Is 27 Billion Dollars Enough to Clean Up China?


The Chinese government will invest 1.35 percent of its gross domestic product (GDP) each year for the next three years in environmental protection, or 200 billion RMB (US$27 billion), the State Council announced Monday.

As we have reported somewhat breathlessly before, China is already spending billions on eco clean-up. In October, the State Council announced it would pay RMB 100 billion, or $14 billion, on cleaning up Lake Tai. In fact, separate from the Lake Tai clean-up, the government already spends roughly 200 billion on environmental cleaning each year.

The results, however, have not been promising. For instance, while China spent 238.8 billion yuan on environmental protection in 2005, accounting for 1.31 percent of that year's GDP, SO2 emissions that year increased by 27.8 percent over 2000 instead of dropping. The country's five-year environment plan for 2001-05 didn't meet its targets either. Between 2006 and 2010, China is aiming for a 10 percent cut in major pollutants, but last year SO2 increased by 1.8 percent over 2005 while Chemical Oxygen Demand (COD), a water pollution index, rose 1.2 percent.

Which brings us to the question: how much money is enough?The question was raised most recently by Time's Simon Elegant:

God alone knows how much the real bill for clean up will be, that is a clean up that actually works. Four pc of gdp ($500 billion)? Six pc ($750 billion or something in that region)?
When you begin to approach one trillion dollars you are beginning to talk real money, even by China's inflated standards.

One estimate by SEPA's famous Green GDP program -- lauded but eventually shelved due to official opposition -- puts the actual cost of environmental degradation in 2004 at 511.8 billion RMB, or $64 billion, in economic losses that year, or 3.05 percent of GDP. And that, say SEPA officials, is a conservative estimate that doesn't account for water pollution among other factors.

Austin Ramzy at Time puts this 3% of GDP into context:

How much is 3% of GDP? It's more than $300 billion, based on last year's numbers. Here's another way to look at it: according to Minxin Pei, a China scholar at the Carnegie Endowment for International Peace, 3% of China's GDP is the amount that ends up in the hands of the country's elite due to corruption each year.

Money's not all that's lost through corruption, of course. Industrial polluters often evade inspection and environmental enforcement by bribing local officials.

Interestingly, a good portion of the money to be spent will go towards research and development for technologies (and marketable, exportable ones) to clean up what is already ruined, as well as more effective bureaucracy, in order to help fight the corruption and lack of information that leads to pollution.

Still, how much will it help?

via People's Daily and Time Blog

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