" South South Cooperation and Strong Sustainability to heal the wounds of our darkest times"

South South Cooperation as a concept emerged from the World War II days. Tensions of global, political and international relations manifested and established the importance of cooperation which further oriented itself mostly towards bilateral and multilateral cooperation in the 1950s. This concept later on was mostly marked by dependency theories and a notion of self reliance of countries which finally turned more towards a developmental imperative since 1990s (http://www.thepoliticalindian.com/saarc-energy-deal/).

Today, south south cooperation means exchange of knowledge, skills, collaborative demonstration projects, movement of people from one country to other. This collaboration is not limited to any one field or area of expertise. It is spreading across fields related to projects dealing with renewable energy, developing solutions for securing energy, livelihoods for the future generation. It has also spread to fields like music, sports where people are coming together to spread peace, ensuring social sustainability. The reason why these collaborations are happening is a testimony to the fact that as humans, nations we are incomplete till we join our hands with another individual near us. That neighbourhood can be within and across communities, nations and different geographical boundaries with the best complementarity to make us complete. The very fact that we need to be complete has a connection with the notion of strong sustainability. We can only be complete when we think of our future and meet our present needs without destroying needs of the future generation.
This requires non substitution of the natural capital by human made physical capital. It also needs a higher emphasis on the ecological space rather than short term economic gains. A strong sustainability concept (http://nz.phase2.org/what-is-strong-sustainability) therefore has to primarily give the utmost priority to our ecological space (as the planet Earth has its limited bounty of resources). Only when the biosphere for future generation survives, the society and the economy will survive (http://nz.phase2.org/what-is-strong-sustainability). Thus a strong sustainability notion, idea needs to sacrifice short sighted economic benefits for the future gains of mother earth where the biosphere survives and ensures that society and finally economy sustains.

Now, here, I would argue that any South South Cooperation measures of today and tomorrow has to imbibe a notion of strong sustainability. This is because we want to cooperate, collaborate to ensure a sustained bright future as when the future survives, strategic gains of cooperation can be realized. Hence, this requires sacrifice of short term benefits for the bright future of our children through exchange of skills, art, music, people to people contact : moreover all these initiatives can only survive the winds of time, when there is a strong sustainability element in it. And let this initiatives get strengthened through emerging countries like China and India.

Today, Africa has become China's Second Continent (quoted from Howard W. French's new book - "China's Second Continent" - http://www.nytimes.com/2014/07/13/books/review/chinas-second-continent-by-howard-w-french.html?_r=0). But does this becoming second been based on a strong sustainability principle? Has the collaboration, joint venture projects of China ensure a peaceful society and creates a basis for meeting the needs of the future children of Africa?  The answer to these questions might not be too optimistic in all cases.

Another emerging country like India also has been doing a lot in Africa through infrastructure building, several knowledge exchange initiatives. It has been a part of the process of continuation of India's partnership with Africa since 1950s. However, China and India together need to retrospect how we have been able to do and ensure the implementation of strong sustainability principles in our collaboration ventures in Africa.

Cant India, China set aside their strategic, political goals and interests and work together in Africa and several other parts of the world to ensure a strong sustainability in all their ventures together?. May be the question is too romantic and idealistic in the midst of these world of political strategies. However being a romantic can sometimes be a good political and economic strategy for the larger good of future.

As when these places will survive, the future generations will peacefully grow, China and India will flourish together and that will also mean long term economic gains without compromising the needs of the biosphere and society of these two countries. With the looming resource depletion threats of key resources such a partnership will forge and bring peace across the world. With respect to that, this is also a high time, when India and China needs to collaborate also to bring peace in the region by combating the force of terrorism which will also be another important factor to thwart strong sustainability for the mother earth. Today, terror activities are launched with a future perspective of creating multiplier effects of destruction to nature and gifts of nature like children. The inherent thinking is that if they are hurted, destroyed, the supply potential of terrorists  of future will be ensured more for these terror groups with more military diversion and chaos which will generate more and more human resources to sustain terrorism. In a scary fantasy world it sounds like a fission detonator which creates enough fission to sustain burning of the society like in Danny Boyle's film "Sunshine" where a group of people traverses to a dying Sun to implant fission detonator so that the Sun burns eternally.

If as a response to these terror attacks, more violent military strikes are made, more societal disaster will happen and it will ensure a steady flow of terrorists for these groups who are destroying the strong sustainability of the earth by eradicating the best gift of nature.

Therefore, it is the duty of emerging powers like China and India to join hands together and destroy this force of terrorism which has started its attack on one of the central pillars of strong sustainability. All other political goals, strategic incentives should be kept aside and a full fledged mission should be started together by these countries to protect our messengers of strong sustainability - the children of this earth. Music, sports, films all instruments have to be brought in together by all emerging countries like China and India to mobilize a movement to protect our messengers of strong sustainability. Otherwise, it will become too late to act as we have already destroyed the earth and who knows as a race we now want to destroy the schools and messengers of our strong sustainability. South South Cooperation changed its orientation in 1990s to a developmental one. Time has come for South South Cooperation to adapt to a new dimension to heal the darkest wounds of our times to ensure strong sustainability for biosphere, society and finally the economy. China and India cannot stay ignorant on this for a long time. As it will be too late by then before someday another Peshawar happens in China, India or any country where sane people are wounded by insanity.

Enigmatic Delusion of Growth is just like a "Curious Case of Benjamin Button"

The chance to be a part of the symposium on "Growth, Degrowth, Green Growth" issues in last two days held at New Delhi created the scope to learn, unlearn and relearn about many dilemmas. These dilemmas have persisted about the concept of growth: and they have not just been only about economic growth. Confusions related to age and basic biological nature of growth of a human body, and what is defined as growth and a normal path of growth got more strengthened during the two days of intense discourse. Even if I wanted to avoid a comparison of these confusions with a film during all the sessions of the symposium, I could not still do so.

The film story which haunted me again and again through out all the sessions of the symposium while listening to all the speakers was of "Curious Case of Benjamin Button". For the purpose of paucity of space and shortage of time to read long blog pieces, I would assume that most of us will know the story of the film that am talking about. Otherwise, in the days of internet, wikipedia, getting access to that story is not an issue. Therefore, here, I would rather draw connections between the underlying essences depicted by the film and how my confusions cluttered up more and more.

The film narrates story of identity. Hence, Benjamin is born as an old man and therefore can associate more with the people who are old even though his age is very less. His emotional connections are much more closer to the people who are old. However, his age diminishes and becomes younger as time progresses unlike a normal human age progress. The identity of Benjamin moves in a reverse direction, his emotions also move in a reverse direction and are considered to be not normal. Therefore, he faces constant hindrances and resistances in social circles, personal space, and in companionship. With a progress in time, Benjamin becomes young and social: his personality changes. Hence Benjamin constantly pokes to us that age as a concept is not a number. My confusions suddenly get more real. I can see the growth paradigm in the story of Benjamin. Does the way Benjamin move in life can be termed as growth or degrowth? Benjamin's age is not merely a number: it perpetuates so many other aspects associated with it. It raises the constant battle between the mortality questions of death in Benjamin's life and its effect on the way he lives the life.

On a very similar note, is growth, economic growth a mere number. To me it is not. A growth of a society, economy is not a linear, mechanical, deterministic process. So will degrowth. Its just like Benjamin and very much like Benjamin's identity, age, emotions, feelings, struggles, personality which evolves constantly as he becomes young after being born as an old man. The concept of degrowth will also face similar battles and will go through the mortality questions of death of growth and its associated impacts on the forms of human lives.

It will also face the questions of how Benjamin was dealing with questions of unacceptance in various social circles and personal spaces. But he was also constantly evolving by accepting it. If growth in society, economy happened then degrowth will also be inevitable. But whether it happens in the way it occured in Benjamin's life is something that needs to be looked for. Story of Benjamin makes us also question that such a life can also be normal and questions the linear assumptions of normality. On a similar note degrowth also questions the normality of illusions related to an enigmatic growth number that human society and economies have been dealing with. Benjamin realizes that acceptance in social elitist class has a lot to do with money. Will degrowth in society, economy in the future days create more such Benjamins amongst us with such realizations. These Benjamins' will not qualify or match with the notions of normality while a degrowth happens and therefore the resistance within themselves and outside will go up. However, a transformation is going to happen and the identities of certain people will finally change over time. It might not change for some too and can stay same.

If the current path continues, notion of an illusionary number will change and there is a feeling that there will be a need to write a new story of curious case of Benjamin button. But this new Benjamin in the story will be society, economy and its associated institutions, actors. Over and above it will be the enigmatic delusion of a concept called growth.

Time to create an integrated model to predict "2012" or "Die Hard 4"

Rare event is an event that happens very less in our day to day life. For instance, the event that we all saw in the film "2012" or in "Day After Tomorrow" Motion picture can be termed as a rare event. Thus the melting and displacement of earth's crust, natural disasters comes under the domain of rare event. The 2007 motion picture flip "Die Hard 4" also had a different form of rare event. It showed us about an organized terror attack that was coupled with cyber and network security attacks creating a complete shutdown of road, power, banking infrastructure. The commonality between all these events is that they are rare but have dire consequences and cannot be predicted easily as the chances of estimating the occurences of these events are often beyond the imagination of mathematicians, modellers. However, they are still possible and they do happen with high damages. Moreover when they happen if the preparation to manage those damages are less the risk of damages to society goes up. Therefore, from a perspective of risk management, it is important to know the chance of occurrence of these rare events so that measures can be taken to manage them. Risk mitigation in case of rare events should also be tried in case of some types of rare events like the terror attack mentioned in case of the film Die Hard 4. It can reduce the extent of damages and uncertainty (simply put as the consequences which are beyond the control of risk mitigation measures at a point of time) associated with the occurence of the event. However, for rare events like as depicted in the film 2012: risk mitigation measures can be difficult as controlling the occurences of the event was totally outside the human control (though the team knew it in the film few months in advance that something will happen) and was a natural phenomenon.

 

Therefore, it is important to understand the pattern of occurence of these events even though it is difficult to put them in a statistical distribution pattern. However, through use of multiple simulations by using Monte Carlo techniques (which creates an imaginary world of simulation and runs such a simulation again and again) and uncertainty modelling if the chance of their occurrence can be predicted even with a margin of error, it can prepare the human society to prepare in a better way to create risk management measures through preventive actions. Policies can be therefore designed on the basis of these predictions (considering the margin of errors in the predictions) to create tangible measures that can protect the human society from adverse consequences of these events when they happen. However, rare event modelling as of now is often not done in an integrated manner. Time has come to join the skills of engineers, psychologists, scientists, modellers, social scientists, people from different disciplines and policy makers to establish integrated rare event models which will capture all the elements of consequences of a damage that can happen to the human society in case of occurrence of a rare event.

 

 

For rare events, which do not have well defined probability of occurence, in other words for whom the uncertainty of probability estimates are very high, there is a larger need for creating integrated rare event models. It is because for most of these events, the damage extent and degree will be very high. Therefore the importance of mitigating risks in such cases assumes a larger relevance. Mitigation of such risks can only happen when within the construction process of a rare event model, there is an engineer who can say that what can be the chances of failure of certain engineering designs of an infrastructure in the wake of a rare event (say a natural disaster). It will also require a scientist in the model building who will incorporate the science of the natural process owing to which the natural disaster happens. Behavioral, social scientists, psychologists will need to pitch in the model-building by suggesting how people can behave in the wake of such a rare event. In case of occurrence of a human induced rare event of an extreme type like cyber and infrastructure network terrorism (as shown in Bruce Willis starrer Die Hard 4), psychologists have to be a part of the modelling process to understand the mind pattern of the terrorists who aim to attack cyber and infrastructure networks. Such an understanding will help in framing some surrogate probability distribution pattern to predict these events for possible risk mitigation measures. Finally, within the modelling team  policy makers, practitioners, have to be there who can constantly question the modelling team to be sensitive to the practical domains of policy realities coming out of the ideal world of modelling simulations while framing the equation structures and finalizing the result interpretations. This will help in coming up with policy prescriptions to create risk mitigation measures for addressing the consequences of rare event occurences. Once, all this integration happens, rare event modelling work will transform to an useful tool to capture the realistic world of imaginations that can happen in future and need to be tackled to protect the human society. However, to achieve that, rare event modelling has to be more of an art based on the science of understanding an imaginary world of occurence of certain events being placed in the present context. Therefore, a good piece of rare event modelling is one where there are many scientists, thinkers, implementors who have turned as artists and are constantly working together to move inwards towards different imaginary layers of dreams as was shown in the motion picture -  "Inception".

The changing landscape of Indian Political space

Change in the New Delhi power regime, upcoming Lok Sabha elections, star studded preelection visits have created enough material for analyzing the landscape of  Indian Political space in minds of every common citizen of this country. Since last November 2013, manifestations of the changing landscape of Indian Political space is quite evident.

On one hand, the people who showed faith on the open ended space creating administration structure of the existing government backtracked and ousted the Indian National Congress in different states to bring new faces, ideas and thoughts in the political space: on the other hand, there are people who are also showing faith on political leaders whose political motivations and agenda are not always driven by a larger reliance on the expansion of human space and rights. At the same time, human space giving nature of the ruling government in a way has acted as a boomerang against them. May be the ruling party gave space to their state operations and gave freedom and lost the control of the local operations which led to corruption, inefficiency of operations at the state and grass root level and reduced their larger connect with the people resulting in loss of the election. The loss happened even though UPA has always brought in the developmental needs of the people of grass roots in their political agenda: be it through NREGS, be it through food security. By saying all this, I donot want to propagate or promote any particular political party. It is just an attempt to independently assess certain trends.

In retrospect, it seems that the developmental agenda within the political process has been making its way for a transparent information disclosure driven non corrupt political decision making. Does the Delhi election win of AAP indicate that? The way of winning the hearts of Delhi people by AAP through transparent sharing of information about funds, credentials of candidates hints towards it. It also indicates that people now want to see that a political party is also efficiently governed through non corrupt finances, effective, efficient information disclosures like a good firm which shares the information to shareholders (in this case the people who vote).

However, the politics of AAP is also not so simple. It has the element of an efficient manager which discloses the information of its firm to the shareholder, but it also has a moral element to it. Therefore it is also questioning morality, ethics of the existing political process and mixing it with a kind of accountable firm. Thus questions of right of people to decide through decentralised nature of operation has been brought in. It is also getting enmeshed with the morality and ethics while making decisions at the local level. It is over here, a danger lies. If the move towards a morality driven politics gets a strong tint and punch of power, then an element of intolerance and encroachment into human space can come in. It can also lead to a control driven politics which can go against the freedom of people and enrage them. If such a control driven politics increases gradually then it can actually again bring back corruption at a decentralized level through the same people who tried to eradicate it at the first instance by using morality, ethics and decentralized form of governing people. Somewhere, the success of AAP will lie how they balance these concerns in the next few months. Their successful balancing will also indicate the direction in which the country is headed in the next 10 years in terms of its political process.

The other player in this political landscape has been in a way more consistent in terms of their political stands. It has been easy to analyze their political motivations which inspite of being promoting the concerns, needs of the hour of the country might not essentially be in the interest of a human being and human right. This has been well evident in terms of their views related to sexual minority rights within the country. It has also brought in the conflict between individualism and nationalism in the political agenda making process of this key contending party of the upcoming Loksabha elections.

Thus, who ever wins the forthcoming Loksabha elections, impact of the changing landscape of Indian political space will surely be felt on human rights and space within this country. Will it be for the betterment, progressive movement of the Indian society can only be realized, felt and sensed in the next two to three years.

Is the U.S. Shutdown an indication of a qualitative change in the global macroeconomic structure: time to be prepared for attachment and detachment at the same time?

Last few weeks, the news of U.S shutdown has been making rounds on social, electronic and all media platforms. If we browse through you tube, there are stories by "am TV" suggesting how this is a pre planned conspiracy of the Obama government for a political gain. Some are suggesting that it has been done to create a threat to nations like China. When we read Chomsky and think of his views, we can sense how he is bashing Obama and his administration. Chomsky through his writings is also hinting of how the U.S domestic political paradigm is now not only of Democrats and Republics but it comprises of a multitude of fractions within them. There is also a movement of these fractions within Democrats, Republics towards the Centre. Apparently, these fractional groups moving towards the centre played a key role in solving the political deadlock that resulted in a loss of almost 22 billion US$ (an approximate number) through a shutdown. The tensed atmosphere has got some fresh air and relief till February 2014 as the debt ceiling from the treasury has been raised. This kind of shutdown is not new for U.S economy as earlier also there have been such shutdowns.

However, I will not deal with the above mentioned issues here. I will approach the event of this U.S shutdown in another way. For a moment, if we believe that U.S is actually running out of money to pay for its debt without considering any of the conspiracy theories, political bargaining situations: then what does it mean to us. It means that investors will lose confidence in U.S treasury bills and they will pull out money. It will mean, China and India which holds U.S treasury bills will be hit hard if U.S defaults in payments. But the larger question is why U.S is not generating enough money within the real economy and why it is depending on the treasury. The answer is quite simple. If one studies the pattern of U.S economy post 1990s, it is well evident, that it has generated over consumptive behaviour within the people of the country. Therefore, it has pushed people to get credit card and buy consumer products, get loans and buy houses, promoted people in buying assets which are toxic. So if the value of these toxic assets are of worth "2x", within the economy there is not even a value creation of goods and services worth even "x". Investments have not been drawn to sectors which can create a good, service for the economy. This can atleast generate real income for the government and the people. Pushing people to buy something through credit cards, loans doesnot create income for them. However, dangerously it can create an illusion for the people as their possession of assets, material can go up without a rise in any real income for the people and the government. This push for illusive consumption can however make one segment of people dealing with the business of credit cards, loans, toxic assets, insurance services very happy. They can lobby hard to maintain this. But at the cost of what - No real income for the economy, people, government?. It is like a house whose monthly earning is only - "y" and it is continuously chasing an aspiration of consuming assets worth of "2y" with the false promise that there will always be a support of virtual money to chase aspirations worth of "2y". This qualitative change has happened in the U.S. economy and pressure points are now being shown again and again: sometimes through financial crisis and sometimes these shutdowns. Something has gone terribly wrong with the U.S. economy and the worst part is that in a globalized world, any such pressure is going to hit other economies too. It is important for U.S to act a little more responsibly and stabilize the qualitative changes that has happened within their economy. Such stabilization doesnot mean that a war is sponsored in some other country of the world that generates some income through sale of weapons at the cost of human losses in different parts of the world. It also doesnot mean an increase in defense expenditure at this juncture. U.S also has to detach itself to not use "oil" as a weapon to get strength in dollar and get back confidence in their macroeconomy and treasury bills. These tactics we all have seen in the past. But in those times, the world was not showing so many pressure points which in some ways are connected to a qualitative change in the U.S. economy.

Today, we are facing other pressure points of domestic, international, political, ethnic conflicts, international terrorism, financial crisis and many more related to the science, laws of nature. In an integrated world, these pressure points spread quickly and effect people. Therefore, its time to detach ourself in little little ways. Every country has to consolidate their domestic set up now independently: this doesnot mean that trade relations will not continue: they have to exist and will continue. Need of the hour is to build up domestic national strengths of economy by bringing a qualitative change in the mindset of the people of every economy. Community, local economy bondages through strong backward and forward linkages to local markets have to be strengthened. Integration between countries through toxic assets, fiscal routes and debt structures have to be reduced. Countries have to generate their own real income through promoting the basic core sectors like agriculture, manufacturing but by protecting environment. These views have to be promoted through forming movements by joining like minded people across nations. This is the new form of globalization that we need to stabilize the uncertainty that has arisen from qualitative changes that has happened in macroeconomies of different countries of the world in the last 20 years. Time for now is to attach and detach to promote development and then growth. Therefore actions have to be initiated to stop any expansion of profit which creates a subjugation of one race, economy, culture, livelihood, economy over the other. Thus the time has come to stabilize profits across all segments of macroeconomies of the world. Time has come to stabilize all uncertainties by detaching from profits and attaching more values to the qualitative attributes of an economy and human life. As they say - attachment and detachment both are necessary for personal development and it holds for a society, nation, economy and the world too!

Can Dr. Raghuram Rajan be the MSD (Mahendra Singh Dhoni) of the RBI team?

Few months back, I was watching the final match between the Indian and Srilankan cricket team in the television. The match was played in West Indies. India needed to score in a huge way in the last over and no body could believe that India can win. However, MSD had thought something different. He was batting with the last batsman and scored consecutive sixes to win the match for India with the last batsman standing at the non striker end. MSD showed the exemplary power of strategic risk taking behaviour, self belief, faith and confidence in that last over.

Months passed: and on 6th September, 2013 towards the late night while reading Raghu Ram Rajan's first day speech as RBI governor, I was being reminded again and again of the last over six hittings of MSD. The first day of the new RBI governor was full of many reform announcements. However, till these announcements are converted to real actions within the macroeconomy, it cant be said that they represent the sixers of MSD. So, which aspects of the speech made me feel reminiscent of MSD's innings. One can list and go through each of the measures and announcements: however, to avoid too much overloading of theoretical rhetorics, I will go through only few ones.

One of the measures relates to the internationalization of Indian rupee. In this tough times of inflation, depreciated rupee and current account deficit, it really takes courage, self belief and faith, trust on the team to think of such a measure. Essentially, this will mean that financial markets have to be more open, liberal for those who receive rupees so that they can invest and plug back in the rupee. This money, can be further be used to finance the existing current account deficit. This thinking at this juncture to me really represented in a way what Dhoni must be thinking when he thought of winning the match for India on that day. It also shows the continuous urge to adapt, change, learn and understand with a drive to take risks for coming out as a winner. This is not only about being technically trained in a profession but more about understanding the context of a situation and taking immediate actions with full faith in decision making.

The new governor's speech also indicated of a regime of stability and transparency and instilling confidence in the Indian monetary policy and rupee. These characteristics of transparency, stability (in tough times) are very key to the success of our Indian cricket team captain. Dr. Rajan as the new captain of the RBI team has also hinted of expanding banking, access to finance for rural people to promote inclusive development. A similar sense of inclusion has also been felt in the other dynamic sports personality who I am comparing with here. It is during MSD's captaincy we have seen cricketers from towns, suburbs coming to the national team and flourish and bloom at the international arena. The entrepreneuring philosophy of reaching out to new talents and including them in the mainstream is reflected in the thinking process of both the two personalities. While this carrot is there, the stick of penalising and communicating to the non performers for the stability of the system also exists in both. However, this comparison is only on the basis of the speech being made and all these will be validated more in the days to come with real actions. In this regard, Dhoni has an edge because we have seen again and again actions from him. However, both seems to be the propagators of non lazyness in the profession. One in cricket, fitness and the other one in banking. Therefore, in banking it will require larger channelization of flow of credit to productive sectors of the economy from government securities. However, in order to move away from this laziness, adequate funds have to come, government finances have to improve and penetration of pension funds, insurance companies need to increase. This needs lot of practical implementation and practice of prudent banking for this to happen. However, the first step is to reduce the lazy thinking. Similar proactive thinking was also being introduced by MSD in the Indian cricket when they were pushed to come out of their comfort zone and experiment with their different cricketing abilities in order to face any changing situation within the game.

However, having said all these, in reality, Dr. Rajan has to implement them with his team to get a larger deserved comparison with MSD. In order to do that, he has to fight a battle with the North Block in the background context of impending elections of 2014. He has to get the strategic buy in of the political leaders, bureacracy and the larger system through which these steps will be implemented. In MSD's case, he did it and am sure he also had to win the trust, faith of BCCI and other governance agents running the administration of cricket within India. I am hopeful that we will see another MSD in New Delhi. However, it will be validated in the days to come. Let us wait and watch till then the performance of the other existing MSD in the upcoming South Africa tour!
 

“Are environmental valuation techniques fair? “– Exploration to bring in equity, justice in environmental valuation techniques

The latest released report titled “Green National Accounting Framework for India” by a committee chaired by Sir Prof. Partha Dasgupta has brought the need for measuring national wealth as a part of the national income accounting framework of countries. According to this report, traditional system of national income accounts doesnot consider the loss in GDP that can happen from natural resource degradation. This accounting framework does not include any measure of income that is embedded within environment and natural resources. Neither does the existing system of national accounts visualize deferred consumption of natural resources as an investment which can be further built into the income accounting framework. The values which are estimated for measuring national income are based on market based prices and on the implicit assumption of putting  a monetary value on environmental resources wherever they are not available.

At the backdrop of this report, there is existing literature on estimation of green GDP which are going all around. TERI also did an estimate of how much of Indian GDP is lost owing to natural resource degradation in India. In the literature dealing with natural resource valuation within India and other developing countries, a value is imposed on natural resources based on shadow pricing techniques which are thereafter included within the national income accounting measures. In order to do that a value of natural resource assets within a country is estimated. This value is calculated on the basis of different modes of shadow pricing techniques. Most of these techniques are borrowed from neoclassical principles of economics and also arise from amenity based projects that had arisen in U.S. in the 1990s. The context in which these amenity based projects and methodological principles were done in 1990s is completely different from the socioeconomic, developmental context faced by countries like India today. The format in which questions within this amenity based valuation framework are asked implicitly assumes that a natural resource can be valued by use of some proxy variables. In most cases a proxy question is being asked to put a monetary value on the natural resource or any natural asset that can include more trees, greater amount of clean water, etc.

For an illustration to the reader, a typical questionnaire in the valuation exercise will ask a question like – “how much more you are willing to pay for a certain defined extra unit of clean air, water” or “how much more you are willing to pay for a road full of forest” or “by how much do you think the price of the property will increase with cleaner environment or more trees in the neighbourhood”. After getting answers to these questions, valuation numbers are compiled through econometric estimation methods: a price number is achieved which indicates how for every extra unit of clean air, environment, water how much more consumers are willing to pay. Essentially, the danger starts from here.

Firstly, in this entire method of valuation exercise, no where an attempt is made to introduce equity considerations into the valuation methodology. It also doesnot consider the issue of right of a human being to have a clean air or water or environment nor the right to preserve certain values arising from environment.

Let us illustrate the concern through a hypothetical example.  Given the path of development and the felt need (which can be again questioned too) to bring many backward forest areas within India into mainstream developmental paradigm, certain sections of policy making fraternity might feel that roads need to be constructed to connect these backward areas to cities by cutting down of trees. Now, before government takes such a decision, valuation of these forests need to be done in order to understand whether these trees should be cut down. In many tribal areas of India, these forest areas not only mean trees, it also means the right of human beings to their old ethnic cultural values as well as to clean environment, biodiversity and ecology that has served them for generations. Gadgil and Noronha (2013)[1] (Madhav Gadgil and Ligia Noronha (2013), An Ecosystem to Save or Squander, The Hindu, May 2, 2013)in a recent article also highlights, how, many of these forests in the Western Ghats are important for preservation of wild species, biodiversity, cultural, ecological and environmental values. Therefore, a valuation exercise of these forests based on the neoclassical and amenity based principles, methodologies is not ethical from the point of view of human rights of people of many communities residing in these regions infested with biodiversity, ecological, ethnic and cultural values embedded within these forests.  

Therefore, we come to the next part of our discussion on how ethics, questions of justice, principles of equity has to be urgently brought in the methods of environmental valuation techniques to inculcate ecological and other implicit values within the process of such techniques. Ghosh (2013)[2] (Ghosh, P. (2013), Equity in Climate Change, A Suggested Approach, Economic and Political Weekly, March 23, Vol 48, Issue 12, Pgs 44 - 51) in one of his EPW article defines equity as “fairness” or an “ethical conduct”. Drawing on the same lines, within environmental valuation techniques, if ethical and the principles of justice have to come in, they have to largely apply principles of normative and meta ethics. Basically, the valuation method will need to have two components of ethics which are – normative and meta ethics. Through normative ethics, a set of criteria pertaining to equity and justice has to be developed within valuation techniques. Other component of the valuation technique will have meta ethics which will have certain logical principles that will assess, analyze, validate the criteria pertaining to equity, justice within the normative ethics component of the valuation measure. Thus, the new valuation measure will have two ethical components – normative and meta ethics. First one will develop the set of different criteria capturing equity and justice and the second one will generate logical principles and methods to analyze the first component.

Basically, through this new method, a technique of environmental valuation will move away from the neoclassical paradigm towards a justice based approach. By means of this method, an environmental natural resource will be valued more from the lense of “rightness or is it ethical or justified to maintain  or preserve a natural resource rather than putting an implicit, proxy monetary value to it and then justify it in terms of money, costs and benefits of its preservation”. A translation to this paradigm will mean that all environmental resources will be assessed from the view point of human rights to have those resources. This will also take into account of the question of equal right of all human beings to these environmental resources so that in the long term wealth of people who have access to quality environmental resources goes up. It will also mean that the total wealth of a country can also go up owing to preservation of high quality environmental resources.

Since, this will mean a shift from neoclassical methods, certain abstract principles of justice, rights will come into the normative ethics part of the valuation measures. However, they will be assessed in an objective way by means of criteria which will capture the issue of rights, ethics. Such an assessment will be done more by means of new techniques like group modeling exercise which will engage people. This group modeling exercise will involve in AHP (Analytic Hierarchy Process) methods where people will be asked questions of justice, ethics and those viewpoints will be simulated and integrated in valuing an environmental resource. Justice, ethics will become domains within the AHP exercise. Under each of these domains, further, indicators will be identified. Questions will be specifically asked to capture the view of people belonging to different sections of society on these indicators indicating the domains of justice, ethics.

Viewpoints of people under each of these domains and catering to different indicators will be duly captured, simulated in a decision making framework. This decision making framework will largely create an understanding of how does an environmental resource (say tree) stand visa vis another option (say road) after considering normative and meta ethics component of valuation after taking account of the questions of human rights and equity.

However, having made these points, it is equally important to envisage how can this methodological framework be implemented within India. At the central level, Ministry of Statistics and Programme Implementation (MOSPI) has to be the coordinating agency to implement this framework. It will have to work with the state statistical departments which will have a dedicated cell working on valuation numbers for different natural resources including this rights, equity based approach.  State nodal cells can estimate a value for particular types of natural resources and will have to report to MOSPI after every six months. State specific different estimates will have to be centralized and maintained in a central data base of MOSPI which should be available for users of this data – viz. government, academia, companies, policy makers, communities, activists and researchers. An approach like this will help in transition of the valuation approach within the country which is currently more of expost in nature (rather than exante) and is unable to stop a natural resource degradation within the country from an onslaught of development activities. 

Therefore the above shift in the methodological framework of environmental valuation will help the policy makers and an implementer to make a decision about what is the value of a particular environmental resource for human beings and communities visa vis another option (say a road). Once this is done, it will bring in a more objective view of questions of rights, justice and equity in environmental valuation methods, techniques. For a country like India, which is standing at the cross roads of questions of the development visa vis ecological/environmental conservation, it is an imperative to move towards these methods of valuation for a more informed policy making by being considerate and sensitive to  rights of people who belong to forests and other areas infested with ethnic, cultural, ecological and environmental values.

Views are personal

[1] Madhav Gadgil and Ligia Noronha (2013), An ecosystem to save, or squander, The Hindu, May 2, 2013

[2] Equity in Climate Change, A Suggested Approach, Economic & Political Weekly EPW March 23, 2013 vol xlvIiI no 12

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[1] Madhav Gadgil and Ligia Noronha (2013), An ecosystem to save, or squander, The Hindu, May 2, 2013

[2] Ghosh, P (2013), Equity in Climate Change, A Suggested Approach, Economic & Political Weekly , vol xlvIiI no 12, March 23, 2013, pgs 44- 51