The New Nation - Internet Edition

Economic growth at cost of ecological systems

In 2007, gross world product (GWP)-the aggregated total of all finished goods and services produced worldwide-was expected to grow 5.4 percent to $72.3 trillion (in 2007 dollars). This estimate reflects actual purchasing power in countries (that is, in purchasing power parity or PPP terms). The market exchange rate GWP, which is based on straightforward monetary terms, was expected to reach $53.4 trillion, an increase of 8 percent since 2006. The projected growth of GWP (PPP) in 2007 was revised downward from earlier estimates due particularly to economic disruptions in the U.S. housing market, which also had ripple effects in other countries, particularly within Europe and in Japan Even with this late-term contraction, growth in 2007 was still expected to be higher than the average since 1970.

The U.S. economy was projected to grow 2.1 percent in 2007, nearly 1 percent slower than the previous year. This significant contraction came in large part from the turmoil felt in the subprime mortgage sector, with foreclosures, reductions in residential investments, and declining housing values reducing growth as well as consumer confidence. Rising gasoline prices also had a significant impact. U.S. economic growth is expected to slow further in 2008.

Although the U.S. economy still accounts for 19 percent of the world total, China is closing the gap-now accounting for 16 percent of GWP, up from 15 percent in 2006. China's gross domestic product (GDP) grew dramatically in 2007, jumping an estimated 11.7 percent and making up one third of the projected $3.7 trillion in GWP growth in 2007. Increases in exports and investments drove this expansion.

Growth in China's GDP, however, has not come without cost. China is increasingly suffering from the externalities of economic growth: politically destabilising inequality and pollution. Today, only 1 percent of China's 560 million urban residents breathe air that is considered safe by European Union (EU) standards. Air and water pollution have led to numerous occurrences of social unrest. And China is now the leading producer of sulfur dioxide emissions and has nearly surpassed the United States in total carbon dioxide emissions (though not in per capita emissions).

The European Union now accounts for 21 percent of GWP, which as an aggregate makes it the largest economy in the world. The EU economy was expected to grow 3.2 percent in 2007, having slowed in some countries due to investments in troubled U.S. financial markets.

India's economy was expected to grow 9.1 percent in 2007, accounting for 11 percent of total GWP growth-more than the U.S. contribution. Growth in the world's second most populous nation was mainly driven by domestic demand.

Sub-Saharan Africa was projected to grow 6.1 percent-with this growth coming mostly from oil exports and from the dominant South African economy, which makes up one third of the region's gross product. Although it is now growing more quickly than in the past, sub-Saharan Africa still accounts for just 2.6 percent of the global economy.

Per capita GWP was expected to reach $10,956 in 2007. (See Figure 3.) This was a growth of 4.1 percent-less than total GWP growth because world population increased by nearly 77 million people. Yet GWP per capita does not reflect the vast disparity in GDP per person-even when these figures are expressed in purchasing power parity terms. In the United States, GDP per person is $44,974, for example, while in China the figure is $8,780 and in India it is just $4,183.

Economic growth is having a direct impact on the ecological systems on which the human economy depends. As the U.N. Environmental Programme's recently published Global Environmental Outlook-4 notes, human society is using the world's renewable resources unsustainably, thus degrading farmland and fisheries, rivers and forests. And society is risking a significant weakening of the global economy if unsustainable resource use is not addressed. In particular, climate change could reduce economic growth by anywhere from 5 to 20 percent by 2100 if left unchecked.

These warnings are not new. In 2005 the Millennium Ecosystem Assessment made it clear that nearly two thirds of ecosystem services have been degraded or are being used unsustainably, and indicators like the Ecological Footprint have demonstrated that human society has been living beyond its means since 1987. According to this measure, humans are now using the equivalent of 1.25 planets' worth of resources. In short, without dramatic redesign of the global economy to reduce the ecological impacts, growth will most likely plummet-for instance, as extreme weather events disrupt agricultural production, flood coastal cities, and cause devastating wildfires.

Several analyses reveal that if ecological degradation is factored into economic calculations, true growth is much lower. In 2004, the Chinese government designed a Green GDP measure to subtract pollution costs from traditional GDP calculations.28 The estimate for that year found that growth would have been 3.1 percent lower if these costs had been deducted. Then in 2007, before releasing its 2005 analysis, the Chinese government shelved this indicator when it discovered that factoring in environmental costs would have reduced growth in some provinces to zero.

GDP is a poor measure of actual economic progress, as it counts all monetary expenditures as positive-whether the money is spent on useful goods, such as food or durables, or on mitigating social ills that could have been prevented. In the United States, the nongovernmental organisation Redefining Progress continues to track its Genuine Progress Indicator (GPI), a measure that provides a better analysis of economic progress by subtracting out pollution and resource degradation, crime, and other economic ills while adding in unmeasured benefits like volunteer work and parenting. According to the most recent analysis, while U.S. GDP per capita nearly doubled since 1970, the GPI grew just 13 percent.

Recognising that not all growth is good, some governments are starting to question whether economic growth should be a priority at all. Thailand, for example, has been investigating a transition to a "sufficiency economy," where the focus is on poverty alleviation (that is, targeted growth), economic self-reliance, and resource conservation.

While still in the theoretical stage, if some pioneering countries move toward this model, perhaps there will be a shift away from the unsustainable idea that infinite growth on a finite planet is a measure of economic success.

(Source: Unep)

Argentina's bid to expand maritime frontier

Marcela Valente

Argentina is hoping to push its national boundary to the east and incorporate a vast territory with energy and other natural resources of strategic value under the Atlantic Ocean. To do this, it must demonstrate that its continental platform goes beyond 200 nautical miles.

An area off the Argentine coast of at least 700,000 square kilometres -- equal to one-third of Argentina's land surface -- holds petroleum, natural gas, minerals and genetic resources of high value for industry, an expert who is closely following the technical studies said in an interview, and who requested anonymity.

To draw up a definitive proposal for its maritime border, in 1997 Argentina created the National Commission of the Continental Platform Exterior Limit (COPLA), an inter-ministerial technical team that reportedly has already gathered 90 percent of the information necessary to demonstrate exactly where its territory covered by the ocean comes to an end.

Countries with ocean coasts have sovereign rights over the sea bed and subsoil to 200 nautical miles from land, which is known as the exclusive economic zone, or to where its continental platform ends, including the slope, up to a maximum of 350 miles. That includes the platform's natural resources, but not the water that covers it.

The data obtained in laboratories and sea missions will have to be presented before May 2009 to the Commission on Continental Platform Boundaries, a technical body of the United Nations Convention on the Law of the Sea, which will decide whether to authorise the new border demarcation.

Argentina is one of the 119 countries that in 1982 signed the Convention, considered a constitutional charter for the world's oceans, and which so far has been joined by 155 countries. The signatories agreed to a 10-year period in which nations could present their proposals for continental platform boundaries, counting from 1999.

According to the preliminary studies in Argentina, the country's continental border extends to 350 nautical miles in some areas, and in others even farther. "The proposal is going to approved without prejudice that it may be debated whether the limit is set five miles more here or five miles less there," said the source.

Interviewed for this article, marine geologist Salvador Aliotta, with the Argentine Institute of Oceanography, explained that countries' sovereignty over 200 miles off their coasts "constitutes a geographical limit, not geological." "The fact there is a layer of water over the land marks just an instant in the geological history, but the continent extends under the sea and all that there is in the soil and subsoil on dry land can also be found under the sea soil," added Aliotta.

The expert noted that several companies are already exploiting oil fields in Argentine waters, extracting petroleum and natural gas, and he suggested that the possibility is also being explored to extract frozen methane, a fuel found at more than 1,000 metres underground.

But in the sea depths there are also minerals: iron, zinc and others of strategic industrial use, like polymetallic nodules of manganese, and cobalt or sulphur crusts, whose exploitation is being made increasingly possible as technology develops, he said.

The new jurisdiction would not include the water above the sea bed and, as such, does not include the area's fishery resources. However, there are living resources that form part of the sea floor.

In some not-so-deep areas there are species that live in contact with the sea bed, like mussels (Mytilidae) or scallops (Pectinidae). But there are also areas with genetic resources that have great potential for use in the pharmaceutical industry, said the source with ties to the report.

It is essential to be very cautious with these little-known species, said doctor Claudio Campagna, of the National Patagonia Centre and executive director of the Sea and Sky Project, for sustainable conservation of the Patagonian waters.

"The bentonic environments -- over the sea bed -- beyond the 200-mile mark are unknown as far as their biodiversity, but it is hoped precisely because of this that they have great value for biology," said Campagna, a biologist with a doctorate from the University of California. "In the slope are transversal canyons that unite the platform with the ocean basin, which need to be evaluated from the perspective of diversity and conservation," he said.

Campagna believes that placing those resources under Argentine jurisdiction would put them in an administrative framework that is stricter than the one existing as part of international waters. "The current state of things does not facilitate monitoring. In contrast, in the context of sovereign interests there would be advances that are more difficult to achieve in the diffuse scenario of international waters," he said.

This could be beneficial only if the resources' biological relevance is the priority, but "as this has not been the case worldwide so far, the result would continue to be uncertain," commented Campagna.

Like Argentina, there are other maritime countries that are preparing their presentations for the Law of the Sea commission. One is Great Britain, which not only will propose the extension of borders of the platform surrounding its islands in the North Atlantic, but also around the Falkland/Malvinas in the South Atlantic, which involves Argentina in a sovereignty dispute.

The islands that Argentina claims as its own have been occupied by Britain since the 19th century. According to technical studies, the Falkland/Malvinas are inside Argentina's continental platform. The COPLA report does not comment on this matter.

The Argentine commission, made up of officials from the Foreign Ministry, the Finance Ministry and the Naval Hydrography Service, is limited to technical work, but its reports and the international response will not be able to avoid the sovereignty dispute.

(This story is part of a series of features on sustainable development by IPS - Inter Press Service, and IFEJ - the International Federation of Environmental Journalists.)

The unaffordable ultra-cheap car

Praful Bidwai

THERE have been two reactions to the unveiling of the Tata Nano. The first is euphoria and exultation over this ultra-cheap "people's car". This regards the vehicle as a "historic breakthrough" which makes "every Indian inches taller" and can unleash a "democratic revolution" by meeting mass aspirations. The Nano, it holds, will effect the greatest change in people's lives since the mobile phone.

The second reaction pours scorn over the vehicle as an "upstart econobox" meant for peons ad lower-middle class social climbers. In America, where the cheapest car (Chevrolet Aveo) costs $9,995, the $2,500 Nano has been called the "ultimate reverse status symbol" - a "golf cart crossed with a jelly bean" which "can seat five people… if no one breathes".

Both reactions are misconceived. The first uncritically accepts that cheap private cars are the solution to global South Asian transport problems. It worships a made-for-profit product as a great philanthropy-driven national feat. It fails to understand that in a poor and frugal society like India's, cars cannot democratise. They polarise, not unite, society.

The second reaction derives from snobbery. It frowns upon anything that's small, minimalist and austere. It also betrays elitist contempt for the poor and lower middle classes, which it holds, are destined to remain at their modest stations in life. It's good enough that they have the ballot, but luxuries associated with the affluent are a no-no. Implicit in this is the falsifiable view that a country like India is incapable of producing a sophisticated product cheaply.

What both reactions miss is an understanding of the extremely limited place of private cars within a rational transport policy, an appreciation of the Nano's safety and environmental problems, and above all, its harmful implications for the universal imperative to prevent climate change. They also accept the almost fictitious claim that this will long remain a one-lakh-rupee ($2,500) car. Tata Motors has stripped the Nano down to its skeleton, but is unlikely to fulfil its Rs 1-lakh price promise for long. In fact, this is an introductory offer excluding taxes and local duties; with them, the bare-bones model will initially cost Rs 1.3-1.5 lakhs. Other versions, including diesel or air-conditioned models, will cost more.

Ratan Tata has already warned: "We may not be able to hold the price emotionally. We have to understand that steel and tyre prices … are rising." He recalled the Maruti-800 was first offered at Rs 45,000; the price almost doubled within a year. The Nano's price-tag hides major subsidies from the government of West Bengal, where it'll be manufactured. According to former Finance Minister Ashok Mitra, the subsidies work out to one-fourth of the project's initial capital costs. The government has leased 997 acres to the Tatas virtually free. It's also advancing them a Rs 200-crore loan at one per cent interest and granting an exemption from the value-added tax for 10 years, amounting to Rs 500 crores. If the indirect subsidies given to all private automobiles through the free use of roads and parking-space are added, the Nano's cost-and price-would be far higher.

This apart, the Nano's safety features and emission standards are inadequate. Needless to say, it lacks safety measures considered imperative in the West, like airbags and anti-lock braking systems (ABS). Ruthless cost-cutting has meant cutting many corners. For instance, the Nano's designers used a hollow shaft instead of a solid beam to connect the steering-wheel to the axle, and plastics and adhesives instead of many bolts. The car's low-performance wheel bearings will wear out rapidly beyond 70 kmph.

It has only one windshield-wiper instead of two. It uses continuous variable transmission, with low acceleration. To save just $10, devices called actuators, which adjust the angle of the car's lights to its load, were eliminated. This is likely to affect the car's safety, sturdiness and durability/longevity. Some impacts will only become apparent once it has been on the road for a few years. Till then, questions about safety and reliability will remain.

However, we know the Nano fails the current Western emission standards like Euro-IV, and will soon fail Indian standards too. Tata's claim that the Nano meets national emission standards Bharat-II and -III hasn't been verified by an independent competent agency. Tata admits that as of now it doesn't meet Euro-IV. Euro-IV norms will enter force in India's major cities in April 2010 and are much stricter than Bharat-II or III. Under them, sulphur emissions must be reduced 35-fold over Bharat-II. Similarly, long-overdue safety standards are on their way. These include full-body crash tests - which determine how cars crumple in collisions - airbags and ABS. Implementing them will raise the Nano's costs by 40 to 50 per cent. According to pollution experts, ultra-cheap bare-bones cars like the Nano lack the complex technology needed to maintain its initial level of emissions, and could soon produce four to five times more.

(Praful Bidwai is a veteran Indian journalist and commentator. He can be reached at praful@bol.net.in )

Environmental groups bring progress

Tarequl Islam Munna

In a meeting with representatives of environmental groups Rainforest Relief and New York Climate Action Group, Parks Commissioner Adrian Benepe unveiled a plan to phase out the use of hardwoods logged from the rainforests of the Amazon, which the agency uses for benches, boardwalks and the decking of bridges in the thousands of parks and areas overseen by the department. Celia Peterson, director of the Specification Office of NYC Parks, stated that as of last month, Parks will no longer specify tropical hardwoods for benches.

The issue was recognized by Mayor Michael Bloomberg in his speech last month in Bali during the climate talks:

"New York, like many cities, uses tropical hardwoods-in our case, for our extensive beach boardwalks and also for the walkway on the world-famous Brooklyn Bridget I've asked my Office of Long-Term Planning and Sustainability to work with the relevant City agencies, and present me, within the next 60 days, with a plan for reducing our reliance on such hardwoods."

"This is an exciting announcement and the most progress we've seen on this issue in a decade," said Tim Keating, Director of Rainforest Relief. "It's been a long, long road to get to this point and we thank Parks Commissioner Benepe and other Parks staff who have worked to find suitable alternatives to rainforest hardwoods. We call on other city and state agencies to end their use of these destructive woods as well." Rainforest Relief, founded in New Jersey in 1989, began a campaign to eliminate the use of rainforest woods by the city in 1995 after recognizing tropical hardwoods at the Coney Island boardwalk in 1994. Recently, the group was joined by a new hard-hitting grassroots organization, New York Climate Action Group, which campaigns to end the city's use of tropical hardwoods because deforestation, mostly in the tropics, contributes an estimated 25 - 30% of human-caused greenhouse gases.

Logging for exported wood is the primary factor leading to tropical deforestation, as roads are first bulldozed by loggers, in their pursuit of high-value species for export. This allows access to farmers and others who then completely clear those devastated forests.

"People worldwide recognize with increasing urgency the need to address climate change. Economists and environmentalists agree that ending deforestation is a highly cost-effective means to do so. We hope that Mayor Bloomberg will institute a policy ending the use of all woods from old growth forests", said JK Canepa, a founding member of NYCAG. In November, Ecological Internet, founded by Dr. Glen Barry, sent an action alert about the issue to a mailing list of over 50,000. The alert generated approximately 200,000 protest emails from 68 countries to state and city staff and officials in the month prior to Mayor Bloomberg's announcement.

"Maintaining large and intact primary and old-growth forests free from industrial logging is a requirement to address climate change, biodiversity loss and to achieve global ecological sustainability," explains Dr. Barry. "Ancient rainforest logs belong in intact rainforest canopies and ecosystems, not NYC park benches and boardwalks."

The writer Conservator, wildlife and environment, in taking positive environmental action around the world to conserve the nature and ecological balance on behalf of World Wide Fund For Nature (WWF) Correspondent, Today's magazine, NC, USA)