Sunday, September 16, 2007

The Real Cost of 'made in China'

When market fundamentalists argue that the free market works best for the general welfare if it is not 'handcuffed' by regulations they are ignoring the problem of the cost to the environment. But, they say, the U. S. economy saw rapid growth in its first two hundred years with very little in the way of regulations. Once the American economy grew big enough it then became easier to tackle pollution. This is the approach that China is taking, but unfortunately, because of global warming, it is too late for it to work the way it did for the United States.

Capitalists love China because labour is so cheap. That's why so much Capital has flowed into China from abroad. Consumers from the developed world love the cheap clothes and the cheap electronics. A win-win deal. Everybody benefits - right?

What's more, not only do we pay less for Chinese goods, we don't have to suffer from the pollution that Chinese factories emit. Instead the Chinese people get to live their lives immersed in grey toxic clouds of smog. In China cancer is the leading cause of death. Deaths from unsafe air and water dwarf deaths from traffic and mining accidents. The Chinese Communist government is so concerned about this that it has banned the publication of statistics on public health and air and water quality. They say that that they have to do this in order to prevent social unrest.

I guess if there was this much pollution here people would get up in arms about it. Eventually we could get the government here to do something about it either through various means of persuasion, or by the ballot box. But the Chinese people have capitalism with a communist government. They get to work for low wages and they don't have the option of free speech or democratic change.

Regulations or taxes could work to lower emissions. A carbon tax at the well-head and the mine entrance could make the price of fossil fuels better reflect the cost of global warming and pollution. We could slash expensive subsidies to fossil fuel corporations in order to get rid of perverse incentives that encourage fossil fuel production and consumption. We could require that all new coal-fired power plants sequester their CO2 emissions and old power plants be retrofitted. Unfortunately the Chinese people have no way of pressuring their government to do these things. They are prevented from even discovering the extent of the problem. After all, it could cause social unrest.

According to Joseph Romm, founder and CEO of The Center for Energy and Climate Solutions, in his book Hell and High Water, if the United States had made the Same goods that were imported from China during the period from 1997 – 2003 there would have been 720 million metric tons Less CO2 in the atmosphere.

China's rapid rate of economic growth now depends on energy from coal. Coal is the cheapest form of energy but the dirtiest in pollutants and carbon dioxide. China uses coal for two thirds of its energy needs. That is the source of the smog blanketing Chinese cities. They say every week a new coal-fired power plant is built in China. And these power plants are less energy efficient than power plants built in North America. But hey, their cheaper to run.

Cheaper labour, cheaper power, less regulations and “social stability”makes building a factory in China very attractive to Capitalists. So naturally capital flows into China and away from the more costly developed world.

The problem comes further down the road when the Chinese economy overtakes the U.S. economy. Not only will they outproduce the U.S. in manufactured goods they will also outproduce it in emissions of CO2 and particulates.

The least we could do is help countries like China become more energy efficient. And we should set an example by significantly lowering our CO2 emissions ASAP. By allowing so much capital to flow to China the “free market” is accelerating the growth in CO2 emissions which will increase the risk of irreversible global warming. It's a lose-lose proposition and no amount of baloney about unfettered markets is going to save us from climate melt-down unless governments work together to lower emissions now.


  1. Did you read my book, "Hell and High Water"?
    You might like my blog:
    Joe Romm

  2. Wow, that was fast. Yes I did read your book and I have been reading your post at gristmill. but I will certainly check out your blog. Your book is great by the way.

  3. Dear Charles,

    Thank you for your article.

    I came from China and am very worried about the environment issue over there. I have created a web site in China to promote better environment policy.

    The key to our success is to get more people involved in this environment movement. I also created a blog in the hope to capture "a few more" hearts.


  4. Thanks for your comment steven. I wish you good luck. Is your blog in English? I'd love to read it if it is.

  5. Dear Charles,

    I created English blog few days ago with two short articles. It is at Could you please take a quick look and let me know your thoughts?

    I plan to visit “non-environmentalist” blog sites and try to win over some hearts. It would be nice if you could make some nice comment on my blog before it is trashed by the people who don’t care about the future generations.

    My Chinese web site called “One thousand years, Ten thousand generations”
    I also have an English web site.

    I will keep checking your blog and obtain idea from it. We are in the same boat.