Case Studies

Which is more important - Environmental Concern or Economic Growth?

Posted by WMM1942 on August 13, 2020 at 8:47am

Sudipta Majumdar, Ph.D.
Amity Business School
Amity University Kolkata

Mr. Amit Mathur paid a farmer 10,000 INR to get permission to drill for oil on a farm in Trombay (Maharashtra, India) and promised to remove the black ooze that would damage the crops. Mr. Mathur was lucky as he found large oil reserves in that area. Big oil companies immediately acquired the surrounding land and Trombay became one of the major petroleum producing regions of India. In a span of a few years, it had started distributing 12 billion barrels of oil and 113 billion cubic feet of natural gas mined in Trombay. This helped companies gain high profits. It also helped in the industrial development of the surrounding area as well as the state (Maharashtra).

But it has raised the pollution levels of Trombay extensively. The oil refineries at Trombay dumped tons of waste containing potentially toxic and heavy metals like carbon and organic chemicals into water for many years. The water in the surrounding areas of Trombay was contaminated by the toxic wastes. The towns near Trombay were also affected as the industrial wastes were dumped off in old wells in the adjoining areas. The off-shore drilling sites dumped the wastes into nearby canal water. People of Trombay had to face serious water pollution problems. Out of the 54 water wells, 50 contained heavy metal deposits.

Much of the pollution associated with oil and gas production was because of the salt and the drilled out mud. In Trombay, the petroleum reserves were found in salt domes and to pull the oil or gas from there, one has to drill the salt out of these domes. When a well is drilled, thousands of litres of brine (salt water) come to the surface. This is then pumped into disposal wells that have been drilled into porous rocks. Drilling mud, another major source of pollution was used to lubricate the drilling bits and flush the drill cuttings to the surface. The mud is a mixture of viscous clay, weighing agents, and chemicals used in different proportions. Weighing agents and heavy metals such as barium, chromium, arsenic, lead, titanium and zinc were added to solidify the rock and prevent it from collapsing. The chemicals used were carbolic acid, caustic soda, ammonia bisulphate, zinc chromate, formaldehyde, asbestos, asphalt and phenols. One third of the drilling mud was forced into rock formations, while the rest of the mud was recycled. The underground water supplies were polluted by the salt, heavy metals and chemicals disposed of by the petroleum industry.

In Trombay, environmentalists found unacceptable levels of salt, heavy metals and chemicals in drinking water. It was two to three times more than what was found in the drinking water of rural farms and small towns throughout the southern part of Mumbai. As a result, many people living in Trombay suffered serious health problems. Many died of cardio pulmonary arrest and with liver cancer. In a nationwide survey conducted on death caused by cancer, the centre for oil and gas production in the state ranked in the top 5%.

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As you read and analyze this case study, your reflective comments are requested on all of the following:

  • Who are the stakeholders, and how are they impacted both positively and negatively?
  • What knowledge and skills are needed to implement sophisticated, appropriate, and workable solutions to the complex global problems facing the world today?
  • What interdisciplinary perspectives would help identify innovative and non-obvious solutions?
  • What insights can you articulate, based on your culture and other cultures with which you are familiar, to help understand your worldview and enable greater civic engagement?
  • What is your position on the right thing(s) to do?

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Comments

  • ss.blahblah@whatever.com October 29, 2020 at 2:25am
    Just like every coin has two sides, it is often these days that the economic growth of any region comes with a price, which is apparently the environment. We as human wants to squeeze every drop of the resource without even thinking twice about the possible long term outcome. However it would not be a wise decision to value one more than other. In-fact both should go side by side. This is all about sustainable development. In these time no region could grow economically without industrial development. However we would also need to protect our environment because this is the only planet we have. The people of Trombay were really enjoy the privilage of having a great natural resource which had the potential to change there lives. But due to mismanagement they ruined their environment. 50 out of 54 wells that were found to be containing heavy metal deposits is the clear sign of the severity of the contamination of the area. People are paying for the negligence by acquiring serious health issues like cardiac pulmonary arrest and liver cancer. The death by cancer in the area is also in top 5% which is alarming. According to me, development should not be at the cost of health and environment. not doing industrial development just in order to save environment is also not a wise option. Thus we should focus more on sustainable development. Putting one ahead of another will be foolishness. All stakeholders including local government, residents as well as the oil companies should take responsibility to save the environment at the same time continuing the economic growth.
  • SSarceusonly October 28, 2020 at 11:44pm
    The stakeholders in this case are the oil companies, the original landowner and the government. Here, the landowner and the government has been impacted negatively while the oil company has been impacted positively. More than knowledge and skills, it is law, or rather implementation of law that is important to create a balance of distribution of benefits to all the stakeholders. Here, the government is somewhat impacted negatively since its subjects are suffering and it wields its power from its subject, it is duty bound to ensure that they can live with dignity. And since it is the government which also has the power, it it is supposed to enact and enforce laws which place limitations on the oil companies as to how they can buy a land more valuable than it is, how they can use it for large scale industrial process and hold companies responsible for the side effects their activities create on the rest of the people of the city.
    In my opinion, an interdisciplinary understanding of law, finance, ethic, environment is required to deal with such issues. While it is difficult to come up with non-obvious solutions, an interdisciplinary approach gives the problem solver a broader view of the subject from different sides to see the bigger picture and come up with a solution which covers every aspect of the issue and takes into account every stakeholder.
    In my opinion, the right thing to do is a subjective answer. However, most people should agree that the right balance has to be struck between economic growth, environmental protection and financial compensation. Sustainability is the key word. The solution has to be such that it is environmentally and financially sustainable.
  • kaitpont October 28, 2020 at 6:25pm
    The stake holders of this case study are the big oil refineries and power plants. Since big oil companies flooded the most desired land for oil in India, the benefited from the pop ups of these refineries and power plants. They gained high profits and it also helped the industrial development of the surrounding areas of Maharashtra and the state. Although their positive effect is a very great gain for their economy, there was many more negative effects from these refineries. For example, the destruction of environments due to accidents in the refineries and power plants has raised pollution levels of Trombay extensively. The refineries dumped toxic and heavy metals into the water of the surrounding areas, and in old wells near the towns of Trombay.
    I believe that you must be aware of the issues that our world is faced with today. Being educated on the events that go on allows for people to make appropriate solutions. Engineers should call out a problem when they see one and redirect the project into the right direction. They should ensure that the project has the necessary resources to complete it, such as proper funding of the project to ensure the highest quality of all the work.
    Some interdisciplinary perspectives that I believe would help weigh out your options would be to make a list of pros and cons to prevent any flaws that could occur while the project is in motion. It is good to consider all the effects that could happen, good or bad, and find ways to improve or prevent destruction. Consider hiring very profound ethical engineers that are dedicated to their job and would highlight the flaws in the project and take into consideration the environmental damage along with any damage that may occur to human atmospheres.
    From my insights, I would believe that people should consider the long-term effects and how their flaws could detrimentally impact something bigger than the picture they are portraying. In this specific case, I believe that Maharashtra was blinded by the profits that they received from the petroleum mining, that they overlooked that lasting effects that took place on the surrounding areas. Because of their inconsideration many people in trombay died and in fact, “In a nationwide survey conducted on death caused by cancer, the center for oil and gas production in the state ranked in the top 5%.” Therefore, I believe that the initial process and planning of bringing these companies to profitable lands is the most important part and should be carefully analyzed.
    I believe that once they found the flaw in the mining process, they should have shut the whole project down. There had to be different ways of preventing these spills and polluted leaks, that shutting it down and reevaluating could have had a positive effect for Trombay.
  • ssbt_biotechguy October 28, 2020 at 4:07pm
    Economic growth and environmental protection are not at odds. They're opposite sides of the same coin if you're looking at longer-term prosperity. ~Henry Paulson

    Rapid industrialisation and urbanisation are inevitable to bring in some economic growth in a country but not by keeping environmental issues at stake. Sustainability of the environmental resources for the future generations are to be kept in mind. Noticeably, environmental quality is being compromised for the goals of mass employment generation and poverty reduction.
    The above case story depicts a similar kind of a dilemma so as to choose between the environmental aspects or to choose the economic growth blissfully ignoring the environmental consequences. However, the man-made changes and natural exploitation for economic growth are the major contributors to climate change and its effects. This is due to the underlying thought that development policies promote economic well being, while environmental policies have been seen to be restricting it. In this context of oil reserves in Trombay, Maharashtra neglecting of environmental principles is a key reason why natural hazards end up causing a significant number of avoidable casualties.

    Development remains the greatest pursuit as well as a challenge, faced by humanity. However, despite the unprecedented economic and social progress that has been made over the last century, poverty, famine and environmental degradation still persist on a global scale. In this scenario Environmental Kuznets Curve (EKC) hypothesis can be applicable wherein which helps the richer countries to improve the environmental quality after degradation of it. The economic development of any particular region should be the prime concern for it’s overall holistic development, as the region of Trombay is now richer it can now take up measures to clean up the environmental mess it has caused. But the damage should have been controlled at a basic level or else these irreversible changes can lead to changes in the earth’s life-supporting systems, which we can eventually see. Research shows that meaningful public participation in decision-making in a variety of environmental and natural resources management contexts will, in the long run, build greater trust among various stakeholders and reduce conflict. We need to strengthen participatory processes such as public hearings in the environmental and ground water clearance process which is heavily contaminated. Ecological economists are arguing increasingly that countries should consider developing and reporting measures of human well-being other than gross domestic product (GDP) that better account for environmental and social costs of resource use. The idea of sustainable development cannot be mere rhetoric; it must be accompanied by transparent, participatory mechanisms that allow for meaningful discussion of the development paths that make growth truly sustainable.

    Moreover, environmental deterioration and climate change have started to show irrevocable damages to the developmental progress made so far. Thus, development goals must be pursued without breaching environment regulations. The transition to economic growth coupled with efficiency in natural resource use and its conservation can help India attain its goals of inclusive growth with sustainable development.
  • peokamii October 28, 2020 at 2:59pm
    1. The Stakeholders, in this case, are big oil companies who invested in the large oil reserves in the area discovered by Mr. Amir Mathur. These companies gained quite a rich land in Trombay and made the best of it, occasioning a successful profit. The state of Maharashtra also benefited from this success, it developed itself economically, and the district of Trombay underwent great gentrification. It also created jobs for the people, reducing unemployment in the small district of Tromba. However, the constant exploitation and the abuse of the city reserves caused a dangerous rise in pollution levels not only in the district but also in the surrounding towns. Due to this abnormal level of pollution, the companies will suffer expenses to reduce pollution. Moreover, their negligence costs several deaths of people from cardiopulmonary arrest and liver cancer. They will compensate for that, which will result in a huge loss of funds, and also negatively impact the companies reputation.
    2. Professional prospectors, environmentalists, geologists, and civic servants are crucial in an effective and durable solution against industries related problems. Companies must consider efficient planning involving environmental risks. Civilians should as well be involved actively in any setting up of industries in their towns or districts.
    3. The concern for the environmental consequences must be a priority for a stakeholder regarding the creation of an industry. Thorough investigations and prospects must be done in the area before any exploitation. Areas designed for the riddance of toxic materials such as oil mud, heavy metals, should be built, prepared, and monitored carefully before the launch of the industry. Furthermore, a strict budget must be established regarding various environmental damages caused by stakeholders.
    4. The main reason why these issues happened is often due to an unethical arrangement between the executives of the companies and the local authorities. In fact, corruption can be what drives stakeholders to take such high risks to make a profit. In some cultures that promote collectivism, people help each other frequently and often end up bribing to get what they need. It then becomes a common thing to do and authorities cannot efficiently fight against it.
    5. The right thing to in these situations is most of the time hard to decide. Economic development is essential to assure the safety and the emancipation of the people in a country thus means to achieve this goal are welcome. Nonetheless, it does not mean the abuse of natural resources and the endangerment of the environment. I think that the stakeholders should prioritize the conservation of the environment, public safety, and be actively supervised by local authorities. Petitions and manifestations are also a way for people to get involved.
  • ssbubu October 28, 2020 at 2:16pm
    As the title says, "which is more important - environmental concern or economic growth", it can be claimed that both are equally important, for the proper survival of living beings. Economic growth is required in order for us to prosper more, and environmental concern is needed because if there is no existence of the planet itself, then there would be no trace of lives as well, resulting to zero economic growth.
    There should always be a proper balance between these two aspects. As we get to see in the case study, that the step taken by Mr. Amit Mathur becomes one of the major reason for the industrial revolution of Trombay. It reaches to extreme success, making it one of the major petroleum producing region in India. Hence definitely other industries too would prefer to build up their branches in that region, which would therefore help in the economic growth of Trombay. And economic growth naturally means rise in the developmental status as well as rise in power. But the industries are so much indulged in the economic development of the region that they tend to dismiss the other major aspect, that is the environmental aspect. As the case study says, that with passing time the pollution level of Trombay has increased to such heights that health issues are naturally creeping up, resulting to deaths. Hence, it should be kept in mind that in order to bring economic prosperity, destroying the environment is not the only way. By blasting mountains in order to build hotels, destroying ponds and lakes to build residencies, destroying forests to build cities, we are so keen in achieving prosperity, that we forget the fact that these deeds of ours is the main cause behind global warming. Unintentionally we are destroying the planet, by violating the environment.
    •In order to maintain a proper balance between these two major aspects, the industries can hire environmentalists, who can help to understand how the industries should work so that the nature remains unharmed, and the economic development is maintained too.
    •More of natural gases and chemicals should be used rather than the toxic ones.
    •More attention should be paid to the environment. It is definitely acceptable for human beings to wish for economic growth. But destroying the environmental aspects in order to fulfill the human desires should not be prioritised.
    As it says, "when there is will, there is way". Hence if we want, we can surely come across ways to maintain a steady balance between economic growth and environmental stability, where we don't have to put one aspect at stake in order for the other aspect to develop.
  • ssbt_yen October 28, 2020 at 12:47pm
    In today's world, people are so much busy to focus on economic growth that they eventually forget about environmental issues and often neglect it for growth and development. But as the matter of fact, both of them should go hand-in-hand. Petroleum and gas are some of the important non- renewable energy sources that are very important. Their process of extraction and usage requires a lot of care. This can cause various types of pollutions, like water, soil and air pollutions respectively. Even those who come in contact can have skin diseases, respiratory tract diseases, etc. Just like the extraction process, the proper waste management system should also be implemented. Sustainable management is also a factor that should be taken into consideration. The use of heavy metals, toxic chemicals has raised the level of pollutions so much that it made the scenario worse. We can think of some alternatives which can be less harmful. Many biotechnological methods can be applied as a solution. Also, the water management system should be kept in check by setting up proper water treatment plants. Economic growth requires proper methods and planning. Overexploitation of resources should not be done as it is a negative aspect of sustainable development. All the factors should be kept in check and maintained properly for positive economic growth, good sustainable development, and environmental growth and safety. We can use CNG and LPG for our daily use, dispose of waste properly and there are several other eco-friendly methods to solve the problem.
    The rate of pollution generated can pass to the next generation and so on. This creates a kind of permanent damage to the ecosystem. For example, Nitrogen and Phosphorus which enter the water bodies when are emitted by agriculture and industries cause a lot of havoc in the water bodies. Some of the algae are exposed to heavy metals making them highly tolerant of toxic metals. This can lead to algal bloom.
  • ss_rikhia October 28, 2020 at 12:18pm
    The stakeholders who experienced positive impacts are: Mr.Mathur who was successful in finding the large oil reserves in Trombay, the oil companies, who were benefited as they could get hold of the land and Trombay became one of the major petroleum producing region of India and were able to make high profits and lead to industrial development, the employees as well as the Government. The stakeholders who experienced negative impacts are the residents of of Trombay, due to the pollution occurred due to the water contamination by the toxic and metals waste, as consequences residents of Trombay faced serious water pollution as water wells contained heavy metal deposits and many people died due to serious cardio pulmonary arrest and with liver cancer.

    1) During these decades, statistics have been showing a higher percentage in discharging of industrial wastewater to wetlands, rivers and coastal areas. This has increased the level of pollution and even caused a serious life hazards for the entire eco- system and human life. As a solution to this fact, industries should provide Industrial Waste Water Treatment plants, by converting waste water to highly purified reusable water for other industrial process like for cooling process, watering, sanitary use etc. The municipal council of Maharashtra also should implement strict rules and regulations to the companies which are causing negative impacts on the environment.

    2) Effective interdisciplinary perspectives like having a good knowledge about the land, knowing about the surrounding, hiring professionals, use of environmentally reliable products, proper waste management techniques, judicious share of profits, energy efficient products and mainly focusing on the ethical codes of conduct,as well as the well-being of the employees and residents of that area are to be kept in mind.


    3) We need to reset our relationship with nature by valuing it as the indispensable resource that it is. Rather than destroying our natural world, we need to apply “nature-based solutions” to our greatest challenges and create more robust resilience to systemic shocks in the future. The employees of the refinery are need to be alert about the growing pollution and its effect on the residents its causing now and also have an idea about the future problems.

    4) My position on the right thing to do is to treat the environment as a public good and implement environmental policies which protects the environment, through regulations, government ownership.Industries should try to be more technological developeded by installing high-end machines that causes less harm to our environment and include quality of life and environmental indicators in economic statistics. We should also try to educate and inform people more about the consequences and ask the government to take serious action against it because the life of people is in jeopardy. The plant should immediately go under complete investigation, so that it is not for third image any harmful chemicals in the river or in the water.

    5) We have seen what happens when we make nature our enemy. If we instead make it our ally, helping us to help ourselves and in doing so create healthy societies, resilient economies and thriving businesses, we will have learnt the greatest lesson from this terrible period. The result will be a world that is not just safer, healthier and more equitable, but one that is prosperous too.
    • kaitpont > ss_rikhia October 28, 2020 at 6:29pm
      I agree with your response. We need to be more considerate of the environment and ensure that when we make decisions we make the with a clear head and after evaluating all of the options. We need to keep the environments best interests in mind will considering the other positive effects that would come with it.
  • Mr King K October 28, 2020 at 11:20am
    1. Knowledge and skills that are needed today to implement solutions to complex global issues should involve benefits to both the economy and the environment. Prioritizing one over the other could result in the fall of the one not being prioritized; you need both to have a livable, working, successful system. Keeping the environment clean and safe is expensive, while on the other hand, going the cheap route is typically bad for the environment. In this scenario the benefits to the economy heavily overshadowed the well being of the environment. This ultimately resulted in huge environmental issues that negatively impacted the neighboring communities greatly. Having a balance between supporting the economy and keeping the environment clean is a very difficult task, that's why it’s one of the most complex issues there is.

    2. Solutions to the problem above would require perspectives from multiple branches of engineering, environmentalism and science. Engineers and scientists would want to come up with plans to create petroleum plants that reduce the amount of waste produced and/or decrease the amount of fuel and energy used to run the plants. Environmentalists can work to provide solutions to dispose of waste in an efficient and clean manner and find better locations for said plants.

    3. Environmental issues in my culture could be combated with unionized effort to reduce these problems. Many people say they are for helping the environment, but that’s just it, all talk and no action. With some real group effort to help solve environmental issues, some real results can be seen. People need to come together and realize we’ve only got one Earth and we need to take care of it by speaking up and taking action together.

    4. As far as what my position is on “the right thing to do” in this scenario, it would be to do what’s right for the environment and the people living in it: reducing the oil production or pulling it entirely. This would be the morally right thing to do. However, this is unrealistic and would most likely never truly happen because so much money is being generated by Trombay, that the people “in charge” will keep it this way to gain as much profit as possible. Unfortunately this is how things typically are: money over everything else.
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