When Chinese Premier Li Kequiang declared "war on pollution" recently, skeptics questioned whether this fast-growing economy can really cut emissions effectively while still maintaining its target of 7.5 percent GDP growth. Looking at most historical precedents, the skeptics would seem to have a point. After all, for most of recent history, economic growth and fossil fuel consumption have been joined at the hip.
But the key word there is "most."
Taking the United States as an example, recent history suggests that it is in fact possible to decouple economic growth from energy consumption and emissions. In fact statistics show that U.S. carbon emissions fell 13 percent since 2007, and while some of that drop was no doubt attributed to the financial crisis, those same stats show that the U.S. consumes 9 percent less energy for each unit of GDP than just five years ago, and overall energy consumption has fallen 5 percent. And that's even before tighter fuel economy standards for new cars and trucks kick in, or the recent tightening of efficiency standards on light bulbs.
But green-minded China-watchers have another reason to feel hopeful that it can tackle its monumental pollution problems — and that's simply that it has no other choice. Emission have gotten so bad that they are directly impacting China's ability to grow.
Here are just a few indicators.
Smog blocks sunlight, squeezes agriculture
Haze over northeastern China (Photo: NASA Goddard Space Flight/flickr)
Economies can't grow if people can't eat. And yet scientists are reporting that Chinese smog is now like a "nuclear winter", blocking sunlight and even directly impacting plant photosynthesis and limiting agricultural yields.
Foreign investors feeling the choke
Once closed to much of the capitalist world, China has been opening its economy to foreign companies and investors. That process has meant an influx of foreign workers, executives and their families. But with global headlines about China's pollution problems, many of these would-be immigrants may think twice before moving their families to the dense smog of Beijing and China's other industrial cities. In fact Japanese electronics giant Panasonic recently announced that it would pay a "pollution premium" to employees willing to relocate to China and that, of course, means an added cost for foreign companies - not to mention an embarrassing indicator to the Chinese government that something must change.
Pollution creates massive health costs
Whether through smoking or pollution, it goes without saying that breathing in excessive amounts of particulate matter on a daily basis can have a negative impact on your health. From lung cancer to asthma, respiratory diseases can be directly linked to poor air quality. And those individual health impacts soon add up for a nation's economy. In fact, back in 2012, MIT calculated that pollution was costing the Chinese economy $112 billion a year in terms of additional healthcare costs and lost labor.
Tourism under threat
Ever since tourism began, travelers have sought out sunny skies, beautiful weather and a break from drudgery. Smoggy air and congested streets? Not so much. When tourists come home complaining of vacations ruined by China's toxic air, it doesn't bode well for the future of the travel industry. In another sign that smog is having a real impact on travel, at least one Chinese insurance company is offering "smog insurance" to Chinese travelers.
Inefficiency is never efficient
And finally, before we get fooled into thinking the "war on pollution" is all stick, no carrot, it's worth remembering that tackling emissions is a massive economic opportunity. With much of the pollution coming from woefully inefficient energy use, old and polluting gas-powered vehicles, and dirty coal-burning power plants, a shift to a low emissions economy could bring massive economic benefits both for energy consumers and clean tech companies alike. In just one sign that that is beginning to happen, Bloomberg recently reported that China is now spending $4.3 billion a year on energy efficiency, beating U.S. investments for the very first time.
So there we have it. The question is not whether China can grow the economy and fight emissions. The real question to ask is if China can fight emissions fast enough so that its economy can continue to grow.
Luckily, there are plenty of strategies it can deploy to get started.
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