What China Teaches Us About Environment and Economy

Shanghai World Financial Center and Jin Mao Tower obscured by smog
Shanghai World Financial Center and Jin Mao Tower obscured by smog

By Jason Sekhon

Within a few minutes of the plane landing on December 8th, we both had stuffy noses and irritated throats. My companion and I were in Shanghai to deliver presentations at the Mobility Conference hosted by UM-SMART and UM-SJTU Joint Institutes. The smog was unreal. No one was hanging laundry out to dry. All the stores were sold out of medical masks because the smog had been that thick for about a week. In fact, the masks do nothing to help filter the particulate which is much smaller than the masks are able to block . Our guide confirmed this but went on to say that, however imperfect, the masks were all that was available.

I saw a similar scene in Bombay in 2012, after  a dust storm from the Middle East blew across the ocean and reduced visibility within the city to a half mile, covering everything in dust.  On our second day in Shanghai, the visibility was even less than Bombay’s half mile. It was kind of like being in a videogame: the buildings and land close to you are visible, but get hazier as you look further away until you see just a grey, cloudy murk everywhere. You couldn’t even discern the sun’s outline. Air quality improved considerably by our third day, and the city looked completely different. The sky was blue, the sun was out, and the general mood of everyone seemed greatly improved and like springtime after a cold, dark winter.

As the smog cleared, I kept re-thinking my accepted knowledge about the contrasts between the Chinese and U.S. economies. China’s lower wages certainly seem to provide an economic advantage over the U.S., but the pollution apocalypse made me wonder if  the U.S.’s less degraded environment could provide a powerful comparative advantage advantage on health, wellbeing, and other fronts. Scientific study after study is calculating the percentage points coming right off the top of GDP due to environment-related illnesses. One recent study calculates that air, water, and soil pollution in northern China is costing an average of 5.5 years in life expectancy.

Could the U.S. benefit economically from this advantage?  If we can demonstrate a direct economic benefit resulting from this healthier environment, then we need to devote more of our resources and political capital to further enhancing the advantage, thus improving our own environment—and economic advantage—even more.

Having grown up in Kentucky, I lived in a culture that valued economic development over the environment and public health when the two are at odds. That was usually the case in the coal industry, and still is in many respects. The prevailing mentality is to bring manufacturing jobs back, even at risk of harming the environment. But I have seen first-hand what happens when that mindset dominates for too long. I may want jobs in my home state, but I want to be able to enjoy the clear blue sky even more.

The U.S. clearly has an advantage with its environmental quality over other economies, like China. The sooner we form a direct, obvious link between the advantage provided by our environment and its economic benefits, the sooner we can begin changing the mentality of those in places like my home state of Kentucky.

Jason Sekhon is a second year MBA/MS candidate at the Erb Institute at the University of Michigan.  Before joining Erb, he worked in the healthcare IT field at McKesson Corporation in Atlanta, GA where he found his niche as a “translator” between business and technical individuals. In 2012, Jason participated in the Environmental Defense Fund’s Climate Corps, working at Pfizer on environmental strategy and building efficiency projects. He is pursuing a career in strategy and environmental policy, particularly as they relate to the CleanTech industry and is keenly interested in the role incentives play in sustainability.

[Image credit: ScaarAT, Flickr]

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One response

  1. The competitive
    debate is critical but shouldn’t overshadow the human tragedy of the
    environmental crisis in China. Wang Xiangwei’s provocative December 16 article in Hong Kong’s South China Morning Post advocates for China’s own Clean Air

    Xiangwei asserts that not just Beijing or Shanghai suffer from severe smog
    (classified as PM2.5 readings higher than 300 ppm), but that it’s the plight of
    some 104 Chinese cities all told. Meanwhile, he claims that 70% of the country’s rivers aren’t fit for even animals to drink.

    some see collapse, other Chinese business people are responding to the growing
    market for environmental products and services. A Clean Air Act should be the
    government’s proactive measure, but it may end up trailing business and
    consumer demand for improvement.

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