Linking the Environmental Pressures of China's Capital Development to Global Final Consumption of the Past Decades and into the Future.

Abstract

China’s rapid growth was fueled by investments that grew more than 10-fold since 1995. Little is known about how the capital assets acquired, while being used in productive processes for years or decades, satisfy global final consumption of goods and services, or how the resource use and emissions that occurred during capital formation are attributable to past or future consumption. Here, enabled by a new global model of capital formation and use, we quantify the linkages over the past 2 decades and into the future between six environmental pressures (EPs) associated with China’s capital formation and attributable to Chinese as well as non-Chinese consumption. We show that only 35% of the capital assets acquired by China from 1995 to 2015, representing 32–39% of the associated EPs (e.g., water consumption, greenhouse gas (GHG) emissions, and metal ore extractions), have been depreciated, while the majority rest will serve future production and consumption. The outsourcing of capital services and the associated EPs are considerable, ranging from 14 to 25% of depending on the EP indicators. Without accounting for the capital–final consumption linkages across time and space, one would miscalculate China’s environmental footprints related to the six EPs by big margins, from −61% to +114%.