Over the decades there have been major industrial disasters and leaks in the country. The most recent being the Ennore ammonia gas leak in Chennai. The Ennore story started in the early 1970s when the coal-fired power station was set up to supply the expanding electricity needs of Chennai. After fifty years, the area houses more than thirty sizable red category industries, such as thermal plants, petrochemical and fertiliser companies. Over the years, residents have had exposure to lead and cadmium that has increased risk for both cancer and non-cancerous diseases. At the same time it has also led to a decline in their economic standing due to lost wages, missed employment and higher medical costs.
How should compensation be calculated
Damage to people is seen as mere collateral damage with miserly compensations like the ones made to the fishermen, by the Tamil Nadu government, after being affected by the 2023 disaster. The compensation ranged from Rs 7500 to Rs 12,500. Creating practical solutions like providing solid property rights and the right to live that are defendable, divestible and measurable could benefit greatly. Harming someone’s living conditions by polluting it is similar to vandalising it. An upstream polluter can be sued for monetary damages and injunctive relief by downstream residents in areas where property rights are recognised. Being more prone to litigation creates additional incentives for responsible resource management by the polluter. Vigorous law enforcement is the key to success here.
Keeping emissions at check the Surat way
The state or the center can broadly decide on energy and pollution laws. These can be tailor made to region specific industrial needs. Solutions like the ones taken in Surat and Ahmedabad can be replicated. Industries have two options: either install pollution-reducing technology or buy emission permits that allow them to spew pollutants over permissible limits. Even though both are fairly recent, a study from Surat shows that particle emissions has reduced by 20 per cent without the city’s economic growth being impeded. It also allows environmentally friendly companies to earn additional revenues by selling permits. The caveat here is that the government has to be vigilant in accounting for emissions and detecting potential market failures.
Nature too has legal rights in Colombia
The government can also create laws like those in Colombia, where elements of nature have been given the equivalency of legal subjects with rights similar to those of humans. This would make litigation efficient, with proper enforcement and accountability being a possibility. Colombia adopted a national green taxonomy in April 2022 as a classification tool that helps borrowers and lenders discover economic activity that support particular environmental goals. The taxonomy is used by the government to issue green bonds and direct investment from the private sector toward its environmental goals. This requirement by the Colombian government has also helped investors choose portfolios that do not harm the climate, thereby forcing industries to invest in green technology. The Colombian economy has not grown spectacularly or the rise in Foreign Direct Investment (FDI) has not been as great as expected. But their energy sector is booming and is estimated to garner USD 2.2 billion in investment in 2024, one of the biggest considering its size.
The demands for better lifestyles have always been achieved by exploiting key resources. As India aims to be a superpower with reduced emissions, effective accountability and enforcement will help achieve this.
The article is co-authored by Vishesh Agarwal, graduate in economics from School of Interwoven Arts and Sciences, Krea University.
