The post-Covid world needs a New Economy!- Day #20 (13 April 2020) 21 day #Covid19 Lock down

Day #20 (13 April 2020)

The post-Covid world needs a New Economy!

“where is the rich society that says: ‘Halt! We have enough’?”

― Ernst F. Schumacher,

Small Is Beautiful: A Study of Economics as if People Mattered

A Virus has crashed the economy of the world! Even the last global financial crisis of 2008 would be an ant before this elephant of a crash. The many orthodoxies of the global economic order is out of the window, probably for ever. The learned economists are going back to the books. But the books are as old as the Jules Verne classic Around the World in Eighty Days, where the protagonist Phileas Fogg, when challenged with the possibility of a single accident causing delay and hence the loss of his bet of travelling the world in eighty days, says, “The unforeseen does not exist”. Those days of certainty or as Fogg himself says, “I will jump – mathematically” is finished or probably was just fiction.

Governments and Corporations are no longer perturbed by the weight of public debts nor about budget deficits. They are spending on an unforeseen crisis. Every nation has broken the regulations that maintain a healthy economy and spending, to pay large populations of workers, casual employees, households, businesses and markets, money worth trillions of dollars to help them tide over the crisis. US, Canada, India...are all forced to do this. Large amounts are also being spent on subsidies and even free supplies to affected people - poverty-stricken families, unorganised workers and migrant labourers to keep them running their homes. Corporations are no more looking at their growth lines and are paying their employees to stay safe at home, and sometimes even cutting down salaries of senior management to do this. The true-blue economist has also been, theoretically speaking, quarantined!

Can there be a rebound? Economists have different opinions on the route the global recession is taking, but is certain that the world will go into a deeper economic crisis, as days go by. They are even predicting a depression. This is because even with a high level of economic stimulus, the market with it’s unprecedented crash down, will not be able to gain the confidence to help a rebound. The investments into it will, nevertheless, have to keep going. It is a pandemic, and make no mistake, it demands immediate, assertive response.

I believe the virus attack episode will be remembered in history for the collapse of the economy, more than the number of people that it infected or killed. It will also be remembered for the great act of humanity, to give up on the health of the economy so as to protect the lives of the people.

But there is something sinister to the current economic model, we seem to be so obsessed with, that many nations even waited to take decisive action in fear of hurting it. This economic model thrives on extraction, production, consumption, denudation, pollution, contamination and eventually even extinction or the collapse. The Gross Domestic Product (GDP), the measuring stick for the health of an economy is singularly based on the value of production, and every nation strives for it’s exponential growth, notwithstanding it’s impacts on human life and ecological sustainability .

But Covid19 turned out to be an eye-opener. I always thought the climate change would do the job. Covid outsmarted it. It told us what a crisis of the future looks like. Covid was like a 2-minute eerie trailor of what is to come. It attempts to tell us, emphatically, that we have crossed the planetary boundaries. It attempts to tell us that handling a crisis such as this will be beyond the capacity of present human societal systems – our governments, our economic models, our political organising.

Two important reports need to be brought back to light here. One of them is the 1972 report - Limits to Growth by Donella Meadows, Dennis Meadows, and Jørgen Randers. The second book by the same authors is the 1992 report – Beyond the Limits to Growth. Why I bring these two reports into discussion here is to tell that these reports were much ahead of their time. For instance, the Limits to Growth alerted the world to the limits of the present economic model and recommended that in 1972 if the growth trends could be altered, we could achieve sustainable ecological and economic stability. Both the books were highly influential ones, and got caught into a number of controversies for obvious reasons. Since then, we have had innumerable scientists and authors alerting and warning us of the “Limits” story and later on the “Collapse” story in various ways. The fact is we did not have enough economists, bureaucrats or politicians who could be bothered about it.

Now, it’s time. It is crisis, one after the other. The Climate crisis manifests itself every year in hundreds of places across the world - destroying property, killing people and wiping out livelihoods. Human activities are denuding ecosystems, forests and depleting natural resources at a pace that nature cannot replenish. Deforestation and habitat manipulations are causing biodiversity loss, species collapse and even pandemics like the SARS, MERS, Ebola, Nipha and so on.

The Covid crisis has shown that even a balance between ecology and economy as proposed in the Limits to Growth is probably no more possible. Soon as the health crisis is over, nations will go back to repairing their economies in the only way they seem to know, guided by fossilised economists and financial experts.

So, does the future have a better deal? I believe, yes. I don’t think we would have a choice.

Atleast some proposals for a total re-look at the economy is in circulation in some countries and regions. The Green New Deal,  a package proposed by a few progressive representatives of the US Congress attempts to tackle the twin crisis of inequality and climate change in the US. Though the resolution was defeated in the Senate, it has wide public support and is expected to come back to limelight in the wake of the Covid crisis. Another promising policy draft with a much more potential is the European Green Deal, which is a road-map for making EU’s economy sustainable. It talks about moving to a clean, circular economy, restoring biodiversity, cutting pollution, de-carbonising the energy sector and many more.

It’s also interesting to note that many smaller but significant efforts are being taken all over the world, by various states, cities, villages and even communities to move towards a carbon-neutral or a climate-resilient one. One instance, which I am closely aware of is the Carbon Neutral Villages project of the Government of Kerala which is technically supported by Thanal, the organisation I have an association with.

Another fall out of the Covid19 crisis with a positive turn is the decision by the Dutch Government to embrace the very interesting “Doughnut Economics” model for Amsterdam. This model, developed by British economist Kate Raworth from Oxford University’s Environmental Change Institute was described in detail in her book Doughnut Economics: Seven ways to Think Like a 21st-Century Economist. This model proposes a visual framework for sustainable development – shaped like a doughnut or an uzhunnuvada ( for us!) – combining the concept of planetary boundaries with the complementary concept of social boundaries. I would encourage you to read more about this.

While these are good efforts, I would believe that in a post-Covid world, the new economic proposal should be founded on a deep respect towards nature and a deep commitment to the public good. The fine print would have to address phasing out of fossil fuels, adopting renewable efficient energy technologies and systems, phasing out industrial agriculture, adopting a more regenerative, community and agro-ecology based food systems, eliminating non-renewable extractive, high carbon economic activities such as in constructions, other infrastructure, work culture etc and adopt green investments that fosters a regenerative low-carbon and circular economy.

But, above all this is my absolute faith in the young generation of people, especially the Millenials and the Generation-Z. These are the ones, in their teens and early-20’s. Many of them are already shaking up the present paradigm with their Friday For Futures and the XR protests. But, what is exciting is that many of them are also turning themselves to simplifying their needs and de-clutering their lives, some even becoming Minimalists. That too is something worth watching out for and encouraging. If the Covid and the lock down throws up more such minimalists, then I will gladly live for the change!

“I certainly never feel discouraged. I can’t myself raise the winds that might blow us or this ship into a better world. But I can at least put up the sail so that when the winds comes, I can catch it”.”

― E.F. Schumacher

A Polluting Industry is a hazardous “Normal”. Keep them locked! - Day #19 (12 April 2020) 21 day #Covid19 Lock down

Day #19 (12 April 2020)

A Polluting Industry is a hazardous “Normal”. Keep them locked!

What has the COVID19 crisis to do with Industry? A CII report from India says most firms would face 10% revenue loss due to the lock down, and there will be many layoffs. The CII has asked for a fiscal stimulus package for the industry. The tourism industry body predicts a loss of Rs 5 lakh cr and job cuts for 4-5 cr people. They have asked for a salary corpus fund from the Government. The World Economic Forum(WEF) has said that 50 millions jobs are at risk in the travel and tourism sector, with 30 million from Asia alone. The auto industry in India stares at a $2 billion loss, as factories and dealers shut shop due to the lock down. The impact of the crisis on industry is huge, and is mounting by the day. We surely do not know when this will end, and when things will be back to “normal”.

But we also have to realise that in a totally different sense, “normal” was itself a crisis, and a noxious and costly one at that. After the lock down, city after city – Delhi, Bangkok, Beijing, Sao Paulo and most industrial towns in most of the Covid19 hit nations reported a surprisingly positive change in the air quality and in their water bodies. It was so clean, that people in these places celebrated the welcome change by sharing thousands of pictures of their surroundings - scenes some have never seen in their lives. Pictures comparing the “then” and “now” from Yamuna river and the Rajpath in New Delhi, the cityscape from Bangkok, clean looking photos of empty streets, the Himachal mountains visible from Jalandhar filled the social media space. (https://www.theguardian.com/environment/2020/apr/11/positively-alpine-disbelief-air-pollution-falls-lockdown-coronavirus) There is a wide realisation across nations that human activities – transportation, construction of buildings, burning of waste and above all the polluting industries were cause for the “normal”. This “normal” changed with the lock down.

The industry lobby has already started their assessment of the losses and have submitted demands for “relief” packages as fiscal stimulus to start functioning. For instance, the industry lobby in the United States has already cornered hundreds of billions of dollars, a lion’s share, from the ‘relief’ bill of $2.2 trillion, while there is wide criticism that the average American has got only pittance. But quite intriguing was the action from the Environmental Protection Agency, whose mandate is to ensure compliance to air and water pollution and hazardous materials norms. They ordered the suspension of all environmental enforcement for industrial polluters, thus leaving the nation’s environment open to worse pollution than ever before. The industry which has always been unhappy about complying with environmental norms, and who found an ally in Trump seems to have used the crisis as an opportunity to further deregulate polluting industries. This has direct impact on human health and long-term environmental damages, the cost of which they are least interested in calculating.

To reiterate, Harvard University conducted a study to determine the link between exposure to air pollution and the Covid19 mortality in the United States. They found that “A small increase in long-term exposure to PM2.5 leads to a large increase in COVID-19 death rate, with the magnitude of increase 20 times than observed for PM2.5 and all-cause mortality. The study results underscore the importance of continuing to enforce existing air pollution regulations to protect human health both during and after the COVID-19 crisis.” ( https://projects.iq.harvard.edu/covid-pm ). Francesca Dominici, the study’s senior author quipped that “If you’re getting COVID, and you have been breathing polluted air, it’s really putting gasoline on a fire,”. They explain that fine particles penetrate deep into the body, promoting hypertension, heart disease, breathing trouble, and diabetes, all of which increase complications in corona virus patients. The particles also weaken the immune system and fuel inflammation in the lungs and respiratory tract, adding to the risk both of getting COVID-19 and of having severe symptoms.

The evidence that pollution adds fuel to mortality in an already mortal attack by a virus such as Covid19 is indisputable. Since most of the Covid19 cases and deaths were from urban centres, one needs to assess how many of these cases and deaths we could have avoided with a zero pollution policy. Industries have been primary sources of air and water pollution across the world. In India, where industries run with such laxity, and where regulation is archaic and monitoring steeped in corruption and a systemic lack of capacity, one can imagine the situation. There is mounting evidence that industries are being allowed to violate environmental norms so that they can operate in these adverse conditions. I wish to bring two cases that happened during the Covid19 crisis.

The media reported the breakage of an ash dump yard wall at the Reliance Power owned Sasan Ultra Mega Power Project in Singrauli in Madhya Pradesh, last friday. Of the six people reported missing, two died and four were still missing. The spillage has inundated several acres of agriculture fields and a reservoir. This is the third time its happening in just one year.

In repeating incidents reported from our own Kerala, highly polluting chemical factories in Eloor-Edayar in Kochi has reportedly dumped kilolitres of effluents and tonnes of hazardous waste into the River Periyar, during the lock down period, in connivance with the Kerala State Pollution Control Board, who even after repeated complaints from the local people, refuse to take any stringent action.

Covid times are also polluting times for some unscrupulous industries. The culprits in most cases are not just the corporate concerned. Purushan Eloor, an activist living in Eloor-Edayar, and leading a number of corrective actions against polluting industries say, “I would accuse four people here, in this order. The No.1 culprit is the Pollution Control agency, for they have all the people, expertise, resources, equipments and the mandate to regulate pollution, but have never done so. The second in line is the management of the company, the third is their workers and trade unions, who have no issues striking against the management for all sorts of reasons, but will never question them on a pollution issue. Finally, its the people, all of us. We seem to be criminally complacent.”

Post-Covid, the polluting human activity – Industry, vehicles, construction, waste burning – can all be regulated, provided we have a pollution control agency that acts, and acts strongly. Covid demands such a change from them.

But, I do feel that post-Covid, we should simply not allow any industry that has closed shop, to reopen without clear commitments to guaranteeing a clean production system. Those factories that cannot guarantee this, and has an inherent behaviour of polluting, for technical or economical reasons, should not be allowed to function. The fiscal stimulus package that Governments will have to give to revive the industrial sector, should be to move them out of the “normal” and change them towards the growing aspiration of the post-Covid world - clean air, clean water and healthy world. If a Virus can force us to move out of the toxic “normal”, I don’t see why we should not be able to do this ourselves.