Climate change: How its economic and political repercussions are ignored

With reference to the Business Life piece, “Climate change costs a lot more than recognised” (November 9), climate change is generally viewed from the angle of biological survival; its economic and political repercussions are ignored. 

The economic development of a country is directly linked to the availability of human and natural resources. Availability of resources ensures their optimum utilisation for national and international trade. This is all the more relevant as global markets are highly competitive, technological changes rapid and consumers more demanding. 

The net effect of mass migration due to adverse environmental conditions is an uneven distribution of land. Large cities with floating population experience an exodus of manpower that is not adequately balanced by the inflow, leading to unutilised or underutilised economic resources. This reduces availability of land for cultivation and shrinks for agricultural and industrial output. Increased prices of fertilisers and pesticides push up cost of crop production. Lower levels of production decrease commodity supply and cause a surge in inflation. So, industries are compelled to either shut down or shift location, leading to unemployment.

There is an unequal distribution of global economic resources after a natural calamity or man-made ecological and environmental damage. Demand for housing shoots up and there is greater pressure on land. Reduction of crop area compromises the quantity and quality of cash and food crops. Industrial output is adversely affected as imports of raw material are inadequate.

In such situations, currency exchange values turn volatile, impacting forward contracts. Tourism experiences a downturn, reducing inflow of foreign exchange.

Countries resort to sealing their international borders to prevent influx of people. This upsets commercial and political relations among neighbours. Civil unrest cannot be ruled out. This also compromises national security.

C Gopinath Nair, Kochi

Stem the damage

One year is too little to assess the impact of a sweeping reform like demonetisation. The volume of black money with respect to tax evasion was miscalculated. That almost the entire amount of demonetised currency was returned to banks confirms the error committed.

In due course, tax due on undeclared income would be realised, but in the process the earning potential of small and medium businesses would be hit for at least three to four years. This sector provides employment to a large section of the population.

Demonetisation has robbed the informal sector of non-formal credit; the formal credit assured to them through MUDRA is in disarray. The sector has lost capital sustenance; to add to its woes, glitches in the implementation of the goods and services tax mean longer-term pain. The situation is similar in the housing sector. It has burdened lending banks and clients to a large extent.

Any talk now of action against benami holdings on the heels of two major reforms will create needless hurdle for the economy.

R Narayanan, Navi Mumbai

Advani’s plight

With reference to the Chinese Whispers item, “An ‘eventful’ birthday” (November 9), veteran Bharatiya Janata Party (BJP) leader L K Advani should thank his stars that he still has well-wishers in political circles. It is interesting that Lalu Prasad, a bête noire of Prime Minister Narendra Modi, found time to greet Advani in his inimitable style. 

It would have been interesting if former Uttar Pradesh chief minister Mulayalam Singh Yadav, who dared to stop Advani’s Rath Yatra to Ayodhya in 1990, had wished the leader on his birthday, now that Yadav is trying to get close to Modi.

Advani deserved better from his party than to be simply made a member of its Margdarshak Mandal. 

S Kumar, New Delhi

Letters can be mailed, faxed or e-mailed to:

The Editor, Business Standard

Nehru House, 4 Bahadur Shah Zafar Marg 

New Delhi 110 002 

Fax: (011) 23720201  ·  E-mail: letters@bsmail.in

All letters must have a postal address and telephone number