China needs to fully mobilize and engage in a war on pollution

17 to 22 million civilians died in the second China-Japan war which lasted 8 years (1937-1945).

Outdoor air pollution contributed to 1.2 million premature deaths in China in 2010, according to a study released this year on leading causes of global deaths.

A Proceedings of the National Academy of Sciences [PNAS] paper’s findings suggest that an arbitrary Chinese policy that greatly increases total suspended particulates (TSPs) air pollution is causing the 500 million residents of Northern China to lose more than 2.5 billion life years of life expectancy. 5 years of reduced life for 500 million people) relative to people in Southern China. Toxic air pollution has led to higher rates of stroke, heart disease and cancer.

Pollution in China will likely get worse before getting better, experts say.

Case in point: The Chinese government announced last week that pilots of domestic airlines are being trained to fly blind landings into the country’s 10 most polluted cities, including Beijing, because of the smog.

The health costs of air and water pollution in China amount to about 4.3 percent of its GDP. By adding the non-health impacts of pollution, which are estimated to be about 1.5 percent of GDP, the total cost of air and water pollution in China is about 5.8 percent of GDP.

China’s economy will go from $8.5 trillion this year to about $12-20 trillion in 2018 (depending upon RMB currency appreciation). The cost to China will be $490 billion to 1.2 trillion in each of the years. It will be in the range of $3-5 trillion over the 5 year timeframe.

I think China could productively spend three to four times its current military budget over five years ($2.1 – 2.8 trillion over 5 years or $420 billion to $560 billion per year) on anti-pollution measures that offset the 5.8% GDP losses.

This would also be an economic stimulus by spending to convert energy away from coal and to control pollution. It would be beneficial stimulus.

Rich enough now to pay to fix the environment

A theory, known as the environmental Kuznets curve, contends that the environment must suffer in order for a society to achieve financial growth. Only when the growth has been reached, the premise says, can the society then afford to clean up the mess—if it wants to.

Various estimates are that pollution gets tackled when per capita GDP is about $8000-13000 (1990 US dollars).

China should be at $7600 per capita GDP (nominal exchange rate basis) in 2014.
In Shanghai and Beijing and other coastal cities per capita GDP is higher at $12000 per capita.
On a purchasing power parity basis China will be over $11,000 per capita in GDP in 2014.

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