Environmental concerns will be one of the topics addressed at the World Economic Forum in Davos, Switerland as part of a holistic discussion about China’s economy.
High levels of air pollution, poor water quality, and unsustainable consumption of fossil fuels like coal are among the issues cited as potentially stymieing China’s economic growth.
Schools and offices in Beijing were closed several days last week because of poor air quality. The Wall Street Journal’s Brian Spegele attributed the rising number of vehicles on the road, coal consumption in neighboring steel-producing provinces, the dense population, and lower fuel standards than the U.S. as the main causes of air pollution in the region.
The government has taken steps to abate pollution through regulation and has seen modest improvements, but most state-owned firms cannot pass the cost of reducing emissions onto the consumer because of state controls. Internalizing externalities is entirely on the shoulders of the corporations, making emission reduction initiatives highly unpopular.