The Atmospheric Pollution and

the Economic Development in China

Outline

1. Introduction and overview of the current state of the atmospheric pollution in the Asia-Pacific region

2. Sulfur dioxide (SO2) pollution in China

3. Carbon dioxide (CO2) pollution in China

4. Concluding remarks

Overview

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

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

Fig 1: Share of world energy demand (1992)

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

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

Air quality in Asia’s mega-cities…

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

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!!!

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

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

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

100

300500

700900

1100

13001500

17001900

2100

23002500

2000 2001 2002 2003 2004 2005

Aggregate SO2Emi ssi on LevelI ndustri alEmi ssi onHousehol dEmi ssi on

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

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

0200400600800

100012001400160018002000

1990 1995 2000 2002 2003

TotalEl ectri ci tyOutput

Fi repowerEl ectri ci ty

Fig 6: Percentage of Firepower Electricity in Total Electricity Output

% of Fi repower El ectri ci tyi n Total El ectri ci ty Output

70. 00%

75. 00%

80. 00%

85. 00%

90. 00%

95. 00%

100. 00%

1990 1995 2000 2002 2003

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.

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)

Fig 7: Kuznets Curve

Income per capita

IncomeInequality

orEnvironmental

Quality

In that study…

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

Fig 10: Pollution-Income Relationship

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

Fig 11: Per capita income and industrial SO2 emission (1995-

2004)I ndustri al SO2 Emi ssi on (Mi l l i on Tons)

(1995-2004)

02

46

81012

1416

1820

4500 5500 6500 7500 8500 9500 10500 11500

Per Capi ta I ncome (Yuan)

Fig 12: China-Europe Comparison

Chi na

0

5

10

15

20

25

30

35

40

45

0 5000 10000 15000 20000 25000

I ncome per capi ta

kg S

O2 p

er c

apit

a

40

45

35

30

25

20

15

10

5

0 0 5000 10000 15000 20000 25000

Per capita Income

· China ◆ Western European Countries

kg SO2 per capita

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

Fig 13: Historical Global Fossil Carbon Emissions

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

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

Fig 15: Per capita CO2 emission (2002)

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

Fig 17: Energy consumption and CO2 emission in China

Total Engergy Consumpti on(mi l l i on tons of coal equi val ent)

500

700

900

1100

1300

1500

1700

1900

2100

1977 1980 1983 1986 1989 1992 1995 1998 2001 2004

Per Capita CO2 Emission

Fig 17+: Number of Vehicles for Civilian Use

Number of Vehi cl es f or Ci vi l i an Use(mi l l i on)

02468

1012141618202224262830

1975 1980 1985 1990 1995 2000 2005

Fig 18: Per Capita Carbon Emission and Per Capita Income

The reason?

• Widespread awareness of the problem was relatively recent

• Costs of pollution were born externally

This is a classic free-rider problem.Remember?! I taught you the damn thing in Econ 328!

Dear Prof. Peter Ibbott

Also a Prisoner’s Dilemma…Consider two groups of countries facing the following choices:

1. 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.

2. Group A adopts EFP, Group B doesn’t. Outcome: Group A becomes disadvantaged in the global economic competition; but a better environment.

3. Group B adopts EFP, Group A doesn’t. Outcome: Group B becomes disadvantaged in the global economic competition; but a better environment.

4. Both groups adopt EFP. Outcome: no one is economically disadvantaged; the best environment among the four choices.

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.

Fig 19: Kyoto Protocol Participation

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

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)

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

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

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.

THE ENDTHANK YOU!