1.1 trillion yuan in economic losses from pollution in 2010, China report says

Ministry's report shows smog caused 1.1tr yuan in losses in 2010, but incomplete study does not include damage to people's health and deaths

PUBLISHED : Thursday, 28 March, 2013, 12:00am
UPDATED : Thursday, 28 March, 2013, 9:53am

The mainland is paying an increasingly heavy price for rampant pollution, with direct economic losses more than doubling between 2004 and 2010, a recent government-backed study has found.

An incomplete calculation of the environmental costs in 2010 showed that pollution had caused 1.1 trillion yuan (HK$1.36 trillion) in economic losses, or 2.15 times the 511.8 billion yuan loss in 2004, when the "green GDP" project was launched.

The direct cost of pollution accounted for 2.5 per cent of total economic output in 2010, but if damage to the ecosystem - including forests, wetlands and grasslands - was included, the losses added up to 1.54 trillion yuan, or 3.5 per cent of that year's gross domestic product.

The cost of pollution also grew more rapidly than GDP in 2010, up 13.7 per cent compared with GDP growth of 10.4 per cent.

The latest update of the study, led by the Ministry of Environmental Protection's Chinese Academy of Environmental Planning, was quietly posted on the academy's website in January, when about a seventh of the mainland was shrouded in smog. It said the findings were incomplete due to lack of data in some areas.

Aimed at putting a price tag on the mainland's runaway economic growth, the study has been stubbornly resisted by local governments because the findings could tarnish their political achievements. As a result, the academy had only previously released figures for 2004 and 2008, even though the study is conducted annually.

"The existing accounting system fails to reflect the true cost of resources consumption and environmental degradation, as a result the country's economic achievement has been over exaggerated," the academy said in a summary of the findings for 2010 that was posted on its website.

The existing accounting system fails to reflect the true cost of resources consumption and environmental degradation, as a result the country's economic achievement has been over exaggerated

Government campaigns targeting major air and water pollutants since 2006 were not able to reverse the trend of rising environmental costs, it said.

A total of 558.9 billion yuan would have been needed to clean up pollution in 2010, an increase of 94 per cent from the 287.4 billion yuan needed in 2004, the study said.

The research does not calculate the health costs associated with pollution, but they would push the economic losses even higher.

A government-sponsored report released in 2006 said air pollution caused 358,000 premature deaths in 600 mainland cities each year, with an estimated health cost of 152.7 billion yuan.

The World Bank estimated in 2007 that the health costs of air and water pollution equalled 4.3 per cent of the mainland's GDP.

Premier Li Keqiang has pledged that the country will not pursue economic growth at the expense of the environment, saying "such growth won't satisfy the people", but has yet to release details of his planned remedy.

Professor Li Wei, from Beijing Normal University, said the "green GDP" project's findings should serve as a wake-up call for local governments and officials, and prompt them to reconsider their economic growth targets.

China Environmental News, the ministry's daily, said on Tuesday that the project might have regained momentum.



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