The Human Development Report, 1998 of the United Nations Development Programme has warned that India's economic march into the 21st century could result in ecological devastation which will erode 4.5 per cent of the gross domestic product.
Ranking India at number 139 in the human development index of 174 countries, the report estimates that the yearly environmental damage to India will be of the order of $10 billion.
Releasing the report yesterday, UNDP resident representative Brenda Gael McSweeney said urban air pollution costs India $1.3 billion a year while water degradation leads to health costs amounting to $5.7 billion a year and account for nearly three-fifths of the country's total environmental costs.
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Soil erosion affects 83 to 163 million hectares of land every year. Land degradation causes productivity loss of about 4-6.3 per cent of the total agricultural output annually which is worth $2.4 billion. Deforestation which took place at the rate of 0.6 per cent a year between 1981 and 1990, led to annual costs of $214 million, she said.
Stating that acid rain was becoming a major problem in the developing world, the report says in India wheat yields have been cut by half in areas close to large sources of sulphur dioxide emissions. Pointing out that it was using conservative estimates of environmental damage, the 1998 report said that the total damage in India would be worth $13.8 billion or 6 per cent of the country's gross domestic product if higher estimates were used.
Calling on the private sector to play a critical role to produce environmentally friendly and poverty-reducing goods, the report points out that the market for environmental goods alone is estimated at $500 billion. Environmental taxes, charges imposed by certain governments and local bodies for pollution, congestion and depletion of natural resources have proved highly effective in both industrial and developing nations. The revenues raised through environmental taxes should be specifically directed for environmental protection, labour, capital and savings or to improve access to social service for poor people and to reduce taxes on labour.
The study calls for removing `'perverse subsidies'' that encourage environmental damage, lower economic efficiency and benefit the wealthy. The report estimates the subsidies in energy, water, road transport and agriculture sectors at between $700 and $900 billion a year. "They are also often distributionally regressive, benefiting mostly the wealthy and often political interest groups, while draining the public budget", it says. In developing and transition economies, the largest subsidies go to energy ($150 billion to $200 billion) and for water ( $42 to $47 billion ).
The report claims that removing water subsidies would reduce water use between 20 and 30 per cent in various countries and in Asia by as much as 50 per cent.
At the same time, the UNDP report says the world needs a second green revolution for increasing yields and incomes of the poor and to preserve and develop the environmental base.
"The second green revolution should not just repeat the first revolution_it needs to aim both at increasing yields and incomes and at preserving and developing the environmental base," it says.