Enhancing the 5 Capitals - Reducing Our Footprints
and Living in Balance
The
exchange of goods and services amongst people represents the economy as
we know it today. However, we know that these transactions draw upon
resources in the natural system represented by exchanges between people
and nature. This heavily influences interactions within the natural
system impacting the capacities of the natural system to be drawn upon.
The ultimate objective of all economic transactions is to enhance ‘the
real wealth of society’ measured by the quality and health of the five
capitals – physical, social, human, financial and natural. We therefore
need to understand whether or not the economic strategies and solutions
that we employ add value to or enhance the fundamental capitals.
As societies and nations, we do not monitor
all capitals equally. Nations very diligently measure and track the
growth and enhancement of financial capital through the GDP and economic
survey reports. To a large extent, the physical and human capitals are
being tracked through the Human Development reports and to a limited
extent, the health of the natural capital, by the State of Environment
reports. Social capital is hardly measured, and we even do not have a
regular reporting system for it. An even bigger gap exists in our
understanding of the inter-dependence and relationships between these
capitals. In fact, the uni-directional draw upon one type of capital
(nature) to grow another (finance) is so ingrained in our economic
strategies and actions that the inevitability of ‘trade-offs’ has been
the dominant narrative in the sustainability debate. Typically, this
dominant narrative has pitched environment – natural capital against
development – human, financial and physical capitals. And social
capital, which could have been the catalyst for synergy is lost in
debate, only surfacing in the ‘social justice’ frame, often in
isolation.
The SDG framework for the first time has
challenged this narrative. For development to be sustainable, it is
necessary that each of the five capitals achieve their right balance
such that their interactions maintain the whole system in a state of
autopoiesis. Can economic or transactive interactions between the
elements of the system – that is people and nature, be such that they
lead to enhanced capacities and potential of each?
The SDG frame is compelling us to ask
whether our policies and implementation processes enable balanced
outcomes, and by doing so is forcing us to seek transformative solutions
and strategies. For example, do production systems lead to more and
better quality jobs? Do they lead to positive or neutral water and
energy foot-prints? Do they enhance, and at least not disrupt eco-system
processes that treat effluents and excretions into soils, air and water?
Do they improve social interactions and safety nets in times of
distress? Is public expenditure leading to fundamental human and social
capacity enhancement? Are public services from private finance
universally accessible and environmentally benign? And does the market
and governance architecture service the small and medium economic
processes just as they do the large industry?
The UN’s Inter-Agency and Expert Group on
SDG Indicators (IAEG-SDGs) has set up the basic indicator frame for
measuring and tracking the Global Goals. India’s processes to develop
and refine indicator sets relevant to its own context are also in the
advanced stages of finalisation. India has prioritised economic
growth, skill development for industry, basic amenities for all and food
security in the 15-year period. In such a scenario, it will be useful
to track the efficiency, effectiveness and relevance of the strategic
economic engines – cities, manufacturing hubs and the service sector
that are expected to achieve our development priorities. How will these
be achieved without the ‘trade-offs’ and rather with ‘win-win’
synergies? It will be useful to understand how results of policy
strategies such as changes in taxes, subsidies or credit support the
above, and the impacts of governance regulations such as social audits,
mandatory disclosures and procurement and resource management guidelines
facilitate the above. Are these strategies and mechanisms resulting in
the demand for and design of solutions that would reduce resource
intensities in production, promote greater social cooperation through
sharing systems and enhance the ability of people to live prosperous,
dignified lives?
It is time we subject our policies,
programmes and solutions to such a scrutiny. Only then will we move on
a path that enhances all five capitals synergistically and only then
will we be able to live in balance. ■
Zeenat Niazi
zniazi@devalt.org
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