This week China has shut down about 40% of all its factories, approximately 80,000 of them. Some may be shut down permanently, some just until they can clean up their act. The early evidence is that fines are being strictly imposed as the tax bureau acts in tandem with the pollution inspectors. Some factory managers and owners may well be sent to jail. There will be disruption in global supply chains. The price of Chinese made things, from clothing to car components will increase a bit in the short term. A few percentage points may be knocked off Chinese GDP figures. However all these things seem a small price to pay for the benefits at stake.
China has a public health emergency in terms of local pollution. In rapidly reducing this local pollution many macro ecological threats from climate change to ocean acidification can also be mitigated. In a blog a couple of weeks ago I wrote about the need to create a pollution minimizing way of maximizing the social and economic benefits of a modern economy. By shutting down obsolete and dirty factories cleantech innovation will be stimulated, leading to more sustainable forms of prosperity. Just in purely economic terms China will probably benefit in the longer term.
Over the last sixty years or so successive legislation has helped clean up most of the rivers of Europe and North America. London’s air quality improved rapidly after the 1956 Clean Air Act. Cleaning up pollution always requires strong government leadership. This week Sadiq Khan introduced the new £10 toxicity charge for bringing older more polluting cars into the centre of London. Although this is to be welcomed, it is too little, too late. The pace of shifting to a cleantech economy needs to speed up dramatically.
The medical journal, The Lancet, estimates that 50,000 people in the UK, and 9 million globally, die each year due to poor air quality. It is time governments the world over took more radical steps to tackle pollution. It will mean shutting down thousands of businesses. This needs to be managed in ways that create greater social and economic security while cleaning up the mess. To me this seems quite doable. Stop subsidies to polluting industries, introduce hefty fines on all forms of pollution, introduce a universal basic income and incentivise cleantech innovation.
In numerous blogs I’ve sounded an optimistic note that China’s carbon emission might plummet over the coming decade. These factory closures will contribute to that goal, and they will also help ensure China is a leading economic powerhouse in the future. As USA under Trump and Britain under the quagmire of Brexit both look back to a fantasy of past glory China is forging ahead, creating the kind of economy which will typify the post fossil fuel age. China has a long way to go to reduce its horrendous pollution, but it is making a very bold start, and that is to be welcomed.