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THE ECOLOGICAL crisis in the Soviet Union is reaching the point where
‘the very life of the Soviet people is in danger’, and only a change in
the way the economy is run can solve the crisis. According to Mikhail Krotov,
an economist at the Leningrad Mechanical Institute, the ecological crisis
is a direct result of the Soviet Union’s economic crisis.

Environmental problems in the country have ‘reached the stage where
people’s health is declining’, Krotov said in an unscheduled talk in Swansea.
The people of Leningrad, for example, drink water drawn from Lake Ladoga,
which is polluted by the effluent from nine pulp and paper plants, two dairy
complexes and a series of chemical factories on its shores.

Krotov insisted that industry is not to blame. ‘Narrow-minded people
blame (the crisis) on technological progress itself, and this has led to
many industrial activities being banned for ecological reasons.’ The real
problem, he explained, is the ‘lack of market mechanisms for the rational
use of natural resources’.

Under the current economic system, where the state has a monopoly on
all natural resources, timber, oil and gas and so on are virtually free.
This has encouraged profligate consumption by industry. Krotov estimates
that for every unit of national income, the Soviet Union uses two to three
times as many resources as other countries. It should be possible to bring
consumption into line with other countries, without reducing productivity.

The best way to cure industry of its wastefulness is to charge the going
rate for natural resources, maintains Krotov. He also proposes the addition
of an ‘ecological supplement’ to the price, the surcharge reflecting the
scarcity of the resource or the damage done to the environment. Under the
old system, research into the science and technology needed to clean up
industry also stagnated. ‘It was just not profitable for factory managers
to introduce clean, safe technology,’ said Krotov.

Krotov’s cure for the Soviet Union’s environmental ills is to privatise
at least half of the state factories to introduce competition among producers.
This would involve existing companies setting up new enterprises and getting
involved in joint ventures with foreign firms. But the Soviet Union must
move away from heavy industry and step up production of consumer goods,
he said. Most importantly, the country must join the international monetary
system so that the rouble becomes convertible.

A second vital component of Krotov’s scheme is to give local governments
control over the resources in their region, by handing over what is now
state property. This would give local governments a direct interest in preventing
pollution and protecting their local environment. ‘People with the greatest
stake in the environment are the local people’ he says. ‘Ecological standards
and rules can only be applied effectively when the local authorities are
the main agent for monitoring and enforcement.’

The Russian republic contains most of the Soviet Union’s natural resources
– and has the greatest environmental problems. But the government of the
republic, led by Boris Yeltsin, has already begun to take steps to remedy
its own problems. It recently announced its intention to take control of
all the natural resources within its boundaries. Yeltsin has introduced
a 400-day programme to revitalise the Russian economy, with backing from
President Gorbachov. And from 1 January, an innovative ‘polluter pays’ policy
comes into force.

The new law means that about 100 of the 500 major industrial concerns
in the Leningrad region will have to shut down because they cannot meet
the new standards set by the Russian authorities. An optimistic Krotov believes
that the extra money coming into the republic from the export of its resources
both abroad and to other parts of the Soviet Union will help to reduce unemployment
by providing funds to set up new, cleaner industries. ‘Economic reform in
the Russian republic will make it possible to harmonise entrepreneurial
activity and the rational use of resources with protection of the environment,’
said Krotov.

While these reforms will bring benefits to the Russian federation, they
will cause problems in other parts of the country and in the countries of
Eastern Europe, which, until now, have had almost unlimited access to raw
materials for virtually nothing.