The Middle Landfill
	Economy vs. Environment
	By Bryan Walsh

Posted Monday, November 17, 2003; 21:00 HKT
Mao dismissed China's pollution problems during his rule with the claim that environmental woes only affected capitalist countries. Seventy percent right again, Great Helmsman. As the mainland continues its whiplash transition into one of the biggest capitalist economies on earth—gorging on cars and condos while consuming natural resources such as bauxite and iron ore as if they were going out of style—the country threatens to make a monumental hair ball of the environment. Despite efforts by the central government to switch from coal-generated electricity to natural gas and hydropower, China's coal consumption jumped more than 7.6% last year, boosted in large part by increased demand for energy from smokestack industries.

When economies boom, consumption outstrips conservation, and the impact of China's soaring appetites won't be limited to the country's own befouled backyard. On a per capita basis, China's production of greenhouse gases is only one-eighth that of the U.S., but the effects of 1.3 billion Chinese aspiring to consume and hence pollute like Americans could in coming years undo any progress in halting global warming. "If China continues to grow using today's ways of doing things, then it's going to have very serious implications for the future," says Professor Michael McEllroy, an environmental scientist at Harvard University who advises Beijing. "It's my own view that those implications are going to be felt around the world."

Anyone who has visited the mainland knows the environment is already Dickensian. Sixteen of the 20 worst cities in the world for air pollution are in China; acid rain falls on 30% of the country; and more than a quarter of the land is subject to desertification—an area that increases by 2,000 sq km every year. The greenest intentions of Beijing often dissipate by the time they penetrate the provinces. Enforcement of environmental regulations is weak at the local level; companies often find it's cheaper to pay the occasional fine and keep polluting rather than clean up. Perhaps most damaging are government policies encouraging the proliferation of automobiles at the expense of environmentally friendly transportation. Tsinghua University estimates that 120 million vehicles and 200 million motorcycles could be on the road by 2030, on par with the biggest developed nations.

That's not to say Beijing isn't trying. Environmental spending rose to 1.3% of GDP in the latest five-year plan, which includes ambitious goals for emission controls. But in the inherent trade-off between strong environmental protection and commercial advancement, the former usually loses.

However, some economists fear that the country's air and water could in coming years become so polluted that further economic growth will be dampened. The World Bank estimates that environmental degradation already shaves China's annual GDP growth by about 7% due to lost productivity from sick workers and wasted resources. Pollution, more than a shaky banking system or chronically high unemployment, "is the bottleneck for the future development of China," says Don Ye, who runs the China Environment Fund, the country's first ecologically conscious venture-capital fund.

Ultimately, Chinese citizens themselves might become economically secure enough to see environmentalism as more than just refraining from spitting in public. According to what economists call the Kuznets Curve, once a country's per capita income breaks $5,000, pollution levels begin to fall dramatically. That could happen in China before 2030. It's unclear whether by that time rampant development will have turned China into the Middle Landfill.

With reporting by Susan Jakes/Beijing and Austin Ramzy/Hong Kong

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