Mains Practice Questions

Introduction:

Ecosystem services (the benefits nature provides such as carbon sequestration, water purification, and pollination), are often treated as "free public goods."

• Their undervaluation in economic policymaking leads to a "tragedy of commons," where short-term developmental gains (e.g., a highway) are prioritized over long-term sustainability, ultimately undermining the very resource base required for future development.

Body:

Assessment of India’s Efforts to Integrate Ecosystem Valuation:

• Institutionalizing Natural Capital Accounting
  • EnviStats India: The Ministry of Statistics and Programme Implementation (MoSPI) now releases annual "EnviStats" reports.
    • These follow the SEEA (System of Environmental-Economic Accounting) framework to track natural assets like soil, water, and biodiversity alongside GDP.
  • NCAVES Project: India is one of the five nations implementing the Natural Capital Accounting and Valuation of Ecosystem Services (NCAVES) project with the EU and UN, aiming to create a "Green GDP" equivalent.
    • It shifts the narrative from "growth at all costs" to "growth adjusted for depletion."
• Ecological Fiscal Transfers (EFT): India operates one of the world's largest systems of paying states for conservation.
  • Finance Commission (FC) Awards: The 15th Finance Commission assigned a 10% weightage to "Forest and Ecology" in its tax devolution formula.
    • This incentivizes states to maintain forest cover by compensating them for the "fiscal disability" (loss of revenue) incurred by not exploiting these forests.
• Regulatory Valuation:
  • Forest Diversion Costs: Under the Forest (Conservation) Act, any user agency (industry/government) diverting forest land must pay the Net Present Value (NPV) of the forest lost.
• Sub-national & Local Successes (Payment for Ecosystem Services - PES)
  • Palampur Model (Himachal Pradesh): A pioneering example where the Palampur Municipal Council pays the upstream Village Forest Development Society to protect the catchment area.

Critical Gaps and Challenges

• Valuation vs. Real Pricing: The NPV is often treated as a mere "cost of doing business" by large industries rather than a deterrent.
  • The valuation is arguably still too low to stop the diversion of pristine forests (e.g., Hasdeo Arand coal mining).
• "Green vs. Green” Conflict: India’s push for renewable energy (solar parks, hydro) often bypasses ecosystem valuation.
  • For instance, large solar parks in Rajasthan threatening the Great Indian Bustard habitat highlights how one green goal (climate) can undermine another (biodiversity).
• Implementation Deficit in EFTs: Studies suggest that while states receive Ecological Fiscal Transfers, this money is often merged into the general budget rather than being specifically reinvested in forestry or environmental restoration.
• Methodological Complexity: There is no standardized national metric for "shadow pricing" services like pollination or flood control, leading to ad-hoc assessments during Environmental Impact Assessments (EIA).

To truly align development with sustainability, India must move from "Accounting" to "Accountability":

• Standardize Green Accounting: Move EnviStats from a statistical exercise to a policy tool. Budget speeches should explicitly mention "Natural Capital Depletion" alongside GDP growth.
• National PES Framework: Formalize a national policy for Payment for Ecosystem Services (PES) to encourage more models like Palampur, especially for river basins (e.g., downstream cities paying upstream farmers).
• Reform EIAs: Environmental Impact Assessments must include a mandatory Cost-Benefit Analysis that monetizes ecosystem loss, ensuring that projects are only approved if public benefits genuinely outweigh ecological costs.

Conclusion:

India has built the scaffolding for ecosystem valuation through the 15th FC and EnviStats. However, for true sustainability, these values must effectively veto unsustainable projects. We must transition from valuing nature to allowing nature’s value to guide our economic choices.