Cost of Environmental Damage in China

At NYT, "Cost of Environmental Damage in China Growing Rapidly Amid Industrialization":

BEIJING — The cost of environmental degradation in China was about $230 billion in 2010, or 3.5 percent of the nation’s gross domestic product — three times that in 2004, in local currency terms, an official Chinese news report said this week.

The statistic came from a study by the Chinese Academy of Environmental Planning, which is part of the Ministry of Environmental Protection.

The figure of $230 billion, or 1.54 trillion renminbi, is based on costs arising from pollution and damage to the ecosystem, the price that China is paying for its rapid industrialization.

“This cuts to the heart of China’s economic challenge: how to transform from the explosive growth of the past 30 years to the sustainable growth of the next 30 years,” said Alistair Thornton, a China economist at the research firm IHS Global Insight. “Digging a hole and filling it back in again gives you G.D.P. growth. It doesn’t give you economic value. A lot of the activity in China over the last few years has been digging holes to fill them back in again — anything from bailing out failing solar companies to ignoring the ‘externalities’ of economic growth.”

And the costs could be even higher than the ministry’s estimate, he said. The $230 billion figure is incomplete because the researchers did not have a full set of data. Making such calculations is “notoriously difficult,” Mr. Thornton said.