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China: economic powerhouse, environmentally unsustainable - part one

By Pan Yue - posted Tuesday, 24 July 2007


Some may not be convinced that this is a good example for China to follow, as these countries have benefited from primary accumulation and 300 years of environmental exploitation, but could Japan's experiences hold lessons for us? Japan's balance of population and resources was even less favourable than China's, but they have successfully built a circular economy and society.

Those who are still not convinced should look at the example of South Korea. By the time the country’s per capita GDP had reached US$5,000, South Korea had already solved its environmental problems. Even a moderately developed country can remedy environmental problems that the developed nations could only solve in the advanced stages of development. There is still hope. Green production, clean technology, sustainable consumption, green capital markets, stocks and shares and green credit are all options that we can explore.

Under the market system, many public resources have no price. We make assumptions that the earth's resources are limitless - that before resources are extracted from the earth, they have no value. This has been a historical limitation of traditional politics and economics. Scarce resources such as water, coal, or biodiversity have no price. The day that a pricing system for these resources is set up will be a day of enormous change in economics.

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Such a transition in our way of thinking about economic development would be revolutionary for China. This is what we mean by a “green economy”, and would be a prelude to the emergence of a new set of environmental economic policies.

Injustice

Why is the environment considered a sociological issue? I have written an article specifically addressing this issue called Environmental Protection and Social Justice, and will not go into too much detail here. Suffice to say that social injustice leads to environmental injustice, which in turn leads to further social injustice, and a vicious circle is set in motion. The result is disharmony throughout society.

Here is a classic example of what should be called environmental injustice: coal mine owners from Shanxi province indiscriminately extract coal and dig up the land, creating pollution. As a result they become extremely wealthy. Once they have polluted Shanxi, however, they do not stay there. Instead they move to Beijing where they buy luxury villas and push up house prices. They have also pushed up property prices in all the coastal regions of north China.

If these areas then become polluted, they will no doubt move to the US, Canada or Australia and cause inflation there too. They create pollution, but are removed from its consequences. They take all the benefits of polluting industries, but pay nothing towards the clean-up costs.

Although the speed of our economic development has been high, the rewards have not been fairly distributed. Power and wealth have flowed towards the cities, the eastern regions and certain wealthy groups. Rural residents, the western regions and the poor have become - in terms of employment opportunities, education, healthcare and social security - the losers in a dualistic system.

The environment has also lost out. Some people and regions “getting rich first” has been achieved by sacrificing the environment of other people and regions.

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There is also the issue of social responsibility. What burden of responsibility should be borne by the business people who got rich first, the officials who have become powerful, and the groups who have benefited the most? What form should this social responsibility take in the fields of the environment and public affairs?

Not long ago I wrote an essay entitled Urging Chinese Business to Take Environmental Responsibility. I suggested those people, regions, industries, departments and cities that got rich first should take on environmental responsibility, in order to narrow social divides and assuage a series of social injustices. They need to understand that the consequences of injustice are the same for rich and poor alike. We always say that we are aiming for a “socialist market economy”, and this is an excellent goal; it combines the efficiency demanded by the market with the fairness encouraged by socialism. But at the moment we are not doing well enough in either efficiency or fairness. Our generation needs to work enormously hard to remedy this.

Another factor is the law: we have more laws for environmental protection than any other country, but how many of them are actually enforced? And when they are enforced, what is the effect? Current laws do not allow severe enough punishment of polluters, and do not give enough power to environmental departments, with the result that it is cheaper to break the law than observe it. The system for maintaining local environmental protection offices is flawed. Their finances and personnel are all determined by the local government. The local government decides who is taken on, how much they are paid, what benefits they receive, what jobs their relatives get and where their children go to school.

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First published as "Green China and young China - part one" in Chinadialogue on July 17, 2007.



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About the Author

Pan Yue is deputy director of China's State Environmental Protection Administration (SEPA). Part of a new generation of outspoken Chinese senior officials, Pan has given rise to a tide of environmental debate, attracting enormous attention and controversy.

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China: economic powerhouse, environmentally unsustainable - part two - On Line Opinion

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