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How much do Indians consume?

By Darryl D'Monte

While India's per capita material consumption is still low, a new report reveals that in 50 years India’s consumption of fossil fuels increased 12 times, construction materials 9 times and industrial materials and ores 8.6 times. How will India support its growing economy sustainably?

Ecological Economists

Just before the Rio+20 summit began on June 20, the International Society of Ecological Economists held its conference in the Atlantic coastal city. It took quite a different approach to the interface between ecology and economics and cited several instances of wrongful appropriation of mineral resources all over Latin America. The summit proper concentrated on the green economy, which has somewhat dubious credentials. The Society is now chaired by Dr Bina Agarwal, director of the Institute of Economic Growth in Delhi, who has done pioneering work on the gender dimension in protection of natural resources and inheritance of agricultural land.

On the sidelines of the Society’s meet, Professor Joan Martinez-Alier, from the Autonomous University of Barcelona in Spain, who is an old India hand and has written extensively on Indian issues, including the devastation of minefields in Orissa, referred this columnist to a recent article in the journal Ecological Economics, on ‘India’s Biophysical Economy, 1961–2008: Sustainability in a National and Global Context’. The lead author is Professor Simron Jit Singh from the Institute of Social Ecology Vienna, Alpen-Adria Universität Klagenfurt, Austria, as are five co-authors. Martinez-Alier and a colleague from Barcelona make up the total of eight.

This is the first time that anyone has calculated the biophysical outflows and inflows into the Indian economy over an entire half-century, as distinct from these measured in prices, which is the universally accepted practice. The authors write that it is their attempt to “better understand the relationship between the economy and biophysical flows… we aim at analysing the ecological ‘embeddedness’ of India’s socioeconomic system. We refer to current standards of economy-wide material flow accounting to quantify domestic extraction (DE) of all raw materials and biomass harvested, their imports and exports and to derive aggregate headline indicators in physical units (mass and energy):

• Domestic material consumption (DMC) measures the apparent consumption of materials in an economy and is defined as the sum of DE and imports minus exports. It has been argued that DMC also equals the waste potential of an economy in the long run.

• Physical trade balance (PTB) measures the physical net trade of a country and is defined as imports minus exports in physical units. Negative values indicate net exports.

• Material intensity (MI) measures the amount of materials required to produce one unit of GDP and is defined here as DMC per GDP. It is the inverse of material productivity.”

On the face of it, India’s consumption of natural resources is low by developed country standards. Although India accounts for as many as one in every five people on the planet, it used only 7% of global material resources and 5% of global energy supply in 2008. If one looks at materials which are sine qua non in an industrialised country, like petroleum or copper, its global share is even smaller. However, in absolute terms, due to its huge population, India is the fourth largest consumer of energy in the world -- and third, after China and the US, in greenhouse gas emissions. What India does -- or doesn’t -- therefore, is of utmost interest to this country as well as the world at large.

The authors state: “As India is on its way to industrialise, the question remains to what extent this may be possible following the same pattern of industrialisation of the West that had occurred under very different conditions, namely, the benefit of cheap raw materials and labour from colonies and the abundance of fossil energy reserves accessible at low cost.”

In 1960, as much as three-quarters of India’s material consumption consisted of biomass -- organic matter like wood, twigs, grasses and so on -- followed by construction materials. As the late Anil Agarwal, founder of the Centre for Science and Environment, in Delhi, used to say, rhetorically, there was Gross National Product and Gross Natural Product, on which the poor subsisted. As one went up, the other went down. The amount of fossil fuels, industrial materials and ores was insignificant in 1960.

In the 47 years since then, not only was the total amount of material consumed much greater, but the composition greatly differed. Although biomass consumption rose two-fold, fossil fuels increased by a dozen times, construction materials nine times and industrial materials and ores by a factor of 8.6. One can only speculate how much the consumption -- and export -- of ores has risen in the years since 2008. Just bauxite, which is smelted to make aluminium, would be enormous, followed by iron and coal. No wonder the title of a new insightful book written by Aseem Shrivastava and Ashish Kothari is Churning the Earth: The Making of Global India (Penguin/Viking, 2012).

Total material flows have increased four-fold since the ’60s, with the bulk coming from non-renewable ‘geological’ stocks. The share of biomass in domestic material consumption (DMC) has declined to 40%, while the share of minerals and fossil materials increased from 25% to 60%. Up to the 1980s, the population grew a little faster than DMC. In the 1960s and ’70s -- during which the late economist Raj Krishna coined the memorable phrase ‘the Hindu rate of growth’ -- material use remained low at less than 3 tonnes per capita per year (t/cap/yr). Since the 1980s, which is when the era of economic liberalisation set in, to a certain extent, there was gradual growth in material consumption, rising to 4.3 t/cap/yr in 2008, with growth accelerating faster from 2003.

“India’s societal metabolism is largely dominated by domestically extracted materials,” the authors assert. “Both imports and exports are small compared to domestic extraction, but the significance of trade for India’s societal metabolism is increasing rapidly… In 2008, India was mostly importing fossil fuels, timber and ores and derived products, while exports were dominated by ores, non-metallic minerals and crop products. Although trade flows are small compared to domestic extraction (DE), India is an important player in global trade relations because of the overall size of these flows. India achieved considerable economic growth during the period observed.”

Perhaps to the surprise of many who imagine that India is already one of the world’s ‘emerging economies’, biomass continues to play a seminal role in the economy. Agricultural biomass accounts for the lion’s share -- 85% of all biomass consumed through the half-century under examination -- followed by wood, which is used for fuel. In the two decades since 1960, India was a net importer of crops. Recall the ‘ship to mouth’ existence, when India was dependent on US handouts of grain under the Public Law 480 provision, and the country strained under the leash of US administrations, particularly that of Lyndon Johnson.

This was one of the catalysts for India going in for the Green Revolution in wheat (and later, rice) although, paradoxically, it was an American technology and was aimed at making this country and others self-sufficient in foodgrain. That it eventually raised productivity only in certain tracts of the country, especially Punjab and Haryana, making other areas dependent on them for food, is another story. The output per hectare of cereals more than doubled in the period, to 2.2 tonnes per hectare per year.

From the 1980s, India started exporting an increasing amount of crops, peaking in 2008 at 17 million tonnes a year. While the extraction of wood doubled domestically in this period, the country began importing more wood to meet its need for timber. More recently, the demand for furniture from Malaysia and some other South-East Asian countries has risen dramatically, due to the burgeoning aspirations of the upwardly mobile middle class, now some 250-300 million strong, a country in its own right.

Again, surprisingly, the last major spike in area brought under irrigation was in the 1950s, with 25 million hectares being cultivated, corresponding to a 25% increase in cropland. Arable land has since remained almost constant at 160 million hectares, rising by only 1% in the period under examination.

The authors calculate that in 2006, the DMC for biomass was just under 2 tonnes per capita per year (t/cap/yr), followed by fossil fuels, a small amount of ores and industrial materials and a fairly large amount of construction materials, yielding a total DMC of 4.3 t/cap/yr. If the total material consumption of the country in 2006 is considered, it amounts to 5 gigatonnes per year.

As Martinez-Alier says: “The EU is at about 14 tonnes per capita. India’s pattern of trade is totally different from the EU, practically self-sufficient for the time being (physical trade balance), while the EU imports about four more tonnes than we export (we buy cheap and sell expensive). Of course the present study is at an all-India level: it would be good to look at the material flows of Orissa and other net exporting states, providing cheap raw materials.”

The authors conclude: “India shows key features of a sociometabolic transition from agrarian to industrial society but is still far behind industrialised nations where the per capita dependency on geological stocks (mineral and fossil materials) is about six times higher and nearly three times in the case of newly industrialising countries such as China. The overall per capita consumption of all materials for an average Indian is significantly low at 3.6 tonnes per year in the year 2000, compared to the world average of 8 t/cap/yr, and far below Europe’s 14.1 t/cap/yr.

“In the last three decades, the Indian economy has exhibited a new pattern of physical growth shifting from a biomass towards a mineral and fossil resource base, and towards a growing per capita resource use. There is no doubt that India’s metabolism will grow in the coming decades. Just as it is imperative that the fully industrial economies will need to reduce their metabolism, India needs to be able to increase its currently extremely low level of resource consumption to improve the quality of life of its population. India needs access to energy and key raw materials, but it is extremely doubtful that India can adopt metabolic patterns typical of industrial economies.

“The big question that arises is, how India, which will be inhabited by 1.7 billion people in 2050, will be able to supply its growing economy with sufficient natural resources either from domestic or international sources and to do so in a sustainable way, without increasing pressures on its domestic and the global environment. India would need a new resource revolution. But unlike the Green Revolution, which boosted the output of plant-based raw materials through increasing inputs of energy and fertilisers, the next revolution must reduce both the use of fossil fuels and mineral materials.”

Infochange News & Features, July 2012