Inaugural address by Thiru T.R. Baalu, Hon’ble Union Minister for Environment & Forests, in the Environment Summit focussing on Energy, Environment and Efficiency, convened by Confederation of Indian Industry on 25th October, 1999 in New Delhi.

Mr Rahul Bajaj, President, CII
Mr Abhay Firodia, Chairman, Environment Committee, CII
Ms Linda Morse, Mission Director, U S Agency for International Development,
Distinguished Delegates and Participants,

Environment, of late, is a matter of global concern and the role of the Confederation of Indian industry (CII) in promoting eco-efficient industrial operations in India is highly laudable. I am delighted to be present in the Environment Summit, which is one of the foremost environmental events in Asia.

Energy is the prime mover for all developments. It is the backbone of industrialisation. Per capita consumption of energy is one of the accepted indicators of the level of development. In the case of India, it continues to be quite low. Coal-based thermal power plants contribute over 70% of the total electricity produced. Indications are that coal will continue to be a primary source of energy in the coming decades also. The environmental consequences of coal mining, transport and power generation are well known.

There is a growing awareness that coal related environmental problems must be seriously addressed and controlled specially because the consumption of high ash Indian coal will continue to steadily rise with the growing demand of energy. Gas emissions, liquid effluents and solid wastes lead to serious consequences resulting in staggering economic loss and human misery.

Environmental issues are thus inter-linked with the economic progress as well as a better quality of life. This is clearly brought out by the recent studies in India, according to which uncontrolled pollution imposes a crippling cost on the economy, besides causing a variety of diseases requiring hospitalisation and even premature deaths. The overall economic loss is estimated to be as high as 4.53% of GDP. No country, despite being rich in natural resources, can afford to bear such a heavy cost due to environmental degradation.

The major contributors to air pollution are energy, transport and industry sectors. We have adopted industrialisation as a strategy for rapid economic development, and all the industrial activities depend upon natural resources for inputs and for the disposal of wastes as ‘sinks’. Environmental problems are, therefore, created either when inputs are demanded beyond the regenerative capacity at the source or when wastes overwhelm the recycling and the capacity of the sink to absorb. Moreover, input resources like minerals, water, air etc. which do not get converted into productive goods and services are manifested as pollutants or wastes.

Efficient production is, therefore, the watch-word for improved productivity and pollution control. The first industrial revolution led to a worldwide emphasis on adoption of industrialisation as a quick route for rapid economic development. In the developing countries, industrialisation has also been accompanied by large scale import of technologies - obsolete and not-so-obsolete. As a result, conversion efficiency, by and large, is low and thereby contributes enormously to wastage of precious natural resources and creation of a staggering backlog of pollution of air, water and land media. The most important role in the conversion of natural resources into productive goods and services is played by the level of technology and the management inputs which determine the conversion efficiency and therefore, the quantum of productivity as well as pollution.

Cleaner production, therefore, makes eminent sense for us to achieve the twin objectives of higher productivity and benefit stream and to reduce pollution load. This is the only way for us to catch up with the rest of the world and participate in the second industrial revolution. This requires serious introspection so that critical interventions at the policy, technology and investment levels could be provided.

The energy crisis in the mid-70’s brought home the realisation that efficient use of energy is a pre-requisite for economic development. The experience of most of the industrial countries, shows that their main focus has been to conserve energy in all areas of development. These efforts today are reflected in their achieving an increasing GNP without commensurately high inputs of energy. This is a goal worth pursuing by us besides suitable economic restructuring.

‘Technology’ obviously holds the key to accelerated economic development. Identification, acquisition, development and promotion of cleaner technologies in different development sectors is, therefore, imperative. Resource conservation and pollution prevention through cleaner production are, indeed, the main themes of the second industrial revolution which is now sweeping the industrialised world. Access to cleaner technologies was, therefore, promised under agenda 21, in full realization that –

Competition in the market has also contributed to the need for adoption of cleaner technologies so that the products from developing countries could compete both on quality and price criteria.

Can we continue to rely upon end-of-pipe treatment enforced through environmental legislation presently in place? Our past performance clearly indicates that this is not enough and there is a need to switch over to efficient production techniques. This underlines the need to catch up with the rest of the world through leapfrogging by adopting a strategy by combining -

Fortunately, because of liberalisation the industry fully appreciates that the competition posed by the giants can be effectively met only through technology innovation. I am quite aware that the large industrial enterprises in India do have the in-house capability for scanning, screening and evaluation of technologies for ensuring judicious acquisition and transfer of technology. There is certainly a need, however, for arming the small and medium scale entrepreneurs also with adequate ‘know-how’ and realistic performance data about the available technologies. Such a need could be met by creating a database, provided the database can ensure that it is user-friendly and objective. Exchange of experience and know-how in this area with the overseas experts participating in this summit could prove to be of much help.

The bottom-line for the enterprises has always been their profit stream. Investment, in the end-of-pipe treatment is, therefore, treated by many enterprises as locking up of the capital without any return. The world-wide trend, therefore, to shift from a regulatory regime to the adoption of market based instruments opens up avenues which can help the regulatory agency as well as the enterprises to function as a team with the common objective of improving productivity and reducing waste. This is an area which demands serious attention and suitable ways and means have to be found to ensure effective utilisation of the market based instruments in the Indian scenario. The rich experience of the international experts participating in this Summit could be gainfully utilised to devise strategies suiting our needs. I look forward to constructive suggestions and recommendations from the industry on this aspect.

Cleaner technologies and improved management skills can be utilised in the new ventures without much difficulty. Nevertheless, the existing units also need suitable interventions through technology upgradation and renovation and modernisation, etc. Judicious use of the available tools and techniques like environmental audits, Environmental Impact Assessment (EIA), Life Cycle Assessment (LCA) and Natural Resource Accounting (NRA) can help to pin point the areas of intervention on a priority basis. While environmental impact assessment of individual projects has been practised in India since the late 70’s, my Ministry has recently taken up LCA studies in the steel sector and natural resource accounting for the Upper Yamuna Basin. Shortly, we plan to take up LCA study for the coal cycle as well. Findings of these studies and judicious use of these tools and techniques will hopefully provide necessary inputs for upgradation and renovation of the energy sector in India.

Exchange of information, know-how and experience is extremely important for better planning and formulation and implementation of action plans. I am very happy to note that CII has taken the initiative to invite renowned experts from many countries to participate in this summit and I am confident that the deliberations will give rise to focussed recommendations and concrete action plans.

With these words, I inaugurate the Summit.

Thank you.