Economic Growth and Negative Externalities in India
DOI:
https://doi.org/10.1956/jge.v15i3.587Keywords:
Negative Externalities, Sustainable Development, and Genuine Saving Rate.Abstract
Of late the world has realized that the growth models that believed in growth- environment tradeoff are not sustainable. In the pursuit of increasing their GDP, countries have ignored the negative externalities of growth, which would seriously threaten the survival of the future generation. Two kinds of damage are caused by unsustainable growth. Firstly, productive base, particularly, natural capital, like forest, minerals, energy, is depleting. Secondly, environmental pollution and climate change caused by excessive CO2 emissions are threatening human lives in terms of deteriorating health conditions and increasing temperature level (OECD, 2012). In the light of these concerns, sustainable development has become an important goal of nations. This study attempts to assess the extent of negative externalities in India and analyze the relationship between negative externalities and growth of GNI. The study finds that the economic growth of India is more sustainable as compared to all income categories countries. Further, the analysis detected a bidirectional relationship between negative externalities and GNI growth in the post-1990s.
Keywords: Negative Externalities, Sustainable Development, and Genuine Saving Rate.
JEL Classification: Q560
References
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World Bank, (1995). Monitoring Environmental Progress, Environmentally Sustainable Development. Washington, DC: World Bank.
WCED, (1987), Our Common Future. World Commission on Environment and Development. New York: Oxford.
Asheim, G., (1994), Net National Product as an Indicator of Sustainability, Scandinavian Journal of Economics, Vol. 96, pp 257–265.
Billah, M., (2005), Measuring the Economic Sustainability: A Case of Forest Extraction in Malaysia, Indian Journal of Agricultural Economics, Vol. 60, no.4, pp 698–708.
Blum, M., and McLaughlin, E., (2016), A Sustainable Century? Genuine Savings in Developing and Developed Countries, 1900–2000, Discussion Papers in Environmental Economics, University of St Andrews, available online at https://www.st-andrews.ac.uk/media/dept-of-geography-and-sustainable-development/pdf-s/DP%202016-15%20Blum%20et%20al.pdf
Brown, R.P.C., Asafu-Adjaye, J., Draca, M., and Straton, A., (2005), How Useful is the Genuine Savings Rate as a Sustainability Indicator for Regions Within Countries? Australia and Queensland Compared, The Australian Economic Review, Vol. 38, no. 4, pp 370–388.
Brundtland Commission, (1987), Report of World Commission on Environment and Development: Our Common Future, available online at http://www.un-documents.net/ocf-02.htm#I.
Demos, (2011), Beyond GDP: New Measures for New Economy, available online at http://www.demos.org/sites/default/files/publications/BeyondGDP_0.pdf.
Dosmagambet, Y., (2010), Calculating Genuine Saving for Kazakhstan, Economic and Environmental Studies, Vol.10, no. 2, pp 271–282.
Ferreira, S., and Vincent, J.R., (2005), Genuine Savings: Leading Indicator of Sustainable Development?, Economic Development and Cultural Change, Vol. 53, no. 3, pp. 737–754.
Frederick, V. P., (2010), Why Do Many Resource-Rich Countries Have Negative Genuine Saving? Anticipation of Better Times or Rapacious Rent Seeking, Resource and Energy Economics, Vol. 32, no 1, pp 28–44.
Glyn, E., and Wilks, A., (1999), The World Bank’s Genuine Savings Indicator: A Useful Measure of Sustainability?, Bretton Woods Project, available online at http://old.brettonwoods project.org /topic /environment / gensavings.pdf.
Hamilton, K., (1994), Green Adjustments to GDP, Resources Policy, Vol. 20, pp. 155–168.
Hamilton, K., (2000), Genuine Saving as a Sustainability Indicator, Environmental Economics Series. 77, Washington, DC: The World Bank.
Hamilton, K., and Clemens, M., (1999), Genuine Savings Rates in Developing Countries, The World Bank Economic Review, Vol. 13. No. 2, pp 333–356.
Hanley, N., Dupuy, L., and McLaughlin, E., (2014), Genuine Savings and Sustainability, Discussion Papers in Environmental Economics. Paper 2014-09. University of St. Andrews, available online at https://www.st-andrews.ac.uk/media/dept-of-geography-and-sustainable-development/pdf-s/DP%202014-09%20Hanley, %20Dupuy%20&%20McLaughlin.pdf
Hanley, N., Oxley, L., Greasley, D., McLaughlin, E., and Blum, M., (2016), Empirical Testing of Genuine Savings as an Indicator of Weak Sustainability: A Three-Country Analysis of Long-Run Trends, Environmental Resources Economics, vol. 63, pp. 313–338.
Hartwick, J. M., (1977), Intergenerational Equity and The Investing of Rents from Exhaustible Resources, The American Economic Review, vol. 67. no. 5, pp 972–974.
Lin, G.T.R., and Hope, C., (2004), The Genuine Saving Measurement and its Application to United Kingdom and Taiwan, The Developing Economies, vol.42. no.1, pp 3-41.
Mota, R.P., Domingos, T., and Martins, V. (2010). Analysis of Genuine Saving and Potential Green Net National Income: Portugal, 1990–2005, Ecological Economics, vol. 69, pp 1934–1942.
OECD, (2012), Green Growth and Developing Countries: A Summary for Policy Makers, Organisation for Economic Cooperation & Development, available online at https://www.oecd. org/ greengrowth/ green-development/50526354.pdf.
Othman, J., Falatehan, R., and Jafari, Y., (2012), Genuine Savings for Malaysia: What Does it Tell?, International Journal of Management Studies, vol. 19, no. 1, pp 151–174.
Pearce, D.W., and Atkinson, G., (1993), Capital Theory and the Measurement of Sustainable Development, Ecological Economics, vol. 8, pp 103–108.
Pezzey, J., and Withagen, C., (1995), The Rise, Fall And Sustainability of Capital Resource Economies, Scandinavian Journal of Economics, Vol. 100, pp. 513–527.
Pillarisetti, J.R., Jeroen, C.J.M., and Van den Bergh, (2010), Sustainable Nations: What Do Aggregate Indexes Tell Us?, Environmental Development and Sustainability, vol. 12, pp 49–62.
Stern, D.I., (1997), The Capital Theory Approach to Sustainability: A Critical Appraisal, Journal of Economic Issues, vol. 31, no. 1, pp 145–173.
Stern, N., (2007), The Economics of Climate Change: The Stern Review. Cambridge and New York: Cambridge University Press.
UNCED., (1992), UN Conference on Environment and Development, United Nations, available online at http://www.un.org/ geninfo/ bp/enviro.html.
UN, (2011). Not Too Late To Change Unsustainable Economic Growth Model, Improve Relationship With Mother Earth, but Time is Running Short, United Nations. available online at https://www. un. Org / press /en /2011 /ga 11075.doc.htm.
Victor, P.A., (1991), Indicators of Sustainable Development: Some Lessons From Capital Theory, Ecological Economics, Vol. 4. no. 3, pp. 191–213.
World Bank. (2018). World Development Indicators, The World Bank. Retrieved from https://datacatalog.worldbank.org/dataset/world-development-indicators.
World Bank, (2013a), A More Accurate Pulse on Sustainability, World Bank, avialble online at http ://www. worldbank.org/en/news/feature/2013/06/05/accurate-pulse-sustainability.
World Bank, (2013b), The Little Green Data Book. Washington, DC: World Bank.
World Bank, (2011), The Changing Wealth of Nations: Measuring Sustainable Development in The New Millennium, World Bank, avialble online at https://siteresources.worldbank.org/ ENVIRONMENT/ Resources/ Changing Wealth Nations.pdf
World Bank, (2006), Where is the Wealth of Nations? Washington, DC: World Bank.
World Bank, (1997), Expanding the Measure of Wealth: Indicators of Environmentally Sustainable Development. Washington, D.C:. World Bank.
World Bank, (1995). Monitoring Environmental Progress, Environmentally Sustainable Development. Washington, DC: World Bank.
WCED, (1987), Our Common Future. World Commission on Environment and Development. New York: Oxford.
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Published
07.10.2019
How to Cite
K, D. (2019) “Economic Growth and Negative Externalities in India”, Journal of Global Economy, 15(3), pp. 143–157. doi: 10.1956/jge.v15i3.587.
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