Sunday, January 21, 2007

Evidence from China

Here is a story from China about the costs of environmental degradation and what it will cost to clean up the mess. I wonder if this is an example of the Environmental Kuznets Curve at work or wise policy makers looking at a bleak future and recognizing the importance of investing in natural and environmental capital for future well-being. What do you think?

15 comments:

Hartley said...

I think many developing (in terms of growth towards countries like the US) countries like China have ignored the effects that economic growth and industrialization had and still has on the environment. Now, China is in a real pickle because they have completely ignored the environmental resources that they were depleting by the amount of pollution that they were emmitting. Also, the article also talks about the focus of the Chinese economy on pollution rich production such as textiles and coal mines. These types of producers are not as environmentally savvy as newer production methods or substitues that are used in the US. As our textbook points out, usually the newer the technology and machinery used, the less pollution is emitted. So if China tries to upgrade some of their equiptment to a newer version, they might help themselves out and reduce some of their pollution. But, their economy started growing so fast, hardly anyone had time to stop and re-evalute the damage done to the environment in China and globally. I do not think that China will be the last case that we see where rapid growth had a detrimental effect on the environment and pollution restrictions.

Rachel said...

I agree with Hartley’s comment that China must adopt cleaner technology so that it does not cause permanent harm to the environment and its people. The article mentioned that other developing countries in similar paths of growth, such as India and Pakistan, have cleaner, more efficient technologies (solar, wind, bio-gas). The similarities between these countries make me wonder why China has not invested in these types of technologies to the extent that India and Pakistan have.

Also, the mention of a per-capita GDP of $10,000 could be the work of the environmental Kuznet’s curve. This theory hypothesizes a U-shaped relationship between pollution and per-capita GDP, so that as a country grows, it uses more fossil fuels and therefore pollutes more. But, when the country reaches a “turning point,” marked by a certain per-capita GDP, technological advances will reduce pollution. However, the curve has been proven inconclusive, working for some forms of pollution but not for others (example, Mexico). Maybe this inconclusive theory means that China should not wait to see whether pollution will decrease after the country reaches a per-capita GDP of $10,000; instead, maybe China should enact appropriate environmental policy to reduce pollution right now.

Drew said...

I agree with both Hartley and Rachel. Although China does not have the per capita GDP of wealthier countries, the world may not be able to wait to see if the Kuznet's curve is conclusive. The position Al Gore makes in the Harvard News article expresses how businesses must take a long-term view, instead of just looking to the next quarter. Businesses around the world need to make this change in order to maintain a sustainable environment.

Anthony said...

I also agree that China must adopt cleaner production technology to reduce pollution. China, in my opinion, adopts some interesting policies as they are on a crash course to be the world's largest energy consumer. One thing I find interesting about China is that they had intented to stop all construction and much of their production in Beijing before the 2008 Olympics in order to improve air quality. So, sometimes I wonder if China's environmental policies don't have an alternative motive.

Anonymous said...

In the incredibly competitive globalizing market that China's most recent economic boom occurred in almost has forced them to ignore long-term environmental goals that large industrialized countries such as the U.S. are just now worrying themselves with. In order just to keep up with Global economic pressures, it seems obvious that they would not consider these negative environmental effects. It seems that incentives that would affect most Chinese citizens into thinking first about pollution reduction need to be provided not just by the Chinese Government, but by other industrialized countries that have just now turned the corner of environmental cleanliness after generations of people running businesses without much care for environment.
-Nat

Brynn said...

Unfortunately, our own production methods here in the US are not even where they could be yet. But maybe with new legislation being proposed in the Senate we are on our way. This act which introduces a permanent biodiesel tax incentive in the US was proposed on the first day of Congress and could help us set an example to countries like China. If we start getting serious about alternative energies, maybe others will follow in our footsteps. Here's the Link (copy and paste it).
http://nbb.grassroots.com/07Releases/pomeroyhulshof/

Lucinda Sardinha said...

China is starting to construct the bigger solar usine of world. I think this decision shows the determination of the country to look for new soucres of less pollutants.

Mackenzie Hutton said...

The Chinese economy has grown rapidly in the past years but at extreme costs to their environment. The rapid speed at which the economy has grown has left little time for the Chinese to implement cleaner technology and has encouraged Chinese industries to ignore the environmental costs of their production. I believe that the Chinese policy makers have wised up have realized that the speed of the economic growth has produced a huge amount of pollution and that without some sort of government program or intervention, serious damage, that will eventually lead to extreme decrease in productivity, will be done. I think that the changes China wants to make are more of a result of policy makers recognizing the importance of investing in natural and environmental capital than the Environmental Kuznet’s Curve.

Kelly Hishta said...

Simply upgrading techonology in developing nations is not the answer. In order to make techonology more efficient a lot of energy is expelled. I am not exactly sure how we all got into thinking that the US produces in an environmentally friendly/savvy way, but what efficiencies we now have all came at a high price. The high price being the pollution/emissions produced in the past and present. For example, per capita CO2 emissions in the US are around 19 tonnes while China is at 3. [from CDIAC] Are we really as efficient as we would like to think we are?

Thomas Gift said...

Jeffery Sachs astutely points out that any solution to the world’s environmental challenges must be addressed through a multidimensional approach that is local, national, and international in scope. At a local level, individuals must take steps to ensure that their daily activities and functions exhibit respect for their surrounding environs. At a national level, governments must develop regulations and market-based incentives that equate as closely as possible national social costs of environmental degradation to national social benefits of production. At an international level, multilateral institutions have an important role in overseeing that countries work together in a fair, collaborative, and efficient way to promote and enforce environmental standards. Taken individually, each approach will serve to strengthen natural and ecological resources throughout the world that are so critical to maintaining acceptable standards of living. Taken collectively, they will ensure a legitimate form of sustainable development that meets the wants of people today without sacrificing those of future generations.

Jon said...

China is not the only country that is thinking ahead when considering power options in the future.

Even though the USA has the saudi arabian equivalent of amount of coal, the coal power plant expansion is slowing as reported by NPR:
http://www.npr.org/templates/story/story.php?storyId=6881347

Anonymous said...

I think for China the sooner they act to reduce pollution the better. Without a consideration for the damaging effects on the environment, China will increasingly rely on coal and the ability to swith to cleaner sources of energy will only become more difficult. As we discussed the importance of information on costs, such as a gasoline tax, on capital purchasing decisions, buying a car, the earlier that China invests in cleaner production methods the quicker and less costly the conversion will be from coal dependent production.
Dave Dreibelbis

Kris Brake said...

Very interesting article and question posed. I can't help see the issue in the light that I have been discussing in several of the other blogs. The main point I try to make is that the Environmental Kuznet's Curve and the decisions of wise policy-makers are almost one and the same. As GDP increases to higher levels, the effects of environmental degredation are multiplied and come to the forefront. The logical conclusion here, now that we have determined that something needs to be done, is to find ways to continue to increase GDP while incorporating the idea of sustainability. Anyone?

Anonymous said...

Over the past years many people have doubted whether China will be able to sustain their growth because of the large negative effects of industry on the environment.
All eyes will be on China in the summer of 2008 for the Olympics. To ease the worlds mind on whether China can sustain their growth the government should put into place a solid plan to show that they are making strides to reduce their footprint. While it will be impossible to show the positive effects of a eco friendly plan by the summer of 2008 a solid plan and possibly the start of implementation would go a long way.
-Evan Fitzgerald

Anonymous said...

China presents a different scenario then the one we are used to. The government still holds control over its citizens and the means of produccion that is not seen in the western nations. I wonder if this will enable china to implement enviormental policies faster (if not more efficiently bc of command and control). Adolfo