The Atmospheric Pollution and the Economic Development in China

1. The Atmospheric Pollution and the Economic Development in China

2. Outline • Introduction and overview of the current state of the atmospheric pollution in the Asia-Pacific region • Sulfur dioxide (SO2) pollution in China • Carbon dioxide (CO2) pollution in China • Concluding remarks

3. Overview • Atmospheric pollution increased significantly in the last three decades due to: • Rapid economic growth • More widespread use of motor vehicles

4. In the Asia-Pacific region... • In 1992, the region accounted for 21% of the world’s commercial energy consumption (shown in Fig 1) • Energy consumption grew by 6.2% while the global energy consumption fell by 1% • 80% of the energy generated by fossil fuels, 40% of which was coal

5. Fig 1: Share of world energy demand (1992)

6. Fig 2: Relative Severity of Air Pollution in Asian Sub-regions

7. In the Asia-Pacific region... Con’d • Sulfur oxide emission increased by 80% (1970-1986) • Sulfur dioxide emission was 50% higher than either Africa or Latin America • Nitrogen oxide emission increased by 70% (1970-1986) • Carbon dioxide grew 60% faster than elsewhere

8. Air quality in Asia’s mega-cities…

9. In the Asia-Pacific region... Con’d • Energy demand will double every 12 years (the world average: 28 years) • Demand for coal will remain high (6.5% annual increase) thanks to: • The abundance of coal • Its easy recoverability • SO2 emission triple in the next 12 years

10. The result… • A significant increase of national and trans-boundary acid deposition • Aggravating urban air pollution • Irreversible ecosystem damage with far-reaching implications… • In a word, the result is pretty darn BAD!!!

11. Sulfur dioxide (SO2) pollution • Generated as a result of the burning of coal and petroleum • When released into the air, it reacts with atmospheric water and oxygen to produce sulfuric acid – major component of acid rain

12. The acid rain… • Has substantially harmful effects on forests, fresh water and soils • Kills off insect and aquatic life forms • Causes chemical weathering to statues and buildings

13. Fig 4: SO2 Emission Level from 2000 to 2005 (10,000 tons)

14. SO2 in China… • In 2005, over 50% of SO2 emitted from the “Production and Distribution of Electric Power and Heat Power Industry” (11.67 million tonnes) • In which 11.12 million tonnes were the result of “Firepower Electricity” generation

15. Fig 5: Total Electricity and Firepower Electricity (1 Billion kwh)

16. Fig 6: Percentage of Firepower Electricity in Total Electricity Output

17. A couple of examples… • June 8, 2004, the SO2 pollution in Guiyang resulted in a “black dust storm”. • Nov. 12, 2004, an SO2 accident in Yichang hospitalized 108 persons.

18. Any optimism here?......Yes! • A study of national income and SO2 emissions in 12 Western European countries in 2006 • Used 132 years of data • Came up with an “Environmental Kuznets Curve” (EKC)

19. Fig 7: Kuznets Curve Income Inequality or Environmental Quality Income per capita

20. In that study…

21. Fig 9: Predicted Sulfur Emissions Per Capita and Income Per Capita

22. Fig 10: Pollution-Income Relationship

23. Compare with the current Chinese situation… • The 2006 income per capita in China is $1,500 • Compared to the Western Europe turning points of $11,900 with regulations, and $12,200 without regulations

24. Fig 11: Per capita income and industrial SO2 emission (1995-2004)

25. Fig 12: China-Europe Comparison

26. Carbon Dioxide (CO2) Pollution • Atmospheric concentration of CO2 is mainly caused by: • Fossil fuel combustion • Deforestation • A vicious domino effect: SO2 emission → Acid rain →Deforestation →High atmospheric CO2 concentration→Greenhouse Effect & Global Warming

27. Fig 13: Historical Global Fossil Carbon Emissions

28. Fig 14: Carbon Dioxide Emissions by Country (1000 tonnnes)

29. In 2002 UN statistics… • U.S. was the largest CO2 emitter (24.3%) • European Union (15.3%) • China (14.5%) • India, Japan and South Korea ranked No.4, 5, and 9 respectively • Canada ranked No. 8

30. Fig 15: Per capita CO2 emission (2002)

31. Fig 16: Sectoral contribution to Greenhouse Gases emission (2000)

32. Fig 17: Energy consumption and CO2 emission in China

33. Fig 17+: Number of Vehicles for Civilian Use

34. Fig 18: Per Capita Carbon Emission and Per Capita Income

35. This is a classic free-rider problem. Remember?! I taught you the damn thing in Econ 328! Dear Prof. Peter Ibbott The reason? • Widespread awareness of the problem was relatively recent • Costs of pollution were born externally

36. Also a Prisoner’s Dilemma… Consider two groups of countries facing the following choices: • Neither group adopts environmentally friendly policies (EFP). Outcome: all economies grow rapidly because no resources are diverted to pollution abatement or prevention; but a very bad environment. • Group A adopts EFP, Group B doesn’t. Outcome: Group A becomes disadvantaged in the global economic competition; but a better environment. • Group B adopts EFP, Group A doesn’t. Outcome: Group B becomes disadvantaged in the global economic competition; but a better environment. • Both groups adopt EFP. Outcome: no one is economically disadvantaged; the best environment among the four choices.

37. Solution… • A coercive authority or a third-party organization, e.g. government and the UN • Kyoto Protocol • To stabilize CO2 and five other Greenhouse Gases concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

38. Fig 19: Kyoto Protocol Participation

39. Under Kyoto Protocol… • Developed countries • Obligated to reduce GHG emission to a certain level by 2012 • Developing countries (including China) • Do not have the obligation of emission reduction

40. CO2 pollution in the near future… • Not so optimistic: • China has passed the EU and become the second largest CO2 emitter in the world • China is building one coal-fired power plant every week (unsubstantiated) • Not China’s fault? (yet to be evidenced)

41. The bright side… • Initiatives have been taken: • Scientific perspective of development (科学发展观) by President Hu Jintao • 30 environmental regulations & 375 environmental standards by central government • Over 900 environmental standards by local governments • 95,000 staff in 8,400 departments mobilized to monitor and enforce these regulations

42. Concluding remarks • Al Gore in An Inconvenient Truth: “We got everything we need [to better our environment], save perhaps, political will…” • A will to even sacrifice the current relative economic advantage • The environmental issue is not an economic issue so much as a political issue

43. A better environment… We hope that, with their excellence in leadership and statesmanship, the political leaders in the world will make this happen. And we’re counting on them.

44. THE ENDTHANK YOU!