China's 'Green GDP' Resurfaces

A controversial study cites pollution costs.
An analysis by Michael Lelyveld
beijing-pollution-305 A man walks past burning trash in Beijing, Jan. 11, 2012.

Publicity for China's "Green GDP" initiative has resurfaced in the official press, adding to signs that environmental concerns are gaining ground against development interests.

In a new study, the Ministry of Environmental Protection (MEP) found that pollution cost the economy nearly 1.4 trillion yuan (U.S. $222 billion) in 2009,  China Daily reported on Feb. 4.

The country spent 3.8 percent of its gross domestic product (GDP), a measure of the value of a country's economic activity, on cleanup efforts that year, the official English-language paper said. The China Green National Accounting Study estimated that environmental costs rose 9.2 percent from the year before.

The study by the MEP's Chinese Academy for Environmental Planning appears to be the latest chapter in the long-running struggle to report “Green GDP”— a measure of economic output reflecting pollution costs that was promoted by the State Environmental Protection Administration (SEPA), the MEP’s precursor, in 2004.

Abandoned measure

When it was launched, the Green GDP exercise was supposed to be a cooperative project with the National Bureau of Statistics (NBS), which compiles conventional economic growth data.

But after the first study, the NBS abruptly withdrew, blasting the results as "not sophisticated enough," China Daily reported in 2007.

Estimates for 2005 were "indefinitely postponed" after the NBS urged they should not be released, a SEPA official said.

"The NBS preferred not to participate because of significant opposition from local governments," said Kevin Jianjun Tu, senior associate in the energy and climate program at the Carnegie Endowment for International Peace in Washington.

One implication of Green GDP accounting is that the double-digit growth rates that have been routinely reported by some provinces are only possible if pollution is ignored.

Local officials have relied on strong economic performance in their evaluations for promotions, making Green GDP reports a political liability.

"Unfortunately, the Green GDP program was doomed from the start and was cancelled by the central government in 2007," the Washington-based Jamestown Foundation said last May in its biweekly China Brief. The MEP replaced SEPA in 2008 under a government reorganization plan.

The Green GDP estimates for 2004 found that economic growth had caused pollution damage of 511.8 billion yuan (U.S. $ 81 billion), equal to more than 3 percent of GDP, suggesting that costs have nearly tripled in five years.


But in an interview, Tu said the concerns with Green GDP also went beyond political problems. The methodology of the studies has been a work in progress, making accurate estimates and year-to-year comparisons questionable.

"The most difficult part is assigning damage costs to environmental degradation," said Tu. The problem of putting a price tag on water pollution or public health has left the estimates open to debate.

Although the formulas have been controversial, some environmental damage estimates have been far higher.

In 2007, for example, a collaborative World Bank study put the total costs of China's air and water pollution at 5.8 percent of GDP.


Tu said the MEP's academy has continued its work on Green GDP studies, although the official press has apparently not reported the findings until now.

According to the China Daily report, this is the "third time" the academy has issued its Green GDP study, suggesting that the suppressed 2005 estimates may have been quietly released.

Perhaps the most significant aspect of the latest study is that China Daily reported it at all. The re-emergence of Green GDP in the press may be one of several signs that environmentalists have gained a stronger hand.

Last month, public pressure over pervasive smog problems forced Beijing officials to start issuing more accurate air quality reports after years of insisting the city had met all its targets for "blue sky days."

A similar outcry over water pollution may be developing after a state-owned mining company spilled carcinogenic cadmium into the Longjiang River of southern Guangxi Zhuang Autonomous Region in January.

Arrests and firings have followed reports that downstream villagers drank water from the river for five days before authorities alerted them to the danger, the New York Times said.

A series of state media reports in the past week have also pointed to stricter environmental controls for the cement, paper, and rail industries, and even the People's Liberation Army.

But Tu said it is too soon to say whether the Green GDP publicity should be seen as a sign of change.

"It's still unclear whether this is just a push made by the MEP or a change in direction by the Chinese government as a whole," said Tu.

While the ministry is committed to its agenda, its position in the government hierarchy remains relatively weak, he said.


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Feb 18, 2012 05:39 AM

The World Bank estimate of PRC pollution costs of 5.8% of GDP is more realistic than the smaller estimate. The so-called economic miracle is more aptly characterized as a China's environmental calamity, for which the CCP will be remembered long after it passes off the scene and is replaced by a more modern and accountable type of government.