Originally posted in The Daily Star on 19 January, 2021
Imagine a world with no scarcity; a world with no externalities. Imagine that resources are unlimited and our actions have no consequences on our surroundings. In the words of John Lennon, “you may say that I’m a dreamer—but I’m not the only one”. We are all living under the delusion that these preposterous assumptions are true. Unfortunately, resources are limited in supply. Energy and matter can neither be created nor destroyed, but can only be changed into different forms. Our individual production and consumption decisions affect the people and environment around us. The production of goods and services uses up limited resources while consumption creates waste which, when transferred back to nature, leads to environmental degradation. Since consumption of energy is irreversible and conversion of energy from one form to another is never completely efficient, our supply of exhaustible natural resources will invariably run out one day—leaving us to survive only on renewable energy sources. Thus, we must acknowledge the fact that the economy and the environment are intricately and inseparably intertwined.
Sustainable Development Goal (SDG) 12 recognises the economy-environment nexus. SDG target 12.2 calls upon countries to “achieve the sustainable management and efficient use of natural resources”. Natural resource rents are indicative of how sustainably natural resources are being used. Natural resource rent is defined as the difference between the market price of a natural resource and the average cost of extracting or harvesting it. At its inception, natural resource extraction is lucrative because the most readily accessible natural resources are gathered first and so the natural resource rents are high. The supply of natural resources represents a country’s stock of natural capital. Hence, a fall in natural resource rents may imply that the natural capital stock of a country is being liquidated too quickly.
In Bangladesh, total natural resource rents as a percentage of Gross Domestic Product (GDP) fell from 0.64 percent in 1990 to 0.27 percent in 1998. However, starting from 1999 onwards there was a rapid increase, and total natural resource rents were equal to 1.86 percent of GDP in 2006. Thereafter, total natural resource rents have undergone a decline, and as of 2016, total natural rents were 0.77 percent of GDP. Moreover, from 1999 onwards, the trend of total natural resource rents in Bangladesh has been largely driven by the trend in natural gas rents. The decline in natural gas rents from 1.20 percent of GDP in 2012 to 0.41 percent of GDP in 2016 indicates that natural gas extraction has progressively become less profitable. This is anticipated, since the cost of extracting an exhaustible natural resource increases as more of it is extracted, provided that supply of such a resource is assumed to be held constant. This suggests that the low hanging fruits have already been collected, and future extraction of natural gas in Bangladesh may be even more costly, which may potentially lead to higher natural gas prices.
Efficient and economical use of resources is a prerequisite for sustainable consumption and production. During the 10 years between 2007 and 2017, domestic per capita consumption of fossil fuels in Bangladesh increased by 57.74 percent, which included 147.22 percent increase in per capita consumption of coal, 52.4 percent increase in per capita consumption of natural gas and 47.53 percent increase in per capita consumption of petroleum. Domestic per capita consumption of all raw materials in Bangladesh increased by 20.70 percent from 2007 to 2017. From these findings, it appears that sustainable consumption is still largely an alien concept in Bangladesh. However, there is some hope on the production side. Domestic consumption of fossil fuels per unit of GDP decreased by 3.82 percent, while domestic consumption of all raw materials per unit of GDP decreased by 26.40 percent from 2007 to 2017. This means that over the years, each unit of GDP in Bangladesh has been produced using progressively fewer units of fossil fuels and raw materials. This represents an increase in resource efficiency of production techniques and technology.
Unfortunately, Covid-19 has led to a surge in unsustainable production of single use plastics and synthetic materials, which have been utilised for making personal protective equipment (PPE) such as body suits, masks and face shields. Fears of virus transmission have also led to a spike in unsustainable consumption of single use tableware and cutlery. Between March 26, 2020 and April 25, 2020, around 14,165 tonnes of single use plastic waste was generated in Bangladesh, which included 455 million surgical masks, 1,216 million polythene hand gloves, 189 million surgical hand gloves and 49 million bottles of hand sanitiser. At a time when the pandemic is threatening the food security of millions of people in some of the poorest countries, vast quantities of food are being wasted each year. Globally, 13.8 percent of all food, whose market value is equivalent to more than USD 400 billion, is wasted during transport, storage and processing. The crash in crude oil prices, as well as the continued fossil fuel subsidies in highly polluting developed countries, pose serious challenges to the transition to renewable energy and make it less likely that the world will build back better in the aftermath of the pandemic.
It must be kept in mind that economic development and environmental sustainability go hand in hand and that there is no scope for being economically developed first and becoming environmentally sustainable later. Globally, the quest of achieving SDG 12 must be led by the developed countries, which have double the material footprint and four times the fossil fuel footprint of developing countries. Nevertheless, there are some exemplary steps that countries like Bangladesh should take in order to establish paradigms for others to follow. Taxes and other economic instruments should be deployed to guide consumers and producers to make more sustainable choices. For example, sustainability taxes should be imposed on plastic bottles, so that private sector bottled water and beverage companies switch to reusable glass bottles. Use of electricity and water should be controlled by optimising utilisation and setting national targets for maximum consumption. A culture of frugality should be promoted among children through advocacy in schools, in order to prevent the hereditary transfer of the consumerism disease. Online platforms and smartphone applications that promote “trash to cash” approaches should be popularised. The notion of sustainable consumption and production should be mainstreamed into local, regional, sectoral and national policymaking and integrated within legal frameworks. Such steps will help Bangladesh build back better in the aftermath of Covid-19 and take the country closer to the achievement of SDG 12 by 2030.
Syed Yusuf Saadat is Senior Research Associate at Centre for Policy Dialogue (CPD).