This is, without a doubt, one of the trickiest issues to tackle. However, in today’s world where more and more attention is given to sustainable economic development rather than GDP growth at all costs, an economic analysis that is oblivious to the pollution dimension cannot paint a satisfactory picture of reality.
First and foremost: yes, China has a pollution problem.
However, so does everyone else and as such, the situation needs to be analyzed globally rather than just laser-focused.
For example, according to a 2017 New York Times report (published in context of the US withdrawal from the Paris Agreement), the United States is the largest carbon polluter in history and for several decades (granted, not in the very recent past), the US generated more CO2 emissions than all other countries… combined. To bring the discussion closer than today, it’s worth noting that the US produced more CO2 than any other country until 2014. So, while it is no longer the world’s #1 polluter at this very point, it’s he largest polluter in history and this, corroborated with its withdrawal from the Paris Agreement should make it clear that China is not the only game in town when it comes to pollution.
That being stated, China is of course an important variable in light of its economic development and huge population. In other words, even if the average United States citizen still burns twice as much CO2 as the average Chinese or European, China’s emissions are a significant problems as a sheer function of its population and the same principle is valid when it comes to India.
Fortunately, steps are being taken to remedy this.
In China’s case, a promise has been made that by the year 2030, 20% or more of its energy will be generated through solutions that do not require fossil fuel. The same way, India also pledged to reduce emissions by 35% until the same year, with the EU being even more aggressive and aiming for a 40% reduction.
Is this enough?
Time will ultimately tell but just like in the world of economics, trends are important as far as pollution is concerned. As such, while the current reality of China and India is problematic not necessarily due to their per capita energy consumption but rather as a result of their population numbers, we have reasons to be optimistic as a result of the fact that pledges are being made, measures implemented and even more so, China is seemingly trying to fill the void left by the US departure from the Paris Agreement. In other words, we are dealing with a “problematic reality vs. promising trend” situation with China and India.
As far as the United States is concerned, while significant progress has been made thus far, the trend when it comes to political initiative is worrying. Should this trend not be reversed, the implications from the perspective of both pollution and economics are hard to quantify. Why? Simply because obvious economic questions will arise:
- If everyone else is spending money and limiting growth in an effort to reduce pollution but individual players such as the United States are using this to their economic advantage by not doing the same, can this imbalance persist?
- Up until this point, the United States had a strong leadership position when it comes to combating pollution, what is likely to happen with the void that has been created? Can China use this to its political advantage and fill it? Will it?
- What would happen if the European Union, with its commitment to the reduction of pollution, ends up dealing with greatly reduced economic growth problems as a result? Will the political sector be able to convince citizens that it is a sacrifice worth perpetuating?
… the list could go on and on.
The bottom line is this: yes, we currently have a serious pollution problem but if everyone is on board with respect to making and keeping promises, we can turn things around. However, in light of the fact that a chain is only as strong as its weakest link, it is hard to quantify the effects of changes in course by major players such as the 2017 decision of the United States.