27 March 2014

The tragedy of the industrialization of China

S writes:*

Ever since the beginning of 2013, I have been hearing in news about severe air pollution in many major cities of China. The situation has worsened over the past few years. Some scientists say that it will take China more than ten years to clean the polluted air. My grandfather has once said to me: “I am excited to see those pavilions with highly advanced technologies in the great Expo, but I also miss the fresh air and clean streets there used to be”. “There ain't no such thing as a free lunch", says Edwin G. Dolan. Everything in this world has a cost. While China is enjoying all the benefits under a booming economy, the country must also consider the negative impacts of industrialization on its environment. Some of the most polluted cities in China are revolved around Hebei province. The province is known as the center of the country’s steel and cement production. These industries account for the main cause of the heavy smog in the capital city of China, Beijing. The situation is paradoxical, if the government forces to shut down the factories, millions of people will lose jobs and suffer from a bad economy. However, if the government does not take any actions, people will also suffer from deterioration in health caused by the toxic smog. In a critical time like this, I suggest the government to shut down factories that frequently ignore pollution limits, reduce exports of steel and subsidize in other industries. In the meantime, the government needs to protect workers from sudden unemployment, it is necessary to invent instruments similar to the Employment Insurance in Canada. In the long run, it also needs to invest in eco-friendly production technologies and develop stronger institutions for environmental regulation.

Bottom Line: Severe air pollution in China harm present and future generations. The government needs to take the lead in environmental management before everything is too late!

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.


  1. I'm totally agrees the ideas on this blog post, all environmental damages should be taken into consideration in China. Another relative argument for this post is that since China is not the only developing country with increasing economic activities and increasing number of cars, why would China suffer the most from the pollution problems? I think there are three main factors. The first reason is rapid industrial expansion. As a major global manufacturing center, China has growing numbers of polluting and energy-intensive industries. However, the industrial wastes are not disposed properly. The second factor is coal consumption. Coal is a major resource for electricity in China since it is relatively cheap and abundant. However, it is one of the dirtiest ways of producing energy. Because of the growing population in China, the needs of electricity also increase for both residents and industries. During the winter time, some people live in the North part of China also have to use coal for district heating. The third point is the pollution of transportation. There are thousands of cars sold in China every year. The adverse health effects of cat exhaust are pervasive and hard to measure.

  2. I also agree with this blog post. Government should implement effective law or rule to reduce air pollution in China. Not only China but also the rest of world should implement policy since air is non excludable.

    Transaction cost of implementing and maintaining the policy should be small. Otherwise, countries will easily give up the policy since it will incur a lot of cost.

    Air pollution is not China's own problem. It is everyone's problem. The world all together should put effort to reduce the air pollution.

  3. Hi, thanks for the comments! I totally agree that coal consumption is also a major factor for pollution in China. In north China, almost all houses are equipped with heating systems due to cold weather conditions. These systems have become common and relatively inexpensive. However, the demand for coal has increased significantly over the past few decades. Population growth is the main factor for the jump in demand. China's coal reserves are overly exploited and an enormous amount of pollution are released by manufacturing and burning of coal. The government of China should subsidize in energy savings industries or education systems. I agree that we need to keep the transaction costs low while we create energy savings projects.


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