Pollution Eats the Fruits of China’s Growth

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Three Gorges DemolitionA new report from the Chinese Academy of Sciences finds that the cost of environmental destruction in China was $402 billion in 2005, or close to one seventh of the country’s economic output. There is a growing realization in China that the current growth model is not sustainable, and should not be exported to other countries unabated.

According to an article in China Daily, the new report was prepared by Shi Mingjun, a professor at the Chinese Academy’s intriguingly named Research Center on Fictitious Economy and Data Science. Shi conservatively estimated the cost of the exploitation of natural resources, ecological degradation and environmental pollution at $401.7 billion, or 13.9 percent of China’s total output in 2005. This figure is considerably higher than earlier estimates by Chinese authorities.

“If we calculate the real cost to the environment and natural resources, the losses are greater than the gains”, Professor Shi commented. “And as the nation’s growth pattern has changed little over the past two years, the conclusions are likely to be the same for 2006 and 2007.”

Earlier efforts by the State Environmental Protection Administration SEPA (now the Ministry of Environmental Protection MEP) to prepare a green GDP for China were undermined by the National Bureau of Statistics. And a joint report by the World Bank and SEPA according to which pollution causes 750,000 premature deaths in China every year was censored by the authorities in July 2007. In this light, the official interest and public information about the latest report is encouraging.

Like other countries, China tends to export its own growth model to other countries through its economic cooperation and foreign aid. The Chinese government has for example invited high-level delegations from South Africa, Congo and other countries to visit the Three Gorges as a model for their own energy sector development. The dam is a prominent example for a project whose growth impacts are eaten up by pollution, and hardly a model which other countries should follow. Will the growing awareness of the cost of this model have an impact on China’s foreign economic policies?

While Professor Shi’s report provides the sobering news of the day, another article in the same issue of China Daily offers hope. According to this story, the Chinese Academy of Environmental Planning CAEP, a think-tank of the MEP, is currently drafting environmental guidelines for Chinese companies investing overseas. The think-tank is cooperating with the Global Environmental Institute and the University of International Business and Economics in this effort. The story confirms internal updates which we have seen earlier, and addresses a recommendation which International Rivers has brought forward again and again.

According to the article in China Daily, a new report by CAEP finds that China lacks comprehensive environmental protection policies in overseas projects. “China should consider and take action as globalization has produced new environmental challenges”, the paper quotes Ge Chazhong, an official of CAEP, as saying. We will look into the new report without delay, and will keep our readers posted.

Peter Bosshard is the policy director of International Rivers. His blog, Wet, Wild and Wonky, appears at www.internationalrivers.org/en/blog/peter-bosshard