It can be further argued that with increasing level of HD, public
awareness on environmental sustainability increase in a particular State,
which in turn will influence its pattern Ofgovernance.1 In Otherwords,
States with higher HDI should ideally be ranked higher in terms of
environmental performance. The relationship between economic growth,
measured through per capita net state domestic product (PCNSDP),
and environmental performance might be more complex in nature. In
general, higher income level is conducive for ensuring higher HD, and
therefore should ideally be favourable for maintaining environmental
sustainability (World Bank, 2006). However, some States might also
choose to grow in the short run by hosting a number of environmentally
damaging but fast-growing industries within their territories, with
obvious consequences on local environment.
Globally, the environmental regulation-avoiding attitude of
Producersoften Ieadstoconcentration Ofpolluting industries in locations
characterized by Iaxenvironmental norms ('Pollution Haven Hypothesis
- PHH,). Usually it is argued that the developed country producers
relocate their polluting units in newly industrializing developing countries
(Eskeland and Harrison, 2003).2 Similarly within a country, relocation
1 Jalan et al (2003) show that raising the level of schooling of woman in an urban
household from O to 10 years approximately doubles willingness to pay for improved
drinking water quality. This is equivalent to increasing the household's wealth level
from the first to the third wealth quartile.
2 Gallagher (2004) cautioned that without environmental laws, regulations, and the
willingness and capacity to enforce them, trade-led growth will lead to increases in
environmental degradation. By citing the example of post-NAFTA environmental
condition of Mexico, he concluded that environmental regulations and enforcement
are not generally decisive in most firms' location decision and therefore Governments
will not be jeopardizing their access to FDI by enacting strong environmental
legislation and enforce it.
along that line from 'cleaner' States to the 'dirtier' States may be noticed
for various reasons.3
Working with the Indian scenario, while negative environmental
performance by transnational corporations during 1980s (Jha, 1999)
and higher FDI inflow in relatively more polluting sectors in the post-
liberalization period have been reported (Gamper-Rabindran and Jha,
2004); several studies rejected the existence of PHH (Dietznbacher
and Mukhopadhyay, 2007; Jena et al, 2005). In long run the PHH may
or may not become a reality in some Indian States.4 However, that is
beyond the scope of the current exercise.
The efficiency of environmental governance and pollution-
abatement is currently a much-researched area (Costantini and
Salvatore, 2006; Dam, 2004; Kathuria, 2004; Kathuria and Sterner,
2005; Murty et al, 2003; Parikh, 2004; Sankar, 1998; Santhakumar,
2001; Somanathan and Sterner, 2003; Sood and Arora, 2006).
The intervention of Supreme Court in India has been quite successful
in this regard (Antony, 2001; World Bank, 2006), although the limitation
3 For instance, a recent study conducted by the Delhi-based NGO, International
Resources, for the Maharashtra Pollution Control Board has shown that although
Maharashtra is the biggest producer of electronic waste in India, the more hazardous
recycling of these products (e.g. - extraction of copper, gold, breaking-up of cathode-
ray tubes etc.) is actually undertaken in Delhi. This particular choice of recycling
location comes from the fact that the extracted materials are important inputs for
the copper and gold business in Moradabad and Meerat respectively, both close to
Delhi (Dastidar, 2006).
4 Though import of hazardous waste for processing or reusing as raw material is
allowed, with environmental consequence within Indian territories. However recently
29 categories of hazardous waste have completely been banned for import and
export (Sharma, 2005).