Lax regulation of industrial pollution is causing thousands of premature deaths and serious health problems in China. Pollution abatement would cost little; inaction amounts to valuing a Chinese worker's life below US$500, a tragically low figure by any standard.
China's recent industrial growth, a remarkable success story, has been clouded by hundreds of thousands of premature deaths and incidents of serious respiratory illness caused by exposure to industrial air pollution. Seriously contaminated by industrial discharges, many of China's waterways are largely unfit for direct human use.
This damage could be substantially reduced at modest cost. Industrial reform combined with stricter environmental regulation has reduced organic water pollution in many areas and has curbed the growth of air pollution. But much higher levels of emissions controls (of particulates and sulfur dioxide) are warranted in China's polluted cities.
For the cost-benefit analysis that led to this conclusion, the authors developed three scenarios projecting pollution damage under varying assumptions about future policies. Their findings:
The stakes are even higher for air pollution because regulatory enforcement has weakened in many areas in the past five years.
Reversing that trend will save many lives at extremely modest cost. China's National Environmental Protection Agency (NEPA) has recommended a tenfold increase in the air pollution levy; adopting NEPA's very conservative recommendation would produce a major turnaround in most cities. For representative Chinese cities, a fiftyfold increase in the levy is probably warranted economically.
To be cost-effective, heavy sources of particulate and sulfur dioxide emissions should be targeted for abatement. Reducing emissions from large private plants is so cheap that only significant abatement makes sense—at least 70 percent abatement of sulfur dioxide particulates and even greater abatement of particulates in large urban industrial facilities.
This paper—a product of the Development Research Group—is part of a larger effort in the group to identify appropriate policies for environmental regulation in developing countries. The study was funded by the Bank's Research Support Budget under the research project "The Economics of Industrial Pollution Control in Developing Countries" (RPO 680-20). Copies of this paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Susmita Dasgupta, room N10-035, telephone 202-473-2679, fax 202-522-3230, Internet address sdasgupta@worldbank.org. (52 pages)
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