Economic Cost of Green Verdicts – UPSC GS3

The NITI Aayog has commissioned a study that seeks to examine the “unintended economic consequences” of judicial decisions that have hindered and stalled major infrastructure projects on environmental grounds.
Example of stalled development:
  • Intends to examine the following projects that have been “impacted” by judicial decisions of the Supreme Court or the National Green Tribunal.
    • Construction of an airport in Mopa, Goa
    • Cessation of iron ore mining in Goa
    • Shutting down of the Sterlite copper plant in Thoothukudi
    • The others are decisions by the NGT involving sand mining, and construction activities in the National Capital Region.
Concerns with respect to judicial interventions:
  • There has been increased judicial activism by courts and tribunals when it comes to environmental v/s developmental issues.
  • The judiciary’s intervention are marked by complete absence of ex-ante (before an event) analysis of the economic costs associated with a decision.
  • The stalling of major infrastructure projects has many negative economic impacts:
    • Loss of job opportunities
    • Revenue loss to the government in terms of tax from the companies
    • Increased cost on the company involved in terms of business impact of closure or stalling
    • Negative impact on the ease of doing business perception which leads to lower foreign and private investment in the Indian economy.
  • Some environmentalists are of the view that it is the government’s failure to uphold environmental laws or negligence in granting go ahead for major projects that has forced the courts to give strict orders.
  • The SC interventions have also had some positive impacts.
  • The Supreme Court’s intervention led to the adoption of CNG (compressed natural gas, in transport vehicles in Delhi) and the economic benefits from it.
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