Economic assessment on national environmental investments in PRC

Abstract

Environmental issues had been widely debated in recent years throughout the People's Republic of China (PRC). The increasingly industrialization took place in China not only produced new workplaces, a vast increase in society's productive capacity, but also raising population and pollutants. The condition of the environmental quality in PRC was one of the World Bank's most serious global concerns. Neighbours of PRC such as Japan and Korea claimed their acid rains were the result of great amount of SO2 emissions in China. Chinese government began to undertake environmental expenditure in the early 1980s. The investment amount was gradually growing from year to year. But the percentage of such investment took in gross domestic production (GDP) has fluctuated from 1980s. The percentage to GDP decreased from 2.5 percent in 1980s to 1.22 percent (CNY 256.6 billion) in 2006. However, with the increased environmental investment, the environmental quality in water, air and solid didn't achieve significant progress. The pollutant discharge or emission amount from industry and domestic both increased year by year. The increase rate of treated pollutant amount cannot catch up with the increase rate of total pollutant. Therefore, weather the investment amount is enough and weather the investment is effective should be exam. This study firstly analysed the environmental pollution and pollution treatment situation in China. Important economic parameters such as GDP, employment rate, industrial production, and energy consumption were chosen to illustrate economic developing condition, and to evaluate the economic capability of investment from Chinese government and the society. Other factors affecting environmental quality were also selected to explicate the interaction between economic growth and environment pollution. After analysing PRC's environmental and economic level, four countries were selected to compare with China's investment condition, according to the similarities in economy, society, and industrialized level. Comparison conducted between PRC and India, Japan, Germany, and the United State (the U.S.) in environmental investment amount, invested area and their environmental achievements. It was found that the investment amount took by Chinese government was almost a quarter to a half of developed countries such as the U.S. and Germany. The percentage that investment amount taken in GDP by Chinese government wasn't reach the level from that by Japanese, American and German government. In such countries, the percentage maintained in more than 2 percent form 1980s, but the percentage in PRC was approximately 1.5 percent or less from year 1990. India, had the most similarities with China in the world, had a fiscal budget in environmental investment which was 20 times more than that of PRC. Suggestions for Chinese government, limitations of this study and recommendations to further research were given at the last part of this thesis.