Friday, September 12, 2008

Cost of environment damage outweighs China's economic benefits

Huge cost of damage to the environment has outweighed China's economic benefits in recent years, a researcher from the Chinese Academy of Sciences has warned.

China Daily reported on Friday that Shi Mingjun, a professor at the academy's Research Center on Fictitious Economy & Data Science, found the cost was 2.75 trillion yuan in 2005, while the growth in gross domestic product for the same year was 2.24 trillion yuan.

Shi said the cost of damage to the environment, such as the exploitation of natural resources, ecological degradation and environmental pollution, was 13.9 percent of the total output for the year.

"If we calculate the real cost to the environment and natural resources, the losses are greater than the gains," he was quoted as saying.

"And as the nation's growth pattern has changed little over the past two years, the conclusions are likely to be the same for 2006 and 2007," he said.

Shi and his team began researching the issue in early 2006. Over the following two years, they managed to calculate the monetary value of the natural resources consumed in 2005, as well as the cost of the pollution and ecological degradation over the year.

Most of the calculations are based on official figures, and Shisaid the team tended to choose the most conservative ones, so as to not "exaggerate the results".

The results validate the view that China's economic growth has relied mainly on the input of natural resources and is causing enormous environmental losses, Shi said.

"Such a growth model is unsustainable."

Thanks largely to its manufacturing powerhouses in coastal regions, China is the fastest-growing major economy in the world.

However, its growth has come at a high price to natural resources and the environment, which led the government to launch a drive to change its development pattern.

In 2005, authorities conducted a pilot project to calculate the "Green GDP", which was designed to gauge real economic growth by deducting the cost of environmental pollution.

The first figures were released in September 2006, and showed an economic loss in 2004 of 511.8 billion yuan, or 3.05 percent of the nation's GDP for that year.

Earlier reports have suggested the reason why the Ministry of Environmental Protection and the National Bureau of Statistics have yet to release figures for Green GDP for 2005 is because some local governments are opposed to the publication of such disappointing results.

Source: Xinhua

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