Percikan pikiran seorang ekonom.


Aris  Ananta

For  Mletiko, 22 December  2010

It is very encouraging to hear that the Indonesia’s Minister of Trade, Mari Pengestu, has urged the palm oil industrialists to do their business without sacrificing the environment. The minister asked the industrialists, who just convened in Bali, Indonesia, to improve the international image of Indonesia. Until now, Indonesia has been accused of sacrificing its environments for its economic growth, including the growth of the palm-oil industries.

Sadly,  some participants of the conference  believed that there were two opposing groups. One is the government of Indonesia, who was concerned with social and economic development. Another group comprises the  NGOs who  were interested on environment.  This dichotomy may have led to a perception that the government of Indonesia did not care about environmental goals, while the NGOs did not pay attention to social and economic development issues.

We also heard   statements implying that  though the industries have been harmful to the environments, they have contributed a lot to economic growth, social development, and employment creation.   They also argued that  Indonesia is a still a low-income country. Indonesia  needs to grow and therefore, Indonesia should be allowed to destroy its environment for the benefit of growth. They implicitly said that the “benefit” from the industries can compensate the suffering of the people from the environmental degradation. They  do not know that the poor usually suffers the most from environmental degradation, though in the short term the poor may seem to enjoy the destruction of the environment. This is similar to the arguments used by cigarette industries to defend their businesses.

The conference of the palm-oil industrialists is just one of the many attacks  to the efforts of the world leaders to combat the world climate change. Since 29 November 2010 until 10 December 2010, the UN has been conducting a conference in Cancun, Mexico, to find solutions to the  world climate change and, particularly, to reduce carbon emission from deforestation and forest degradation.    The industrialists are worried that the Cancun conference would result in a resolution that would reduce their profit.

What happened in Bali and Cancun reflects the classical debate on the tradeoff between environmental and developmental goals.  Some economists and industrialists believe that  economic growth  needs some environmental sacrifice. They believe that a serious attention to environmental protection will be harmful to economic growth and employment creation.  However, the problem is that the environmental degradation is not calculated as the cost to the industries. They did not see long term impact of the environmental degradation.

What these economists and industrialists did not know is that quality of environment is one of the goals of developments, while economic growth is only a means to achieve so many important goals of development. Therefore, economic growth and employment creation should never sacrifice environments. There is no trade off between growth and environment since growth is only one of the means of the protection and improvement of the quality of environment.

At a micro level, people may not care about the negative impact on the environment as long as their economic conditions improve. People may even be thankful to the employment opportunities created by industries which are destroying the environment, if the people do not have other alternative employment opportunities. This fact has often been cited as justification  of the industries to economic growth and employment creation.

Therefore, to continue the effort the safeguard our only planet, and  the welfare of all people, including the poor, the industrialists should  switch their business to environmentally friendly profitable business. To do so, we need to raise the consumer awareness. It is the right of the consumers to know whether the goods and services they consume are environmentally friendly.  The consumers also have the right to know whether the goods and services they consume are produced using environmentally friendly activities.  The governments, international organizations, and NGOs can be active in disseminating information on goods and services that are environmentally harmful and produced using environmentally harmful activities. This is similar to what have done on smoking. Consumer awareness and rights have resulted in cigarette industries moving to regions where the consumers have not been aware about the danger of smoking.

Questions may then be raised on the loss of employment opportunities for many people, including the poor. We do not have to worry about this. For example, the consumers’ awareness in health has resulted in the availability of vegetable in many fast food restaurants. The business follows the consumers. There is no loss of employment opportunities because of the awareness of consumers to reduce the consumption of meat. What happened is a change of what the business produced and sold.  Similarly, if consumers demand environmentally friendly goods and services, business will be quick to switch to produce these commodities. No employment opportunities will be lost.

At the same time, we also need to actively create alternative employment opportunities.  These alternative employment opportunities should depend on the quality of environment. With these employment opportunities, people will have motivation to protect their own environments.

Finally, innovations are needed to create these alternative employment opportunities and to campaign against consumption of environmentally harmful goods and services. To start this, policy makers should immediately change their development paradigms. They should not see any trade off between development and environmental goals.  The benefit of the enhancement of the quality of environment is for  themselves, their children, and their grand children.

Related articles

*Impacts of Environmental Degradation on Upland Poverty: the case of South Kalimantan (Indonesia) and Sarawak (Malaysia)

*The Statistical Revolution is Finally Here

*The Thinker: Where There’s Smoke


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