Business

Is the global economic meltdown good for the environment?

A recent article from GlobalPost suggests that the one “upside” to the economic crisis is a cleaner environment:

Bad economy, better air?
By Kathleen McLaughlin
February 26, 2009

If there is a bright spot amid the global economic slump for China, it may be in the air — and in the water and soil. Dramatically slowed production in recent months has meant less pollution. In notoriously filthy places like Taiyuan, the capital of China’s coal country, that means more relatively blue skies and healthier breathing.

McLaughlin reports that the sharp decline in demand for power, concrete, steel and iron - along with massive factory closures - has provided some relief to severe air pollution. Basically, the global recession has caused some low-budget, inefficient, highly polluting factories to shut down because they aren’t able to compete.

Newsweek recently published a similar article, talking about the recession’s “green lining”:

The impact of China’s slowing economic growth (6.8 percent in the fourth quarter last year but 13 percent in 2007) has hit hardest in cities in the export-heavy south such as Dongguan. There, roughly 10 percent of the 22,000 factories have closed since last year. In Zhejiang province, just south of Shanghai, at least 60,000 small factories are shuttered. Survivors have slashed production and grounded fleets of diesel-fume-belching trucks. As a result, streams where factories dumped their waste are getting cleaner and the air is less smoggy. In 2008, the number of days with dangerous levels of air pollution in Dongguan fell by 65 from the year before, mostly in the final months of the year. “When there’s less work, there’s less release of sewage and trash, so environmental pressures have eased,” says environmental scientist Liu Zhiming of Dongguan University of Technology.

But is this really a good thing? And can we look forward to a long-term respite from pollution as a result of this economic slump?

Definitely not, experts say.

First of all, the short-term benefits don’t tell the full story. “The credit crisis is helping to conceal the growing energy and natural-resource crises, which are conspiring to distract attention from the accelerating climate crisis,” write John Elkington and Jodie Thorpe on chinadialogue. The authors point to a World Economic Forum “Global Risks” report that explains the link between the global economy and a number of sustainability issues, like climate change, health care and resource scarcity.

Second, the short-term benefits aren’t guaranteed to last. McLaughlin from GlobalPost says China’s economic stimulus may lead the country to revert to the same bad habits from before. “Factories looking to save might skip required pollution controls, and, as has often been the case in years past, simply fail to turn on the filters,” she writes. “There is potential for even worse pollution than before.”

And Newsweek’s reporters echo the same cautions:

Factory owners in China and elsewhere argue that their top priority should be job preservation, and that spending money on pollution controls or switching to renewable energy has to wait. In Guangdong province, factory owners are lobbying the government to roll back environmental standards that, they argue, have made them uncompetitive with Southeast Asia. And factory managers, under pressure to cut costs, know they can reap easy savings by turning off smokestack scrubbers and dumping waste rather than treating it.

There is hope that the financial crisis has already forced China to realize that economic and environmental sustainability are not mutually exclusive (Elkington and Thorpe highlight this in their reference to a report from Sustainable Asset Management, which argues that corporate sustainability, measured in terms of things like eco-efficiency and environmental reporting, is a key competitive advantage.)

There’s been much talk about how the Chinese government plans on allocating some of its $585 billion (about 4 trillion yuan) stimulus to fund “green economy” projects that will improve energy efficiency and, ultimately, stem climate change. (Check out some handy pie charts on the China Environmental Law blog that break down how the yuan will be spent. )

Other examples of China’s commitment to improving the environment in response to the recession include the Financial Times report on “green tinges” in China’s plan to build more infrastructure, like rail and power, as one solution to surviving the downturn; and a recent Reuters article about the National Development and Reform Commission’s commitment to saving energy and reducing pollution despite economic woes.

So while the economic crisis has revealed a slight green lining, it’s important to remember the big picture.

As Michael Klare writes for the Huffington Post:

It’s unclear at this point whether the crisis will do more good or more harm for the environment. In the short term, it will certainly slow the increase in carbon dioxide emissions… But if the crisis also sets back the development of energy alternatives for any significant length of time, it will cancel out any of these positive developments. Many people are waiting and watching what happens in the global financial markets. Likewise, the verdict is still out on the ultimate impact of the crisis on the environment.

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