Chinese Economic Development and the Environment

Chinese Economic Development and the Environment

New Horizons in Environmental Economics series

Shunsuke Managi and Shinji Kaneko

Over the past two decades, China has become an economic powerhouse. However, as the world’s largest producer of CO2 emissions, the scale and seriousness of China’s environmental problems are clearly evident. This pioneering book provides an economic analysis of the significant environmental and energy problems facing China in the 21st century.

Preface

Shunsuke Managi and Shinji Kaneko

Subjects: asian studies, asian development, development studies, asian development, development economics, economics and finance, development economics, environmental economics, environment, asian environment, environmental economics

Extract

China’s economic growth has been extremely rapid in the past two decades, with an annual growth rate of about 10 percent in the last two decades. Subsequently, environmental problems are threatening China’s sustainable future. Pollution damage is estimated to be around $54 billion annually and close to 8 percent of Chinese GDP. Policy makers in China are facing the tradeoffs between economic growth and environmental protection. The world’s most populous country and largest coal producer and consumer, China contributed more than 15 percent of global CO2 emissions in the year 2007, making it the world’s largest emitter of CO2. Previous studies have suggested that China’s energy consumption and CO2 emissions will continue to rise during the next five decades. This raises a series of questions: what happened during this period? How did underlying forces contribute to the changes in CO2 emissions? Do the changes represent only a temporary fluctuation or a long-term trend? These can be answered by using energy efficiency or productivity measurement. Productivity growth plays an important role in GDP growth in China. Technological change is central to maintaining standards of living in modern economies with finite resources and increasingly stringent environmental goals. In addition, the costs (and availability) of alternative production and pollution abatement technologies, which are important determinants of the environmental compliance cost, are also influenced by productivity. Thus, it is important to understand the interaction between productivity change and environmental policies, which influence the compliance costs. In the long run, the most important single criterion...