Potential health and economic impacts of shifting manufacturing from China to Indonesia or India

Abstract

The diversification or decoupling of production chains from China to alternative Asian countries such as India or Indonesia would impact the spatial distribution of anthropogenic emissions, with corresponding economic impacts due to mortality associated with particulate matter exposure. We evaluated these changes using the Community Earth System Model, the Integrated Exposure-Response (IER) model and Willingness To Pay (WTP) method. Significant effects on PM2.5 related mortality and economic cost for these deaths were seen in many East, Southeast and South Asian countries, particularly those immediately downwind of these three countries. Transferring all of export-related manufacturing to Indonesia resulted in significant mortality decreases in China and South Korea by 78k (5 per 100k) and 1k (2 per 100k) respectively, while Indonesia's mortality significantly increased (73.7k; 29 per 100k), as well as India, Pakistan and Nepal. When production was transferred to India, mortality rates in East Asia show similar changes to the Indonesian scenario, while mortalities in India increased dramatically (87.9k; 6 per 100k), and mortalities in many neighbors of India were also severely increased. Nevertheless, the economic costs for PM2.5 related mortality were much smaller than national GDP changes in China (0.9 % of GDP vs. 18.3 % of GDP), India (2.7 % of GDP vs. 84.3 % of GDP) or Indonesia (9.4 % of GDP vs. 337 % of GDP) due to shifting all of export-related production lines from China to India or Indonesia. Morally, part of the benefits of economic activity should be used to compensate the neighboring communities where mortality increases occur.