Emerging Economies and Environmental Degradation
INTRODUCTION:
Emerging national economies, also known as emerging markets are less developed nations with fast-growing economies. In other words, they are countries undergoing rapid growth and industrialization that are poised to emerge onto the global market. Emerging national economies, also known as emerging markets are less developed nations with fast-growing economies. In other words, they are countries undergoing rapid growth and industrialization that are poised to emerge onto the global market. As these emerging national economies become more stable, they become attractive to investors and businesses in developed countries. This can bring new factories and technologies into these nations, further boosting their national economy. However, this economic growth and prosperity does not come without environmental risk.
BRICS STATES:
In the recent past the world has witnessed the remarkable growth of the emerging market economies, notably BRICS (Brazil, Russia, India, China, and South Africa) and EAGLE nations. This has to a great extent led to the transformation of the global economy. The concept of an emerging market economy was first introduced by Mr. Antoine W.Van Agt of the International Financial Corporation of the World Bank. It can be defined as an economy with low to middle Per Capita Income. These economies constitute 80% of the world population and represent 20% of the global economy. There are a number of environmental concerns with industrial development in emerging nations.
With increased manufacturing and other industrial processes come the need for more energy and the potential for more pollution. As emerging nations grow, they become responsible for increased greenhouse gas emissions. A greenhouse gas is an atmospheric gas that holds the sun's heat and may contribute to global climate change. In addition to the global atmospheric impact of industrialization, there is the threat of damage to the emerging countries' domestic environments. Industrialization spikes the need for resources, such as lumber, fossil fuels, fertile soil and water.
EMERGING ECONOMIES:
Globally, the majority of the public believe “we’re heading towards an environmental disaster unless we change our habits quickly” (78% and 85% in emerging economies). What this means in terms of consumer behavior is less clear – 81% around the world say they are willing to pay more for products that use ingredients that do not harm the environment. At the same time consumers do not believe businesses are doing their part – only 39% of the global public feels they can trust business to care for the environment. Legislative changes can make a big difference. Many countries have introduced charges for plastic bags over recent years, with 500 million fewer bags used in the first six months of the charge in England. Not only did the public become more supportive of the plastic bag charge, but also more supportive of other charges to tackle waste.
ENVIRONMENTAL DEGRADATION:
Industrialization initially increases the exploitation of raw materials as well as the use of waterways and air as repositories for industrial waste. Moreover, since incremental additions to income are more important at lower levels of income, poor countries are often less willing than rich countries to sacrifice current income to improve the environment. Eventually, however, higher incomes can help reduce environmental problems (an outcome suggested by the environmental Kuznets curve—see figure). Technological progress can reduce the energy intensity of output, the reliance of industrial processes on raw materials, and the air and water pollution resulting from industrial production.
Rising incomes also increase the demand for a better environment and the resources available to achieve it. And as incomes rise, the sect oral composition of output tends to shift towards services, which often involve fewer raw material inputs and less pollution than manufacturing. With the major exception of Brazil, most large emerging markets are understandably ranked well below advanced countries on Yale’s 2012 Environmental Performance Index, which is one indicator of the link between the environment and income level.
THE ENVIRONMENT MAY GET A LOT WORSE BEFORE IT GETS BETTER:
If history is any guide, the prospects for radical steps to improve environmental sustainability at the cost of growth are poor. Today’s advanced countries endured enormous damage to their air and water systems as their industrialization progressed, and governments proved understandably reluctant to shutter factories and throw masses of people out of work to achieve environmental goals. Determined efforts to address the environmental consequences of growth often waited until wealth was sufficiently high and technology sufficiently advanced to achieve cleaner production at minimal costs. For example, smog often obscured London’s streets throughout the nineteenth and early twentieth century, and is believed to have been responsible for numerous deaths, but little was done to address it until the dramatic smog attack of 1952. It remains unclear whether developing countries will be able to wait until they have reached much higher income levels before addressing their severe environmental problems.
It is true, however, that developing countries have relatively low-cost access to less-polluting technologies, while advanced countries had to shoulder the cost of developing new technologies. Thus the BRICs face a less difficult tradeoff between rapid growth and environmental destruction than Britain and the United States did.
IMPROVING INFORMATION, STRENGTHENING ADMINISTRATION, AND GETTING INCENTIVES RIGHT:
Policies are critical for reducing environmental deterioration at minimal cost to growth. There is an urgent need for more information on both the environmental implications of production decisions and the health implications of environmental deterioration. Understanding how specific industries may be causing hundreds of thousands of deaths a year is central to making intelligent choices on environmental policies. Administrative systems need to be more impartial and efficient in considering environmental tradeoffs. For example, while on paper China has strong laws protecting the environment, at the provincial level many layers of administration, conflicts of interests created by, for example, local government ownership of polluting factories and corruption severely weaken the effectiveness of these laws.
Finally, imposing limits on pollution by administrative fiat may be necessary to avoid the destruction of critical resources and to place the state’s moral authority behind pollution controls. Nevertheless, economic incentives—including the taxation of pollution-intensive activities, subsidies to encourage more energy-efficient production and consumption, and appropriate pricing of common resources—tend to be more effective than controls in improving the tradeoff between growth and environmental damage. For example, it may be necessary to prosecute the managers of firms that knowingly dump raw sewage in a city’s drinking water supply. But it is perhaps even more important to set the price for water use at a level that reflects its true scarcity.
Advanced countries can play a useful role in helping developing countries tackle their environmental problems, for instance by facilitating the transfer of clean technology and providing funding for environmental projects? Helping developing countries to clean up their domestic environments could also be a step towards addressing global environmental challenges, most importantly climate change.
Given their low incomes, emerging markets are unlikely to severely constrain growth in order to curtail environmental damage. Thus, efforts to address domestic environmental challenges may not significantly threaten global recovery over the next few years. Developing country residents will meanwhile have to bear the burden of environmental degradation. And at some point they, along with the global economy, will likely have to pay the piper.
ICT AND THE KNOWLEDGE-BASED ECONOMY:
A major feature of the knowledge-based economy is the impact that ICTs have had on industrial structure, with a rapid growth of services and a relative decline of manufacturing. Services are typically less energy intensive and less polluting, so among those countries with a high and increasing share of services, we often see a declining energy intensity of production – with the emergence of the Knowledge Economy ending the old linear relationship between output and energy use (i.e. partially de-coupling growth and energy use). ICTs have played a key role in making services tradeable and the globalisation of IT and ITenabled services.
Houghton and Welsh (2009) note that among those countries exporting more than USD 3 billion worth of combined IT and IT-enabled services in 2006, those enjoying the fastest average annual growth since 2000 included: India, Ireland, Hungary, the Russian Federation, Switzerland, Poland, Denmark, China (incl. SARs), Singapore, Finland, Sweden and Spain, which all achieved annual growth of 15% or more. Looking at the intensity of IT and IT enabled services exports, they note that in only four countries did computer and information services account for more than 10% of total services exports during 2006 – India, where they accounted for almost 40% (down from 50% in 2004), Ireland 31% (down from 39% in 2004), Israel 27% and Costa Rica 12%,
The impacts of ICT on the environment can be direct (i.e. the impacts of ICTs themselves, such as energy consumption and e-waste), indirect (i.e. the impacts of ICT applications, such as intelligent transport systems, buildings and smart grids) or third-order and rebound (i.e. the impacts enabled by the direct or indirect use of ICTs, such as greater use of more energy efficient transport.
Exactly what the impacts of ICT are, and to what extent there may be rebound effects (Box 1), are widely discussed topics. However, it is clear that attempts to measure the impacts of ICT on the environment should take account of the potential rebound effects and the entire life cycle, rather than simply the direct impacts of the product or application itself.
CLIMATE CHANGE MITIGATION:
There are numerous ways in which ICTs can be used to mitigate environmental impacts, including through their contribution to measuring, monitoring and managing, and enabling more efficient use of resources and operation of infrastructures, through dematerialization (e.g. online delivery of content, such as newspapers, books and music) and transport substitution and intelligent transport systems, logistics and freight rationalization, smart buildings and home automation.
There are many studies and reports identifying areas in which ICTs can have a major impact on the environment, with a number identifying energy efficiency in buildings and transport rationalization and substitution through dematerialization, tele- and video-conferencing and tele-work as the major areas of impact based on sectoral energy use shares and trends, as well as application opportunities.
Developing and emerging economies face many challenges in the provision of infrastructures as economic growth progresses, with rapidly increasing demand for reliable electricity supply, transport infrastructures and commercial buildings. The very difficulties faced in meeting rapidly growing demands can, and are, driving investments towards more energy efficient solutions. The Climate Group (2008) cites a number of examples.
ENERGY INFRASTRUCTURE:
Smart Grids entail the modernization of electricity distribution networks through the introduction of ICT and sensing network technologies. Smart grids enable improved monitoring and control of the energy network as a supply chain, which means reductions in energy losses, greater network operational efficiency, better quality and reliability of energy supply, greater customer control of their energy use, better management of highly distributed sources of energy generation (e.g. greater solar and wind generation), and reductions in greenhouse gas emissions. Smart meters add the possibility of two-way communication and supply between providers and users (Access Economics 2009), and play a vital role in making energy and environmental issues visible to the household consumer, thereby empowering consumers and enabling behavioral change.
Electricity generation capacity limitations and grid transmission and distribution losses are driving „smart grid‟ developments in India and China which are both improving energy use efficiency and reducing the rate of expansion of what are largely coal-fired electricity generation systems. Electricity generation accounts for 57% of India’s total emissions and with rapidly increasing demand those emissions are forecast to increase by 4% per annum, twice the global average. But, it is estimated that as much as 32% of generated power is lost along the grid . With infrastructure investments for the next 20-30 years now taking place, there is an opportunity to „leapfrog‟ to smart grid systems, to reduce power losses and outages and realize greater energy efficiency, and Indian distributors are looking to smart grid investments (e.g. North Delhi Power).
Emerging national economies, also known as emerging markets are less developed nations with fast-growing economies. In other words, they are countries undergoing rapid growth and industrialization that are poised to emerge onto the global market. Emerging national economies, also known as emerging markets are less developed nations with fast-growing economies. In other words, they are countries undergoing rapid growth and industrialization that are poised to emerge onto the global market. As these emerging national economies become more stable, they become attractive to investors and businesses in developed countries. This can bring new factories and technologies into these nations, further boosting their national economy. However, this economic growth and prosperity does not come without environmental risk.
BRICS STATES:
In the recent past the world has witnessed the remarkable growth of the emerging market economies, notably BRICS (Brazil, Russia, India, China, and South Africa) and EAGLE nations. This has to a great extent led to the transformation of the global economy. The concept of an emerging market economy was first introduced by Mr. Antoine W.Van Agt of the International Financial Corporation of the World Bank. It can be defined as an economy with low to middle Per Capita Income. These economies constitute 80% of the world population and represent 20% of the global economy. There are a number of environmental concerns with industrial development in emerging nations.
With increased manufacturing and other industrial processes come the need for more energy and the potential for more pollution. As emerging nations grow, they become responsible for increased greenhouse gas emissions. A greenhouse gas is an atmospheric gas that holds the sun's heat and may contribute to global climate change. In addition to the global atmospheric impact of industrialization, there is the threat of damage to the emerging countries' domestic environments. Industrialization spikes the need for resources, such as lumber, fossil fuels, fertile soil and water.
EMERGING ECONOMIES:
Globally, the majority of the public believe “we’re heading towards an environmental disaster unless we change our habits quickly” (78% and 85% in emerging economies). What this means in terms of consumer behavior is less clear – 81% around the world say they are willing to pay more for products that use ingredients that do not harm the environment. At the same time consumers do not believe businesses are doing their part – only 39% of the global public feels they can trust business to care for the environment. Legislative changes can make a big difference. Many countries have introduced charges for plastic bags over recent years, with 500 million fewer bags used in the first six months of the charge in England. Not only did the public become more supportive of the plastic bag charge, but also more supportive of other charges to tackle waste.
ENVIRONMENTAL DEGRADATION:
Industrialization initially increases the exploitation of raw materials as well as the use of waterways and air as repositories for industrial waste. Moreover, since incremental additions to income are more important at lower levels of income, poor countries are often less willing than rich countries to sacrifice current income to improve the environment. Eventually, however, higher incomes can help reduce environmental problems (an outcome suggested by the environmental Kuznets curve—see figure). Technological progress can reduce the energy intensity of output, the reliance of industrial processes on raw materials, and the air and water pollution resulting from industrial production.
Rising incomes also increase the demand for a better environment and the resources available to achieve it. And as incomes rise, the sect oral composition of output tends to shift towards services, which often involve fewer raw material inputs and less pollution than manufacturing. With the major exception of Brazil, most large emerging markets are understandably ranked well below advanced countries on Yale’s 2012 Environmental Performance Index, which is one indicator of the link between the environment and income level.
THE ENVIRONMENT MAY GET A LOT WORSE BEFORE IT GETS BETTER:
If history is any guide, the prospects for radical steps to improve environmental sustainability at the cost of growth are poor. Today’s advanced countries endured enormous damage to their air and water systems as their industrialization progressed, and governments proved understandably reluctant to shutter factories and throw masses of people out of work to achieve environmental goals. Determined efforts to address the environmental consequences of growth often waited until wealth was sufficiently high and technology sufficiently advanced to achieve cleaner production at minimal costs. For example, smog often obscured London’s streets throughout the nineteenth and early twentieth century, and is believed to have been responsible for numerous deaths, but little was done to address it until the dramatic smog attack of 1952. It remains unclear whether developing countries will be able to wait until they have reached much higher income levels before addressing their severe environmental problems.
It is true, however, that developing countries have relatively low-cost access to less-polluting technologies, while advanced countries had to shoulder the cost of developing new technologies. Thus the BRICs face a less difficult tradeoff between rapid growth and environmental destruction than Britain and the United States did.
IMPROVING INFORMATION, STRENGTHENING ADMINISTRATION, AND GETTING INCENTIVES RIGHT:
Policies are critical for reducing environmental deterioration at minimal cost to growth. There is an urgent need for more information on both the environmental implications of production decisions and the health implications of environmental deterioration. Understanding how specific industries may be causing hundreds of thousands of deaths a year is central to making intelligent choices on environmental policies. Administrative systems need to be more impartial and efficient in considering environmental tradeoffs. For example, while on paper China has strong laws protecting the environment, at the provincial level many layers of administration, conflicts of interests created by, for example, local government ownership of polluting factories and corruption severely weaken the effectiveness of these laws.
Finally, imposing limits on pollution by administrative fiat may be necessary to avoid the destruction of critical resources and to place the state’s moral authority behind pollution controls. Nevertheless, economic incentives—including the taxation of pollution-intensive activities, subsidies to encourage more energy-efficient production and consumption, and appropriate pricing of common resources—tend to be more effective than controls in improving the tradeoff between growth and environmental damage. For example, it may be necessary to prosecute the managers of firms that knowingly dump raw sewage in a city’s drinking water supply. But it is perhaps even more important to set the price for water use at a level that reflects its true scarcity.
Advanced countries can play a useful role in helping developing countries tackle their environmental problems, for instance by facilitating the transfer of clean technology and providing funding for environmental projects? Helping developing countries to clean up their domestic environments could also be a step towards addressing global environmental challenges, most importantly climate change.
Given their low incomes, emerging markets are unlikely to severely constrain growth in order to curtail environmental damage. Thus, efforts to address domestic environmental challenges may not significantly threaten global recovery over the next few years. Developing country residents will meanwhile have to bear the burden of environmental degradation. And at some point they, along with the global economy, will likely have to pay the piper.
ICT AND THE KNOWLEDGE-BASED ECONOMY:
A major feature of the knowledge-based economy is the impact that ICTs have had on industrial structure, with a rapid growth of services and a relative decline of manufacturing. Services are typically less energy intensive and less polluting, so among those countries with a high and increasing share of services, we often see a declining energy intensity of production – with the emergence of the Knowledge Economy ending the old linear relationship between output and energy use (i.e. partially de-coupling growth and energy use). ICTs have played a key role in making services tradeable and the globalisation of IT and ITenabled services.
Houghton and Welsh (2009) note that among those countries exporting more than USD 3 billion worth of combined IT and IT-enabled services in 2006, those enjoying the fastest average annual growth since 2000 included: India, Ireland, Hungary, the Russian Federation, Switzerland, Poland, Denmark, China (incl. SARs), Singapore, Finland, Sweden and Spain, which all achieved annual growth of 15% or more. Looking at the intensity of IT and IT enabled services exports, they note that in only four countries did computer and information services account for more than 10% of total services exports during 2006 – India, where they accounted for almost 40% (down from 50% in 2004), Ireland 31% (down from 39% in 2004), Israel 27% and Costa Rica 12%,
The impacts of ICT on the environment can be direct (i.e. the impacts of ICTs themselves, such as energy consumption and e-waste), indirect (i.e. the impacts of ICT applications, such as intelligent transport systems, buildings and smart grids) or third-order and rebound (i.e. the impacts enabled by the direct or indirect use of ICTs, such as greater use of more energy efficient transport.
Exactly what the impacts of ICT are, and to what extent there may be rebound effects (Box 1), are widely discussed topics. However, it is clear that attempts to measure the impacts of ICT on the environment should take account of the potential rebound effects and the entire life cycle, rather than simply the direct impacts of the product or application itself.
CLIMATE CHANGE MITIGATION:
There are numerous ways in which ICTs can be used to mitigate environmental impacts, including through their contribution to measuring, monitoring and managing, and enabling more efficient use of resources and operation of infrastructures, through dematerialization (e.g. online delivery of content, such as newspapers, books and music) and transport substitution and intelligent transport systems, logistics and freight rationalization, smart buildings and home automation.
There are many studies and reports identifying areas in which ICTs can have a major impact on the environment, with a number identifying energy efficiency in buildings and transport rationalization and substitution through dematerialization, tele- and video-conferencing and tele-work as the major areas of impact based on sectoral energy use shares and trends, as well as application opportunities.
Developing and emerging economies face many challenges in the provision of infrastructures as economic growth progresses, with rapidly increasing demand for reliable electricity supply, transport infrastructures and commercial buildings. The very difficulties faced in meeting rapidly growing demands can, and are, driving investments towards more energy efficient solutions. The Climate Group (2008) cites a number of examples.
ENERGY INFRASTRUCTURE:
Smart Grids entail the modernization of electricity distribution networks through the introduction of ICT and sensing network technologies. Smart grids enable improved monitoring and control of the energy network as a supply chain, which means reductions in energy losses, greater network operational efficiency, better quality and reliability of energy supply, greater customer control of their energy use, better management of highly distributed sources of energy generation (e.g. greater solar and wind generation), and reductions in greenhouse gas emissions. Smart meters add the possibility of two-way communication and supply between providers and users (Access Economics 2009), and play a vital role in making energy and environmental issues visible to the household consumer, thereby empowering consumers and enabling behavioral change.
Electricity generation capacity limitations and grid transmission and distribution losses are driving „smart grid‟ developments in India and China which are both improving energy use efficiency and reducing the rate of expansion of what are largely coal-fired electricity generation systems. Electricity generation accounts for 57% of India’s total emissions and with rapidly increasing demand those emissions are forecast to increase by 4% per annum, twice the global average. But, it is estimated that as much as 32% of generated power is lost along the grid . With infrastructure investments for the next 20-30 years now taking place, there is an opportunity to „leapfrog‟ to smart grid systems, to reduce power losses and outages and realize greater energy efficiency, and Indian distributors are looking to smart grid investments (e.g. North Delhi Power).
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