Sunday, January 11, 2009

Report from "China in a Turbulent Economic and Environmental Situation" Conference at Tsinghua University

This past Saturday, Tsinghua University's School of Public Policy and Management and the Brookings-Tsinghua Center hosted a conference entitled "China in a Turbulent Economic and Environmental Situation." This post gives a few highlights.

In a keynote presentation, famed economist and sustainable development expert Jeffrey Sachs called for a readjustment in global consumption patterns. Calling previous levels of US household consumption unsustainable, Sachs called for Chinese consumers to spend more, and American consumers less, thus changing global trade patterns. Perhaps most controversially, Sachs claimed that the level of government spending in the US economy is too low, and must grow over time to a permanently higher level. This position stands at odds with political sentiment in America, particularly since it implies sustained tax increases.

A panel of Chinese experts on economics and environmental protection claimed, in a nice turn of phrase, that China is "not yet an economic superpower, but is already a pollution superpower." Despite this honesty, much of the message was familiar: environmental pollution naturally follows economic development, China struggles with high resource consumption and high capital inputs. As one expert, Ren Yong, put it, China enjoys a "trade surplus, but an environmental deficit." In response to a question by Professor Sachs, the panel repeated the familiar line that emissions reduction targets for China are not feasible in the short term.

Nonetheless, a few notable messages were put forth. Scholar Song Ligang argued that China cannot afford to follow the "Kuznets curve model," which suggests that environmental protection is only achieved after a sustained process of economic development results in higher standards of living. Song also urged "proactive adaptation" to climate change, which would involve an adjustment of economic consumption patterns. Scholar Qi Ye continued to emphasize that China's current economic model is unsustainable, and that its environmental problems are likely to worsen as a result of the financial crisis, which will probably cause investment in environmental protection by local governments and enterprises to decrease.

CGS's main take-away from the conference is that China, like the rest of the world, is struggling to articulate a real theory of sustainable development. What is desperately needed is an economy-wide template for economic growth that reduces greenhouse gas emissions, air and water pollution, while also reducing capital inputs and improving energy security. China, given time, may well be successful in this effort. But success if far more likely given cooperation from the developed nations. Perhaps most usefully, the United States and Europe could strive to develop economy-wide sustainability strategies. By lighting the way, these countries can give a push to the growing realization in China that some new vision is needed.

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