Greenhouse Gases and Human Well-Being: China in a Global Perspective

Abstract

Most pollution is an unequivocal social bad – a negative externality – but the relationship between greenhouse gas emissions and human well-being is unusually complex. In the long-run, there is a strong scientific consensus that greenhouse gas emissions will result in higher temperatures and sea levels, and a disruption of historical weather patterns. In the short-run, greenhouse gas emissions, and the activities that produce these emissions, result in a mixed set of consequences. Industrialized countries have higher emissions, but also more revenue from the sale of industrial products. China and a few other rapidly industrializing countries stand in the middle. On one side are poorer, less industrialized countries with little responsibility for the emissions that cause climate change and few resources with which to combat its effects. On the other side are richer, more industrialized countries with enormous culpability – both past and present – for the problem of climate change and ample funds for adaptation measures to protect human well-being. This paper takes China as a case study to examine the relationship between greenhouse gas emissions and human well-being. Greenhouse Gases and Human Well-Being WP-US-0907 Stockholm Environment Institute 2 Copyright © 2009 by the Stockholm Environment Institute This publication may be reproduced in whole or in part and in any form for educational or non-profit purposes, without special permission from the copyright holder(s) provided acknowledgement of the source is made. No use of this publication may be made for resale or other commercial purpose, without the written permission of the copyright holder(s). For more information about this document, contact Elizabeth A. Stanton at Liz.Stanton@sei-us.org Stockholm Environment Institute US 11 Curtis Avenue Somerville, MA 02144-1224, USA www.sei-us.org and www.sei.se Greenhouse Gases and Human Well-Being WP-US-0907 Stockholm Environment Institute 3 1. Climate Change and Development Most pollution is an unequivocal social bad – a negative externality – but the relationship between greenhouse gas emissions and human well-being is unusually complex. In the long-run, there is a strong scientific consensus that greenhouse gas emissions will result in higher temperatures and sea levels, and a disruption of historical weather patterns, from heat waves and droughts to more intense storms. The effect of climate change on human well-being will vary greatly from country to country, but if the increase in global average annual temperature exceeds a 2oC threshold, total world food supplies will begin to shrink even as the risk of triggering feedback processes that would accelerate warming grows steeply (IPCC 2007; Stern 2006). In the short-run, greenhouse gas emissions, and the activities that produce these emissions, result in a mixed set of consequences. Industrialized countries have higher emissions, but also more revenue from the sale of industrial products. Countries with more automotive transportation, larger homes, warmer homes in winter, cooler homes in summer, more lights and more consumer electronics have higher residential and transportation-related emissions, but also have lifestyles that are – perhaps – more comfortable, more convenient, and more in tune with all of the benefits of the information age. At the same time, every country suffers the ancillary costs of burning fossil fuels: emissions of SOX, NOX and particulate matter, together with a host of attendant health, environmental, and aesthetic impacts. And for a small but ever increasing number of countries, the worst impacts of climate change have already begun. Some countries are especially vulnerable to climatic changes because of their geography, among these: lowlying, small islands; coastal areas in the paths of hurricanes and typhoons; and arid regions where water availability is dropping still lower. Other countries are economically vulnerable; they cannot afford to insulate their populace from the effects of climate change with costly dykes, air conditioning, desalinization plants, or rigorous building codes. China and a few other rapidly industrializing countries stand in the middle. On one side are poorer, less industrialized countries with little responsibility for the emissions that cause climate change and few resources with which to combat its effects. On the other side are richer, more industrialized countries with enormous culpability – both past and present – for the problem of climate change and ample funds for adaptation measures to protect human well-being. The case of China, viewed from a global perspective, can illuminate a difficult but not intractable issue of international equity: How can the international community balance each individual’s right to an adequate standard of living with the imperative of greenhouse gas emissions reductions? Greenhouse Gases and Human Well-Being WP-US-0907 Stockholm Environment Institute 4 2. Emissions versus Well-Being: The International Context As global emissions of greenhouse gases increase, the impacts of climate change worsen, but these same emissions are essential to maintain high-consumption lifestyles in rich countries and make development possible for poorer and middle-income countries. A statistical examination of this relationship requires good measures of both emissions and human well-being. In this article, the primary measure of greenhouse gas emissions will be emissions per capita of carbon dioxide for 2004 (hereafter, simply referred to as emissions per capita). 1 It is worth noting that while each country’s total emissions are often emphasized in the Western press and are even at times the subject of international negotiation, any serious analysis of the equity implications of climate change requires a per capita measure of emissions 2 : Luxembourg ranks 90 th in terms of total emissions, but has the third highest per capita emissions in the world; conversely, China rivals even the United States in terms of total emissions, but 73 countries have higher per capita emissions. Establishing a credible measure of human well-being is less straight-forward. Two measures are commonly used as proxies for well-being in the development literature: gross domestic product (GDP) per capita adjusted for purchasing power parity (PPP) 3 and the Human Development Index (HDI) 4 . PPP-adjusted GDP per capita can be interpreted as average private consumption, but it fails to include access to public goods and other aspects of well-being, both measurable (like long life or educational attainment) and immeasurable (like happiness or the strength of one’s community). HDI combines PPPadjusted GDP per capita with average life expectancy, the literacy rate, and school enrollment 5 ; there is a strong correlation between this income measure and the other measures included in HDI. Both PPP-adjusted GDP per capita and HDI are based only on national averages 6 and therefore can impart no information regarding inequalities of ethnicity, gender or region within each nation. 1 World Bank, World Development Indicators online database. 2 For a discussion of per capita emissions rights see Baer et al. (2008) 3 PPP adjustments to GDP per capita are an output of the International Comparison Project (ICP). According the World Bank: “The ICP uses a series of statistical surveys to collect price data for a basket of goods and services. For meaningful inter-country comparisons, the ICP considers the affordability and price level of necessities and luxuries, which exchange rates ignore. Surveys are held every three to five years, depending on the region. The data collected are combined with other economic variables from countries’ national accounts to calculate Purchasing Power Parities or PPPs, a form of exchange rate that takes into account the cost and affordability of common items in different countries, usually expressed in the form of US dollars. By using PPPs as conversion factors, the resulting comparisons of GDP volumes enable us to measure the relative social and economic well-being of countries, monitor the incidence of poverty, track progress towards the Millennium Development Goals and target programs effectively.” See http://www.worldbank.org. 4 For more information on the HDI see http://hdr.undp.org/. 5 PPP-adjusted GDP alone explains 61 percent of the variability in HDI. 6 Or nation-level projections in the case of life expectancy data. Greenhouse Gases and Human Well-Being WP-US-0907 Stockholm Environment Institute 5 In this article, the primary measure of well-being will be PPP-adjusted GDP per capita for 2005 7 , but several other development indicators will be discussed. Note that GDP per capita alone explains 65 percent of the variability in emissions per capita, indicating a high degree of correlation between income and emissions. (Hereafter, PPP-adjusted GDP per capita will be referred to simply as income per capita.) Figure 1 is a scatterplot of emissions per capita versus income per capita for 174 countries; China, at 3.9 metric tons of CO2 emitted annually and $4,088 (PPP) per capita, is highlighted in pink at bottom left. To give some context to the relative positions of each country: mean annual global emissions per capita is 4.3 tons (similar to that of Mexico); mean global income per capita is $8,700 (similar to that of Kazakhstan). 7 World Bank, World Development Indicators online database. Greenhouse Gases and Human Well-Being WP-US-0907 Stockholm Environment Institute 6 Figure 1: Emission per capita versus PPP-adjusted GDP per capita