Introduction

In the global perspective, countries are aiming at increasing their GDP under any cost. This increase in GDP leads to increase in material and energy use and therefore to environmental unsustainability. Economic growth is often associated with environmental degradation. Increased consumption of Earth’s resources and its negative environmental impact has led to unsustainability in economic growth. Rising consumption levels require corresponding extraction, transportation, processing of natural resources, followed by consumption and disposal of the final products.

Brock (1973) stated that ‘received growth theory is biased because it neglects to take into account the pollution costs of economic growth’. This is because in an unregulated market the cost of pollution is not internalised. Pollution in this case is an unpaid factor of production, with production becoming more costly if less pollution is allowed. In this context, environment is used as a factor of production which is not fully compensated, and its use in the production process can be captured by introducing emissions as an input in an aggregate production function. Again, the energy intensive industries creates both air and water pollution to a large extent. This is the negative aspects of increasing production of energy intensive industries. So, in a sense we can’t go on increasing the output of energy intensive industries in an unlimited manner. In other words, factor productivity or total factor productivity are affected negatively by the extent of pollution (industrial waste) generated by energy intensive industries. Hence, it would not be illogical to say that economic theory along with environmental studies is to be taken into account. Here in lies the interdisciplinary relevance of our research work.