The official loot of the treasury can have equally adverse effects on the environment. Government subsidies have been considered necessary to support the poor and meet vital national goals like self-sufficiency in food. But subsidies given in the name of the poor have usually benefited the rich. For instance, subsidy on diesel for irrigation provides cheap fuel to run luxury cars (see box: Robbing the poor).
Untargetted subsidies have led to inefficiency in the use of natural resources and consequent over consumption has had adverse impacts on the resource itself. Even the white paper on government subsidies in India produced by former Finance Minister, P Chidambaram, accepts that "untargetted subsidies promote inefficiency and wastage of scare resources".
Even the relative importance of different subsidies has also changed over the years. Food subsidies which accounted for 70 per cent of total explicit subsidies had declined to 40 per cent in 1995-96 as compared to the previous year. And in 1994-95, the Centre spent more than five times less money on "merit" goods - necessary for social justice and equity - than what it did on "non-merit goods".
In a bid to protect the global environment, various countries have forged environmental treaties relating to protection of the ozone layer, global biodiversity and endangered species. Corruption can affect the successful outcome of several of these treaties, as in the case of the Indo-China tiger conservation programme (see box: Species at stake).
The smuggling of chlorofluorocarbons (CFCs) is another happening which threatens to jeopardise the Montreal Protocol. An estimated us $500 million worth of CFCs were smuggled into the US in 1996. It is alleged that CFCs manufactured in India, China, Mexico - developing countries are allowed to continue manufacture of CFCs under the pact - are finding their way to the industrialised world. Although the us has stopped producing or importing CFCs, it has not banned the sale or use of the compound made before the 1996 deadline. The exemption, meant for the servicing millions of on-road cars which use CFC air conditioning, has encouraged a black market to flourish. Smuggled CFCs are passed on as recycled CFCs. While there is no evidence to link Indian industries to the illegal trade, it is suggested that CFCs manufactured in India and exported to licensed dealers or industries as per the guidelines of the Montreal Protocol makes its way to lucrative markets in North America and Europe. Russian manufacturers are said to be deeply involved in the illegal CFC trade.