1. How do environmental factors impact the lives of the poor and the poverty reduction efforts? 2. How environmental degradation is capable of accentuating poverty? 3. How to reduce the environmental price of economic growth and consequently poverty alleviation?

1. POVERTY-ENVIRONMENT
NEXUS
Ashish Bharadwaj
M.Sc.Economics (I)
Madras School of Economics

2. Questions posed:
• How do environmental factors impact the
lives of the poor and the poverty reduction
efforts?
• How environmental degradation is capable
of accentuating poverty?
• How to reduce the environmental price of
economic growth and consequently poverty
alleviation?

3. Some Statistics…
• India ranks 101st out of 146 countries in
Environmental Sustainability Index (Esty, 2005)
• Ranks 5th in terms of GHG emissions (WRI, 2005)
• Ranks 109th in terms of ecological footprint
(WWF,2006)
• P.c availability of forestland is 0.0747 ha-lowest
in the world-against the 0.5 ha for LDCs (SFR,
2003)
• Dense forest shrinking in almost all the major
States (SFR,2003)
• >57% of total geographical area degraded (Sehgal
& Abrol, 1994)

4. Poverty-Environment Linkages
• Natural Resource degradation, if not checked, will
result in large-scale poverty & destitution, and can
hamper the very process of socio-economic
development (Nandkarni 2000, Agarwal 1995))
• Environment Degradation impacts the poor much
more than the better off (greater dependence, limited
assets, vulnerability to disasters)
• Rural women are disproportionately affected by
natural resource degradation (B. Agarwal, 1995)
• Concentration of the poorest groups in perhaps the
ecologically most fragile areas implies greatest risk to
their welfare

5. Two key dimensions of poverty
and Natural Resource degradation
1. Livelihoods
2. Health

6. Livelihoods
•
Extreme vulnerability of the poor in relation to
water scarcity (Vidharbha case study by Devasia,
1998)
• Large population on the Indian Coast depends
primarily on fishing for livelihood and nutrition.
However during the last two decades, availability
of natural resources has eroded severely
(UNWRI, 1998) possibly due to:
a) Unsustainable extraction of fuelwood
b) Premature & destructive harvesting of NTFPs
c) Unregulated grazing & recurring fires

7. Forest dependence and Poverty
Region 1
Deforestation
Increase
in Poverty
Region 2
Displacement of directly
dependent inhabitants
Non-availability of other
lands for subsistence
Lack of
employment
opportunities
Makes them
destitute migrants

8. • Forests play an important role in the socio-economic
lives of people in India.
• Source of meeting daily needs such as timber, fodder,
industrial products, medicinal products and various
kinds other NTFPs
• However dense forest in almost all major States has
been declining (urbanization, agricultural land)
Forest Cover of Major States in India (1987-2001)
Forest Cover (in hectares)
140,000
120,000
100,000
1987
80,000
1995
60,000
40,000
2001
20,000
0
Source: SFR, 2003
AP
MP
UP
States
Orissa

9. Environmental Health
• EH refers to those aspects of human health,
including quality of life, that are determined
by physical, biological, social and
psychological factors in the environment.
• Both poverty and environmental
degradation ,via independent ways,
jeopardize well being and health.

10. Environmental Health
Modern Hazards such as urban air
pollution and exposure to agroindustrial chemicals & waste
Traditional Hazards such as lack of safe
water, inadequate sanitation & waste
disposal and vector borne diseases
Poverty and lack
of development
Development that lack
environmental safeguards
Environmental Health Groups Burden of Disease from Major Environmental Risks (% of all DALY’s)
India
Asia Pacific
All LDC’s
Water Supply &
Sanitation
Vector Diseases
9
8
7
0.5
1.5
3
Indoor Air Pollution
6
2
4
Urban Air Pollution
2
5
2
Agro-Industrial Waste
1
1
1
All Causes
18.5
17.5
18
DALY: Disability Adjusted Life Years
Source: Murray & Lopez 1996; Smith 1993, 1998, 1999 ; WHO 1997 ; WDI 1999 ; World Bank Staff in World Bank 2000a

11. egradation
nvironmental
E
conomic
Vs.
D
evelopment
•First empirical evidence for an inverted U-shaped relationship
between certain pollutants and income (Grossman & Krueger, 1993)
•Labeled by Panayotou (1995) as the ‘Environment Kuznet Curve’
(EKC) Environmental Pressure(EP)
Phase 1
Phase 2
Phase 3
GDP/capita

12. • Empirical research suggests that air and water
pollution increases with development until pc income
reaches a range of $5000 to $8000-the turning point
(Dasgupta et.al 2005)
• Per capita GDP of India in 2002 (in PPP dollars) was
$2572 (WRI, 2005)
• Except Bihar, all States in India are on the upward
sloping part of the EKC (Mukherjee & Kathuria 2006)
• This implies substantial increases in pollution during
the next few decades.

13. Economic growth as a means to
alleviate poverty
• EG-One of the necessary factors if not the only
factor to tackle the problem of poverty
• Without it, poverty alleviation involves
redistribution from the better-off to the poor
• Redistribution solution is therefore simply
impossible (cake is not big enough to
provide for all, no matter how thinly
slices are cut)
• Economic growth increases the size
of the cake to give everybody at least
a decent slice without having to reduce
the size of the larger slices

14. Trade-offs faced by Governments
• Industrial development creates employment and incomes for
poor but may also have various adverse impacts
• Food supply can be increased by converting a forest to
agricultural land but it may lead to decrease in supply of other
services (clean water, timber,drought control)
• Alleviating poverty and conserving environmental resources
pose a major economic and moral challenge
• Environmental Degradation is a major issue with poor local
communities-evident from growing conflicts.

15. • Restricting access through changes in property rights
likely to increase poverty (Reddy & Chakravarthy,
1999)
• Where their exists policy distortions, deterioration of
environment (at low income levels) per unit of pc GDP
rise is higher than it would be otherwise(Panayotou,
1997)
• Improvement of the environment with income growth is
not automatic-it depends on appropriate policies (mix of
pro-poor policies with environment conservation
techniques)
• GDP growth creates conditions for environmental
improvement by raising the demand for improved
environment quality.

16. Environmental Pressure (EP)
PRs ill defined, externalities not
internalized, resource use and
pollution subsidized
Environmentally harmful
subsidies removed
Subsidies removed, externalities
internalized, PRs defined
GDP/capita
Policies and markets determine the ‘environmental
price’ of growth and consequently poverty
alleviation.

17. Some possible policy suggestions:
a) More secure PRs over resources
b) Participatory resource management involving local communities
and public agencies.
c) Pollution taxes
d) Vouchers (such as carbon credits)
e) Effective regulation and enforcement of controls
f) Generating awareness of ecological & economic impacts of
natural resource depletion

18. THANK YOU
QUESTIONS….