Tuesday, October 22, 2013

Chinese Smog Crisis is Driving the Transition to a Greener Economy

Air quality and other environmental concerns are forcing China to transition to a greener more sustainable  economy. With visibility in Harbin, China being reduced to 10 meters, the city was shut down by a thick blanket of smog that descended on Monday, October 21. Levels of smog in the city are five to ten times worse than America's most smog ridden city, (the Southern California city of Bakersfield). While officials are blaming the dense smog in Harbin on heating, the real issue is the country's reliance on coal.

Smog is caused by particle pollution (soot) composed of tiny bits of solids and liquids that can lodge deep in your lungs and raise the risk of heart disease, stroke, and asthma attacks. The Word Health Organization (WHO) recently reported that air pollution leads to cancer. A July report indicated that increasing air pollution in China is cutting short the life spans of people living in the north. According to the study published in the U.S. journal 'Proceedings of the National Academy of Sciences' the average person who was alive in the 1990s and living in Northern China will live an average of five-and-a-half years less than his counterpart in southern China.

An index measuring PM2.5, or particulate matter with a diameter of 2.5 micrometers (PM2.5), reached a reading of 1,000 in some parts of Harbin, in Bakerfield that number hovers around 100. A level above 300 is considered hazardous, while the WHO recommends a daily level of no more than 20.

Harbin is the capital and largest city of Heilongjiang province in China's northeast region, as well as the tenth most populous city in the nation with a population of 11 million people. Harbin is not the only city in China to be severely impacted by smog, other cities in the northeast including Tangshan and Changchun, have their own serious air quality problems. Last winter Beijing suffered its own smog emergency when the PM2.5 surpassed 900.

While China is already a world leader in renewable energy production, these efforts do not appear to have made much progress in smog reduction. Chinese citizens are increasingly alarmed about the situation prompting the government to set ambitious targets for emissions reductions in key industries by 30 percent by the end of 2017. As the world's biggest auto market, Chinese cities have also announced policies that restrict new vehicle purchases.

More recently, the government has launched an 800 million dollar fund for cities designed to encourage cleaner air initiatives. Another way that China may be able to reduce pollution is through eliminating the nations overcapacity in energy generation.

While there is much that the government can do to minimize emissions from industry, they will also have to tackle the issue of home heating. Policies like handing out free coal for heating are incompatible with efforts to address the smog problem. 

The government cannot afford to dither, Chinese are increasingly speaking out and protesting against poor air quality and other environmental issues. This costs the country in terms of productivity and in terms of slowing the flow of expats returning home from abroad and contributing to the economy.

Concerns about air pollution are driving the transition to more efficient and less polluting energy sources. This will not only calm social tensions caused by an increasingly outraged Chinese public, it will add to longer lifespans which will yield economic dividends.

Do to higher cost of compliance and potentially lower production, a more focused sustainable growth strategy may have short-term economic impacts. But longer term, these measures will generate sustainable growth.

To definitively combat the problem, China will either have to sacrifice growth or invest in cleaner air initiatives associated with a greener economy.

© 2013, Richard Matthews. All rights reserved.

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