Building a Planet-Friendly Economy

Simi Mehta, Amita Bhaduri

We are all living testimonies to the consumption-led paradigm on which the current economic model is thriving. In this process, concepts like community, equity, fairness, and justice find themselves relegated to a marginalized space. All participants in the economy work on the principle of profit maximization and don’t explore options of making it more compassionate.  

To throw light upon this issue, the Center for Environment, Climate Change and Sustainable Development (CECCSD), IMPRI Impact and Policy Research Institute, New Delhi, and India Water Portal organized an IMPRI Special Lecture – #WebPolicyTalk on Building a Planet-friendly Economy, by Dr. R Balasubramanium, a development activist and leadership trainer who founded the Grassroots Research and Advocacy Movement and the Swami Vivekananda Youth Movement (SVYM). 

Dr R Balasubramanium Building a Planet friendly Economy

Impact of COVID-19

Dr. Balasubramanium started off by highlighting the impact of the pandemic on indigenous communities. Following the prevention norms in the context of COVID-19, such as isolation and social-distancing, isn’t too difficult in urban households. Our access to disposable incomes allows us to purchase necessities like sanitizers and soaps.

There is a need to realize that the last year has affected everyone differently. Usual policy response tried to incorporate a straight-jacketed approach, for example, it was expected that a  family of 6 inhabiting a 10×10 room to practice social distancing. When we use the term ‘social distancing’, we don’t realize the impact it has on rural and tribal communities. 

Income Inequality in the COVID-19 Era

A recent Oxfam report that was released in the World Economic Forum revealed that within 8-9 months of the COVID-19 crisis being announced in 2020, the top thousand billionaires of the world have possibly come back to their pre-Covid level. Elon Musk and Jeff Bezos together generated around $67 billion, an unthinkable sum for the rest of the world. 

“If a thousand billionaires in this world can recover and come back to their pre-COVID levels of maintaining billions within 9 months of the COVID-19 crisis, has it really hit them? Is it as bad as what we imagine it to be?”

Dr. Balasubramanium

The problem comes when we look at the other end of the spectrum- the world’s poorest will now need at least a  decade to go back to the pre-COVID levels. The next 10 years and how the economy is going to be supported or redistributed in various mechanisms will determine if the world’s poorest can actually reach pre-COVID levels. This is a huge setback in the fight against poverty. 

In India itself, NFHS surveys tell us that close to 67-70 percent of people slipped back into poverty levels. But the 10 richest people in the world, together with between them, can make sure that no individual around the world can slip back into poverty. During this crisis, India itself added 17 more billionaires. Even today, 1 percent of India controls 73 percent of India’s wealth. 

The next crisis, already highlighted by Dr. Balasubramanium previously, is the crisis of inequity that we have created for ourselves. We have fashioned an economic model through which the rich amass wealth rapidly and the poor fall in the cycle of poverty. Dr. Simi Mehta agreeing with Dr. Bala asked an important question, ‘How much is enough?’.

Major Crises

COVID is just a representation of a major crisis. We don’t recognize that COVID alone is not the crisis. COVID is telling us a story of a deeper volcano that is going to emerge if we don’t do something about this. This pandemic will have a rippling crisis effect in almost all sectors of human life. 

The current unprecedented ecological crisis is one of the biggest challenges that we’re facing. Dr. Balasubramanium says that the argument can no longer be about building an economy or not; economic growth is as essential as human existence today. There is an imminent need to shift the focus on the ecological crisis that we have created. We are consuming more than 50 percent extra resources than what the Earth can offer us today. 

A few weeks ago, in a small suburb in Karnataka, it poured hailstones the size of small rocks. None of the inhabitants could remember if they had experienced such a hailstorm ever before. There are multiple other examples of such sudden ecological shifts occurring. Issues of climate change are not just slogans used by scientists to scare us. These are experiences that each one of us is going through every day and they are inseparable from our daily lifestyle. 

Rethinking our economic model

With an 8 percent growth rate, India is going to be the fastest-growing economy again this year. We talk about it as a great achievement, the concern though remains if this is the right way to grow? We need to ask ourselves, how much of this growth is going to benefit how many people? What is the per capita participation that is creating the wealth that we are generating? The answers to these questions are a little challenging for all of us. 

“Is a 5 trillion-dollar economy the only story we need to have? Or a 5 trillion-dollar economy shared by 1.3 billion people in a pragmatically beneficial way where each one gets what he deserves?”

Dr. Balasubramanium

The economic model that we have crafted, this constant growth expansion model, is driven by one principle called profit maximization. All of us, in our own ways, are accountable for this. The more one consumes, the more one promotes consumerism. 

We have created an education system that talks about the exploitation of abilities to maximize wealth. Thus, when we grow up in a generation of people where the narrative of success is driven by how much and how well we maximize, the narrative of how many resources we’re consuming, environment, and sustainability becomes a side story. 

But things are changing. Today, more and more young people are refusing to participate in the growth narrative that has virtually destroyed their childhoods as they were growing up. They are as concerned about climate change as they are about their personal issues. 

The private sector is also slowly waking up to the fact that their business and markets are no longer determined by pricing alone. People are willing to pay extra if they know where the product is coming from. Fairtrade practices, planet-friendly products, child-labor-free products, etc. are not just slogans anymore but demands of the new growing generation, which is very keen on fulfilling social obligations. 

Dr. Balasubramanium gave the example of the USA, where several young people had boycotted Unilever a few years ago because some of their beauty products contained plastic microbeads, which eventually get washed into the oceans. The use of those creams and products and their runoff results in thousands of tons of plasticized microbeads are getting dumped into the ocean and infiltrate marine life. 

Unilever was forced to then invest millions of dollars in R&D in order to produce more planet-friendly and sustainable products. So there can be a movement of corporates from profit maximization to being planet sensitive. An aware consumer can result in forcing big conglomerates to shift to Planet-friendly Economy.

Fourth Sector: Planet-Friendly Economy

Dr Balasubramanium proposed a new economic model that is commonly known as the fourth sector economy. The fourth sector economy is very simple- it’s soulful, compassionate, and is driven by the principle of benefit optimization. Every participant in this economic food chain is a person who is contributing and therefore, deserves a benefit proportional to his contribution. 

This means that if one is going for work 8 hours a day, it’s not just the duration but also the intensity and non-replaceability of the contribution that decides the benefits one gets out of it. We all become stakeholder participants in the economy and not just shareholders that corporates have to worry about. 

A New Narrative

What we need to do today is borrow the DNA of the good parts of all three sectors- public, private, and social. The public sector’s public accountability, public responsibility, a public obligation; private sector’s efficiency and generation of profits but in a way that benefits all; social sector’s civil society obligations and the way they show their social outlooks. 

We must combine the DNA of all the three and bring in a new narrative and economic model whose primacy is social intent and a planet-friendly world but doesn’t sacrifice making profits. It’s not about giving up profits but making profits in a way that is fair, just, ethical, and distributes the profits reasonably based on the contribution of what each person brings to the table. 

Acknowledgment: Chhavi Kapoor is a research intern at IMPRI and is pursuing bachelors in Political Science, Literature, and Economics from St. Xavier’s College, Mumbai

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