Nature, Justice and the Environmental Policy Crisis

Introduction

No man is permanently innocent or ignorant of innocence. A nation learns quickly but changes also rapidly. Nature is closer to man unless he himself prefers to deny his integrity with nature. Indigenous people live with nature but they do not grow as growth and development are inseparable from science and technology. Underdevelopment has denied several benefits of science and technology due to lack of institutional infrastructure and poverty. Developed nations have realised slowly equity and justice to human development of all. The competition to exploit nature has outlived the principles of equity and justiciability. As a result of it the highest exploiter of nature is the winner. The price of winner is the global warming which has multiplied the loss to the humanity through environmental degradation.

Cost Benefit Analysis

The World Bank follows CBA with other economic analysis tools while its own Independent Evaluation Group (IEG) has different view point.

The Cost Benefit Analysis (CBA) is considered an important tool for rational policy making process of environmental challenges. This is a simple, powerful tool and it is able to translate all impacts of a proposed policy—cleaner air, saved lives, forestalled climate change—into a common monetary value ($) and subtract the costs with a little distortion comparing to other methods to quantify policy impacts. In the net analysis if the result is positive then the policy is considered efficient and sound. The CBA is often misused to manipulate environmental policy priorities as there are methodological flaws, ethical blind spots, and inconsistent application on the most important policy choices. It is found through case studies from the United States, European Union, China, and India, and an examination of international institutions like the World Bank.

The social discount rate is used to calculate the present value of future costs and benefits and the variation in the social discount rates may alter distortion the environmental policy preferences. The Stern Review of UK used the social discount rate of 1.4 % considering the future generation’s welfare is equally important to the present and on that basis, it was calculated that an 1% of global GDP investment was considered sufficient to avoid environmental crisis while the Noble laureate William Nordhaus recommended the higher discount rate of 4-6%.

China considers priorities first and analysis is secondary and the environmental policy is not driven by cost benefit analysis. China’s environmental policy follows top-down political targets of Five-Year Plans. However, China uses CBA to measure the cost effectiveness. India is adopting to CBA on environmental policies but it deliberately conceives policy conflicts between developmental and political goals. India uses CBA analysis to achieve 400+ GW solar energy. This approach is not the lowest cost-effective model but there is a cost of subsidies and hence the approach of CBA analysis is not free from criticism even though it is better than coal-based energy.

The USA adopts to CBA. It is found successful in pollution controlling with a cost of $ 65 billion and has derived the gross benefit of $ 2 trillion and the net benefit of $ 1. 935 trillion. The application of CBA has not yielded results in all sectors like the power sector. Some of the critics argued that CBA is used as a political tool to fight over a predetermined priority.

Impact Assessment (IA) and Multi-Criteria Analysis (MCA)

The European Union adopts both these models. The EU uses IA in the “Fit for 55” Package and the European Trading System (ETS) and it has achieved 2 to 2.5 % reduction in emissions per year. The EU is aspiring to achieve reduction of emissions by 55% by 2030 using IA analysis. At the same time, the EU adopts Multi-Criteria Analysis (MCA) to assess non- measurable sectors like job creation, energy independence, biodiversity and others. It adopts the Precautionary Principle. MCA is more transparent tool than CBA.

Value of a Statistical Life (VSL) Model

The Value of a Statistical Life model is used to quantify the benefits of environmental rules (like pollution reduction), On the basis of this, it is found that the VSL is estimated between $ 7.1 million and $ 8.5 million for OECD and high-income countries while for Low- and Middle-income countries the VSL is $ 1 million. This model is widening the disparities between rich and poor.

Cost Effectiveness Analysis (CEA)

The World Bank mostly relies on the CEA as it has found that the CBA is found controversial. The CEA is an analytical tool that the compares that the relative costs and outcomes of two or more courses of action. It accepts a non-monetary unit assessment of cost per ton of CO2 or cost per live saved. This is applied predominantly in the Paris Agreement and it has achieved consensus of global nations pertaining Global Climate Policy. The CEA is adopted in the international institutions including the Climate Investment Bank. However, it is argued that CEA is a tool for implementation but not for priority setting of environmental policies.

Life Cycle Assessment (LCA)

LCA is an engineering and environmental science tool proposed to prevent problem shifting rather than solving an environmental problem through a new one. LCA is also known as “cradle- to -grave” analysis assessing all environmental impacts of a product, policy, or process, emanating from raw material extraction, through manufacturing, transportation, use, and final disposal. It is the powerful tool for finding unintended consequences and informing policies on the circular economy and Extended Producer Responsibility. It is a complex and data intensive tool.

Environmental Impact Assessment (EIA) and Strategic Environment Assessment (SEA)

EIA is a project type tool with a tremendous supporting laws, regulations, and policy guidelines drawn from national policies, and global policies from international institutions like the World Bank. SEA is a policy tool. In fact, it is considered as a legal and procedural tool. It promotes public consultation and participation. It is criticized as a political tool.

Environmental Justice (EJ)/ Distribution Analysis

The EJ analysis considers the distribution of environmental burdens. It is a direct moral and political response to the failures of aggregated analysis like CBA (etc.). The USA adopts the EJ analysis as a central, mandatory and mandated priority. Due to this analysis, the USA allots 40% of the overall benefits of federal climate, clean energy, and housing investments to disadvantaged communities. The World Bank’s policy approach on Environmental and Social Framework (ESF) incorporates specific standards to promote community health and safety of indigenous peoples.

Conclusion

Above mentioned tools and methodologies are considered fundamental to the policy approaches to address the environmental policy crisis. These tools are used to define and identify the environmental policy crisis individually and collectively. The wisdom of man prepares tools for solutions but the general will of the society is considered an imperative experiment with integrating man with nature. The efforts are genuine but the distance is longer than understood. The continuity of deriving benefit from science and technology which defines the distance to realise the nature of integration and kind of Sustainable Development.

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