1.

BASIC CONCEPTS IN ENVIRONMENT AND DEVELOPMENT

1.1. Environment

1.1.1. Concept of Environment

Different scholars in different fields of study provide different definitions for the term
environment; i.e.
 A geomorphologist may define it as the whole earth on which both physical and human
actions can take place;
 A biologist may give strong emphasis on the biotic and abiotic aspect; where as
 A sociologist may stress on the cultural dimension of the environment etc.
In all round, environment can be defined in the following ways:
 It is the totality of surrounding conditions.
 It is simply as the environment comprising all living and non living things that occur
naturally on earth or some part of it.
 It refers to a complex of surrounding circumstances, condition, or influences in which
a thing is situated or developed.
 It is commonly thought as the external forces affecting living things.
 As built environment, it is man-made surroundings that provide the setting for human
activity ranging from the large scale civil surrounding to the personal places.
 As social environment, it is the cultures that an individual lives in, and the people and
institutions with whom they interact.
Furthermore, the word environment commonly means the surrounding. In its ecological sense, it
includes the biotic and abiotic factors and the interactions between them. The biotic or physical
aspect includes factors such as temperature, humidity, rain, soil characteristics, etc. The biotic
environment comprises the living organisms: micro organisms, plants and animals including
man.
In the process of interaction, an organism tends to change and affect its surroundings in many
ways. Thus, the activities of the organism, to a large extent determine its own environment. Such
interactions between the organisms and the environment are, of course, essential to satisfy the
bare necessities of the organism.
Generally, no organisms can live without an environment. Man is no exception. His dependence
on the environment is even more than other organisms. It is the only species that requires more
things for his comfort and safety than any other organism. As a result, he has developed a new
kind of environment the social and cultural environment.

In more precise concept, environment is the sum total of physical and biological factors that
directly influence the survival, growth, development, and reproduction of organisms. It is made
up of physical, biological, and socio-cultural factors which interact and relate continuously with
each other. Therefore, the physical, biological and socio-cultural components make up the
environment.

Physical components Example: Water, Soil, Air

ENVIRONMENT

Biological components Socio-cultural components

Example: Plants, Animals Example: Traditions, Customs, Religion

Figure 1.1 Components of the Environment

1.1.2. Types of Environment and their Characteristics

It is said that environment refers to a unique set of external factors that influence the life of
organisms. These factors could be:

 Biotic factors (living organisms)

 Physical/ abiotic factors (non-living variables).

1. Biotic components of the Environment

 These are all the living members of the ecosystem.
 Various components are connected through food and other relations.
  Food is an open system (both energy and matter are transferred).
 Food is manufactured from inorganic materials by autotrophs only.
 Autotrophs are producers.
 Other organisms that cannot manufacture food are hetrotrophs.
Consumers (herbivores and carnivores)
Hetrotrophs
Decomposers

A. Producers (Autotrophs)

 Are photosynthesis plants

 They synthesize organic food from inorganic raw material helped by solar radiation _
Photosynthesis

All other organisms depend on producers for their supply of organic compounds or food.

B. Consumers (Hetrotrophs)

 Are animals feed on other organisms or their parts.

 They ingest their food

Herbivores (first order consumers)

Consumers Primary carnivores (second order consumers)
Carnivores
Secondary carnivores (third order consumers)

C. Decomposers

 Are saprotrophic micro-organisms feed on dead bodies of organisms or organic wastes of

living organisms.
 Secrete digestive enzymes to digest organic matter.
 Are also called reducers because they remove or degrade dead bodies
 Called micro-organisms due to their small size.

Sometimes there are two types of decomposers:

  Detrivores
 Parasites

2. Abiotic components of the Environment

 Are non-living substances and factors
 Consist climatic and edaphic factors

Climatic factors:
 Temperature
 Light
 Wind
 Humidity
 Precipitation
 Gases
Edaphic factors:
 Soil
 Topography
 Mineral elements, etc

1.1.3. Man-Environment Relationship

Man’s evolution is tied to the interaction between him and his natural environment.

 Natural environment is man’s sole base for the creation of material wealth.
 The goal of interaction is to satisfy man’s increasing needs.

The role of man in this interaction was understood differently in different times. The following
are the popular concepts used to designate man-environment interaction in the late 19 th and early
20th centuries in geography and anthropology:
 Environmental determinism
 Environmental possibilism
 Environmental probabilism
 Environmentalism
  Environmental perception
 Environmental culture
 Environmental education

Environmental determinism

 Environmental determinists advocated that human actions were controlled by the natural
environment.
 Environment wholly determines the activity of man.
 Environment is considered as master while man is slave.
 Exponents of the idea say that, man is not only the child of the earth but also dust of her
dust.
 Environmental determinists relegated man to a passive role.
 In environmental determinism, there is, therefore, a one way relationship.

The view was in imitation to the Darwin’s theory of life – “The fittest will survive – Natural
selection”.
 As time passed, environmental determinism neither matched with reality nor was
theoretically tenable.
 Then a way out of this was to substitute it with antithesis terms like: environmental
possibilism, environmental probobilism.

Environmental Possibilism

 It was meant to refer to the idea that the physical environment was passive.
 Man being the active agent, was at liberty to choose between wide ranges of
environmental possibilities.
 As an active agent, man can transform or modify nature through science and technology.
 Nature doesn’t direct him in one direction, rather offers a number of opportunities.
 It suggested a complete disregard of environmental factors in socio-economic
development efforts.
 To some writers environmental possibilism is neither a denial nor a confirmation of
environmental determinism.
Environmental Probabilism

 It meant that environment doesn’t necessarily determine human action.

 But it makes some developments or patterns probable and others unlikely under a given
socio-economic conditions.
 This view saved the environmental factors from being discarded completely in
development considerations through its explanatory role was reduced into insignificance.

Environmentalism

 Environmentalism embraces all the shades of meanings cited above.

 It tries to provide a balance on the roles of man and environment on each other.

Environmentalism covers a number of issues such as:

 It concerns about the environment and its protection
 It is a theory emphasizing the primary influence of the environment on the development
of groups or individuals.
 It stresses on the importance of the physical, biological, psychological or cultural
environment as factors of human and animals’ behavior.
 This view, in politics, has resulted in rise of ‘Green Parties’ in many countries which aim
to “Preserve the planet and its people”.

Environmental perception

 It is an intuitive understanding of the ecosystem and its natural resources, based on

human experiences, cultural attitudes, or beliefs.

Environmental culture

 This involves the total of learned behavior, attitudes, and knowledge that the society has
in protecting its natural resources, the ecosystem and all other external factors affecting
human life.
Environmental education
 Is an educational process deals with the human interrelationships with the environment.
 It utilizes interdisciplinary problem solving approaches with value clarification.
 Concerned with education progress of knowledge, understanding, attitudes, skills and
commitment for environmental problems.
 It has continuous need because each new generation needs to learn conservation for it.
1.1.4. Major Environmental Problems

The problems facing the environment are vast and diverse. Some of them include:
 Global warming
 Depletion of ozone layer
 Water pollution
 Air pollution
 Species extinction
 Environmental racism, etc

A. Global Warming
 Refers to the increase in the average temperature of the earths near surface and oceans’
temperature in recent years.
 Within the last century, the average global temperature has increased by about o.6 degree
Celsius (1 degree Fahrenheit).
 This increment may seem small but during the last ice age the global temperature was
only 2.2 degree Celsius (4 degree Fahrenheit) cooler than it is presently.

Cause of global warming

All temperature increase over the last 50 years has been due to the increase in the concentration
of greenhouse gasses like:
 Water vapor
 CO2
 Methane
 Chlorofluorocarbons (CFCs), and
 Nitric oxide.
The largest source of greenhouse gases is burning of fossil fuels leading to the emission of CO2.
NB: - Carbon dioxide is the most important of the greenhouse gases, contributing about 60 % of
the total green house effect.

It is agreed that there are three ways to reduce CO2 emissions:

 Increasing energy efficiency
 Switching to non-carbon fuels
 Taking carbon out of the atmosphere – through afforestation and reforestation.

Greenhouse gases have greenhouse effect.

 Greenhouse effect refers to the effect of greenhouse gases which allow shortwave solar
radiation to reach the earth but retain outgoing long wave radiation, which causes
warming of the atmosphere and oceans.

Consequences of global warming

Global warming may result in either of the following adverse effects on the environment:
 Melting of polar ice
 Sea level rise – flooding of low lying areas
 Increase frequency of severe storms and drought (extreme weather condition)
 Extinction in plant and animal species
 Change in global wing pattern
 Agricultural disruption
 Ecological imbalance

B. Depletion of ozone layer

 Ozone is a form of oxygen (O3), found in greatest quantities at height of 20-25 km in

earth’s atmosphere.
 It is believed that ozone absorbs ultraviolet radiation. Therefore, the ozone layer acts as a
filter protecting lower atmosphere and ground surface from potentially harmful
ultraviolet rays.
  Recent researches have shown that ozone in the ozone layer are being seriously depleted,
largely as a result of chlorofluorocarbons (CFCs) from sources such as:
Domestic refrigerators
Aerosol spray cans.
 The so-called ‘holes’ in the layer have been discovered, first over Antarctica, and more
recently, over the North Pole (figure 1.2).

Ho l e

Figure 1.2: Ozone layer hole

 The ozone layer is thinning because ozone is being destroyed than it is being regenerated
naturally.
 Chlorofluorocarbons (CFCs) are chemicals used in
Refrigeration
Air conditioning systems
Cleaning solvents
Aerosol sprays
Deodorants, …
 CFCs release chlorine in to the atmosphere.
 Chlorine, in-turn, breaks down ozone molecule.
 A single chlorine molecule has the ability to destroy large amount of ozone in extended
periods of time.

Consequences of ozone layer depletion

Ozone layer depletion has given rise to fears concerning possible adverse effect on human health
(from increasing incidence of ultraviolet radiation.)

 This would lead to:

 Increase incidence of skin cancer and cataracts
 Reduce the ability of immune system
 Decline of the growth of world’s oceanic plankton, which is the base for food of
photosynthesis organisms that break down CO2.
 Reduced plankton may be lead to increased CO2 level in the atmosphere hence
global warming.
 Global warming, in-turn, may increase the amount of ozone destroyed.

C. Air pollution

 Air pollution refers to introduction in to the atmosphere of substances that are not
normally present therein and that have harmful effect on human beings, plants, or other
animal life.
 Industry and transportation burns fossil fuels. When this happen, chemicals and
particulate matters are released in the atmosphere.
 Common air pollutants are:
 Carbon
 Sulfur, and interact one another and with ultraviolet radiation
 Nitrogen
For instance: acid rain forms when sulfur dioxide and niters oxide transform into sulfuric acid
and nitric acid in the atmosphere and come back to earth in the form of precipitation.
 Acid rain has made many lakes so acidic that they no longer support fish population.
 Acid rain may destroy historical monuments and heritages.
 It is also responsible for the decline of many forest ecosystems worldwide.
D. Water Pollution

 Water pollution is contamination of streams, lakes, underground water, bays, or oceans

by substances harmful to living things.
 Estimates suggest that 1.5 billion people worldwide lack safe drinking water and that at
least 5 million deaths per year can be attributed to water-borne diseases.

Water pollution may come from point sources or non-point sources.

 Point sources of water pollution: discharge pollutants from specific locations, like:
 Factories,
 Sewage treatment plants, and
 Oil tanks
 These types of pollution are relatively easier to control than non-point source of
pollution.

 Non-point source of water pollution: sources of pollution are not from specific points.
These sources include:
 Farmland
 Vehicles
 Land fills
For instance, when the runoff moves, it picks-up and carries away pollutants, like pesticides and
fertilizers and deposits them in lakes, rivers, wetland, coastal waters, and even underground
drinking water.
 Non-point sources of water pollution are difficult to control.

E. Groundwater depletion and contamination

 Water that collects beneath the ground is called groundwater.

 Worldwide, groundwater is 40 times more abundant than freshwater.
 Although groundwater is renewable resource, it replenish relatively slowly.
For instance, in the United States, groundwater is withdrawn approximately four times faster
than it is naturally replaced.
  In addition to groundwater depletion, scientists worry about groundwater contamination
that arises from:
 Leaking underground storage tanks,
 Poorly designed industrial ponds, and
 Seepage from the deep-well injection of hazardous wastes in to underground
geologic formation.

F. Habitat destruction and Loss of Biodiversity

 The term biodiversity (biological diversity) refers to the variety of species, both flora
and/or fauna, contained within an ecosystem.
 It broadly refers to the variability among living organisms from all sources.
 Some ecosystems (like tropical rainforest) are known with very high biodiversity while
others (such as boreal forest) have much lower biodiversity.
 A serious human impact on many ecosystems has been to reduce biodiversity through:
 The extermination of species,
 The threatening of endangered species.
 Due to these factors, plant and animal species are dying out at unprecedented rate.
 Over the past 50 years, humans have changed the ecosystem more rapidly than ever
before, largely:
 To meet rapidly growing demands for food, fresh water, timber, fiber, and fuel.
 This has resulted in the loss of biodiversity at annual rate of extinction ranges from 4,000
to 5,000 species that mainly caused by habitat destruction.

Effects of biodiversity loss

The loss of biodiversity causes:

 a rapid loss of ecosystems
 triggers extinction of species and population
Common effects of loss of biodiversity include:
 The loss of basic necessities for life such as food, timber, waxes, resins, fiber and
chemicals.
 Loss of medical plants
  Lost opportunities for disease control and improved yields
 Loss of opportunities for future development in biotechnology and genetic engineering.
 Expansion of deserts
 Loss of aesthetic values and cultural values.

The rate of biodiversity loss has not been reduced because the 5 principal pressures on
biodiversity are persistent; these are:
 Habitat loss and destruction
 Climate change
 Excessive nutrient load and other forms of pollution
 Over-exploitation and unsustainable use
 Invasive alien species.

G. Environmental Racism
 Studies have shown that not all individuals are equally exposed to pollution. For
example, worldwide toxic-waste sites are more prevalent in poorer communities.
 In the United States, the single most important factor in predicting the location of
hazardous-waste sites is the ethnic composition of a neighborhood.
For instance:
 Three of the five largest commercial hazardous-waste landfills in America are in
predominantly black or Hispanic neighborhoods, and three out of every five black
or Hispanic Americans live in the vicinity of an uncontrolled toxic-waste site.
 The wealth of a community is not nearly as good a predictor of hazardous-waste locations
as the ethnic background of the residents, suggesting that the selection of sites for
hazardous-waste disposal involves racism.
 Environmental racism takes international forms as well. American corporations often
continue to produce dangerous, U.S.-banned chemicals and ship them to developing
countries.
 Additionally, the developed world has shipped large amounts of toxic waste to
developing countries for less-than-safe disposal.

For instance,
  Experts estimate that 50 to 80 percent of electronic waste produced in the United
States, including computer parts, is shipped to waste sites in developing countries,
such as China and India.

1.2. Development

1.2.1. The concept of development

Like many multidimensional concepts in academics, the concept of development is very much
illusive. Therefore it would be very difficult to seek universally or commonly accepted definition
for development. What there about the definition of development ids the view of various
individuals from various fields of study. Accordingly, development could have the following
concepts:

 Development is the process of improving the entire living conditions of all people of a
nation.
 It is a move from a current way of life towards a better health, wealth, education, and
better transportation networks and the like.
 It is the extent to which the resources of an area or a country have been brought in to full
productive uses.
 Development is both physical reality and state of mind in which societies have secured
for obtaining better life.
 It also suggests changes in traditional, social, cultural, and political structures resembled
more near those displayed in countries and economies believed ”advanced”.
 Some conceptualize development as an incident that causes a situation to change or
progress.
 Here development is the process of changing and becoming larger, stronger, or
more impressive, successful, or advanced of causing somebody to change in this
way.
 Traditionally, development has been conceptualized as growth of national economy from
more or less static towards progress.
  In this concept of development, due attention is given to generate and sustain an
annual increase in Gross National Product (GNP) at rates of perhaps 5%, 9%,
11% or more.
In general, development refers to social, economic, political and environmental structures and
processes that enable all members the society to share in opportunities for education,
employment, civic participation, social and cultural fulfillment as human beings in the context of
fair distribution of the society’s resources in sustainable manner.
 Under this definition, development:
 Is multidimensional including economic, social, political, environmental and
cultural improvements;
 Equality in share of opportunities;
 Sustainability.
 Development is also understood widely in terms of increase in productivity, increase in
intensity of modernization, urbanization, and industrialization.
 Under this concept, development is viewed as the process of the quantum increase
of goods and services, and transformation of society:
 From pre-modern to modern in terms of institutional arrangements;
 Transformation of economy from agrarian to industrial;
 Migration of population from rural to urban areas;
 Shifting of economic activities from agricultural to non-agricultural.

To this end, development does have several connotations such as:

 Development as growth;
 Development as change and transformation; and
 Development as modernization

A. Development as Growth

Development as growth refers to:

 An increased capacity to produce consumption and increase in consumption patterns.
 As growth, development, very simply may be defined as an increased ability to fulfill
basic human needs of food, shelter, clothing, health care and education.\
  An expansion of possibilities, an increase in individual choices, capabilities and
functioning.
In all the above connotations, development is regarded as:
 Positive,
 Progressive,
 Natural beneficial, and
 Inevitable.

B. Development as Change and Transformation

As change and transformation, development refers to the economic, social, political and cultural
processes of change in human society.

C. Development as Modernization

Although some may disagree about them being one and the same, development is also
understood as modernization.
 Modernization:
 Is being seen as a means to development;
 In economic realm, it connotes to the process of industrialization, urbanization
and technological transformation of agriculture.
 The political realm, it requires a rationalization of authority in general and a
rationalizing bureaucracy in particular.
 In social realm it is marked by the weakening of ascriptive ties and the primacy of
personal achievement in advancement.
 In cultural realm, it is the growth of science and secularization, along with an
expansion of the literate population that makes for what has been referred to as
‘disenchantment’ of the world.
 Development in the sense of modernity stands for what is understood as Westernization,
where the west stands as the model for progress of the rest of the world.
In this sense, development becomes a comparative adjective, which is based
on west centric assumption that there is a process of linear evolution of the
 world in which the West leads world history and evolution and other nations
must follow in their footsteps towards a homogenous world.

World Bank, which during 1980s championed economic growth as the goal of development,
joined the group of observers taking a broader perspective in 1991 in its World Development
Report says:

The challenge of development … is to improve the quality of life. Especially in

the world’s poor countries, a better quality of life generally calls for higher
incomes-but involves much more. It encompasses as ends in themselves better
education, higher standards of health and nutrition, less poverty, a cleaner
environment, more equality of opportunity, greater individual freedom, and
richer cultural life.
When it is generalized, in development, economic growth cannot be sensibly treated as an end in
itself, and development has to be more concerned with enhancing the lives we lead and the
freedoms we enjoy; and hence development is much broader than economic growth.

1.2.2. Core values and Objectives of Development

Development may be defined as a sustained advancement of an entire society and social system
towards a better or ‘more human’ life. However, the question of what constitutes good life is as
old as philosophy of human kind. The appreciate answer for developing countries in the first
decade of the 20th century is not necessarily the same as it would have been in previous decades.

But it is agreed that at least three basic components or core values should serve as conceptual
bases and practical guidelines in understanding the inner meaning of development. These core
values, namely:
 Sustenance,
 Self-esteem, and
 Freedom, represent common goals sought by all individuals and societies.
They relate to fundamental human right.

A. Sustenance: The ability to meet basic needs

All people have certain basic needs without which life would be impossible. These lives
sustaining basic human needs include food, shelter, health, and protection.
 When any one of these is absent, or in critically short supply, a condition of “absolute
underdevelopment” exists.
 The basic function of economic activities is to meet these basic needs.

Thus, it can be claimed that economic development is a necessary condition for the improvement
in the quality of life.
 Human beings are born with certain potential capacities. Without these basic needs, the
utilization of human potential would not be possible.

B. Self-esteem: To be a person
The second universal component of good life is self-esteem which is a sense of worth and self
respect, not being used as a tool by others for its own ends.
 All people and societies seek some basic form of self-esteem. Though they may call it
authenticity, identity, dignity, respect, honor or recognition the nature and form of self-
esteem may vary from society to society and from culture to culture.
 However, with the proliferation (increment) of the “modernizing values” of developed
nations, many societies in developing countries that have had a profound sense of their
own worth suffer from cultural confusion when they come in contact with economically
and technologically advanced societies.
 Of course, it is closely associated with material prosperity. Consequently, it is often
difficult for those who are materially deprived to expense sense of pride or self-esteem.
 Development is legitimized as a goal because it is an important, perhaps even
indispensible, way of gaining self-esteem.

C. Freedom from servitude: To be able to choose

The third and final universal value suggested in constituting the meaning of development is the
concept of human freedom.
 Freedom here is to be understood in the sense of emancipation from alienating material
conditions of life from social servitude to nature, ignorance, other people, misery,
institutions, and dogmatic beliefs, especially that one’s poverty is one’s predestination.
  Freedom (liberty), right of individuals to act as they choose. In this sense, it is frequently
called individual liberty.
 Freedom involves an expanded range of choices for societies and their members together
with a minimization of external constraints in the pursuit of some social goal we call
development.
According to Lewis (2003), the advantage of economic growth is not that wealth increases
happiness, but that it increases the range of human choices. Wealth can enable people to gain
greater control over nature and the physical environment than they would have if they remained
poor.
 The concept of human freedom should also encompass various components of political
freedom including, but not limited to, freedom of expression, personal security, political
participation, and equality of opportunity.

The Three objectives of Development

It could be concluded that development is both physical reality and state of mind in which
society has, through some combination of social, economic, and institutional process, secured the
means for obtaining a better life.
 Whatever the specific components of this better life, development is all societies must
have at least the following three objectives:

1. To increase the availability and widen the distribution of basic life sustaining goods such as
food, shelter, health and protection.

2. To raise levels of living, including, in addition to higher incomes, the provision of major jobs,
better education, and greater attention to cultural and human values, all of which will serve
not only to enhance material well-being but also to generate greater individual and national
self-esteem.

3.To expand the range of economic and social choices available to individual and nations by
freeing them from servitude and dependence not only in relation to other people and nation-
state but also to the forces of ignorance and human misery.

1.2.3. Indicators of Development

1. Economic Wealth

Wealth is the net worth of a person, household, or nation, that is, the value of all assets owned
and net of all liabilities owed at a point in time.
 It is usually measured by economic indicators such as Gross Domestic Product (GDP),
and Gross National Product (GNP).
 These are measures of economic performance in a country.
Gross Domestic Product (GDP): is the money value of the total final outputs of goods and
services produced in a single year within a country’s boundaries.
 It is one of the primary indicators used to gauge the health of the country’s economy.
 It represents the total money value (eg. US dollar) of goods and services produced over a
specific period- it could be thought as the size of the economy.

For example, if the year-to-year GDP is 3%, this is thought to mean that the economy has grown
by 3% over the last year.

On the other hand, Gross National Product (GNP) is the total domestic and foreign output
claimed by residents of a country.
 It is Gross Domestic Product (GDP) plus transfers in to the economy citizens minus
transfers out of the economy through foreigners.
Measuring GDP is complicated but its most basic, the calculation can be done in one of two
ways:
 Either by adding up what everyone earned in a year (income approach), or
 By adding up what everyone spent (expenditure method).
Logically, both measures should arrive at roughly the same total.

A. The income approach which is sometimes referred to as GDP (I), is calculated by

adding up total compensation to employees gross profits for incorporated and non-
incorporated firms, and taxes less any subsidies.
B. The expenditure method is the more common approach and is calculated by adding total
consumption, investment, government spending and net exports.
As one can imagine, economic production and growth, what GDP represents, has a large impact
on nearly everyone within that economy.
 For example, when the economy is healthy, you will typically see low unemployment and
wage increases as business demand labor to meet the growing economy.
These are the most common approaches to assess the level of development. To compare levels of
economic development, we should use single currency such as USD and Euro.

 GDP or GNP is also easier to measure and obtain. But it is less accurate in countries of
non-market economies, where:
 The economy is centrally planned, i.e., non-market oriented
 Market is less developed

 Trading is usually done at home through bartering, and

 Much production is done at home for subsistence.

Figure 1.3

Moreover, higher per capita income in a country does not necessarily mean that its people are
better off than those in a country with lower per capita income. This is because there many
aspects of human wellbeing that these indicators do not capture.

As a result, GDP/GNP per capita has the following limitations:

  They do not show how equitably the country’s income is distributed.
 They do not account for pollution, environmental degradation and resource depletion.
 They don’t register unpaid work done within the family or community or work done
within the shadow (underground or informal).
 They attach equal importance to “goods” such as medicine and “bads” like cigarettes and
chemical weapons whereas ignoring the value of leisure and human freedom.
 Tell only parts of a complex story, and they ignore the participation of small nations.

Therefore, due to these and other shortcomings of GDP/GNP measures, another more inclusive
criteria of social, cultural and welfare came in to use.

2. Social, cultural and welfare criteria

The Physical Quality of Life Index (PQLI) is an attempt to measure the quality of life or
wellbeing of a country.
 The value is the average of three statistics:
 Infant mortality,
 Basic literacy rate, and
 Life expectancy at age one
It was developed by the Overseas Development Council (ODC), which is an international policy
research institution based in Washington, DC in the mid-1970s as one of a number of measures
created due to dissatisfaction with the use of GNP as an indicator of development.

Here, life expectancy at age 1, infant mortality, and literacy are used as indicators of
development, describing:
 Progress in health,
 Sanitation,
 Education, and
 Women’s status
Unlike GDP/GNP, the Physical Quality of Life Index (PQLI) is summation of complex social
interrelationships on which no theoretical explanation imposes any given biases.
 Equal weight is assigned to each component and it is measured between 0 and 100.
The PQLI informs about the changing distribution of social benefits among countries, between
the sexes, among ethnic groups, and by region and sector.
 The PQLI, with signs of lowered infant mortality and lengthened life expectancy, paints a
less fatalistic pessimistic picture than the GDP/GNP.
But PQLI:
 Shares the general problem of measuring quality of life in a quantitative way.
 It has also been criticized because there is considerable overlap between infant mortality
and life expectancy.

3. The Human Development Index (HDI)

In 1990, the United Nations Development Program (UNDP) published the first Human
Development Report in which development was measured using Human Development Index
(HDI).
 A new way of measuring development by combining indicators of life expectancy,
educational attainment and income into a composite Human Development Index, the
HDI.
 The HDI sets a minimum and maximum for each dimension, called goalposts, and shows
where each country stands in relation to these goalposts, expressed as a value between 0
and 1.
 HDI is a summery measure of three dimensions of human development:
 Leading a long and healthy life;
 Being knowledgeable; and
 Having a decent standard of living.
 Hence, HDI measures the average achievements in a country in three basic dimensions of
human development.
 A long and healthy life, as measured by life expectancy at birth;
 Knowledge as measured by adult literacy rate and combined primary,
secondary and tertiary gross enrollment ratio; and
 A decent standard of living, as measured by GDP (PPP US$) per capita.
Purchasing power parity (PPP) refers to the number of units of a foreign country’s currency
required to purchase the identical quantities of goods and services in the local (LDCs) market as
$1 would buy in the US. Here, identical goods will have the same price in different markets
when the prices are expressed in terms of one currency.
 The HDI sets a minimum and a maximum for each dimension, called goalposts.
 Then, aggregating the sub-indices produces the Human Development Index.
 HDI is, therefore, obtained by the geometric mean of the three dimension indices using
the following method.

HDI = (I Life 1/3 x I Education1/3 x I Income1/3) or

HDI = 1/3(life expectancy index) + 1/3(education index) + 1/3(GDP index)

 On the basis of HDI, countries of the world are categorized as follows:

 0.0 _ 0.499 Low Human Development
 0.5 _ 0.799 Medium Human Development
 0.8 _ 1.00 High Human Development

How is HDI used?

HDI can be used in the following ways:
1. To capture the attention of policy makers, media and NGOs and to draw their attention
away from the more usual economic statistics to focus instead on human outcomes.
 It was created to re-emphasize the people and their capabilities should be the
ultimate criteria for assessing the development of a country, not economic growth.
2. To question national policy choices – asking how two countries with the same level of
income per person can end up with such different human development outcomes (HDI
levels).
 For example, Equatorial Guinea and Czech Republic have similar levels of
income per person (22,218 USD and 22,678 USD respectively), but life
expectancy and literacy differ greatly between the two countries, with Czech
Republic having a much higher HDI Value (0.841 and rank 28 th in the world) than
Equatorial Guinea whose HDI value is 0.538 and its rank is 117th in the world.
 3. To highlight wide differences within countries, between provinces or states, across
gender, ethnicity, and other socio-economic groupings.

Limitations of HDI

 It does not reflect political participation or gender or gender inequalities.

 It does not measure human rights or freedom. This is why UNDP did produce separate
Human Freedom Index (HFI) in 1991though freedom is difficult to measure.
 It does not allow us to judge the relative importance of its different components.

4. Other Criteria for Measuring Development

There are also other criteria in measuring development in which each can be categorized either in
to social, economic and or environmental dimensions.
 Birth rate
 Crude death rate
 Percentage of young population
 Number of doctors and hospitals per population
 Infant mortality rate
 Life expectancy
 Maternal mortality rate
 Percentage of rural population
 Telephone network
 Circulation of news papers
 Energy consumed per year
 Access to safe water
 Import and export items
 Number of cars, etc…

1.2.4. Development Theories

Development theory is the collection of theories about how desirable change in society is best to
be achieved.
What is the difference between theory and model?
  A theory is a simplified and coherent explanation of the relationships of two or more
facts.
 A model is a simplified representation of reality.
 Theory is used to understand the diverse and complex phenomena of reality.
 It is operational tool with the help of which one can understand reality, not the whole but
useful and comprehensive segments of it.

Classic Theories of Economic Development

The post World War II literature on economic development has been dominated by four major
and sometimes competing stands of thought:
(1) The linear-stage of growth model,
(2) Theories and patterns of structural change,
(3) The international dependence revolution, and
(4) The neoclassical, free-market counterrevolution.

Theories of the 1950s and early 1960s viewed the process of development as a series of
successive stages of economic growth through which all countries must pass.
 It was an economic theory of development in which saving, investment, and foreign aid
was all that necessary to enable developing nations to proceed along an economic growth
path that historically had been followed by the more developed countries.
 Development thus became synonymous with rapid, aggregate economic growth.
This linear-stages approach was largely replaced in 1970s by two competing economic and
ideological schools of thought.
 The first, focused on theories and patterns of structural change, used modern economic
theory and statistical analysis to depict the internal process of structural change that a
“typical” developing country must undergo to succeed in generating and sustaining a
process of rapid economic growth.
 The second, the international dependence revolution, was more radical and political
orientation.
 It viewed underdevelopment in terms of international and domestic power
relationships, institutional and structural economic rigidities, and the resulting
 proliferation of dual economies and dual societies both within and among the
nations of the world.

Dependence theories tended to emphasize external and internal institutional and political
constraints on economic development.
 Placed emphasis on the need for major new policies to eradicate poverty, to provide more
diversified employment opportunities, and to reduce income inequalities.
 The objectives were to be achieved in the context of a growing economy, but
economic growth per se was not given exalted status accorded to it by the linear-
stages and the structural-change model.

Throughout much of the 1980s and early 1990s, a fourth approach prevailed. This neoclassical,
(sometimes called neoliberal) counterrevolution in economic thought.
 Mainly emphasized the beneficial role of free markets, open economies, and the
privatization of inefficient public enterprises.
 According to this theory, failure to develop is not due to exploitive external and internal
forces as expounded by dependence theorists.
 Rather it is primarily the result of too much government intervention and regulation of
the economy.

1.2.4.1. Development as Growth, and the Linear-Stages Theories

Rostow’s Stages of Growth

According to Rostow doctrine, the transition from underdevelopment to development can be

described in terms of a series of steps or stages through which all countries must proceed.
 Rostow further explains his theory by mentioning that it is possible to identify all
societies, in their economic dimensions, as lying within one of the five categories:
 The traditional society
 The pre-condition for take-off in to self-sustaining growth
 The take-off
 The drive to maturity, and
 The age of high mass consumption.
  One of the principal strategies of development necessarily for any take-off was
mobilization of domestic and foreign saving in order to generate sufficient investment to
accelerate economic growth.
 The model was developed by an American Economic Historian Rostow, in 1960 who
suggested that countries passed through five stages of economic development. These are:

Stage 1: Traditional Society

 The economy is dominated by subsistence activity where outputs are consumed by

producers rather than traded.
 Any trade is carried out by barter where goods are exchanged directly for other goods.
 Agriculture is the most important industry and production is labor intensive using only
limited quantities of capital
 Resource allocation is very much determined by traditional methods of production.

Stage 2: Transitional Stage (the precondition for take-off)

 Increased specialization generates surpluses for trading.

 There is an emergence of a transport infrastructure to support trade.
 As incomes, savings, and investment grow entrepreneurs emerge.
 External trade also occurs concentrating on primary products.

Stage 3: Take-off

 Industrialization increases, with workers switching from the agricultural sector to the
manufacturing sector.
 Growth is concentrating in few regions of the country and in one or two manufacturing
industries.
 The level of investment reaches over 10% of GNP.
 The economic transitions are accompanied by the evolution of new political and social
institutions that support the industrialization.
 The growth is self-sustaining as investment leads to increasing incomes in-turn
generating more saving to finance further investment.
Stage 4: Drive to Maturity

 The economy is diversifying into new areas.

 Technological innovation is providing a diverse range of investment opportunities.
 The economy is producing a wide range of goods and services and there is less reliance
on imports.

Stage 5: High Mass Consumption

 The economy is geared towards mass consumption.

 The consumer durable industries flourish.
 The service sector becomes increasingly dominant.

According to Rostow, development requires substantial investment in capital. For the economies
of LDCs to grow, the right conditions for such investment would have to be created.

Figure 1.4 Rostow growth model

Limitations of Rostow Model

  Rostow’s model was developed with Western cultures in mind and not applicable to
LDCs.
 Its generalized nature makes it somewhat limited.
 It does not set down the detailed nature of the pre-conditions for growth.
 In reality, policy makers are unable to clearly identify stages as they merge together.
 As predictive model it is not very helpful. Perhaps its main use is to highlight the need for
investment.
 Like many of the other models of economic developments it is essentially a growth
model and does not address the issue of development in wider context.

1.2.4.2. Structural Change Models

Structural change theory focuses on the mechanism by which underdeveloped economies
transform their domestic economic structures from a heavy emphasis on traditional subsistence
agriculture to a more modern, more urbanized, more industrially diverse manufacturing and
service economy.
 It employs the tools of neoclassical price and resource allocation theory and modern
economics to describe how this transformation process takes place.
 Two representative examples of the structural change approach are:
 The “two-sector surplus labor” theoretical model of Arthur Lewis; and
 The “patterns of development” empirical analysis of Hollis Chenery and his co-
authors.

A. The Lewis Theory of Development

The Lewis two-sector model became the general theory of the development process in surplus-
labor Third World nations during most of the 1960s and early 1970s.
 In this model, the underdeveloped economy consists of two sectors:
 A traditional, overpopulated rural subsistence sector characterized by zero
marginal labor productivity in a sense that this labor can be withdrawn from the
agricultural sector without any loss of output; and
 A high productivity modern urban industrial sector in to which labor from the
subsistence sector is gradually transferred.
The primary focus of the model is on both the process of labor transfer and the growth of output
and employment in the modern sector.
 Both labor transfer and modern-sector employment growth are brought about by output
expansion in that sector.
 The speed with which this expansion occurs is determined by the rate of industrial
investment and capital accumulation in the modern sector.
 Such investment is made possible by the excess of modern-sector profits over wages on
assumption that capitalist reinvest all their profits.
 Lewis assumed that urban wages would have to be at least 30% higher than average rural
income to force workers to migrate from their home areas.

B. Structural Change and Patterns of Development

Like the earlier Lewis model, the patterns-of-development analysis of structural change focuses
on the sequential process of through which the economic, industrial, and institutional structure of
an underdeveloped economy is transformed over time to permit new industries to replace
traditional agriculture as the engine of economic growth.
 However, in contrast to Lewis model and the original stages view of development,
increased savings and investment are perceived by patterns-of-development analysts as
necessary but not sufficient conditions for economic growth.
 In addition to accumulation of capital, both physical and human, a set of interrelated
changes in the economic structure of a country are required for the transition from
traditional economic system to modern one.
 These structural changes involve virtually all economic functions, including the
transformation of production and changes in the composition of consumer demand,
international trade, and resource use, as well as changes in socio-economic factors such
as urbanization and the growth and distribution of a country’s population.
 Empirical structural-change analysts emphasize both domestic and international
constraints on development.
 The domestic one include economic constraints such as a country’s resource
endowment and its physical and population size as well as institutional constraints
such as economic policies and objectives.
  International constraints on development include access to external capital,
technology, and international trade.
 Differences in development level among developing countries are largely ascribed to
these domestic and international constraints.
 But, it is the international constraints that make the transition of currently developing
countries differ from that of now industrialized countries.
 Since there are opportunities presented by industrial countries as:
 Source of capital,
 Technology, and
 Manufacturing imports and markets for export and hence their transformation
may be even faster than the early stages of developed nations.
 Thus, the structural change model recognizes the fact that developing countries are part
of a highly integrated international system that can promote (as well as hinder) their
development.

The best known model of structural change is the one based largely on the empirical work of the
late Harvard economist Hollis B. Chenery, who examined patterns of development for various
developing countries during the postwar period.
 These empirical studies of countries at different levels of per capita income led to the
identification of several characteristic features of the development process.
 These characteristic features included:
 Shift from agricultural to industrial production,
 The steady accumulation of physical and human capital,
 The change in consumer demands from emphasis on food and basic necessities to
desires for diverse manufactured goods and services,
 The growth of cities and urban industries as people migrate from farms and small
towns, and

 The decline in family size and overall population growth as children lose their
economic value and parents substitute child quality (education), for quantity, with
population growth first increasing, and then decreasing in the process of
development.
  Proponents of this school often call for development specialists to “let the facts speak for
themselves,” rather than get bogged down in the arcane of theories such as the stages of
growth.

1.2.4.3. The International-Dependence Revolution

During the 1970s, international-dependence models gained increasing support, especially among
developing-country intellectuals, as a result of growing disenchantment with both the stages and
structural change models.
 Essentially, international-dependence models view developing countries as beset by
institutional, political, and economic rigidities, both domestic and international, and
caught up in a dependence and dominance relationship with rich countries.
 Within this general approach, there are three major streams of thought:
 The neocolonial-dependence model,
 The false-paradigm model, and
 The dualistic-development model

A. The Neocolonial-Dependence Model

The first major stream, which we call the neocolonial-dependence model, is an indirect
outgrowth of Marxist thinking.
 It attributes the existence and continuance of underdevelopment primarily to the
historical evolution of a highly unequal international capitalist system of rich country-
poor country relationships.
 Whether because rich nations are intentionally exploitative or unintentionally neglectful,
the coexistence of rich and poor nations in an international system dominated by such
unequal power relationships between the center (the developed countries) and the
periphery (the LDCs) renders attempts by poor nations to be self-reliant and independent
difficult and sometimes even impossible.
 Certain groups in the developing countries, directly or indirectly, are dominated by and
dependent up on international special interest groups including:
 Multinational corporations,
 National bilateral-aid agencies, and
  Multilateral assistance organizations like World Bank and International Monetary
Fund (IMF),
Which are tied by allegiance or funding the wealthy capitalist countries.

 In short, the Neo-Marxist, neocolonial view of underdevelopment attributes a large part

of the developing world’s continuing and worsening poverty through the extension of
policies.
 Unlike other linear stage and structural change theories, in dependence-theories,
underdevelopment is seen as an externally induced phenomenon.
 The Northern Capitalist systems are therefore, required to free dependent developing
nations from the direct and indirect economic control of their developed-world and
domestic oppressors.

One of the most forceful statements of the international dependence school of thought was made
by Theotonio Dos Santos:
 Dependence is a conditioning situation in which the economies of the one group of the
countries are conditioned by the development and expansion of others.
 A relationship of interdependence between two or more economies or between such
economies and the world trade system is based on the expansion and exploitation of
dominant countries.

The Central Propositions of Dependency Theory

There are a number of propositions which form the core of the dependency theory. These
include:
1. “Underdevelopment” is a condition fundamentally differs from “un-development”.
 “Un-development” simply refers to a condition in which resources are not being
used. For example, if the land was not actively cultivated on a scale consistent with
its potential then this condition is “un-development”.
 “Underdevelopment” refers to a situation in which resources are being actively
used, but used in a way which benefits dominant states and not the poorer states in
which the resources are found.
 2. The distinction between underdevelopment and un-development places the poorer
countries of the world in a profoundly different historical context.
 Poor countries are poor because they were coercively integrated in to the
European economic system only as producers of raw materials or to serve as
repositories of cheap labor, and were denied the opportunity to market their
resources in any way that competed with dominant states.
3. Dependency theory suggests that alternative uses of resources are preferable to the
resource usage patterns imposed by dominant states.
 For example, export agriculture is criticized in that many poor economies
experience high rates of malnutrition even though they produce great amounts of
food for export. So, dependence theorists argue that those agricultural lands
should be used for domestic food production in order to reduce the rates of
malnutrition.
4. The preceding proposition can be amplified as follows: dependency theorists rely upon a
belief that there exists a clear “national” economic interest which can and should be
articulated for each country.
 Proponents of this theory believe that this national interest can only be satisfied
by addressing the needs of the poor within a society, rather than the satisfaction of
corporate or governmental needs.
5. The diversion of resources over time is maintained not only by the power of dominant
states, but also through the power of elites in the dependent states.
 These elites are typically trained in the dominant states and share similar values
and culture with the elites in dominant states.

The Policy Implication of Dependency Analysis

Some of the important new issues concerning the implication of dependency theory include:
1. The success of the advanced industrial economies does not serve as a model for the
currently developing economies.
 All nations need to compete successfully with the patterns used by rich countries.
 2. The success of the richer countries was a highly contingent and specific episode in global
economic history, one dominated by the highly exploitative colonial relationships of the
European powers.
3. Dependency theory disproves the central distributive mechanism of the neoclassical
model, what is usually called “trickle-down” economies.
 The primary concern of neoclassical model of economic growth is the efficient
production, and assumes that market will allocate the rewards of efficient
production in a rational and unbiased manner.
 But, dependency theorists argue that economic activity is not easily disseminated
in poor economies.
 For these structural reasons, dependency theorists argue that the market alone is
not a sufficient distributive mechanism.
4. Since the market only rewards the productivity, dependency theorists discount aggregate
measures of economic growth such as the GDP or trade indices.
 Far greater attention is paid to indices such as life expectancy, literacy, infant
mortality, education, and the like.
 Dependency theorists clearly emphasize social indicators of development far
more than economic indicators.
5. Dependant states, therefore, should attempt to pursue policies of self-reliance.
 A policy of self-reliance should be interpreted as endorsing a policy of controlled
interactions with the world economy – poor countries should only endorse
interactions on terms that promise to improve the social and economic welfare of
the larger citizenry.

Relevance of Dependency Theories

 Dependency theory forecasts that the world system will tend to concentrate production in
the hands of relatively few transnational corporations, making the world an oligopoly
market. From this, the theory also forecasts a long tend to slow down production and to
speed up income polarization.
 The economic divide and income gap between industrialized countries and developing
countries has widened continually. The polarization between North and South is more
 pronounced than ever. In other words, the rich are getting richer while the poor are
getting poorer.
 Therefore, there should call attention to the fact that these growing disparities between
people and nations have to be accounted for and analyzed.

Critics of Dependency Theory

 The principal criticism of dependency theory has been that the school does not provide
any substantive empirical evidence to support its arguments.
 There are few examples that are provided but many exceptions are there which do
not fit in with their core-periphery theory, like the newly emerged industrial
countries of North East Asia.
 It has also been said that dependency theories are highly abstract and tend to use
homogenizing categories such as developed and underdeveloped, which do not fully
capture the variation within these categories.
 Another point of criticism is that the dependency school considers ties with multinational
corporations are detrimental, while one view has been that they are important means of
transfer of technology.
 The other criticism which is labeled against the dependency theorists is that they base
their arguments on received notions such as nation-state, capitalism and industrialization.
 Some of the Eurocentric biases are inherited in these theories of dependency
school: for example they assume that industrialization and possession of industrial
capital are crucial requisites for economic progress.
 Dependency theorists do not reflect the changed socio-economic and political situations
of the contemporary world.
 What we need to ask ourselves is whether the essential ideas and the ideology behind the
dependency theory have any relevance in the present context?

NB: Read and take notes on the following concepts from the given material

B. The False-Paradigm Model

C. The Dualistic-Development Thesis
1.2.4.4. The Neoclassical Counterrevolution: Market Fundamentalism

1.2.5. Sustainable Development

The concept of sustainable development emerged into the world agenda via the World
Commission on Environment and Development whose report came out in 1987.
 The concept sustainable development is coined from two different yet interrelated
words.
 These are “development” on one hand and “sustainable” on the other hand.
 The most widely and commonly used definition of sustainable development, which
meets the needs of the present generation without undermining the ability of future
generation to meet their own needs.
 The idea of sustainable development was identified to overcome two fundamental
conflicts:
1. The seeming incompatibility between maintaining a healthy environment and
economic growth needed for development.
2. Continuing gap between the quality of life in developed countries (the global
‘North’) and developing countries (the ‘South’).
 Sustainable development was originally devised as a compromise between two
contradictory aims:
1. The pursuit of environmental conservation; and
2. The pursuit of economic growth and the development that generally followed as a
result.
 Sustainable development has assumed two contradictory meanings among different
governments and NGOs around the world:
 From the perspective of developed countries, sustainable development is
primarily about conserving the environment.
 As viewed from the developing world, it means the continued pursuit of
development with the aim of reducing poverty and attaining the status of modern
societies.
 It holds the key to understand the historical development of human civilization and
predicting its long term prospects.
  For development to be sustainable, it must take accounts of social and ecological factors,
as well as economic ones; of living and non-living resource base; and the long-term as
well as short-term advantages and disadvantages of alternative actions.
 Sustainable development was recommended to developing countries as a development
pathway that would not replicate the environmental degradation that had been included in
the industrial countries.
 However, in this stage it was expressed in rather general form, and lacked both proper
definition and any accompanying guidelines as to how it might be achieved in practice.

1.2.5.1. Principles of Sustainable Development

In 1987, the World Commission on Environment and Development (Brundtland Commission)
called for the development of new ways to measure and assess progress towards sustainable
development.
 In November 1996, practitioners and researchers came together in Bellagio, Italy and
developed the Bellagio principles for assessment of sustainable development.
 These principles serve as the guidelines for the whole of assessment including:
 The choice and design of indicators,
 The interpretation and communication of the result.
 They are intended for use in starting and improving assessment activities of:
 Community group
 NGOs
 Corporations
 National governments
 International Institutions.

Overview of the Principles

These principles deal with four aspects of assessing progress towards sustainable development.
 Principle 1 deals with the starting point of any assessment-establishing vision of
sustainable development and clear goals that provide a practical definition of that vision.
 Principle 2 up to 5 deals with the contents of any assessment and the need to merge the
sense of the overall system with a practical focus on current priority issues.
 Principle 6 through 8 deal with the key issues of the process of assessment, while
  Principle 9 and 10 deal with necessity for establishing a continuing capacity for
assessment.

More detail, the principles are:

1. Guiding vision and goals
2. Holistic perspectives
3. Essential elements
4. Adequate scope
5. Practical focus
6. Openness
7. Effective communication
8. Broad participation
9. Ongoing assessment
10. Institutional capacity

1.2.6. Environmental Accounting

 Environmental accounting is defined as a set of aggregate national data linking the
environment to the economy, which will have a long-run impact on both economic and
environmental policy making.
 It is an inclusive field of accounting.
 It provides reports for internal use:
 Generating environmental information to help make management decisions on
pricing.
 Controlling overhead and capital budgeting.
 External use disclosing environmental information of interest:
 To the public and so to the financial community.
 Environmental accounting is an important tool for understanding the role played by the
natural environment to the environment.
 Environmental accounting provides data which highlight both:
 The contribution of natural resources for economic well-being; and
 The cost imposed by pollution or resource degradation.
 Environmental accounting, sometimes referred to as:
  “green accounting”
 “resource accounting”
 “integrated economic and environmental accounting”
 It is modification of the System National Accounts (SNA) to incorporate the use of
depletion of natural resources.
 Environmental accounting is an expression path:
 To measure environmental performance
 To integrate environmental policy with business policy
 To increase public concern over environmental issues
 To incentive-based regulations.
 The of the missing elements from the system national accounts include:
A. Environmental Expenditures

These expenditures may be:

 Expenditures to protect the environment from harm, or to mitigate that herm, cannot be
indentified from the data in the accounts.
 Some of these expenditures include:
 The cost incurred to prevent environmental harm, for example, pollution control
equipments purchased by factories
 Costs of remedying that harm, medical expenses.
These expenditures are already included in the income accounts, however, they cannot be
disaggregated to highlight the costs incurred to prevent or mitigate environmental degradation.
B. Non-Marketed Goods.

Environment provides many goods which are not sold, but which are nevertheless of value; for
example, fuel goods and building materials from obtained nature, meat and fish from lake water,
as well as medical plants.
 Some countries do not include these to their national income accounts. Again estimation
is incomplete, and cannot always be disaggregated from products which are sold.

C. Non-Marketed Services
Environment provides unsold services such as watershed protection by forests, or water filtration
by submerged vegetation.
 These services are not included in the System National Account.
 It can be very difficult to estimate their economic value, but need to be aggregated to
System National Account.
D. Consumption of Natural Capital

The SNA treats gradual depletion of physical capital machines and other equipments – as
depletion rather than income, in accordance with conventional business accounting principles.
 However, the depletion of natural capital-forest in particular, is accounted for as income.
 So, accounts of a country which harvest trees very quickly will show quite high income;
but nothing will show the destruction of a productive asset-the forest.
 Thus, the depletion of natural capital should be accounted for in the same way as other
productive assets.

2. PERCEPTION OF POOR PEOPLE TOWARDFS THE ENVIRONMENT

2.1. The Population-Environment-Development Debates

The population-environment-development debate is important to us because it:

  Provides a framework for understanding inter-sectoral linkages,
 Helps to define the context and very nature of the individual linkages
 Assists to improve policy and development programming through understanding of
compatibilities and inconsistencies among strategic objectives in key sectors.
Let us begin with short review of the defining parameters of the debate:
 Ecological theory tells us that, over the long time, there are two interrelated sets of
responses that population will muster in adapting to greater population pressure and
resource scarcity.
 These adaptation responses developed through decades are:
1. The first response is to change the population size through:
 Lower fertility,
 Higher mortality, and
 Emigration
2. The second is to change the productive economy of the population towards more
diversified and more specialized use of labor, and using more productive
technologies.
These two adaptive measures/responses could be grouped as:
 One largely demographic, and have received considerable research attention
 The other economic over years.

Cornerstones of the Debate

The demographic response has been a focal point of the debate since the time of Malthus, whose
writing depicted the dangers of population growth-notably higher mortality through diseases,
war, and famine.
 They are called by Malthus as “positive checks” that population endures as they re-adjust
to the carrying capacity of their resource base.
 To Malthus, demographic change is necessary to avert continued resource degradation and
declining standard of living.
 As Malthus suggested, perhaps the main place where environment, population and
development interact is on the farm itself, and this is important because farmers
constituent the vast majority of the Third World population.
  Accordingly, what would happen to farmers’:
 New farmland distribution,
 Alternative income through selling wood, or herding; were Malthus’s questions.
But, whether farmers can derive greater output from their land-holdings through sustainable
intensification-is the crucial issue.

Others have focused the debate on the economic (income generation) response (sometimes called
intensification).
 This is with the hypothesis that demographic pressure causes populations to intensify their
systems of agriculture production with:
 More labor,
 Improved seeds, etc.
 Boserub is one of the proponents of the intensification response.
 She outlines a number of technology and investment paths to agricultural intensification
that farmers follow in the wake of land constraints-conditions resulted from:
 Population growth,
 Increased demand for agricultural products, or
 Reduces transportation costs.
 Her work emphasized on two broad paths:
1. The first refers to capital-led intensification which entails, in addition to the use of
farm labor and land, the use of “capital” including non-labor variable inputs that
enhance soil fertility (ex. fertilizers) and quassi-fixed capital that protects the
land(like terracing).
2. The second path makes little or no use of “capital” (as defined above). We refer to
it as labor-led or labor-only intensification.
 Under labor-led path, farmers merely add (unaugmented) labor to the production process
on a given unit of land,
 Allowing them to crop more densely,
 Weed and harvest more assiduously, and so on.

 Many agricultural researches have illustrated the two intensification paths as capital-led
and labor-led.
  In African context, several studies have categorized the agricultural system in certain
regions where demographic pressure has pushed farmers to intensify along these paths.
 For example, Malton and Spencer noted that the capital-led path is more suitable and
productive in:
 Fragile, and
 Resource-poor areas.
 It has also been categorized a variety of agro-climatic and policy setting in-terms of these
two paths, specially focusing on capital-led path (which they term “policy-led”).
 They maintain that the labor-led path has not led to land productivity growth in sub-
Saharan Africa.
 In much of the tropic, the labor-led path intensification is unsustainable, and lead to land
degradation and stagnation of land productivity.
 This danger is at its maximum in East African highlands and other highland areas in Asia
and Latin America, which are characterized by heavy rainfall and steep slopes.
 In latter setting, the capital-led intensification path that incorporates land conservation is
much more sustainable.
 In contrast, areas that follow only the labor-led path in that setting are on course of long run
ecological degradation and poverty.
 That’s why the report of World Commission on Environment and Development has been
warned countries to focus on sustainable development.

2.2. Population, Resources, and the Environmental Linkages

Much of the concern over environmental issues stems from the perception that we may reach a
limit to the number of people whose needs can be meet by the earth’s finite resources.
 But it is clear that continuing on our present path of accelerating environmental degradation
would severely compromise the ability of present and future generations to meet their
needs.
 As slowing of population growth rates would help ease intensification of many
environmental problems.
 However, the rates and timing of fertility decline, and thus the eventual size of the world
population will largely depend on the commitment of governments to creating economic
and institutional conditions that are conducive to limiting fertility.
 Rapidly growing populations have led to:
 Land, water and fuel wood shortage in rural areas,
 Urban health crisis from lack of sanitation and clean water.
 In many poorest regions of the world, increasing population density has contributed to the
severe and accelerating degradation of the resource that these growing populations depend
on for survival.
 To meet expanding LDCs needs, environmental devastation must be halted and the
productivity of existing resources stretched further so as to benefit more people.
 If increases in GNP and food production are slower than population growth, per capita
levels of production and food self-sufficiency will fall.
 Then the resulting persistence of poverty would be likely to perpetuate high fertility rates.
 Hence, cause and effect and/or dual effect of poverty, one on the utilization of natural
resources and the other on the contribution to the rapid population growth.

Lack of access to appropriate

technology, capital, resources

Inadequate resource Need for family labor and

management family security

Environmental High fertility

degradation

Rapid population
growth
Figure 2.1 Population growth and natural resource degradation, the dual effects of poverty

 Policy wise, this thought is regarded as inefficient neither in population policy nor in
more technical intervention as long as the “real” factors of degradation are not addressed.
 Therefore, it advocates poverty alleviation through a more equitable distribution of
resources and the readdressing of distorted relation both within and between countries.
 Unlike natural resource degradation issues, there has been little analysis of the role of
population dynamics in population.
 Soil, air and water pollution is mostly urbanization and industry-related.
 That’s rural pollution by agricultural chemicals is limited when compared to
industrial wastes from urban areas which are emitted in much higher quantities.
 These problems cannot be much alleviated by population policies.
 they have to do mostly with:
a. Economic and technological models that favor mass production and place
paramount value on GDP and income considerations, downplaying quality of
life (including health) and the importance of clean environment, and
b. Careless individuals and household behavior.
 Some policies have attempted to reduce the rate of growth of urban agglomeration, but
clearly the margins for interventions are limited in this domain.
 This needs to harmonize urban population growth rates with the rates of growth of
productive employments in cities.
 But, this should be done by reducing the “push” factors in rural areas, especially when
this leads to readdressing unjustifiable inequalities.
 Of course the broad policy conclusion is that measures are needed to attack the “root
causes”.

2.3. Perception of Poor People towards Environment

 How do the poor perceive the Environment?
 Conventional wisdom holds that concern for the environment is limited to the residents of
the wealthy industrialized nations of Northern Hemisphere.
 Those who live in the poorer, Southern nations are assumed to be too preoccupied with
economic survival to be able to worry about environmental quality.
 Residents of the industrialized nations remain more concerned about environmental
problems than do those of the less economically developed countries.
 At the 1992 UN Conference on Environment and Development (Rio de Jeneiro), the
governments of poorer nations emphasized on the importance of “development” and
those of the richer nations that of “environment” (to the neglect of development), and
means of achieving “sustainable development” remained ambiguous.
Poor peoples’ perception of the environment is a good starting point for understanding the ways
in which:
a. Poor people themselves link poverty to their environment; and
b. The importance attached to the environmental issues in their lives.
 The livelihoods of poor people are strongly tied with the environment.
 On the other hand, environmental crises affect everyone on the planet.
 But the crisis stress poor people more.
 Degradation of common property resources pulls labor away from directly productive
activities towards gathering activities like collecting woods, cutting trees, etc.
 In addition to this, biomass degradation results in food shortage.
 Recurrent drought, natural calamities, also affects poor people.
 In their quest to food security, the rural poor have sometimes little choices but to over use
the limited resource available to them.
 They focus on “short time horizons” which favor immediate imperatives over long term
objectives.
 The poor may be both agents and victims of environmental degradation, especially in
marginal areas.
 But, it cannot be assumed that the poor have an intrinsic propensity to degrade
environmental resources.
  Poverty eradication would not erase environmental degradation but change the nature of
environmental problems.
2.4. Poverty and the Environment

For better understanding, poverty can be seen from two perspectives:

 Absolute poverty, and

 Relative poverty

Absolute poverty: refers to the inability to meet minimum human needs such as food, cloth,
health care, shelter.
 It is a lack of basic necessities for survival.

Relative poverty: refers to the inability to attain a given contemporary standard of living.
 It is understandable why people who are hungry, ill, unemployed and lacking the
elementary amenities of life.

In both cases, people show little interest in environmental considerations.

 And are too forced to meet short time survival needs at the expense of sustainability.
 That is why it is commonly said that poverty is the major environmental hazard.

2.5. Poverty in fragile ecosystems

Absolute poverty has been on the retreat in most high potential areas in developing countries.
 The most important disparities are not between poor and rich people, but between high
potential and high investment areas and fragile ecosystems.
 In many developing countries, poverty reduction process has forced or brought
environmental destruction.
 High population pressure in fragile ecosystems has aggravated the problem.
 For instance,

 80% of the people in Latin America

 60% in Africa

 50% in Asia
  As a result of this, fragile ecosystems are rapidly becoming ghettos (minors) of poverty
and environmental degradation.

 The need for urgent actions can be recognized in relation to the following characteristics
of these regions:

1. They constitute a significant part of the world’s land resources. So, their
degradation exerts a far reaching influence on other areas.
2. A serious of ecological deterioration caused by overgrazing, deforestation and
excessive cultivation threatens the livelihood of the populations.
3. Mountains and dry zones are important sources of water, energy, minerals,
agricultural products and biodiversity.
4. A high portion of the absolute poor in ecologically fragile areas are indigenous
people that depend on renewable resources for their well-being.
5. Degradation of land and loss of its vegetative cover also has consequences at the
global level, due to its contribution to carbon exchange.

3. ENVIRONMENTAL PRIORITIES FOR DEVELOPMENT

3.1. Solid and Hazardous Wastes

 Solid waste disposal is normally solid or semisolid materials, resulting from human and
animal activities that are “useless”, “unwanted”, or hazardous.

 Selecting a disposal method depends almost entirely on cost, which in-turn is likely to
reflect local circumstances.
Solid waste management involves the collection, storage, transport, treatment, disposal, and
minimization of the refuse or byproduct produced by the community and industry.
 In addition to the health effect, solid wastes have economic, social, and environmental
effects.
 There are a number of ways that these solid wastes can be managed. From these, core ones
include:

A. Landfill Method

Sanitary landfill is the cheapest satisfactory means of disposal, but only if suitable land is there
within economic range of the source of the wastes.
 Collection and transportation accounts for 75% of the total cost of the solid waste
management.
 It contributes much for the pollution of surface and ground water, but the pollution may be
minimized by lining and contouring the fill, compacting and planting the cover, selecting
proper soil, diverting upland drainage, and placing wastes in sites not subject to flooding
or high groundwater levels.
 The Repi landfill site in Addis Ababa is one of the best examples of landfill method of
solid waste management.

B. Incinerator Method
 In incinerator method of solid waste management, refuse is carried and burned in
secondary chambers.
 Combustion is 85 to 90 percent complete for the combustible materials.

C. Composted Method

 Composting operations of solid wastes include preparing refuse and degrading organic
matter by aerobic microorganisms.

D. Recycling Method

 The practice of recycling solid waste is an ancient one.

  Today, recyclable materials are recovered from municipal refuse by a number of methods,
including shredding, magnetic separation of metals, air classification, that separate light
and heavy fractions, screening and washing.

Hazardous wastes

Hazardous wastes could be defined as wastes that pose a potential hazard to human or other
living organisms for one or more of the following reasons:
1. They are non-degradable or persistent in nature
2. Their effects could be magnified by organisms in the environment
3. They can be lethal (harmful up to death)
4. They may cause detrimental cumulative effects.

General categories of hazardous wastes include toxic and flammable chemicals, radioactive, or
biological substances.
 Radioactive substances are hazardous because prolonged exposure to ionizing radiation
often results in damage to living organisms and the substances may persist over long
periods of time.

Of course, ‘natural hazards’ generally invokes image of violent events like hurricanes, floods,
tsunamis, earthquakes, volcanic eruptions, the collapse of mountain slopes; which result in
widespread death, destruction and desolation.

Sources of Hazardous Wastes

Hazardous wastes can come from various sources. But, the most common and identified sources
are stated as:

A. Industrial Waste
 Hazardous wastes are generated by nearly every industry; those industries that
themselves generate few hazardous wastes nonetheless use products from hazardous
waste generating industries.

B. Agricultural Waste
  Agriculture produces such wastes as pesticides and herbicides and the materials used in
their application.
 Fluoride wastes are by-products of phosphate fertilizer production.
 Soluble nitrates from manure may dissolve into groundwater and contaminate drinking-
water wells.

C. Household Waste

 Household sources of hazardous wastes include toxic paints, flammable solvents, caustic
cleaners, toxic batteries, drugs and mercury from broken fever thermometers.

D. Medical Waste

 Hospitals and doctors’ offices must be especially careful with needles, scalpels, and
glassware called “sharps”.
 Pharmacies discard outdated and unused drugs; testing laboratories dispose of chemical
wastes.

3.2. The Concept of Energy

In a literal sense energy is the ability to do work. It may be the ability to move, lift, or push
something or the ability to produce heat or light. It can be classified as stored (potential) energy,
and working (kinetic) energy. Potential energy is the ability to produce motion, and kinetic
energy is the energy of motion.
Forms of energy include:
 Energy of motion (kinetic energy),
 Heat (thermal energy),
 Light (radiant energy),
 Photosynthesis (biological energy),
 Stored energy in a battery (chemical energy),
  Stored energy in a capacitor (electrical energy),
 Stored energy in a nucleus (nuclear energy), and
 Stored energy in a gravitational field (gravitational energy).

Forms and Sources of Energy

Energy comes in many forms. Radiant energy is light, and thermal energy is heat. An object in
motion has mechanical energy. Broccoli, flashlight batteries, and gasoline are some things that
store chemical energy.
All forms of energy are grouped into two broad categories:
1. Potential energy and
2. Kinetic energy.
Potential energy is stored energy, while kinetic energy is moving energy. Take a roller coaster
car, for example. When it pauses just before making a drop, it has potential energy. That energy
quickly changes to kinetic energy when the car goes careening down the slope.

On the other hand, sources of energy with some common examples include:
 Biomass (firewood),
 Fossil fuels (coal, oil, and natural gas),
 Flowing water (hydroelectric dams),
 Nuclear materials (uranium), sunlight, and
 Geothermal heat (geysers).

Energy sources may be classified as non-renewable and renewable.

 Non-renewable energy is energy that is obtained from sources at a rate that exceeds the
rate at which the sources are replenished. Examples of non-renewable energy sources
include fossil fuels and nuclear fission material such as uranium.
 Renewable energy is energy that is obtained from sources at a rate that is less than or
equal to the rate at which the sources are replenished. Examples of renewable energy
include solar energy and wind energy.
Renewable and non-renewable energy sources are considered primary energy sources because
they provide energy directly from raw fuels. A fuel is a material which contains one form of
energy that can be transformed into another form of energy.

Primary energy is energy that has not been obtained by anthropogenic conversion or
transformation. The term “anthropogenic” refers to human activity or human influence. Primary
energy is often converted to secondary energy for more convenient use in human systems.
Hydrogen and electricity are considered secondary sources of energy, or “carriers” of energy.
Secondary energy sources are produced from primary sources of energy.
Secondary sources of energy can store and deliver energy in a useful form. The kinetic energy of
wind and flowing water are indirect forms of solar energy and are considered renewable. Wind
energy technology relies on gradients in physical properties such as atmospheric pressure to
generate electrical power. Wind turbines harness wind energy and convert the mechanical energy
of a rotating blade into electrical energy in a generator.

Equally important, renewable energy is energy derived from natural resources that can be
replenished, or replaced, through natural processes. Renewable resources such as solar, wind,
water, biomass, and geothermal energy cannot be used up. No matter how much we use them,
the sun will keep shining, winds will blow, rain will fall, plants will grow, and Earth will emit
heat. Nonrenewable resources, on the other hand, cannot be replaced naturally. Even though
plentiful supplies may exist, they can be used up. One example is uranium, the major source of
fuel for the reactors that create nuclear energy.

Alternatively, Sunlight is the most basic energy resource on the planet. Plants absorb sunlight, or
radiant energy from the Sun-also known as solar energy. They transform that energy into sugars
and starches, which they break down to create chemical energy. This process is called
photosynthesis.

Types of Energy
A. Nuclear Energy

Nuclear energy is an energy released during the splitting or fusing of atomic nuclei. The energy
of any system, whether physical, chemical, or nuclear, is manifested by the system’s ability to do
work or to release heat or radiation. The total energy in a system is always conserved, but it can
be transferred to another system or changed in form. In other words, nuclear energy is derived
from the energy locked inside the nucleus, or center, of an atom. Atoms are made up of three
types of particles-protons and neutrons, which form the nucleus, and electrons, which orbit
around the nucleus. Most nuclear power plants produce energy by inducing a reaction called
nuclear fission. It involves firing a neutron into the nucleus of an atom, splitting the atom apart.
This releases a tremendous amount of energy in the form of heat and light.

One of the major advantages of nuclear power is that it is a clean resource compared to fossil
fuels. Nuclear power plants generate virtually no carbon dioxide or other greenhouse gases.
Uranium is also a highly concentrated source of energy. Only a tiny amount generates massive
amounts of power. Nuclear power allows many countries to be energy independent.
 They don’t have to import expensive foreign fuels to produce their electricity.
France, for example, relies more heavily on nuclear energy than does any other country in the
world. Nuclear power plants generate 78 percent of the country’s electricity. When France
launched its nuclear power program in the 1970s, a French official explained the decision: “We
have no oil, we have no coal, we have no gas, and we have no choice.”

B. Hydropower
Hydropower is power derived from the force of moving water. That water may be rushing down
a river, cascading over a waterfall or dam, or surging forward as ocean waves or tides. Humans
have harnessed hydropower since ancient times. They devised ways to capture the kinetic energy
of moving water and convert it into mechanical energy. In earlier times that energy was used to
perform such tasks as grinding grain. Thanks to hydropower both humans and animals were
relieved of tedious physical labor. Today, hydropower is one of the world’s leading methods of
generating electricity.

C. Solar Energy
Solar energy is radiant energy coming from the Sun. That energy arrives on Earth in the form of
heat and light. Solar energy is the most abundant of our renewable resources; it is available as
long as the Sun keeps shining. In just one hour enough of the Sun’s energy reaches the earth to
meet the entire. The most common way of generating electricity from sunlight is with solar
photovoltaics (PV). Solar cells are the devices used to generate PV power. Usually made of
silicon, they are also known as photovoltaic cells or photoelectric cells. They convert sunlight
directly into electricity.
From 2006 to 2007 worldwide use of solar PV power grew 62 percent. Almost every year brings
another “world’s largest” solar PV plant. Germany and Spain were all building huge-capacity
plants in 2008. The largest PV power station in the United States is Nellis Solar Power Plant in
Nevada, with 70,000 solar panels.

D. Wind Energy

Wind energy refers to energy contained in the force of the winds blowing across the earth’s
surface. When harnessed, wind energy can be converted into mechanical energy for performing
work such as pumping water, grinding grain, and milling lumber. For instance, wind power
offers many advantages. For example, it is a renewable energy source, and the supply is endless.
As long as the Sun keeps shining, the wind will keep blowing. While fuel prices may go up and
down, making the price of fuel generated electricity fluctuate, the price of wind-powered
electricity will remain stable, because no fuel is purchased. Wind power is also environmentally
friendly.
 Wind turbines emit no carbon dioxide or other greenhouse gases.
Although wind farms cover a lot of land area, that land is still available for other uses. Farmers
can safely graze cattle or raise crops on a wind farm.

Biomass Energy
In terms of energy resources, wood is a form of biomass. Biomass is any organic material-that is,
any material derived from plants or animals. Besides wood, biomass includes crops, farm wastes,
plant oils, animal fats, and even some kinds of garbage. When biomass is used as a fuel, its
chemical energy is converted into heat, electricity, or mechanical energy. Basically, biofuel is
made from organic material produced by living things, in contrast to fossil fuels such as coal,
petroleum, or natural gas that come from long-dead plants and microorganisms. Biofuel includes
any solid, liquid, or gaseous fuel produced either directly from plants or indirectly from organic
industrial, commercial, domestic, or agricultural wastes.

In principle, burning biofuels adds less carbon to the environment than burning fossil fuels
because the carbon atoms released by burning biofuel already existed as part of the modern
carbon cycle. Burning fossil fuels, on the other hand, always adds extra carbon because the
carbon they contain comes from a buried source that was not part of the modern carbon cycle.
 3.3. Industry
The term industry in a general sense is the production of goods and services in an economy. It
also refers to a group of enterprises (private businesses or government-operated corporations)
that produce a specific type of good or service-for example, the beverage industry, the gold
industry, or the music industry.

 Some industries produce physical goods, such as lumber, steel, or textiles. Other
industries-such as the airline, railroad, and trucking industries-provide services by
transporting people or products from one place to another.
 Still other industries, such as the banking and restaurant industries, provide services such
as lending money and serving food, respectively.

The word industry comes from the Latin word industria, which means “diligence,” reflecting the
highly disciplined way human energy, natural resources, and technology are combined to
produce goods and services in a modern economy.

While societies have always produced goods and services, large-scale production did not occur
until the Industrial Revolution, a period of mechanization that began in Britain during the 18th
century. Large-scale production is driven by machinery, makes use of advancing technologies,
and employs a sizeable workforce unconstrained by preindustrial relationships, such as those of
slavery or feudalism. The Industrial Revolution did not occur in the United States until the first
half of the 19th century. Although many countries have since developed or are beginning to
develop industries in the second half of the 20th century, most of the world’s poorest countries
have yet to establish a solid industrial base.
Classification of Industries
An industry is usually classified either by a major input (good or service used to produce the
final product) or by the industry’s final product.

 When a final product is used by another industry, it is called a producer good. Steel,
which is used by other industries to produce automobiles, airplanes, construction
materials, and numerous other products, is an example of a producer good.
 Final products, such as automobiles, which are purchased and used by individuals, are
called consumer goods.

Industries also may be classified as primary, secondary, or tertiary industries.

 Primary industries use raw natural resources as major inputs. Agriculture, commercial
fishing, mining, and the forest industry are primary industries. They use farmland,
oceans, mineral deposits, and forests, respectively, as their major inputs.

 Secondary industries use producer goods to assemble their products. For example, the
construction industry produces houses, other buildings, and roads. Its inputs include
lumber manufactured by the forest industry.

 Tertiary industries are those that provide services. For example, retail stores, universities,
hotels, banks, television stations, hospitals, and travel agencies are all tertiary industries.
It is also classified as tertiary industries are all forms of government activity, ranging
from local trash disposal to the armed force.

4. BETTER DECISIONS FOR BETTER DEVELOPMENT

4.1. The Need for Policy Reform

There is growing recognition that insufficient action has been taken to reduce environmental
hazards through:

 Primary health care,

 Education, and
 The provision of services such as clean water and sanitation.

According to one estimate, expenditure on these programs will have a double over the next few
years just to maintain the current situation. But the structure of some existing programs may
actually hinder progress.

Currently, few low budget grassroots services are provided, even though they tend to be more
cost-effective, especially when community organizations become involved.

Annually:

 $10 billion, or only about 0.5% of developing country GDP, is spent on sanitation and
water services;
 80% is spent on program costing at least $550 per person, and
 Less than 20% is spent on program costing less than $ 30% per person.

Similar patterns occur in the health profession.

 As a consequence, government schemes tend to reach a relatively selected group of
constitutes while falling far short providing universal access for the poor, who are
subjected to the worst environmental degradation.
Unless governments vastly increase the breadth (extent) of the population served by programs,
these disparities will tend to worsen with increased urbanization in the future.
 Unfortunately, the poor generally lack the clout to demand their share of environmental
protection efforts.
 To this end, meeting their targets in the face of increasing financial shortages,
governments will have to radically change the manner in which scare resources are
managed.

In the past, many polices designed to cure environmental ills have actually worsened the
problems that they were designed to alleviate.
 Where, scare resources have been provided to recipients at prices far below.
For example, on average in developing countries, the price paid for piped water is only 35% of
the total cost of supporting it.
 Due to rationing, such subsidies frequently benefit only people with high incomes.
 The poor are thus forced to buy water from vendors at a price 10 times that of piped
water.
 Many governments provide free water service at little or no charge, even in areas with
water shortage - The result is the waste of precarious resources.

In Cairo, Jakarta, Lima, Manila, and Mexico City, among other cities, more than half of urban
water supplies remain unaccounted for.
 Ironically, while chronic water shortages affect two billion people annually, over-
irrigation and water logging have contributed to the salinization of roughly 25% of all
irrigated land, greatly reducing its productivity.
 Similar patterns are repeated for energy and agricultural inputs.
 The average price paid for electricity in developing countries, which, again, is usually
available only to the relatively well-to-do, represents less than half the cost of supplying
it, and losses in transmissions are three to four times higher than in industrialized
countries.
Cognizant of the aforesaid challenges in urban areas of LDCs,
 Better pricing policies and efficiency requirements would lead to improvements in the
allocation of resources, as well as substantial saving on fuel imports.
Fertilizer and pesticide subsides, with most frequently benefit large farmers, tend to promote
monocultures that droplet soils and to discourage the use of sustainable methods such as
integrated pest management.
 Another factor that needs more careful consideration in the design of environmental
policy is the important role of women in the management of resources.
Though their roles as managers of fuel and water supplies, agricultural producers and guardians
of household health, women control the fate of many of the world’s resources. Yet they are
rarely consulted in the design of government services or monthly work 60 to 90 hours a week,
will have little or no use for resources unless they are made easily accessible. As a result, further
investment in the educational attainment of women, which is closely related to the health of their
children, can thus greatly enhance environmental efforts.
  Over the past two decades, environmental degradation, including land degradation has
continued to worsen exacerbating further poverty and food insecurity.
 Conversely, awareness of the importance of the environment and its conservation has
increased. There has been a transformation in people's perception of the poverty problem
in developing countries.
 If one accepts that hard core rural poverty is increasingly a phenomenon associated with
marginal lands, then new strategies are required that integrate poverty alleviation and
environmental management.

Until recently, the international community and national governments have tended not to
appreciate the need for integrated rural poverty alleviation and environmental management
programs in marginal areas.

 There were a number of promising initiatives in this field, usually undertaken by NGOs
and community-based organizations, but they were usually small and much localized.

 At the same time, in many regions, rural people's perceptions of their environment and
the priority they give to a better relationship with it have changed.
Increasingly, rural people are realizing that:

(a) The fragile environment on which they depend for their survival is being neglected or over-
exploited, and it is now necessary to rehabilitate it and manage it sustainably; and
(b) The environment belongs primarily to them, and they must take the responsibility for the land
and organize themselves in groups, cooperatives, village development associations and other
local association to defend it.

 UNCED's Agenda 21, the global action program for sustainable development, is perhaps
the first expression of international commitment to addressing the poverty-environment
nexus.
To this end the issue of “combating poverty" called for specific long-term strategies that
integrate poverty eradication and sustainable management of the environment.
Agenda 21 devoted two chapters to the special needs of fragile ecosystems, namely

 Chapter 12 on "Combating Desertification and Drought" and

  Chapter 13 on "Sustainable Mountain Development".

For mountainous areas, efforts are currently under way to develop the basis for an action plan for
sustainable mountain development, known as the "Mountain Agenda".

A set of action proposals has been developed by those involved in promoting sustainable
mountain development.
The main proposals for action that are emerging, identified through a broad participatory process
involving the major NGOs, encompass five specific areas of focus:
Poverty eradication; the strengthening of a global information network and database;
strengthening country capacity and the generation of "National Mountain Action Programs";
raising awareness through the preparation and organization of a World Conference on
Sustainable Mountain Development in early 1997.

 While the underlying incentives to enter into partnership must exist, what is also needed
is a favorable context to promote its emergence and functioning.
 Here, more is meant than economic and fiscal policies, although these are of course
extremely important.
 It also means a policy orientation that actively focuses on empowerment of local actors to
take advantage of new opportunities and overcome old constraints.
 The Convention therefore encourages devolution of decision-making from the centre to
local populations and resource users.

 An emphasis on empowerment of local populations and civil society should not be

construed as a wish to actively withdraw from the sustainable development arena.
 Instead, it is based on a recognition that the public sector and multilateral finance can
facilitate but cannot substitute for action that must come from economic agents at the
local level that act individually or collectively.

 What is needed now is to build an operational coalition between NGOs, CBOs as well
as other institutions of civil society together with government institutions and
international agencies, to form action-oriented partnerships around specific and
concrete areas of intervention.

Neither national budgets nor statistics on international financial flows to developing countries
give clear figures on resources presently allocated to combat desertification.

 But there is little argument about the dearth of international funding for desertification
control.
  Even resources formally provided under Global Environmental Facility (GEF),
which, by and large, precludes eligibility for desertification programs - are judged to
be inadequate.

The Global mechanism configuration is about improving the effectiveness and efficiency of
existing flows, in addition to catalyzing and leveraging new flows and sources of finance. It
encourages a greater role for domestic resource mobilization, private sector initiative, and a
blending of various concessional and non-concessional external finances.

This diversity of flows and the multifaceted diverse coalition which one hope it would represent
will in the end make the Convention and the actions it triggers more robust and sustainable.

 One should work towards that coalition, by assisting to set in place policy and
institutional frameworks that are favorable to private initiative, by helping
governments to provide public goods, by pump-priming promising initiatives, and by
assisting local populations and community organizations to interface more
productively with the private sector.

4.2. Financing Peoples' Participation

Local-level activities and creativity championed have a number of implications for the nature of
resource mobilization as well as the manner through which resources are utilized.

 First, there is a need to step up efforts aimed at awareness-building at local level. This is
a task for which NGOs and CBOs are best suited.

 The NGO community, and in particular the international NGOs, should give a high
priority to this objective when mobilizing resources for CCD as stipulated in the
Convention.
  Second, CCD calls upon parties to promote a National Desertification Fund (NDF) and
similar mechanisms for directing funds to the local level. Such mechanisms should be run
on the basis of participatory governance involving local communities and their partners in
the NGO community.

National Desertification Fund (NDF) should also be flexible and simple in design. To preserve
the confidence of both donors and local populations, it is imperative to ensure full transparency
and effective accountability in its management.

Moreover, the local populations could be true shareholders and effectively claim their share in
the partnership if, in addition to the contribution from the external donors and national resources,
they shoulder part of the financial burden. This could be done by mobilization and pooling of
individual savings as well as through decentralization of collection and management of taxes,
levies and other revenues derived from local resources.

 Third, it is absolutely important that the NDF resources are to be utilized for community
level investment and that they lead to the creation of durable economic assets, shared
collectively.
Using the proceeds of NDF for relief activities or financing individually-owned enterprises
would be a costly mistake. The former would deplete the resources of the fund without any
lasting benefit, and the latter would distort the local financial market, preventing the creation of
sound credit/saving structures. Such structures are equally important to facilitate investment for
crop intensification or to promote economic diversification to lessen man and livestock pressure
on land.
4.3. Policy Options in Developing Countries
What less Developed countries can do?

In fact, achieving better development in a particular country and or even geographical area is
much more challenging. As it is the result of complicated and multifaceted relationship between
and among countries. Nevertheless, there are a number of policy options available for LDCs
government, which indeed can be regarded as a temple for addressing problems LDCs are facing.
Being a temple it may or may not solve the multifaceted problems of developing countries as
they are different in many regards (contextual differences between and among countries. E.g.,
the social, economic, political, environmental, cultural, and historical differences between
Ethiopia and America, on one hand and Ethiopia and many other African countries, on the other
hand).

However, there are six stand out that have been forwarded as policy options to LDCs so as to
overcome their problems. These are:

(1), Proper resource pricing;

(2), Community involvement;
(3), Clearer property rights;
(4), improving economic alternatives for the poor;
(5), Raising the economic status of women; and
(6), Polices to abate industrial emission.
So let us briefly examine each in turn.

4.3.1. Proper Resource Pricing

The most obvious area for reform is probably in government pricing policy, which can
exacerbate resource shortages or encourage unsustainable methods of production.

Often programs that were ostensibly designed to reduce hardship for the very poor have had little
impact on poverty and have worsened existing inequalities.

 High income households have frequently been the predominant beneficiaries of energy,
water, and agricultural subsidies. The results have often included the wasteful and
unsustainable use of resources.

 Even though elimination of misdirected subsidies is a relatively costless (or profitable)

way of protecting the environment, the political stakes are high powerful elite’s stands to
lose lucrative government transfer.

4.3.2. Community Involvement

Programs to improve environmental conditions are likely to be most effective when they work in
tandem with community networks, ensuring that program designing is consistent with both local
and national objectives.

 The experience of development agencies has demonstrated that grassroots efforts can be
more cost-effective because they generally involve the use of low-cost alternatives and
provide jobs to local populations.

 When poor communications truly benefit from public-works programs, residents are
often willing and able to contribute much or all of the program costs.

As far as community intervention upon the surrounding environment is concerned, it seems

imperative to consider the community involvement as a way out and decisions in attempts to
overcome environmental problems, on one hand and achieve better development, on the other
hand.

4.3.3. Clearer Property Rights and Resource Ownership

Investments in household sanitation and water and on-farm improvements often represent a large
portion of lifetime saving for the poor, the loss of which can impose harsh economic
consequences on households. Hence, lack of secure tenure on rural or urban property can greatly
hinder investment in environmental upgrading.

 Legalization of tenure can lead to improved living conditions for the poor and increasing
in agricultural investments.
  In many cases, however, land reform may be necessary. It is not uncommon for renters or
sharecroppers to lose the economic gains from their on-farm investment because it is
relatively easy for landlords to extract higher rents once the productivity of the land has
been improved.

For instance, transferring title to tenants may be the only means of ensuring that financial
rewards from land-augmenting investment accrue to the investor. Land reform may also be
required where unequal distribution of land has led to tracts of uncultivated high quality land in
closer proximity to overexploited marginal lands cultivated by large numbers of landless
workers. Being aware of lack of secured tenure for rural and urban poverty which, greatly hinder
investment in environmental upgrading; legislation of tenure and property right can lead to
improved living conditions for the poor both in urban and rural areas.
 All these could contribute for the increase of agricultural investment in rural areas.
This is because unless resources are properly set their prices, the benefit will go into the pockets
of few individuals.

 So, in order to benefit and maintain the equitability of resource utilization, it is recommendable to
design feasible resource pricing strategies equitable resource distribution, in particular and better
development, in general.

4.3.4. Programs to Improve the Economic Alternatives for the Poor

Further environment devastation in rural areas may be avoidable in many cases through on-farm
investments in irrigation and sustainable framing techniques, the use of alternative fuels, and the
creation of barriers to erosion. However, the economic cost of each of these alternatives is
prohibitive for the vast majority of impoverished family producers.

 As luck would have it, the greater the environmental devastations, the less likely that
rural population will be able to afford alternative methods of production, and vice versa.

 It is therefore important that government programs make credit and land-

augmenting inputs accessible to small farmers.
 By providing rural economic opportunities outside the home, governments can
also create alternative employment opportunities so that the very poor are not
 forced to cultivate marginal lands.
 For example, program to build rural infrastructures (roads, storage, facilities, etc)
create local jobs, alleviate population pressures on ecologically sensitive land,
stimulate rural development, and reduce the flow of rural to urban migration.

4.3.5. Raising the Economic Alternatives of Women

Poverty and urbanization are highly gendered, with women constituting the poorest of the poor
in most developing countries. It was observed that the increasing poverty of women is
manifested in the last 20 years has been attributed to:

 Their unequal position within the labor market,

 Their subordination under patriarchal social system, and

 The undermining of their status and power through capitalism. All of these factors are being
exacerbated by structural adjustment and global economic trends.

In light of this, the 1995 Human Development Report was devoted to “the relentless (permanent)
struggle for gender equality” based on the argument that “human development, if not
engendered, it is endangered” (UNDP 1995).

 Therefore, improving the educational attainment of women and increasing their range of
economic alternatives raise the opportunity cost of their time and may lead to decrease in
desired family size.

 Education tends to increase women’s access to information concerning child nutrition

and hygiene, a factor that has been linked to rapid decline in child mortality.

 It is important that community-based environmental programs work closely with women

because their own day-to-day activities may largely determine patterns of resource use
and their ability to meet the needs of their families is dependent on the sustainable
management of water and fuel supply.

4.3.6. Industrial Emission Abatement Policies

Being aware of the negative impacts of emission from industries on the natural environments of
not only the LDCs but also the industrialized ones despite they are the major sources of the
pollutions.

 A range of policy options is available to developing country governments for the purpose
of limiting industrial pollution, including the taxation of emissions, tradable emissions
permits, quotas, and standard.

 There is some evidence to suggest that the first two policies, which are market-based, are
more effective because they tend to reward the more efficient producers, allow greater
flexibility for firms, and are generally easier to enforce.

 Regulations should be simple as possible and must be enforceable.

 Additional incentives to adopt clear technologies may be provided through tax credit and
subsidies specifically tied to the purchase or development of pollution abatement
technologies.

 Paradoxically, the hardest industries to regulate are those run by a general rule, it is
difficult for any group to regulate itself.

4.4. Development Assistance

So far we have seen how problems originated in developed countries (emissions from industries)
has been affecting the environment of LDCs, which in turn, affect the lives of many people in
LDCs as in health impacts, reduced productivity, increased temperature (climate change) and
many others. Considering the effects caused by problems mainly originated in developed
countries, substantial new development assistance is necessary in LDCs to achieve sustainable
development.

To this end, these investments would be used for a variety of programs to alleviate poverty,
provide services, and promote sustainable patterns of production. Additional aid from LDCs
earmarked for theses purpose could have a positive impact on developing-country environments.
Even greater sums would be necessary to maintain tropical rain forest, which provide benefits to
the entire international community through reduced carbon dioxide (CO2) emissions. As
mentioned earlier, external funds provided for this purpose should be considered aid because
they are in the interest of all living things.
4.5. Strengthening Assets Bases

The key role that assets play in helping low-income individuals or households avoid deprivation
is now more widely recognized. However, the discussion of the role of assets in this has
generally concentrated on those that are important for generating or maintaining income or for
helping low-income people cope with economic stress or shocks. Too little attention has been
paid to the role of good quality housing, infrastructure, and services in reducing low-income
vulnerability by protecting them from exposure to environmental health hazards, and to the role
of health care services and emergency services in reducing their health impacts.

In this sense, it is the quality of housing and basic services that is the asset-regardless of whether
the house is owned, rented, and borrowed. Discussions on housing as an asset tend to concentrate
on its capital value or its potential income earning possibilities.

4.6. Public-Private Partnership for Environmental Services

Basically, environmental service delivery is critical to environmental health, and is often lacking
in low-income areas. In many countries, the public sector has historically been responsible for
providing environmental services. Increasingly, governments are attempting to work in
partnership with the private sector in order to improve service delivery. This involves new roles
and capacities for both the public and private partnership, especially if the partnerships are to
address the problems of the low-income areas.
In pursing the Brown Agenda, city governments are increasingly turning to the private sector to
help provide water, sewerage, and waste management. The hope is that the resulting public-
private partnerships will not only improve economic and technical efficiency, but also improve
access to environmental services even among low-income residents. Private-public partnerships
in environmental services provisions are also being promoted internationally, often by donors
whose mandate is to reduce poverty. They are frequently portrayed as a means of combing the
strengths of both public and private sectors, and thereby providing services both equitably and
efficiently.
In practice, the outcome clearly depends upon the qualities of both the partners and the
partnership. Private sector involvement in infrastructural provision has been increasingly rapidly
over the past decade, even in low-income countries. The fastest growth has been in the energy
and telecommunication sectors but an increasing number of initiatives involve water, sanitation,
and waste management. To date, public-private partnership only accounts for a small share of
environmental service provisions in southern cities.

Ultimately, success with public-private partnerships depends not just on the willingness of
private companies, but the capacity of local governments and regulatory bodies to negotiate
effectively, encourage competition, engage with other stakeholders (including low-income
residents) and form partnership that serve the public interest. The capacity is closely linked to
local governance. Indeed, given good local governance, decisions on both whether and how to
engage the private sector are far more likely to be economically informed, environmentally
sound, and equitable.

6. ECONOMIC DEVELOPMENT AND THE ENVIRONMENT

6.1. Economics and the Environment
Rising pressures on environmental resources in developing countries can have severe
consequences for:

Self-sufficiency,
Income distribution and
Future growth potential in the developing world.
Environmental degradation can also detract from the pace of economic development by imposing
high costs on developing countries through health-related expense and the reduced productivity
of resources.
The poorest 20 % of the world’s population will experience the consequences of
environmental ills most acutely.
Severe environmental degradation, due to population pressures on marginal land, has led
to falling farm productivity and per capital food production.
Since the cultivation of marginal land is largely the domain of lower-income groups, the
losses are suffered by those who can least afford them.

Similarly, the inaccessibility of sanitation and clean water mainly affects the poor and is
believed to be responsible for 80 % of disease worldwide.

Solutions to these and many other environmental problems involve enhancing productivity of
resources and improving living conditions among the poor.

Through there is considerable dispute concerning the environmental costs associated with
various economic activities, consensus is growing among development economists that
environmental considerations should form an integral part of policy initiatives.
The exclusion of environmental costs from calculations of GNP is largely responsible for
the historical absence of environmental considerations from development economics.
Damage to soil, water supplies, and forests resulting from unsustainable methods of
production can greatly reduce long-term national productivity but will have a positive
impact on current GNP figure.

It is thus very important that the long-term implications of environmental quality be

considered in economic analysis.
Rapid population growth and expanding economic activity in the developing world are
likely to do extensive environmental damage unless steps are taken to mitigate their
negative consequences.
The MDCs those destruct the world’s remaining forests, which are concentrated in a
number of highly indebted developing countries including Brazil, Mexico, Peru, and the
Philippines, will greatly contribute to global warming and the greenhouse effect.
6.2. Growth verses the Environment

 If it is possible to reduce environmental destruction by increasing the incomes of the

poor, is it often possible to achieve growth without further damage to the environment?

Evidences indicates that the worst perpetuators of environmental destruction are the billion
richest and billion poorest people on earth.
It has even been suggested that the bottom billion are more destructive than all four
billion people in between.
It follows that increasing the economics status of the poorest group would provide an
environmental windfall.
However, as the income and consumption levels of everyone else in the economy also
rise, there is likely to be a net increase in environmental destruction.

Meeting increasing the consumption demand while keeping environmental degradation at

a minimum will be no small task.

6.3. Poverty and Environment

Natural resources are the most significant source of rural livelihoods in many parts of LDCs.
Poor people, forced to overuse environmental resources for their daily survival, are
further impoverished by the degradation of these resources.
It is, therefore, believed that poverty needs to be eradicated in developing countries before they
can turn their attention to environmental protection.
However, the perception of the ‘vicious circle’ as characterizing the environmental
degradation and poverty in developing countries is somewhat simplistic and misleading.
 For example, if one looks at history, there was not much environmental
degradation even when poverty levels were much higher.
Now that poverty levels are declining significantly, it does not seem plausible to attribute
environmental degradation to poverty.

Thus, there is enough empirical evidence now to establish that environmental conservation must
go hand in hand with economic development because any economic development which destroys
the environment will create more poverty, unemployment, and disease.

In fact, if poverty is indeed the major cause of environmental degradation, the poor actually have
a good reason to support conservation movements.

Due to the increasing focus on the urgency of reducing poverty, and the broadening
understanding of poverty, many international organizations are attempting to develop a
better understanding of the linkages between poverty and the environment.

It has been argued that:

Poverty is viewed as one of the primary causes of environmental destruction.

Poor people cannot in their present state practice sustainable development (short term
maximizes).

If much of the environmental problem is poverty, then eliminating poverty and poor
people through (economic) growth becomes a key to saving the environment.

The simplistic approach of viewing poverty and environmental degradation as a mutually

enforcing downward cycle-fuelled by population explosion has given way to an argument for
examining a range of issues that help to build up a fuller picture of the reality of poverty-
environment links.

Common Myths and Misconceptions about Poverty and Environment

Poverty and population growth cause environmental degradation;
Equity, participation, and environmental sustainability go hand in hand;
Nature seeks balance;
High-input farming is the only way to avoid a global food crisis;
Urbanization and urban consumption are the biggest environmental threat;
Poverty eradication first before environmental improvement;
Poor people are too poor to invest in the environment.
However, key issues that have emerged from the current body of knowledge are:
That poor people are disproportionately affected by living in a degraded environment.

Those actions taken by different groups of stakeholders have a much wider impact than
that in the immediate locality e.g. run off from pesticides and fertilizers in the water
supply in rural areas present health problems for downstream urban populations.

That the relationship between poverty and environment is mediated by institutional,

socio-economic factors.

Though it is clear that environmental destruction and high fertility go hand in hand, they are both
direct out growths of a third factor - absolute poverty.
 For environmental policies to succeed in developing countries, they must:
 Address the issues of landlessness, poverty, and lack of access to institutional
resources.
 Insecure land tenure rights, lack of credit and inputs, and absence of information often
prevent the poor from making resource-augmenting investments that would help preserve
the environmental sets from which they derive their livelihood.
Hence, preventing environmental degradation is more often a matter of providing institutional
support to the poor than fighting an inevitable process of decay. For this reason, many goals on
the international environmental agenda are very much in harmony with three objectives of
development

6.4. Rural Development and the Environment

To meet the expanded food needs of rapidly growing LDC populations, it is estimated that food
production in developing countries will have to double by 2010.

Because land in many areas of developing world is being unsustainably over exploited by
existing populations, meeting these output targets will require radical changes in the
distribution, use, and quantity of resources available to the agricultural sector.
 And because women are frequently the caretakers of rural resources such as forest and
water supplies and provide much of the agricultural supply of labor, it is of primary
importance that they be integrated into environmental programs.

In addition, poverty alleviation efforts must target women’s economic status in particular to
reduce their dependence on unsustainable methods of production.

The increased accessibility of agricultural inputs to small farmers and the introduction (or
reintroduction) of sustainable methods of framing will help create attractive alternatives
to current environmentally destructive patterns of resource use.

Land-augmenting investments can greatly increase yields from cultivated land and help
ensure future food self-sufficiency.

The intensification of land use by a rapidly growing population, the cutting of trees fire-wood,
and the clearing of marginal land for cultivation, the soil is increasingly exposed to destructive
environmental forces.

The loss of vegetation, which helps mitigate the destructive impact of heavy winds, rain,
and desiccation by the sun, leads to more rapid erosion of precious topsoil needed for
cultivation.

Good yields are more difficult to obtain and the consequences of drought years are more
intense.

Desertification, the encroachment of the desert into areas where erosion has been most servers-
threatens to consume even the more productive land.

As a result of the loss of precious topsoil and declining output, there are fewer crops to
bring to market to batter for necessities. In many households there is less food for the
children.

And yet the family must spend longer hours trying to obtain enough income to survive.
In actual fact, deforestation can lead to a number of environmental maladies that, over a period
time, can greatly lower agricultural yields and increase rural hardships.

On a day-to-day basis, the increasing scarcity of firewood means that women must spend
large portion of the day in search of fuel, diverting time from other important activities
such as income generation and child care.

In the worst cases, fuel shortages are sufficient to require the burning of biomass or
natural fertilizers, such as manure, which are important on farm-inputs for maintain crop
yields.

6.5. Traditional Economic Models of the Environment

For the sake of discussion that there are two different types of traditional economic models
which deal with environment. These models are (a), privately owned resources, and (b), common
property resources.

A. Privately Owned Resources

Therefore, we will review some common economic models of the environment. In each model,
the market failure to account for environmental externalities is the exception rather than the rule,
and neoclassical theory is then applied in order to cure or circumvent efficiency. Neoclassical
theory has been applied to environmental issues to determine what conditions are necessary for
the efficient allocation of resources and how market failures lead to inefficient and to suggest
ways in which the distortion can be corrected.

Figure 6.1 demonstrates how the market determines the optimal consumption of a natural

resource. Finding the optional market outcomes involving maximizing the total net

benefits to society from a resource, which is the difference between the total benefits

derived from a resource and the total costs to producers of providing it. This is equal to the

shaded areas in Figure 6.1. Total net benefit is maximized when the marginal cost of

producing or extracting one more unit of the resources is equal to its marginal benefit to

the consumer. This occurs at Q*, where the demand and supply curve intersect. In a
In principle, some of these scarcity rents could be taxed and used for environmental protection or
other socially useful purposes.
In this regards, the proponents of neoclassical free-market theory stress the inefficiencies in the
allocation of resources result from impediments (obstacles) to the operation of the free market or
imperfections in the property right systems.
So long as resources are privately owned and there are no market distortions, resources will be
allocated efficiently.

Figure 6.1: Static Efficiency in resource allocation

B. Common Property Resources

If a scarce resource (such as arable land) is publicly owned and thus freely available to all (for,
say, farming or grazing animals), as is the case with a common property resources, any potential
profits or scarcity rents will be competed away.
 As we have noted, neoclassical theory suggests that in the absence of scarcity rents,
inefficiencies will arise.

Using a somewhat different framework, we will investigate the misallocation of resources

under a common property system.

Figure 6.2 describes the relationship between the returns to labor on a given piece of land and the
number of laborers cultivating it.

Suppose for the moment that title to this piece of land is privately held.

Conventional wisdoms tells us that the landowner will hire additional labor to work the
land until the marginal product of the last worker is equal to the marker wage, W, at point
L.

The workload is shared equal among the employees, each of whom produces the average
product.

However, assuming decreasing returns to labor, each new worker hired reduces the
average product of all workers.

The marginal product of each additional worker is thus equal to his average product
minus the decreasing in the average products across the workers.

If an additional employees is hired beyond L, his cost to the producer, W, will be greater
than his marginal product, and the difference will represent a net loss to the landowner.

A profit minimize will thus hire L workers, with a total output equal to average product
AP multiplied by the number of workers, L. Scarcity rents collected by the landowner
will equal AP CDW.

Society’s total net benefit from the land will be lower under a system of common property,
unless workers can coordinate their resource use decisions in a cooperative manner.
Generally, if land is commonly owned, each worker is bale to appropriate the entire
product of his work, which is equal to the average product of all workers.
Worker income will continue to exceed the wage until enough workers are attracted so
 that the average product falls to the level of the wage, at which point the labor force
equals LC.
Through the total farm output may either rise or fall (depending on whether MPL is
positive or negative-as it is negative drawn in figure 6.2).

Number of laborers

Figure 6.2 Common Property Resources and Misallocation

The marginal product of the additional workers is below the wage.

Because we are assuming that all workers could be employed elsewhere with productivity
equal or greater than W, it follows that social welfare must fall when marginal product
falls below W.
No scarcity rent is collected at LC.
The implication of the common property resource model is that, where possible,
privatization of resources will lead to an increase in aggregate welfare and an efficient
allocation of resources.
It should be noted that these neoclassical models are strictly concerned with efficiency
and do not address issues related to equity.
Income distribution is not considered, and the theory is unconcerned with the
distributional issues arising when all scarcity rents from national resources accrue to a
few private owners.
 Although neoclassical theories have sometimes suggested that an optimal outcome may
be achieved through the taxation and then “lump sum” redistribution of the gains
accruing to the owners of scare natural resources, the historical record for such efforts is
not encouraging.
This is especially true where the authorities responsible for legislating and coordinating
such redistributions are also the owners.
Thus the large scale privatization of resources does not necessarily ensure an
improvement in standard of living for the improvised majority.

Beyond the standard neoclassical arguments, there are a number of alternative reasons why
individuals making use of publicly owned resources may inefficient use of them within the
context of farming system in developing countries.
For example, family farmers who are generally the most efficient cultivator of land may
be reluctant to make land-augmenting investment if they are afraid of losing tenure on
common property plot.
They may also have insufficient funds to hire additional labor or purchase
complementary resources due to lack of collateral, a factor that frequently excludes the
poor from competitive credit markets.
It is therefore possible that conferring extended tenancy rights or ownership of family
farmers would raise productivity.

6.6. Urban Development and the Environment

The rapid population increases accompanied by heavy rural-urban migration is leading to

unprecedented rates of urban population growth, sometimes at twice the rate of national growth.
Consequence, few governments are prepared to cope with the vastly increased strain on existing
urban water supplies and sanitation facilities. The resulting environmental ills pose extreme
health hazards for the growing numbers of people exposed to them. Such conditions threaten to
precipitate the collapse of the existing urban infrastructure and create circumstances ripe for
epidemics and national health crisis. These conditions are exacerbated by the fact that under
existing legislation, much urban housing is illegal. This makes private household investment
risky and renders large portions of urban populations ineligible for government services.

For instance, congestion, vehicular and industrial emissions, and poorly ventilated household
stove also inflate the tremendously high environmental costs of urban crowding. Lost
productivity of ill or diseased workers, contamination of existing water sources, and destruction
of infrastructure, in addition to increased fuel expenses incurred by people’s having to boil
unsafe water, are just a few of the costs associated with poor urban conditions. Research reveals
that the urban environments appear to worsen at a faster rate than urban population size increases
so that the marginal environmental costs of additional residents rise over time.

In some ways, lie among the poor urban slums is similar to that of the poor in rural village;
families work long hours, income is uncertain, and difficult trade-offs must be made between
expenditures on nutrition, medical care, and education. Though on average, urban dwellers were
likely to have higher incomes, the poorest are frequently at greater risk of being exposed to
dangerous environmental conditions. In a typical slum in Asian metropolis, health threatening
pollutants are commonplace both inside and outside the home. Women are scarcely aware that
the smoke from the fuels they burn in the home to cook and boil water may have server long-
term consequences for the health of their children. However, even if they did, knowledge alone
would do little to alter the economic necessity of cooking with relatively dirty but cheap and
accessible fuels. Conditions resulting from poorer ventilation in the home are equivalent to
smoking several packs of cigarettes per day, and women and their children are exposed to these
fumes for long portions of each day.

In the same way, the urban centers of developing world will absorb 80 % of future increases in
world population. Much of the intensification of urban congestion, however, will result from
heavy rural-urban migration. It was expected that by 2010, the rural population of developing
would stabilize at 2.8 billion, at which rural-urban migration could be sufficient to counteract
any additional population growth. The rapid expansion of urban centers has placed increasing
strain on the resources of developing country governments’ attempting to provide adequate
infrastructure and service to its inhabitants.
Through the health implications of environmental degradation are currently highest in rural
areas, due to rapid urbanization the vast bulk of future increases in human exposure to unsafe
conditions will occur in cities. Unsanitary environmental conditions exacerbated by rapidly
increasing urban congestion and industrial emissions pose severe health hazards. Exposure to
high concentration of toxic pollutants as well as pathogens in contaminated air and water can
cause a variety of health problems at tremendous cost to a struggling economy. Left unchecked,
environmental hazards tend to grow exponentially as the size of cities in developing countries
increases.

Because the urban poor are much less able than the wealthy to insulate themselves from the
negative effects of a tainted environment, they are more likely to suffer serious consequences
resulting from environmental degradation. In addition, malnutrition and poor health among
people living in urban shantytowns tend to reduce individual resistance to environmental
hazards. Thought 60 % of people residing in the cities of developing countries already live in
squatter settlements, this number may rise in the future, because a much higher proportion of
new housing each year is located in shantytowns.

To make things worse, much of the environmental degradation of urban areas and the
consequences for economic growth and human health are avoidable. However, to exposure
viable solutions, it is necessary to have a clear understanding of sources of problems and the
ways in which they interact. The cause of sever urban environmental problems are numerous, but
for simplicity of analysis we will divide these factors into categories-those associated with
urbanization and industrial growth and those that must be dealt with in any community but tend
to be exacerbated by the congestion of urban setting.

6.7. Industrialization and Environmental Problems

The economic development in the societies of the world has taken a great toll on
the natural world that we live in. We must all wake up to the fact that our
environment is in trouble, and try to find ways to undo the damage caused to it.

Conversely, economic development and the environment are not compatible. Environmental
pollution resulting from gradual changes or by a sudden catastrophic event has always existed.
From the moment the planet began to support life there have been continual disturbances of the
biosphere by variations in solar activity, earthquakes, forest fires, meteorite impacts. However, a
new threat to the biosphere began with the advent of industrialization. Despite of the negative
impact of industrialization over environment, it has been praised and believed that
industrialization led to economic development.

For instance, for a long time people were only interested in the process of economic development
and the environment with all its problems was neglected. The process of industrialization started
many acts have restricted the industries to meet the air, water and land pollution levels. Over the
years the Acts, the books, etc. have only been preserved with the publishers or on self, rotting to
find a pair of human hands. Somewhere in nineties after the landmark Rio Declaration, the books
and the Acts were taken out from their resting-place and the minds started working in the
direction, how to undo the loss already done to the environment. Some of the historical
developments which have given thrust to the environmental issues started late in the 20th
Century.

6.7.1. Industrialization and Urban Air Pollution

Unarguably, there are a number of environmental problems (to mention some of these, urban air
pollution, environmental degradation, water pollutions, and many others), which are resulted
from the process of industrializations. However, for the time being let us take industrialization
and urban air pollution as a case in point of discussion. The early stages of urbanization and
industrialization in developing countries are generally accompanied by raising incomes and
worsening environmental conditions. Cross-sectional analyses of numerous countries at different
levels of income suggest that urban pollution tends first to rise with national income levels and
then fall. This effect has been dubbed the “environment Kuzents curve”.

According to the 1992 World Development Report, pollution levels for even the worst quartile of
high income cities are better than for the best quartile of low-income cities. Indeed, the higher
incomes it is easier to afford expensive clean technologies. However, there is nothing inevitable
about the trend. Air (and water) quality is closely related to the extent of government regulation,
in both high and low income countries. Moreover, some environmental resources, such as rain
forest, may be irretrievably lost unless there is action taken immediately.
The principal sources of air pollution, which pose the greatest health threat associated with
modernization, are energy use, vehicular emissions, and industrial production. Industrialization
can lead to increases in waste either through direct emissions or indirectly by altering patterns of
consumption and boosting demand for manufactured goods. The production of manufactured
goods generally entails the creation of byproducts that may be detrimental to the environment.
The extent to which they degrade the environment will depend on a number of factors, including
the types of by products produced, their quantities, and their means of disposal.

Unfortunately, in the absence of regulation, the cheapest way to dispose unwanted by-products is
usually to release them untreated into the air and waterways or to dump them on ground water
runoffs is free to sink into ground water or wash into rivers. Due to the broader transmission of
ideas, greater availability of goods, and increased incomes, changes in patterns of consumption
and their environmental consequences are likely to appear first cities. Until technologies and
infrastructures capable of copying with environmental consequences are introduced,
modernization is likely to lead to high urban environmental costs. Some of representative
examples of the extreme disparities in per capital consumption off various goods in selected
high, middle, and low-income countries are found.

Health hazards are created by toxic air emissions as well as increasing volumes of waste that
contaminate water supplies and land. Through research on the issues has been scanty, there is
increasing evidence that in the absence of regulation, current and future increases in LDCs
manufacturing and transport will have serious consequences for public health. It is estimated that
in the latter half of the 1980s, by World Health Organization (WHO) standards, 1.3 billion
people lived in cities with unsafe levels of airborne particular matter and 1 billion were exposed
to unacceptably high levels of sulfur dioxide. Other compounds, such as nitrous oxides and
organic compounds rise in importance as industrialization proceeds. By contaminating water
supplies, contributing to dangerous levels of air pollution, and damaging public and private
property, industrial pollution can exact a high toll in terms of human health and economic
prosperity.

A number of case studies indicate the potential severity of industrial pollution. For example, in
Bangkok, high levels of airborne lead have caused such severe consequences for the
development of small children that the average child’s IQ has been lowered by four or more
points by the age of 7. Seventy percent of children in Mexico City have abnormally high blood
levels of lead by WHO standards. Due to serious air pollution in 1980 the industrial town of
Cubatao, Brazil, reported 10, 000 medical emergencies involving respiratory ailments in a total
population of 80,000. Health complications caused by smog tend to be worse in developing
countries, where poor nutrition and general ill health greatly lower individual tolerance to
pollutants. The implications for health are worse for young children twice as many pollutants per
unit of body weight as adults do.
In short, the above mentioned case studies briefly summarize the negative impacts of
industrialization not only on the surrounding environments of urban areas of developing
countries but also greatly on the health conditions of the inhabitants. To this end, it is
recommendable to make a cost-benefit analysis of industrialization for the urban development
and the subsequent environmental problems so that it will not be difficult to sustain the positive
impacts of industrialization for urban development in cities of LDCs.

 THE END!