The recent history of China has been one of spectacular economic growth. The country’s GDP soared from 3.43 percent of global GDP in 2000 to 11.35 percent in 2012. Its per capita income of US$6,100 in 2012 puts China in the category of middle-income countries such as South Africa, Egypt, and Thailand.
At the same time, China has experienced very serious environmental degradation. Its energy consumption has increased rapidly, and it overtook the United States as the world’s largest energy consumer in 2010. Coal has been China’s dominant source of energy, accounting for 66.6 percent of the country’s total primary energy consumption in 2012. Given this heavy reliance on coal, China became the world’s largest carbon dioxide (CO2) emitter in 2006, and in 2012 it accounted for 29 percent of global CO2 emissions.
In addition, China’s air, water, and soil have been polluted to alarming degrees. Extreme air pollution in China, for example, is making international headlines, and this is not just anecdotal: In March 2014, China’s Ministry of Environmental Protection announced that only 3 of the 74 large Chinese cities it monitors met official standards for air quality in 2013.
The environmental situation is so dire that the country’s prior consensus of focusing on economic growth over environmental protection has broken down, spawning interest in the potential for green growth strategies for China. “Green growth” is a politically attractive term because it speaks simultaneously to two key challenges currently faced around the world: economic growth needed to improve the living standards of the world’s growing population, and measures needed to address the issues of environmental sustainability and climate change.
Sweeping energy and environmental policies—such as China’s enormous effort to decarbonize its energy system through increased reliance on wind and nuclear generation—are one crucial step toward a green growth path. But they will not succeed without the support of changes to the country’s institutional rewards system and governance structures, which until now have prioritized GDP growth over environmental protection.
The Relationship between GDP Growth and the Environment
Green growth is generally used to mean economic growth that is environmentally sustainable. Thus it carries with it the claim that environmental protection is, at a minimum, compatible with economic growth. When economists think about the relationship between GDP growth and the environment, they often point to the environmental Kuznets curve.
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