INDIA KNOWS HOW TO AVOID COLLAPSE
by Daniel Taghioff
India is a country that is set to face huge social tensions. Not only will Climate Change make life more precarious for the poor, but the suggested solutions to climate change will de-stabilise them yet further. However, India also contains the seeds to a solution to this, especially amongst its activist struggles.
Jared Diamond’s book Collapse is a chilling read, considering how closely its account of the implosion of civilisations past also traces out the arc of our current global predicament (Diamond, 2005). He teases out the implications of population and consumption growing exponentially: It means that consumption hits natural resource limits at a very great speed, and that the moments before that collision are a huge party for those at the top, since consumption is at its absolute peak. This leads to a situation where the rich are living such a high life that it is near impossible for them to imagine the plight of the poor, who are the first people to be hamstrung by the dwindling of resources. This gap is what disables the early warning systems of failing societies, and it is precisely this gap that we see opening up around climate change. Right here, right now, in India; but also even more so globally this fatal gap in understanding between rich and poor is stark and growing.
No issue exemplifies this gap and the dangers it represents better than climate change. The Darfur Crisis was called a taste of things to come with climate change occurring in one of the most population dense parts of the world (Moon, 2006). However, commentators on the area pointed out that at the same time as food became scarce in Darfur due to the shifting climate regime, the value of land rose, especially as it was already being bought up for capital intensive schemes funded by the World Bank and IMF to reform agriculture. Effectively, what kicked off the civil war in the area was urban elites coming in and speculatively buying up the land that had started rising in value, thus increasing its value further in a positive feedback, a kind of Gold Rush (Polgreen, 2007). It was this gap, between speculation and subsistence, which was the spark that set the area on fire.
This is a problem not just for Darfur but for the world at large, and nowhere illustrates this better than India. By dint of its huge population and very high levels of land pressure like Darfur, Asia is highly vulnerable to climate change. Asia lacks huge areas of free land for people to move into, and it is also nuclear-armed (China, India, Pakistan and so on). So in security terms, the whole world needs social solutions under climate change that will create stability in densely populated areas. This applies to Asia as a whole but especially to India which holds the most poor people of any country on earth (some 30% of all people below a dollar a day).
You can see this gap between subsistence and speculation opening up in India right now. India is to date in receipt of over 2 Billion USD of Clean Development Mechanism (CDM) funding, which is designed to let developed countries emit by paying developing countries for making cuts. The CDM funds are going to the industrial interests already involved in marginalising local people, as well as corrupting local politics.
The first issue of Mausam illustrated the problems of treating Climate Change as an arena of financial speculation (Mausam passim). Soumitra Ghosh explained how the Jindal Steel Plant in Karnataka was receiving Clean Development Mechanism (CDM) money even as it displaced local people, making them more vulnerable to climate change. The same was in the case of the Tata Refractories, Bhushan Steel, the Hindalco Smelter in Orissa as well as the MSPL wind energy plants in Karnataka, and the Satara and Supa wind energy plants in Maharashtra (for more on this, see Mausam passim.) By this mechanism, India as the second largest receiver of CDM funds, is already leading the way in practicing mitigation as a way of displacing people.
Felix Padel and Samarendra Das explain the enormous resource and energy intensity of the Minerals industry, to the extent that ore refineries often have coal-powered plants attached to them. Yet these industries that also displace huge numbers of people and divert huge areas of forest lands are also to be subsidised in the name of Clean Development (for more on this also see Mausam passim). The processes of displacement by mining are accelerating fast: More than twice as many diversions of forest for mining were granted from 1997-2007 than for the previous ten years (Nayak, 2008). So again India is forging ahead in the displacement sector.
I would like to look at a case in depth to tease out how the economics of resource shortage drive these issues. Since Felix and Samarendra have already covered the Gold Rush that is chasing dwindling minerals, let’s instead look at the links between oil prices, demand for bio-fuels and food prices. The food price spike in 2008 was attributed by the World Bank as being 75% down to the growth in bio-fuels1. Cultivable land, instead of producing stuff to feed humans, was turned over to feed energy markets. Food markets are dominated by the poor, in terms of sheer weight of numbers, although their pitifully low purchasing power confounds that to a great extent. This is what lets countries export food even as people starve.
Energy markets are by stark contrast utterly dominated by the rich, since energy consumption and income track each other very closely (Strahan, 2007). When energy markets become tight, for instance in 2008 when demand for oil outstripped supply, it is very easy for purchasing power to cascade, through linkages like bio-fuels, into food markets and so hit the poor very hard. In other words, the scarcity of oil leads to a rise in the cost of energy, and this is passed on into a rise in the cost of food. Does this sound like Collapse?
In 2008, the oil price went to $100 dollars a barrel. Even the International Energy Agency now admits that it is just a question of when conventional oil production peaks and they say 2020 (Macalister and Monbiot, 2008). Then the price could go as high as $300 a barrel (Strahan, 2007). Just imagine the impact on food prices! A chilling footnote to this discussion is that in February 2009, just before predictions regarding the summer’s drought were first taking shape, a US-India deal was brokered to increase bio-fuel production (Taragana, 2009). Coming up is the budget for carbon offset in the new US Climate Bill, which is talking of figures of 2 billion tonnes of Carbon offset per year, three times the size of any previous national carbon trading proposal. To put this in context only 7.5 million tonnes of Forest Carbon were traded in 2007, so we are talking orders of magnitude of potential growth in this trade, that is, orders of magnitude of pressure on forest land (Baka, 2009, personal communication).
Behind each of these stories there was a dwindling resource (carbon air-space or minerals), and then a move by the rich to corner that resource, often by enclosing what was formerly a commons, and carving it up amongst themselves and trading it. It is a sobering fact of life that as a resource becomes scarce its value increases. It follows that as something becomes expensive, then those with money tend to circle in. As we can see happening, Climate Change is already turning into a politics of land control, and toxic financial products like the Clean Development Mechanism are already starting processes of displacement.
When you consider that natural resource consumption is growing exponentially across the board, it becomes clear resource shortage, around minerals, around carbon commons with CDM, increasingly around fresh water (Barlow and Clarke, 2002) and also around oil (David, 2007), will be followed up by gold-rush after gold-rush of purchasing power seeking out quick and lucrative fixes to the problems of over-consumption. With bio-fuels, this is exactly what is being seen all over the world, from Madagascar, where a deal to grow Palm Oil as a bio-fuel precipitated a coup, to Sudan where South Korean companies have bought up 690,000 hectares of land (Vallely, 2009).
Financialisation is clearly not a solution. Then why is it so popular as an approach? It is remarkable to see how policy-makers really start to take an issue on board. The Stern Report marked a sea-change in climate debates, bringing the economics of it into public focus2. Crudely put, instead of considering how many people climate change might kill, someone came up with figures about how much it would cost. This seems deeply sick (Monbiot, 2008), and at a collective level it is, but it is understandable when you look at how people get things done in big organisations. These organisations see the world and act on it through budgets and statistics, this is the language of action in a policy context (Hacking, 1983). Understandable though this is, it makes it no less dangerous. The biggest impacts of climate change will be in the non-cash economy, amongst those whose environmental problems are already under-recorded through State Pollution Control Boards, or State Below Poverty Line registers.
These marginal groups are the humans who most often rely on the commons that are being enclosed, such as forests and “waste-land”. However, being drawn into the cash economy will only expose them further to the economic forces likely to be their undoing under conditions of scarcity. They simply cannot secure access to a livelihood by cash-means when in competition with rich world purchasing power for a dwindling resource base. So the language of large institutions leads to financialised approaches to climate change, which heighten the crisis for those actually facing shortage in a life-threatening sense. This is Jared Diamond’s gap written across the face of the earth.
It is possible to protect livelihoods by non-market means, but to do so you need to secure non-tradable access to those livelihoods, preferably with a certain amount of local democratic control in terms of how that access is managed. Amartya Sen and Jean Drèze put forward the useful idea of “entitlements” to help economists understand famines (Drèze and Sen, 1989). In their analysis it carries two burdens. One is to point out that people obtain things from outside the cash economy. The second is to show how famine can be driven by a collapse in purchasing power, and not necessarily directly by food shortage. This helps to explain, for instance, how there can be famines in times of increased food production when there is a collapse in both direct entitlements to food (from the environment, without a cash nexus) in a certain area alongside a collapse in purchasing power to bring food in via economic entitlements from the high production areas, as happened in the Bengal Famine. This also explains how India can export food even as people starve (Patnaik, 2007)3.
Climate change is likely to create a crisis both of direct entitlements to food from the environment, due to unpredictable weather and displacement by sea-level rise, but also a crisis of purchasing power, with the Gold Rushes described above likely to be a major factor in that. So what you need in order to deal with this combination is some kind of protected non-tradable entitlement that is immune to these gold rushes and that gives some buffer against climatic unpredictability.
One possible way forward is “targeted benefits,” like the NREGA scheme, coming from the central government. But this makes local communities dependent on political will at the centre. How long will such political last when chemical agricultural inputs and petrol become very expensive, when food price inflation sets in? At what level of financial pressure does the government cave in and leave the poor to their fate? There were suggestions in 2008 that the relatively small food price rise then was placing financial strain on the government, and this with oil at $100 a barrel, what of $300?
There is an alternative approach to social security that has emerged in another area, that of Forests. Forests have also become caught up in the process of trying to trade for space in the Carbon Cycle. As mentioned by Soumitra Ghosh in Mausam’s opening piece, forests are to be brought into the CDM regime via a scheme called reductions in emissions from deforestation and forest degradation in developing countries (REDD)(UN, 2008). The move towards this process has caused a great stir amongst Indian policy-makers, who have latched on to the statistic that India’s forests absorb 11% of India’s emissions, a major bargaining chip for them in the Global Carbon Countdown. Judging by CDM, and the expensive procedures involved in verifying Carbon Credits, these schemes look highly unlikely to involve local communities and are much more likely to displace them. However, there is little need for speculation on this point; by a happy coincidence India already has a mechanism for trading forests that looks remarkably similar to the Trees-as-Carbon-Credits approach of REDD.
In an attempt to enforce the Forest Conservation Act of 1980, to limit State government diversion of Forest lands, the Supreme Court case known as Godavarman mutated into the ongoing Mandamus of “The Forest Case” overseeing all clearances for diversion of Forest (Dutta and Yadav, 2007). Ironically, and perhaps unsurprisingly, this centralised clearance process had begun to resemble the “Single Window Clearance” process desired by the World Bank and other business lobbies to simplify investment access to natural resources (Gopalakrishnan, 2008). This political process took an even more unusual turn when the Supreme Court decided that in order to protect Forest Land from diversion it should effectively be put up for sale. The scheme was to force parties diverting Forest land to pay both the net present value of the land, supposedly calculated to reflect market rates, and also to pay a compulsory afforestation fee (CAMPA), which represented the cost of reforesting twice the area of the land to be cleared. Admittedly these measures were to prevent State governments diverting land to their-friends-in-business on the cheap, but they morphed into a mechanism where powerful parties could buy their way into Forest land. Any observer of Indian politics would not find it hard to answer the question “Where is Carbon best stored? As a tree in the ground, or as money in a political pocket?”
Despite condemnation from the Parliamentary Standing Committee, central agencies have kept hold of the funds from CAMPA, allocating only 1000 out of 11,000 crores of the fund to planting trees, and none of it to supporting local governance of natural resources, contrary to the Standing Committee’s recommendations (CSD). It was precisely this fund that was being touted as India’s new 2.5B USD afforestation programme in the run-up to Copenhagen (Mohuiddin, 2009). Clearly this is not a scheme that will lead to local empowerment of communities, to more social security, to adaptation, and judging by the way the funds have gone so far, it is unlikely to help mitigation either. What it is likely to do is further open the door of a single window clearance model for forest diversion based on the principle of who pays wins. In other words yet another Gold Rush that will undermine livelihoods.
This amounts to a very potent recipe for Collapse. Consider that the request from the developed world towards countries like India is that they re-jig their entire energy infrastructure away from cheap and dirty solutions like coal. India is a country with a severe social unrest problem, as the current problems in Chhattisgarh illustrate. This has been worsened by the pressures of liberalisation upon the poor, which have reduced per capita calorie intake as well as increased indebtedness and farmer suicide rates (Patnaik, 2007). A financialised approach to climate change—far from helping the vulnerable 40% who depend on the rains for their food (Briscoe and Malik, 2007)—is likely to further displace them from their livelihoods. It seems clear that in order to have the resources and social stability required to re-jig your energy system, you cannot be engaged in a war with your own people, witness the offensive on Maoists in its central Forest Belt, in an operation called, with the utmost in unintentional irony, “Green Hunt”. This is in order to secure those areas for investment (Democracy Now, 2009). In other words something has to give.
What is it that can provide a buffer to rich-world purchasing power in the face of dwindling resources? The earlier discussion of the Food Crisis shows that centralised schemes like NREGA are not necessarily to be relied upon. Apart from it being unclear if the government can afford them, they also have a tendency to descend into corruption and to bring about patron client relations between the givers and receivers of assistance.
This is very much the view of groups like the Deccan Development Society, working with food security or rather as they put it Food Sovereignty. Their contention is that climate instability can be met by traditional crops such as millets, which can grow under dry conditions. However millet cultivation is looked down on as backward and not at all lucrative, and so can only take place where communities have control of their own land and some sort of autonomy from local political and economic processes. It is a picture that every activist here will recognize—any relation with a government or business body tends to turn exploitative, based on political and economic purchasing power. This is a situation already being worsened in the emerging natural resource Gold Rushes. So the answer is local autonomy over natural resources, a return of control over the commons as Anna Pinto puts it (Pinto, 2009).
This is pretty much exactly what the Forest Rights Act (FRA)4 attempts to put in place. It is such measures that secure livelihoods regardless of the flows of purchasing power. This approach is already being discussed in the context of extending it within India towards fisher communities, partly via the context of mangroves, with the notion of “Sea-Tribal” being mobilised to describe the traditional and direct relationship with nature of those communities (Sridhar and Shanker, 2007).
The marine example illustrates the crux of the issue: The lack of natural boundaries at sea makes a co-existence regime with nature much more self-evident than the land-based human exclusion models that have dominated wildlife and forest law to date. That fisher communities also tend to be autonomous and internally democratic also speaks to the provisions in the FRA for Community Forest Resources, where collective control and policing of natural resources locally becomes the basis of Forest Governance in inhabited areas. It is this innovation, of decentralised local natural resource governance overseeing the allocation and maintenance of both forests and rights to them, which forms the kernel of the political project behind the act. This is a response to the historical injustices of Adivasi dispossession, which went on under existing closed and bureaucratic systems of rights allocation (Bijoy, 2008).
There are ongoing debates raging about how successful such decentralisation of control is likely to be, from the failures of meaningful participation under Joint Forest Management (JFM) to anxieties about lack of local environmental knowledge (Ghate, 2009). However, none of this explains away the need for a local democratising project in relation to natural resources to provide the autonomy required for resilience in the face of climate and financial instability.
With resource pressures mounting across the board, and the need for a stable transition to low-carbon economies becoming ever more pressing, these kinds of approaches need to be broadened to become an inclusive safety net for the poor in the face of a rapidly changing world. The bottom line is that there are emerging models for local democratic non-financialised control of natural resources out there for all crucial livelihood areas, and there is an existing model in law (the FRA) showing how to start creating a legal framework for this—one based around local autonomy and democratic governance of natural resources. This is an approach that could be applied to things like the right to water (Grönwall, 2008) and the right to food (Saxena et al., 2008), as well as to agricultural development. This is an area that is ripe for further study and policy work, to move India further towards an integrated regime of democratic natural resource management. What India really needs to move in this direction is the political will to make it so. This may be born of the understanding that there is nowhere else to go, but it is also only really likely to happen via political pressure. In bringing this about, India, and by this I mean activist India, could lead the world.
Footnotes
[1] Jenn Baka, who works on bio-fuels at Yale, is skeptical of the 75% figure “I don't agree with Mitchell's assessment as it lacks rigour – he arrives at 75% basically by subtracting from 100 what he thinks is the significance of other impacts such as the Australian drought.” However, somewhere between 30% to 75% of the rise is likely to be down to bio-fuels, which is more than enough to cause a crisis.
[2]. Within the dismal science Stern put a fire under the climate-costing debates by rallying against the “Jam-now-pay-later” school. He did this by using a 0% discount rate on the future, taking responsibility in this way, being somewhat radical amongst the professors of prudence. (Thanks to Jenn Baka for flagging this).
[3]. It is important to note that this mechanism can also occur where purchasing power chasing a given resource increases, thus driving up prices, bringing about an effective collapse of a local cash-entitlement without necessarily seeing a decrease in local purchasing-power, at least as expressed in cash terms.
[4] The Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Bill 2006.
References
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Acknowledgement
Many thanks to Jenn Baka for her comments on this piece. Of course the errors are mine.