Technology, Natural Resources and Economic Growth

Technology, Natural Resources and Economic Growth

Improving the Environment for a Greener Future

New Horizons in Environmental Economics series

Shunsuke Managi

Through a combination of global data analysis and focused country level analysis, this timely book provides answers to the most pertinent country and industry specific questions defining the current relationship between technology, natural resources and economic growth.

Chapter 13: Policy Implementation and its Effectiveness in China

Shunsuke Managi

Subjects: economics and finance, environmental economics, environment, environmental economics, innovation and technology, technology and ict


INTRODUCTION During market transition reforms in China, the incentives of economic agents were generally improved. By and large, the consequences of this reform process were comprehensive, consistent and deep, and this helps to explain why the reform process was more successful in China, as against Eastern Europe, in the period up to 1990. Relationships between institutional changes, economic performance, and economic conditions are clearly interconnected as the cycle continues and reform moves forward (see Managi and Kaneko, 2009a, for review). China is clearly an economic powerhouse with average economic growth of close to 9 percent per annum over the last 25 years.1 However, as a result of the country’s extremely rapid economic growth, the scale and seriousness of its environmental problems are clearly evident. Consequently, a number of environmental problems, including growing energy consumption, heavy reliance on coal, and increasing air pollution, are threatening its sustainable future. For example, the World Bank estimated that economic damage caused by pollution in China cost around $54 billion annually, amounting to close to 8 percent of GDP (ibid.). Currently, China is suffering from serious surface-water pollution (Managi and Kaneko, 2009b). The seven major rivers have pollution problems, while major lakes have prominent eutrophication problems. According to the State of the Environment (SOE) Report of 2008, among 409 monitored sections of 200 rivers, 20.8 percent were worse than Grade V water quality, which means that water cannot be used for any purpose. Among the 28 major lakes, 39.3 percent had water quality worse than...

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