Abstract

China has made great strides in the last two decades in bringing prosperity to a greater share of its people. The country's Gross Domestic Product (GDP) averaged an annual growth rate of 9.6 percent between 1979 and 1999. Many older state-run industries are being replaced by a dynamic new economy. Unfortunately, this economy requires a huge engine to run it, and prosperity has brought with it a huge cost in the form of air pollution. In 1999, two-thirds of the primary energy consumed in China was produced by the burning of coal. Even with improvements in end-use energy efficiency, energy demand continues to grow and so does the air pollution. In China, pollution is causing serious health problems, crop damage and acid rain, all of which are taking a social and economic toll. The World Bank estimates the burden of air and water pollution in 1995 to be about $50 billion or 8 percent of GDP.

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