Role of Ecology in Economic Stability | 15 May 2025

The profound statement "Ecology is the permanent economy" made popular by environmentalist Sunderlal Bahuguna, reminds us that human prosperity is fundamentally linked to ecological health. Economic development and stability are impossible without both utilizing and conserving our natural resources. As climate change and biodiversity loss accelerate, finding the right balance between environmental protection and economic growth has become essential. This balance represents true sustainability—where neither ecological systems nor economic progress is sacrificed.  

How are Ecology and Economy Interdependent? 

• Natural Capital as the Basis of Economic Wealth: Economic activities fundamentally rely on natural capital—ecosystems provide raw materials, energy, and services essential for production and consumption. 
  • Ignoring ecological limits risks resource depletion and economic instability. Sustainable economies must integrate ecosystem health as a core asset. 
  • The World Economic Forum's 2020 report titled "Nature Risk Rising" estimates that over 50% of global GDP, or approximately $44 trillion, is dependent on nature and its services. 
• Climate Change Amplifies Ecological-Economic Risks: The accelerating climate crisis, driven by ecological imbalance, threatens economic sectors through extreme weather, resource scarcity, and health impacts.  
  • Economic growth models ignoring climate risks face massive financial losses and social disruption. Climate-resilient development is imperative for economic stability. 
  • WEF estimates that Climate change costs the world 12% in gross domestic product (GDP) losses for every 1°C of warming. The 2023 IPCC report highlights global economic losses of trillions of dollars annually due to climate-induced disasters. 
• Biodiversity Loss Undermines Livelihoods and Food Security: Biodiversity supports ecosystem resilience, agricultural productivity, and pharmaceutical resources critical to human well-being and economic health.  
  • Its rapid decline jeopardizes food security and rural incomes, threatening sustainable development. Conserving biodiversity safeguards economic futures. 
  • The IPBES Global Assessment found that one million species are threatened with extinction, a figure that underscores the severe impact of human activities on biodiversity.  
    • This threat isn't just about individual species loss; it jeopardizes the services ecosystems provide, impacting the livelihoods and well-being of billions of people, including at least 1.6 billion globally. 
• Green Economy Transition Creates New Economic Opportunities: Ecological sustainability drives innovation in renewable energy, circular economy, and green technologies, fostering job creation and economic diversification.  
  • Investing in nature-based solutions promotes both ecological restoration and economic growth, making sustainability a catalyst rather than a constraint. 
  • The World Economic Forum estimates that investment in nature-based solutions needs to at least triple in real terms by 2030 
• Human Well-being and Economic Productivity: Clean air, water, and natural spaces directly affect public health, reducing healthcare costs and enhancing productivity.  
  • Ecological degradation increases disease burden and economic losses, linking environmental stewardship with human capital and economic output. Investing in ecological health is investing in human and economic capital. 
  • The World Health Organization (WHO) estimates that 7 million premature deaths occur annually due to the combined effects of ambient and household air pollution, costing economies billions in lost productivity.  

How is Ecological Conservation Contributing to India's Economic Development? 

• Renewable Energy Driving Sustainable Economic Growth: India’s aggressive expansion in renewable energy enhances energy security, reduces fossil fuel dependence, and attracts green investments, fueling GDP growth.  
  • In FY 2024-25, India added 23.83 GW of solar capacity, pushing total renewable capacity beyond 130 GW, moving towards the 500 GW target by 2030.  
  • The $19 billion Gujarat Hybrid Renewable Park exemplifies large-scale sustainable infrastructure driving employment and regional development. 
• Forest Conservation Bolsters Carbon Sequestration and Livelihoods: India’s forest and tree cover increased to 25.17% of land area (India State of Forest Report 2023), strengthening carbon sinks vital for climate mitigation and ecosystem services. 
  • Sustainable forestry supports livelihoods through agroforestry and non-timber forest products, contributing to rural economies and biodiversity conservation, crucial for long-term ecological and economic resilience. 
• Eco-Friendly Mining Enhances Resource Sustainability: India’s mining sector is adopting stringent environmental norms and green technologies, minimizing land degradation and pollution.  
  • With nearly 68 mines awarded a five-star eco-rating by the Indian Bureau of Mines, sustainable extraction safeguards mineral supply chains vital for infrastructure and manufacturing, while aligning with the National Mineral Policy 2019’s sustainability goals. 
• Urban Greening Improves Public Health and Productivity: Urban afforestation and green infrastructure reduce pollution, enhance climate resilience, and improve quality of life, thereby boosting workforce productivity.  
  • Uttar Pradesh’s Miyawaki forests and plastic road projects demonstrate innovative waste-to-resource approaches, enhancing urban livability in rapidly growing cities that contribute significantly to India’s service-driven economy. 
• Biodiversity Conservation Enhances Ecotourism and Rural Incomes: India’s rich biodiversity is a growing asset for ecotourism, which supports rural livelihoods and generates foreign exchange.  
  • Wildlife tourism in destinations like Kaziranga, that witnesses an all time high of over 4.06 lakh tourists in 2024-25 contribute significantly to the local economy. 
  • The involvement of the Dhurwa tribe of Bastar in promoting eco-friendly activities such as kayaking, bamboo rafting, and trekking has not only provided them with a sustainable livelihood but also preserved their cultural heritage.

What are the Key Challenges in Balancing Economic Development with Ecological Conservation in India?

• Resource Depletion due to Rapid Industrialization: India’s industrial growth exerts unsustainable pressure on finite natural resources, leading to deforestation, water stress, and soil degradation.  
  • Balancing development demands with conservation is difficult as resource extraction fuels GDP but harms ecosystems. Unsustainable mining and infrastructure projects often bypass environmental safeguards. 
    • For example, a CGWB report for 2023 stated that over 60% of wells in India showed signs of depletion, indicating that groundwater extraction is exceeding recharge in many areas 
    • A recent analysis suggested that Nabarangpur, Puri, Kendrapara, and Kalahandi districts of Odisha lost more than 20% of their forest cover due to mining.  
• Urbanization Leading to Environmental Stress: Rapid urban expansion creates habitat loss, pollution, and waste management challenges, straining ecological systems. 
  • According to UN Habitat, cities consume 78% of the world's energy and produce more than 60% of greenhouse gas emissions. 
    • Indian cities show significant emissions from major metropolitan areas like Delhi, Mumbai, and Kolkata, pushing India’s urban ecosystems to the brink. Integrating green infrastructure into urban planning remains inadequate. 
• Conflicting Land Use Priorities: Agriculture, industry, urban development, and conservation compete for limited land, creating conflicts that hinder sustainable planning. 
  • Prioritizing short-term economic gains often leads to forest encroachment and wetland destruction. Lack of integrated land-use policy exacerbates these tensions. 
  • For instance, according to an estimate by the Wetlands International South-Asia (WISA), nearly 30% of the natural wetlands in India have been lost in the last four decades due to urbanisation, infrastructure building, agricultural expansion and pollution 
• Inadequate Environmental Governance and Enforcement: Weak implementation of environmental regulations and overlapping jurisdiction among agencies undermine conservation efforts.  
  • Delays in Environmental Impact Assessments (EIA) and corruption hamper accountability. Balancing development with ecology is challenged by bureaucratic inefficiencies. 
• Poverty and Livelihood Dependency on Natural Resources: Millions in rural India depend directly on forests, water bodies, and land for subsistence, creating tensions between conservation and livelihood needs.  
  • Restrictive conservation policies can marginalize communities, leading to resistance and unsustainable exploitation. 
  • Over 275 million people rely on forest resources (India State of Forest Report 2023).  
    • A study in Jharkhand found that forest-based livelihoods contribute a significant portion of rural income, ranging from 12% to 42%, complicating strict conservation enforcement. 
• Climate Change Exacerbating Ecological Vulnerabilities: Climate change intensifies extreme weather, impacting agriculture, water availability, and biodiversity, complicating the development-conservation balance. Adaptive capacity is low in vulnerable regions, amplifying socio-economic and environmental risks. 
  • In 2024, India experienced 536 heatwave days, the highest in 14 years. Glacial retreat in the Himalayas threatens water security for over 100 million people downstream. 

What Measures can India Adopt to Effectively Balance Economic Development with Environmental Conservation?  

• Landscape-Scale Integrated Resource Governance: Implement cross-sectoral, landscape-level governance frameworks that synchronize forest, water, agriculture, and biodiversity management. 
  • Harness synergies between Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) and National Afforestation Programme to optimize water use efficiency, enhance soil health, and restore degraded ecosystems, fostering climate resilience and sustainable livelihoods. 
• Strengthening Multi-tiered Environmental Regulatory Mechanisms: Establish robust, decentralized environmental regulatory bodies equipped with advanced technologies like AI-powered remote sensing and blockchain for transparent monitoring and enforcement.  
  • Promote dynamic Environmental Impact Assessments (EIA) that incorporate cumulative and long-term ecological-economic effects, while ensuring participatory decision-making involving local communities and stakeholders. 
• Circular and Bioeconomy Transformation in Industry: Drive transition from linear to circular industrial models emphasizing waste valorization, eco-design, and closed-loop systems. 
  • Integrate Zero Defect Zero Effect (ZED) for MSMEs with Extended Producer Responsibility (EPR) frameworks, incentivizing manufacturers to adopt sustainable materials, reduce pollution footprints, and foster eco-innovation clusters, thereby decoupling growth from resource depletion. 
• Mainstreaming Nature-Based Climate Solutions (NbCS): Scale up NbCS by embedding ecosystem restoration, urban green corridors, blue carbon initiatives, and agroforestry into national climate strategies.  
  • Institutionalize monetary valuation of ecosystem services using tools like Payment for Ecosystem Services (PES), enabling conservation finance through market-based incentives, which align economic development with biodiversity conservation imperatives. 
• Community-Centric Conservation with Sustainable Livelihoods: Empower forest-dependent and indigenous communities through rights-based participatory forest management, linking Forest Rights Act (FRA) with MGNREGA-backed eco-restoration projects.  
  • Foster climate-resilient livelihoods via skill development in non-timber forest products, eco-tourism, and renewable energy entrepreneurship, creating a virtuous cycle of conservation and inclusive economic empowerment. 
• Green Urban Infrastructure and Sustainable Mobility:  Promote integrated urban planning under Smart Cities Mission and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) by embedding nature-based infrastructure—permeable surfaces, urban wetlands, green roofs—and enhancing multimodal sustainable transport networks.  
  • This reduces urban heat island effect, air pollution, and carbon emissions, elevating liveability and economic productivity. 
• Accelerating Clean Energy Adoption with Synergistic Policies: Fast-track deployment of renewables by aligning National Solar Mission and Perform Achieve Trade (PAT) with emerging battery storage and smart grid technologies.  
  • Foster public-private partnerships to incentivize green hydrogen and bioenergy innovations, positioning India as a global clean-tech hub while ensuring energy security and industrial decarbonization. 
• Environmental Literacy and Behavioural Transformation at Scale: Institutionalize sustainability education across all levels, integrating experiential learning with indigenous ecological knowledge systems.  
  • Launch nationwide digital campaigns leveraging social media influencers and gamification to cultivate pro-environmental behaviours, responsible consumption, and climate action commitment, reinforcing bottom-up societal stewardship. 
• Mobilizing Green Finance and Climate Risk Disclosure: Develop a comprehensive green finance ecosystem through incentivized green bonds, ESG-compliant investments, and mandatory climate-related financial disclosures across sectors. 
  • Establish national environmental risk assessment protocols integrated with RBI’s prudential norms to mainstream ecological risks in credit appraisal and investment decision-making. 

Conclusion:  

The interdependence of ecology and economy is undeniable, as sustainable economic prosperity hinges on the health of our natural environment. India’s challenge lies in integrating robust environmental conservation with ambitious development goals. As the Supreme Court has affirmed, forests and natural resources are national assets integral to the country’s financial wealth, underscoring their protection as a constitutional and economic imperative. Achieving this balance is essential not only for safeguarding biodiversity and climate but also for securing India’s sustainable future.