Chinese Environmental Sensitivity

The Chinese government may be far ahead of the US in recognizing the cost of environmental destruction, even though it is vicious toward environmental activists.

Chinese State Environmental Protection Administration. 2006. China Green National Accounting Study Report 2004.” 2006-09-08


The Chinese State Environmental Protection Administration reported on an “environmentally-adjusted GDP accounting in China and marks that the initial progress had been achieved on Chinese green GDP accounting. The preliminary result shows that economic loss caused by environmental pollution reaches 511.8 billion yuan accounting for 3.05% of national GDP in 2004 while imputed treatment cost is 287.4 billion yuan accounting for 1.80% of that.”

“The Green GDP Accounting Research Project was launched in March 2004 jointly by SEPA and NBS. In the past two years, the technical team conducted accounting analysis on physical quantification of environmental pollution, imputed treatment cost and environmental degradation cost for 42 industries and 3 regions of the East, the Middle and the West. According to the accounting conclusion, economic loss caused by environmental pollution is 511.8 billion yuan accounting for 3.05% of national GDP in 2004, among of which environmental costs by water pollution, by air pollution and by solid wastes and pollution accidents are 286.28 billion yuan, 219.8 billion yuan and 5.74 billion yuan, accounting for 55.9%, 42.9% and 1.2% of the total costs respectively.”

“Due to limitation of basic data and technical approaches, the accounting results in 2004 only represents the environmental pollution cost, without accounts of costs of natural resources depletion and ecological damage. The environmental pollution costs should include costs of over 20 items while the current Chinese Green GDP accounting only covers costs of 10 items (health, agricultural and materials losses caused by air pollution; health, industrial and agricultural production losses, and water shortage caused by water pollution; economic loss caused by land occupation of solid wastes and etc.). Groundwater, soil contamination and other key items are not touched upon in the accounting. On the whole, this accounting result is only a fraction of ultimate green GDP calculation result. In addition, there are some underestimate and missing items existed in the calculated costs of 10 items. Even so, the environmental pollution cost has accounted for 3.05% of the GDP. This striking figure just tells us that environmental pollution is quite severe at present.”

“Apart from environmental pollution cost, pollution discharge amounts and treatment costs are also taken into calculation in the Green GDP accounting. The calculation result shows that the one-off direct investment of about 1080 billion yuan, accounting for about 7% of the GDP at that year, should be required if all the discharged pollutants from point source were treated or disposed in 2004. Besides, the additional operation expenses of 287.4 billion yuan (imputed treatment cost) are also needed for treatment, which accounts for 1.8% of the GDP in 2004. In fact, the pollution abatement and control investment only accounted for 1.18% of the GDP during the “Tenth Five-year Plan” period, which is of great gap with the accounting result.”


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