Environment the biggest challenge

The 18th National Congress of the Communist Party of China is being held at a time when China is facing some critical economic challenges. Foremost among them is the balance that needs to be struck between economic growth and sustainable development.

The concerns over environment, and the priority to be given to its preservation, were reflected in CPC General Secretary Hu Jintao's opening address to the 18th CPC Congress, where he put as much emphasis on ecological civilization and sustainable development as economic, political, cultural and social civilizations.

The environment has paid a high price for China's high economic growth. There are two aspects to the environmental damage. The first is the increase in air and water pollution. The second is the increase in carbon emissions. These increases are the result of rapid industrialization, energy-intensive economic growth, urbanization, increasing affluence and demand for energy- and carbon-intensive products (such as automobiles and air-conditioners).

Rapid industrialization from a low base always increases pollution because initially industries do not have access to less-polluting and energy-saving technologies. Several core manufacturing industries such as cement, paper, chemicals, plastic, leather, rubber and steel are highly polluting.

The literature on the relationship between economic growth and pollution, popularly expressed through the "Environmental Kuznets Curve", suggests the increase in per capita income to be associated with the increase in pollution in a country until it reaches a certain threshold of income. Once a country crosses that threshold, its pollution starts decreasing, because consciousness increases about environmental protection among consumers, and producers are able to increasingly adopt cleaner but more expensive technologies. This explains why middle-income countries are more polluted than the richest and poorest countries.

The research on the relationship between per capita income and environmental sustainability for China indicates a correlation between income and environmental degradation. Given the association, greenhouse gas (GHG) emissions from burning fossil fuel and wastewater discharges are expected to reduce over time as regions and provinces cross their income thresholds.