urbanisation and industrialisation has placed significant pressure on India’s
infrastructure and its natural resources. Deforestation, soil erosion, water pollution
and land degradation are serious policy concerns in rural India. On the other hand,
the rapid industrialisation and urbanisation in India’s booming metropolises are
straining the limits of municipal services and causing serious air pollution.
As most of these environmental problems can be directly attributed to the
structure of production and consumption, it would seem urgent and necessary to
find ways to make explicit those problems within an accounting framework. In
order to do this, it is important to develop a consistent framework which will
incorporate the economic and environmental indicators. It is in such a context that
this paper should be interpreted. More concretely, this work is an attempt to respond
to the need to include, explicitly and directly, the two sets of indicators into a
system which accounts for their relations to the economic system and provides the
basis for diagnoses and eventually for policy making.
1.1 Approaches Available to Integrate Economy
and Environment
In the context of integrating economy and environment, the Systems of
Environmental and Economic Accounting (SEEA) was initiated by United Nations
in the year 1993 and the latest available database is for the year 2014. But this
database does not provide any information about India. In India, various researchers
have estimated economic values of environmental goods and services by following
shadow price methods, hedonic price theory and contingent valuation methods
(Murty et al. 2004; Markandya and Murty 2000; Murty and Gulati 2004; Roy et al.
2008). Apart from these Ministry of Environment and Forests (MoEF) of government of India, The Energy Data Directory (TEDDY) of The Energy Research
Institute (TERI) publishes quite regularly the activity-specific environmental data
for India for various years.
However, the above-mentioned initiatives taken by the Indian researchers and
government consider only the direct relationship between economic activities and
environment. Apart from the direct relationship, there can be indirect and induced
impacts of economic activities on environment as the economic activities are
interdependent to each other. This issue of indirect and induced impacts on environment is crucial while considering demand or input management options for
environmental conservation. An economic activity may be insignificant contributor
of pollutants from its own production systems but its input consumption pattern
may result significant indirect implications on environmental pollution. Now this
issue of indirect-induced impact can be captured if we can integrate environmental
indicators in a social accounting matrix (SAM) framework.
204
B.D. Pal
infrastructure and its natural resources. Deforestation, soil erosion, water pollution
and land degradation are serious policy concerns in rural India. On the other hand,
the rapid industrialisation and urbanisation in India’s booming metropolises are
straining the limits of municipal services and causing serious air pollution.
As most of these environmental problems can be directly attributed to the
structure of production and consumption, it would seem urgent and necessary to
find ways to make explicit those problems within an accounting framework. In
order to do this, it is important to develop a consistent framework which will
incorporate the economic and environmental indicators. It is in such a context that
this paper should be interpreted. More concretely, this work is an attempt to respond
to the need to include, explicitly and directly, the two sets of indicators into a
system which accounts for their relations to the economic system and provides the
basis for diagnoses and eventually for policy making.
1.1 Approaches Available to Integrate Economy
and Environment
In the context of integrating economy and environment, the Systems of
Environmental and Economic Accounting (SEEA) was initiated by United Nations
in the year 1993 and the latest available database is for the year 2014. But this
database does not provide any information about India. In India, various researchers
have estimated economic values of environmental goods and services by following
shadow price methods, hedonic price theory and contingent valuation methods
(Murty et al. 2004; Markandya and Murty 2000; Murty and Gulati 2004; Roy et al.
2008). Apart from these Ministry of Environment and Forests (MoEF) of government of India, The Energy Data Directory (TEDDY) of The Energy Research
Institute (TERI) publishes quite regularly the activity-specific environmental data
for India for various years.
However, the above-mentioned initiatives taken by the Indian researchers and
government consider only the direct relationship between economic activities and
environment. Apart from the direct relationship, there can be indirect and induced
impacts of economic activities on environment as the economic activities are
interdependent to each other. This issue of indirect and induced impacts on environment is crucial while considering demand or input management options for
environmental conservation. An economic activity may be insignificant contributor
of pollutants from its own production systems but its input consumption pattern
may result significant indirect implications on environmental pollution. Now this
issue of indirect-induced impact can be captured if we can integrate environmental
indicators in a social accounting matrix (SAM) framework.
204
B.D. Pal