Central, state and district authorities. Two, the command and control regime should be replaced by an innovative approach for pollution prevention and control. The idea should be to move beyond the conventional ‘do no harm’ approach to a more pro-active ‘do good’ approach.

Three, a key consideration would be to move the current environmental regulations of ‘prohibit and punish’ from the ambit of criminal laws toward civil laws. According to the National Environment Policy, 2006, recourse to criminal sanctions is expected to act as a deterrent; instead, there is little flexibility and efficiency.

Four, economic incentives for environment-friendly policies could include fiscal incentives, capital/interest subsidies, tax exemption, eco labelling and bank guarantees. There is a special need to direct such measures at micro, small and medium enterprises. Five, the time taken in decision making can be reduced at each level. Reconstitution of state environmental impact assessment bodies after their terms are over should be done in a time-bound manner. In certain cases, ‘deemed approvals’ can be instituted if timelines are overrun.

Six, the focus should be on reducing adverse environmental impact rather than on production capacity. Limits can be imposed on discharge of emissions, effluents, wastes and their pollutant loads, moving from ‘concentration-based’ standards to ‘load-based’ standards. In industries where zero effluent discharge is difficult, reduction of fresh water use per unit of production could be the focus by utilisation of treated effluent by downstream users.

Seven, industry could explore clean technologies which reduce the net environmental impact through recycling or end-use. Manufacturing industries are discouraged from going in for innovative clean technologies, as these are not exempted from environmental impact evaluation. A 10-15 per cent increase over the baseline production capacity due to technological or productivity enhancement should be permitted. Finally, all government policy relating to industry and infrastructure can ensure environmental sustainability by incorporating green technologies, energy efficiency and optimal utilisation of natural resources.

The environment is vital, but economic activities can often conflict with sustainability. Both need to be pursued. As the country promotes green economic transition, we also need to deal with immediate process issues.

The writer is the director-general of CII

Published on June 04, 2014
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