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Hello World | China’s loss could be India’s gain. But not without environmental risks

The environmental impact of a growing manufacturing base needs to be managed better because denial is not an option.

August 11, 2021 / 12:27 PM IST
(Representational image) Indian companies have the benefit of hindsight, and an opportunity to focus on cleaner manufacturing techniques and better ways of managing environmental impact.

(Representational image) Indian companies have the benefit of hindsight, and an opportunity to focus on cleaner manufacturing techniques and better ways of managing environmental impact.

Note to readers: Hello world is a program developers run to check if a newly installed programming language is working alright. Startups and tech companies are continuously launching new software to run the real world. This column will attempt to be the "Hello World" for the real world. 

"For once, you don’t need to worry about having a hangover in the morning—because there won’t be any more mornings," exclaims Max Quordlepleen, the entertainer who hosts at Milliways, the Restaurant at the End of the Universe. At the restaurant, the main act is the end of the universe. Guests come from across the universe to witness the spectacle. And Quordlepleen encourages guests to drink and make merry as the universe comes to an end.

hello world logoAlas, we don’t live in Quordlepleen’s fictional world. Our world is in a dire place. Which is why we need to worry about the end of the world, if not hangovers. Earlier this week, the Intergovernmental Panel on Climate Change (IPCC), said "averaged over the next 20 years, global temperature is expected to reach or exceed 1.5°C of warming".

“For 1.5°C of global warming, there will be increasing heat waves, longer warm seasons and shorter cold seasons. At 2°C of global warming, heat extremes would more often reach critical tolerance thresholds for agriculture and health,” the panel said. This means more rains, floods, droughts, rising sea levels, melting glaciers, marine heatwaves, ocean acidification, and so on.

In this column, I’ve previously argued that China’s loss could be India’s gain  in electronics manufacturing. Like how the Yen crisis of the 1970s pushed global companies to move manufacturing from Japan to other countries like China, once again, today’s geopolitics is pushing them to diversify. India, with relatively lower cost of labour and a young population,  has a second chance at growing its manufacturing industry.  And Indian companies also seem to be gearing up for this change. 

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On Monday, Tata Group Chairman N. Chandrasekaran said that the conglomerate plans to enter the semiconductor manufacturing industry, pegging the market opportunity of high-tech manufacturing at $1 trillion. Several others, including global manufacturers like Foxconn, have already set up in India and this trend is set to accelerate. The good news is obvious: more jobs, economic prosperity, and so on. 

The bad news is that large-scale manufacturing takes a massive toll on the environment. China paid a heavy price for ignoring it. In 2007, Elizabeth Economy wrote that environmental degradation and pollution cost the Chinese economy the equivalent of 10% of gross domestic product (GDP) annually. “The effect on the population is alarming. Already more than 400,000 people die each year as a result of the country’s air pollution, according to environmental expert Vaclav Smil at the University of Manitoba, and an estimated 190 million people drink water so contaminated that it makes them sick. Some 40 million people have had to migrate because their local ecology can no longer sustain them,” wrote Economy, a senior fellow for China studies at the Council on Foreign Relations, a New York-headquartered think tank.

While on one hand we need to encourage manufacturing, we also need to make investments in innovations that reduce carbon emissions. A good example of such an innovation is a startup called Carbon Clean Solutions. The startup, founded by an IIT Kharagpur alum, helps capture carbon dioxide (CO2). Since 2016, the startup has helped the Tuticorin Alkali Chemicals and Fertilisers Limited capture tens of thousands of tonnes of CO2 and convert it into soda ash, an ingredient found in household products, thus helping the plant improve its bottom line. 

Instead of jumping headlong into the fray, with the benefit of hindsight and a relatively fresh start, we have an opportunity to focus on cleaner manufacturing techniques and better ways of managing environmental impact. Manufacturing growth is necessary for a country like India. But let’s face it, it needs to be managed better because climate change denial is not an option.

Read more: Book Excerpt | 'Talent, Strategy, Risk: How Investors and Boards Are Redefining TSR': On creating value in the 21st century
Jayadevan PK is a storyteller who focuses on business and technology. His first book, Xiaomi: How a Startup Disrupted the Market and Created a Cult Following, was published by Harper Collins in April 2021.
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