Nature, Economy and Society

This chapter introduces the broad framework of the discipline of ecological economics which is both a transdisciplinary and interdisciplinary field of research. Ecological economics addresses the critical problems at the interface of nature, economy, and society but also acknowledges the interdependence and co-evolution of human societies and the natural ecosystems over time and space. Ecological economics further integrates the institutional factors that govern an economic system within its disciplinary grid. This chapter provides an overview of the volume by engaging in a brief description about the chapters contributed by the various authors in the volume. In the process of doing so, the chapter approaches towards a definition of the scope of ecological economics at the interdisciplinary interface of nature, economy, and society.

This chapter first examines aspects of the linkages between nature, economy society reiterating the urgent need for dealing with the complexity of nature and society interactions from diverse disciplinary perspectives: It further postulates that whichever discipline we begin from, it is the ethical undertones that drive the analysis in directions which acquire meaning in terms of the quality and legitimacy of decision-making. Methodologies acquire meaning only when interfaced with or interpreted in the context of value systems. The emerging literature on valuation of ecosystems and ecosystem services is examined, both as a methodology and as a tool for providing policy direction.

Finally, observing that, the choices which India and South Asia face, as development and environment both need to be addressed aptly, span a large number of these challenges. The question addressed is: What directions does the current level or state of knowledge give to help us to emerge with meaningful policy directions?

The industrial economy works in practice by shifting costs to poor people, to future generations, and to other species. Could an industrial economy work otherwise? K. W. Kapp wrote in 1950 that capitalism is an economy of unpaid costs, but the socio-environmental impacts are not due to capitalism as such, they would not be different in another system of industrial economy if there was one. The impacts occur at various temporal and geographical scales. They arise because of the increased social metabolism, and this chapter shows which are its main trends in India explaining the methods for counting the energy and material flows and giving the main results of the material flows for the economy of India between 1961 and 2008 as researched by Simron Singh et al. (2012). Drawing on work done for the Environmental Justice Organizations, Liabilities and Trade (EJOLT) project, it shows the links between the changing social metabolism and ecological distribution conflicts, looking at clashes over illegal sand mining in India, responses in Odisha to bauxite mining, the ban on iron mining in Goa in 2012, social disputes on waste management options in Delhi, and ship breaking in Alang, Gujarat. The aim is to show how a history of social metabolism leads to a history of socio-environmental conflicts and of the changing valuation languages deployed by various social actors in such conflicts. There is too much emphasis among policy makers on hypothetical economic valuations of environmental damages and on economic instruments, and too little on this great tide of environmental justice. The movement to impose market values and increase profits by expanding the frontiers of capitalism is resisted by counter-movements (as Karl Polanyi already explained in The Great Transformation in 1944) aiming to protect nature and humans.

When the stakeholders in such conflicts do not insist so much on economic compensation for externalities as on different local alternatives (as explained in Shrivastava’s and Kothari’s book 2012) they join those in Latin America searching for a buen vivir or Sumak Kawsay, perhaps translatable as aparigraha, a voluntary simplicity rooted in local social values, and they also join and support those few in rich countries who preach a moderate décroissance (degrowth) leading to a “steady state economy” or a “prosperity without growth”.

The United Nations (UN) framework System of National Accounts (SNA) released in 1968 is inadequate for accounting of contribution of natural resources to the well-being of people in a country. The UN methodology of the System of Environmental–Economic Accounting (SEEA) provides for integrating SNA accounts of a country with natural resource accounts. However, even after almost two decades of its existence, it is now found that no country in the world has made full use of this methodology for estimating its green gross domestic product (GDP). In many developed countries, attempts have been made for integrating some immediately implementable components of the SEEA with the methods of resource accounting currently used by them. Most of the developing countries have not yet started working on developing databases linking natural resources with economic activities.

Forest resources are of great concern all over the world due to their eminent quality in maintaining ecological balance, supporting the economy and meeting the social requirements. However these resources are overtly exploited and prone to various threats. Proper forest resource valuation and accounting help to understand the stock and flow of the forest resources and thus represents status of forests resources not only in quantitative/qualitative terms but also monetary terms. It would facilitate to consolidate the forestry sector contribution to gross domestic products (GDPs). The estimation of the economic value of forest goods and services and their inclusion in the national accounting system is essential to substantiate the positive impacts of forestry projects and programmes not only on local economy but also in the regional and global economies.

In India, the conventional system has some semblance of forest resource accounting (FRA) and neglects most of forest benefits. This in turn contribution from the forestry sector to the economy is grossly underestimated. This is primarily due to the fact that the conventional system of FRA, not only in India but also in many countries, partially includes the value of tangible and intangible benefits, thus consequently underestimating the real contribution of the forest sector. The chapter presents three case studies—one each relating to Palakkad Division, Munnar Forest Division and Thenmala Forest Division in the state of Kerala. The case studies were conducted with a view to understand the conventional system of FRA and to apply some of the methods of valuation to estimate the values of various forests goods and services and highlight the extent of distortions involved in the existing system of FRA. The study compared and identified the gaps between monetary values of recorded and unrecorded forest benefits and costs at the divisional as well as the state level. This chapter also demonstrates an approach for preparation of forest assets and flow accounts at the state level. The studies also present an approach for improving the conventional system of FRA through incorporation of unrecorded forest benefits. Further, at the national level the values of unrecorded forest benefits will be enormous indeed if such system is adopted throughout the country and the real contribution of the forest sector to the country’s economy will be revealed. The FRA presented in this chapter if practiced and institutionalised will help understand the sustainability of resources through intervention of appropriate policy and planning.

The demand for urban water supply service is increasing rapidly as globalization accelerates economic development and brings improvements in living standards in India, with the interactive effects of demographic growth and influx of migrants into cities due to push and pull factors. Provision of reliable and safe water supply to urban habitat is an essential input for overall economic and social advancement. However, urban local bodies mandated to perform this task in India have been experiencing constant budgetary bottlenecks in mobilizing resources to meet the water consumption targets of the present as well as future population. Urban water supply sector in India and particularly the study area Bangalore is facing a number of challenges and constraints in meeting one of the important components of the United Nations’ Millennium Development Goals, i.e., to ensure supply of adequate potable water to half the number of people who are currently living without access to sustainable, safe drinking water sources by 2015. These problems and constraints include increasing scarcity of water, low pricing, high subsidy, poor cost recovery, high transmission, and distribution losses due to poor maintenance, rising unaccounted-for and non-revenue water outgo. Bangalore Water Supply and Sewerage Board (BWSSB) is experiencing poor cost recovery and has been unable to generate enough revenue to meet the investment requirements of the growing water needs of the city. BWSSB is also facing serious performance gaps such as reliability, financial sustainability, environmental sustainability, and affordability due to deterioration of infrastructure.

Energy value (use-value) of irrigation under surplus rainfall conditions, like all parts of the state of West Bengal with an annual rainfall of 1000 mm or more, represents the value of unsaved rainwater, an ecosystem function, to the farmer-cultivator for meeting the water requirements of the planted crops, an ecosystem service. In such situations, substantial run-off results in considerable use of labour and material towards irrigation, even if the seasonal effective rainfall is more than the potential evapotranspiration (PET) or the crop water coefficient of a water-intensive crop like paddy.

This chapter uses the method of energy analysis for computing the energy cost of various irrigation practices across 2281 plot-season-crop combinations in 38 selected blocks of West Bengal spread over five agro-climatic zones, three seasons, and three size-classes for the agriculturally normal year 2004–2005. In tehsil/blocks with rainfall over and above the PET for kharif and winter seasons together, average per hectare seasonal energy values were: 0.697 for kharif, 4.3 for winter, and 2.96 for summer for all plot sizes (in barrel of oil equivalent). There was a fall in the average per hectare cost with an increase in size-class in all seasons. Further, for each size-class, per hectare energy cost remained highest for winter, followed by summer and then kharif, which is an expected result.

Panel data collected from a cross section of agri-food processing firms in Sri Lanka to represent industry structure, by means of personal interviews with environmental managers supported by a structured questionnaire, were used to investigate the dynamics of, and key drivers affecting, firms’ corporate environmental response, where the level of adoption of recommended solid waste management practices (SWMPs) by individual firms was of special interest. Scores provided by respondents to a series of statements to reflect potential impact of internal and external market-based, regulatory/legal, and altruistic motives governing firms’ environmental response in Stage I and Stage II (i.e., 3 years later) were subject to confirmatory factor analysis (CFA) techniques, separately, to derive indices (value range from 0 to 1), and which was analyzed using count data analysis. The results suggest that, overall, firms’ response, reflected by number of SWMPs in place, is “poor”; but, it has increased overtime. State of regulatory environment and altruism, along with firm characteristics (i.e., type, size, and vintage) had a significant impact in augmenting firms’ response in both stages, while the market-based incentives and internal efficiency (IEF) drive them towards higher adoption in the latter stage. Results highlight the importance of designing an incentive-based co-regulatory regime, where both local governing institutions and private firms work alongside to facilitate and promote corporate environmental response.

Even the harsh environments stressed for water and biomass, dependent on commons with low-input production systems, are not exempt. Performance of such breeds has been a serious concern in these programmes as any mortality and nonperformance can further increase debt burden of the poor. Also, the potential of nonrecognized local breeds well adapted to the scarcity cycles in dry land areas is not seriously explored. These are considered ‘nondescript’ and therefore, do not qualify for support in the government programmes. Located in this context, the chapter documents and analyses the performance of external Murrah buffaloes inducted into semiarid regions in Andhra Pradesh. The study also brings out the potential of various types or groups within the local breeds and presents their productivity traits.

Comparative analysis of performance of these groups of local buffaloes with that of inducted Murrah buffaloes brings out the potential of the local ‘nondescript’ buffaloes. In a situation where induction of external Murrah buffaloes leaves behind substantial debt burden and despair, results of the analysis make a case for recognizing the local breeds and for shifting the focus of livestock development and poverty programmes towards improving the fodder and feed resources in the commons and fallows, creating access to water and to improve management systems. A combination of such inputs along with selections from among the local breeds might be a better strategy for development of buffalo production systems in the semiarid regions.

Green Revolution technology gains in agricultural productivity and food security were widely associated with irrigated lands. However, there are now widespread problems associated with the use of chemical fertilisers, mismanagement of surface water and overexploitation of groundwater. Potential for expanding irrigated agriculture is decreasing and hence rainfed agriculture remains high on India’s development agenda. As a major provider of organic manure, livestock are crucial to the stability of dryland agriculture. Soil fertility management affects not only farmers but also landless poor, cattle owners and shepherds. Based on the fieldwork done in Andhra Pradesh, this study explores the local farmers’ in-depth knowledge on soil fertility management, and the cultural and socioeconomic web woven around these practices. Both qualitative and quantitative methods were used for understanding the farmers’ soil fertility management practices and the conditions under which they adopt such practices. The present study revealed that farmers in semiarid regions are actively managing soil fertility and other soil properties through diverse practices that are based on local resources and knowledge. This study highlights the contribution of organic matter by traditional soil fertility management practices in maintaining soil fertility. Regression analysis revealed that “large ruminants” is a key variable influencing soil fertility. The empirical results of this study call for an argument to be made for an approach to supporting soil fertility management by farmers that is more attuned to the range of circumstances that is found on the ground and best suits the long-term productivity of soils.

Decentralisation and devolution has been a major policy theme in common property resources (CPR) (including forest) governance in developing countries over the past few decades. Participatory forest management (PFM) has become one of the key objectives of forest policies and programmes in India, including in the state of Odisha since late 1980s. Simultaneously, efforts by local communities, which have evolved since early 1960s in different areas, have resulted into evolution and development of self-initiated forest protection groups (SIFPGs) in the state. These groups have grown and matured into viable institutions with self-governance, and they have been protecting and conserving forests of their own.

However, the present status of decentralisation of forest governance is beset with a number of problems, including exclusion of marginalised groups including women in the decision-making process and in the distribution of benefits.

The nature of decentralization of forest governance is analysed by using three contextual components, namely, access to resource, rules designed to govern it and the characteristics of the community and its involvement. Successful decentralised governance creates opportunities for agents for effective participation in decision-making that reduces the transaction cost of monitoring the behaviour of agents. It also provides incentives for hard work for the safeguarding and development of resources.

Based on secondary sources of information and the authors’ own findings from field work, this chapter tries to understand the nature of forest governance in the context of Odisha with a view to understand its functioning. It also analyses the implications in regard to the access to benefits accruing to the primary stakeholders in the context of their livelihood.

This chapter examines the multifunctional benefits of mangrove ecosystems and their benefits as being revealed by different communities who have been part of the mangrove restoration activities in Gujarat promoted by the state government. The chapter is based on an empirical survey of 227 households covering seven villages spread over four districts around the Gulf of Kutch and the Gulf of Khambhat, viz., Kutch, Surat, Anand and Bharuch. The analytical frame of the study is conceived on the principles of multifunctionality of mangrove ecosystems, including their critical role in the provision of ecosystem services, besides the tangible and intangible benefits reportedly enjoyed by the coastal communities in the study villages. This chapter also tries to explore how different communities perceive the tangible and intangible benefits of the mangrove restoration activities going on in the state. It then discusses some of the critical issues that need serious attention for sustaining the regeneration and conservation efforts in the villages. As the communities are different in terms of socioeconomic status and occupational structure, their perceptions of the benefits from mangroves differ, leading to differences in attitudes towards the conservation of mangrove ecosystem. This is further constrained by the impediments faced by the village communities in accessing the multiple benefits of mangroves. Eventually, the entire mangrove restoration process seems to be deficient in terms of the lack of initiatives by the state agencies in creating a social space for collective action, facilitating further expansion and sustainable conservation of mangrove ecosystems in the region.

Rapid industrialization coupled with growth of environmental consciousness has generated a debate on linkages of economic growth and environment. In this context, the motivation behind this chapter is to explore whether globalization affects the environment. The study examines impact of globalization/openness on pollution level, pollution intensity and relative change of pollution on the developing countries, using the panel data technique. The empirical results show that globalization leads to increase in pollution of developing countries.

Capital looks at waste management as a new emergent global market, where a rentier position can be acquired and profits realized. Indeed, capitalists consider waste management as one among several economic spaces to be occupied for the expansion of the scale and scope of capital accumulation (Harvey, 2003). However, the commodification, the marketization and the privatization of wastes increase ecological distribution conflicts, i.e. the struggles around the redistribution of benefits and costs generated by an increase of the societal metabolism (the energy and material flows) of industrialized societies (Martinez-Alier, 2002). Shipbreaking in the developing world is not just an externality but a successful case of cost shifting, or else, capital accumulation by contamination. This is the process by which the capital system endangers, through cost-shifting, the means of existence (and subsistence) of human beings to in order to find new possibilities for capital valorization (e.g. alteration of biogeochemical cycles). An appropriation of de-facto property rights takes place resulting in the shifting of costs and risks, i.e. exploiting the sinks over their sustainable assimilative capacity (e.g. climate change). The consequences most likely fall upon the most vulnerable social groups (e.g. small scale farmers or fishers in the South), but the society as a whole can be affected. The shipping industry constitutes a key element in the infrastructure of the world’s social metabolism. Ocean-going ships are owned and used for their trade by developed countries but are often demolished, together with their toxic materials, in developing countries. Ship breaking is the process of dismantling an obsolete vessel’s structure for scrapping or disposal. The Alang–Sosiya yard (India), one of the world largest shipbreaking yards, is studied here with particular attention to toxic waste management. Ship owners and ship breakers obtain large profits dumping the environmental costs on workers, local farmers and fishers. This unequal distribution of benefits and burdens, due to an international and national uneven distribution of power, has led to an ecological distribution conflict. The controversy at the Indian Supreme Court in 2006 over the dismantling of the ocean liner ‘Blue Lady,’ shows how the different languages of valuation expressed by different social groups clashed and how a language that expresses sustainability as monetary benefit at the national scale, dominated.

The study estimated the externality cost of soil salinity caused by shrimp farming on paddy productivity by comparing an affected village, Poovam, with an adjacent unaffected village, Thiruvettakudy. Soil salinity status was normal in both the villages in the pre-shrimp period (1994–1995). But soil samples of 2005 showed that soil salinity was in the normal range in the unaffected village. A spatial pattern in soil salinity was observed in Poovam lands. The per-hectare net returns from paddy is ₹ 5348 in Thiruvettakudy against a loss of ₹ 5058 for Poovam farms. The estimation of paddy production functions with different specifications reveals that salinity has a negative and statistically significant influence on paddy yield. The average gains from salinity reduction ranged from ₹ 1000 to 5000/ha^-1 depending on the production function specifications. This amounts to a yield increase of 172–836 kg/ha^-1. The study suggests the need to have a regulatory framework of taxing externalities for sustainable agricultural development in the coastal region.

Perform, Achieve and Trade (PAT) has emerged as a significant policy tool to mandate decrease in specific energy consumption (SEC) of the energy-intensive industries in India. As there are similar cap and trade policies operating in different other parts of the world, learning and experience derived from those will be helpful to make PAT more effective and accurate without delay. The objective of this chapter is to highlight basic experiences of the initial phase of European Union Emission Trading Scheme (EU-ETS) and analyse its implications for PAT. This chapter gives an overview of the genesis of PAT and EU-ETS, briefly describes the mechanism design of PAT and identifies issues with PAT which need to be revisited on the basis of what has been learnt from the similar mechanism design of EU-ETS during its pilot phase. Targeting specific energy consumption under PAT as compared to grandfathering in allocation of emission permits in case of EU-ETS makes the former free of certain allocation inefficiencies, but the target has to be stringent enough to avoid reduced mitigation effort and resultant price volatility of the emission trading instruments.

The study seeks to analyse the persistence of Jhum cultivation—a predominant mode of agricultural practice in many hilly regions of the world, including Northeast India. We build a formal game theoretic model that tries to explain how the existence of social capital can lead to persistence of Jhum. We find that all equilibria involve too much labour being allocated to Jhum, compared to the case where there is no social capital. The intuition relies on the fact that the amount of labour being employed by the two households are strategic complements. Turning to the comparative statics, we find that the results depend on whether the equilibrium is a corner one or not. We find that under the appropriate parameteric restrictions, there is a unique Nash equilibrium where all of the labour is employed in Jhum cultivation. In this case, we find that an increase in outside wages has no impact on labour allocated to Jhum, thus providing a theory of persistence of Jhum. Interestingly, we find that in the absence of social capital, such persistence cannot arise. The study is important for policy perspective, particularly in the context of transition economies, where a subsistence form of production suffers from a typical inertia of persistence. While jhum offers a limited scope to grow beyond subsistence, a standard incentive approach may not work to draw labour away from such subsistence practice.

Prosopis juliflora, an exotic plant popularly known as the poor man’s fuel wood, has been spreading all over the country. In the semiarid region of Tamil Nadu, especially in and around Ramnad district, P. juliflora has been systematically harvested and the charcoal made out of this plant has many industrial uses. The present investigation found that charcoal making out of P. juliflora is as lucrative as rainfed rice cultivation in this region. Therefore, most of the local inhabitants prefer to go for charcoal making rather than rainfed agriculture. Though local people economically benefited from this exotic plant, they also face severe ecological problems such as loss of grazing land, reduction of medicinal plants’ diversity, reduced availability of meat and milk, change in land-use pattern and loss of ecosystem services. Our findings suggest that effective management of P. juliflora stands should be given the highest priority to maintain the quality of ecosystem services in this region.