Trade-Offs Between Economic Growth and Biodiversity Conservation

Following the Industrial Revolution in the 18th century, global GDP has grown massively from around USD 600 billion in the 1700s to reach about USD 50 trillion in the 1990s which was right at the dawn of increasing globalization. Poverty and unemployment rates slowly started to decline as technological advancements took centre stage.

Fast forward to the present day where the average person has access to the many comforts and facilities of the modern-day economy. Think about highways that crisscross the landscape and facilitate efficient transportation, continuously advancing medical research that is pushing the bounds of life expectancy rates and an interlinked system of corporations that provide employment and contribute to GDP growth. This is not to say that we are free from problems. However, relatively speaking, we are presently in the best possible position to collectively navigate these hurdles. Some may even say that humanity has never seen better years.

But as someone aware and concerned about the holistic state of affairs that envelop an ever-increasing rate of carbon emissions, decreasing biodiversity and the risk of disrupted weather patterns, you surely know better than to translate rising global GDP as inclusive economic development.

There are, of course, several facets of the environment that have been impacted by reckless and unsustainable practices implemented in the name of development. This article lays a focus on the effects suffered by wildlife populations in particular.

Let's start off with Indonesia's carbon rich tropical forests that are home to orangutans, Sumatran tigers, birds and rhinos among several other species of plants and animals. Once brimming with biodiversity, large hectares of these forests are now being set ablaze to make way for palm oil plantations. The resultant fragmentation and encroachment of natural forest cover is contributing to huge wildlife loss. As of 2018, 191 species of mammals, 160 species of birds and 458 species of higher plants found in Indonesia were classified as threatened by the International Union for the Conservation of Nature [IUCN]. On the other hand, demand for the oilseed continues to climb at alarmingly high rates with over 50% of packaged goods like shampoos, toothpastes, chocolates, deodorants, etc. containing palm oil. It has the highest per hectare yield as compared to other oilseeds such as sunflower oil or mustard oil which largely drives down its cost of production and makes it an attractive option for giant corporations that are slowly setting up shop in Indonesia.

A few thousand miles to the left, Himalayan rivers flowing in India are witnessing downsides to the construction of the Tehri dam which is presently the largest dam in the country. Dams, as we know, have a slew of benefits ranging from irrigation to generation of electricity that make up for about 70% of the world's renewable energy. On the flip side, construction of dams hugely disrupts the migratory patterns of aquatic animals and breaks the longitudinal connectivity that is essential for species to sustain themselves. In the specific case of the Tehri dam which is built along the river Bhagirathi, studies have shown how the construction of the dam has led to a reduction in the population of the "mahseer" which is a type of freshwater fish known for its golden hue and relatively high weight that averages at around 110 pounds. The presence of the dam makes genetic dispersal of the mahseer impossible and creates isolated microhabitats that dampens the chances of population growth.

It is obvious that the dilemma at hand is a classic case of the trade-off between economic growth and sustainability. One school of economics, i.e., environmental economics, proposes that we operate on a price-based system which incentivizes sustainable practices. For instance, emissions may be cut down by implementing a carbon taxation policy and conservation of a forest may be viewed in terms of revenue that could be generated through ecotourism. On the other hand, ecological economists propose a pluralist approach to the trade-off with more emphasis on the irreversibility of climate change and biodiversity loss. As Partha Dasgupta mentioned in his book "The Economics of Biodiversity: The Dasgupta Review", we need policy makers to start thinking about ways to integrate the stock of natural resources in our definition of the "wealth" of a country. In a world of limited resources and unlimited demand, we could definitely do with a fresh and non-conventional way of thinking about development that does not come with a cost to the planet.

Written by Ritika Sowda


Sir Partha Dasgupta, “The Economics of Biodiversity: The Dasgupta Review (Abridged Version), 2021.

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