An environment for reform

Clearances should not depend on ministerial intervention

Written by Anant Sudarshan | Updated: June 18, 2014 4:47 pm
The new government has a unique opportunity to revisit environmental law and regulation, left stagnant for decades. The new government has a unique opportunity to revisit environmental law and regulation, left stagnant for decades.

It has been about three weeks since Narendra Modi’s government was sworn in, and the ministry of environment and forests has already begun to make news. Day one saw a welcome step forward, with the MoEF changing its name to include the words “climate change”. Later, the new minister, Prakash Javadekar, announced that a number of steel and mining projects would immediately be given clearances. This is at best a symbolic step. The challenges before him are larger than simply clearing projects. On environmental regulation, we are still stuck in 1991. If sustainable development is to become a reality, we must think about major reforms in environmental regulation.

Before liberalisation, the licence raj was blamed for preventing fast and equitable growth. Similarly, although environmental regulation is blamed for creating roadblocks for industrial activity, we are simultaneously failing to protect the environment. A 2014 study by Yale University ranked India 155th out of 178 nations on an overall environmental performance index. On air pollution, we ranked last. The costs of these failures are high. A recent report in the New York Times estimated that air pollution in India may cost us over three years in life expectancy. This does not even count the costs of air pollution in infant mortality, disease and reduced productivity.

We need to recognise the need for reform. The new government has a unique opportunity to revisit environmental law and regulation, left stagnant for decades. The MoEF should introduce a structured programme of regulatory reform and follow a three-pronged approach of identifying innovative ideas, testing them in the field to rigorously establish their usefulness, and then scaling up the changes that work well. This is a pathway that both environmentalists and industry would support.

There are many areas where reform can begin. Take air pollution. India’s flagship environmental laws, the air and water acts, are built on a dated criminal system where draconian penalties such as imprisonment or industry closure are the main recourse available to regulators. These penalties are so severe —  and so time consuming to impose — that they are seldom used. This leads to non-compliance by industry and a bad name for environmental regulation. The solution is to introduce civil fines for environmental offences, and to allow regulators to calibrate fines to the severity of the offence. This would ensure that all violations are punished, but penalties are proportionate and easily imposed.

We also need to take a hard look at the rules themselves. India’s command and control regulations impose steep costs on industry, discourage innovation, place a heavy monitoring burden on regulators. They also do a poor job targeting the total load of pollutants released in an area, the quantity that ultimately matters for health. As new plants are set up in a particular region, the air may grow unhealthier even if most industries adhere to the letter of the law. Once the situation gets bad enough, as in Vapi, Noida or Chandrapur, we see crisis responses such as wholesale industry closures or moratoriums.

The way forward might be to use technology to monitor plant emissions remotely and to experiment with market-based environmental regulation such as the coal cess. Another example is an ongoing pilot initiated by the MoEF and spearheaded by Gujarat, Maharashtra and Tamil Nadu. It aims to test continuous emissions monitoring systems as well as a cap and trade scheme to regulate pollution from industry. The MoEF should support such innovation, learn from small pilots and adopt good ideas if they work. Embracing regulatory innovation could solve many problems at once.

When it comes to environmental clearances, our problems are structural. It is obvious that if ministerial intervention is required to get projects started, the system is both broken and amenable to political pressure. Environmental clearances need an independent regulator with independent budgets. We also need to consider how environmental assessments are carried out, and who should pay and appoint auditors.

A study by researchers from Harvard and MIT in collaboration with the Gujarat Pollution Control Board showed that when accredited environmental labs were paid and appointed by the factories they were supposed to audit, they produced reports that showed low pollution. This made their data unusable and the audit system a meaningless burden. When the auditors were paid from a common pool and appointed through a lottery, they compiled accurate data. When Javadekar said, “the government believes in environment and development, not environment versus development” he hit the nail on the head. But weaknesses in our environmental laws make it difficult to achieve either of the minister’s stated goals.

The writer is a research fellow in sustainability science at the Kennedy School of Government, Harvard University