China_Cost_of_Pollution.pdf - 115 Xizhimen Nanxiaojie Beijing 100035 P R China Tel 86(10 6653.2331 Fax 86(10 6653.2424 www.sepa.gov.cn COST OF POLLUTION

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Unformatted text preview: 115 Xizhimen Nanxiaojie, Beijing 100035, P. R. China Tel: 86 (10) 6653.2331 Fax: 86 (10) 6653.2424 COST OF POLLUTION IN CHINA The State Environmental Protection Administration CONFERENCE EDITION COST OF POLLUTION IN CHINA ECONOMIC ESTIMATES OF PHYSICAL DAMAGES Rural Development, Natural Resources and Environment Management Unit, East Asia and Pacific Region, The World Bank 1818 H Street, NW, Washington DC 29433, USA Tel: + 1 (202) 458.4073 Fax: + 1 (202) 477.2733 16th Floor, China World Tower 2 No. 1 Jianguomenwai Avenue Beijing 100004, P. R. China Tel: + 86 (10) 5861.7600. Fax: + 86 (10) 5861.7800. THE WORLD BANK The World Bank Office, Beijing THE WORLD BANK THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA Environmental and Social Development Unit East Asia & Pacific Region Ph: 202-458-5660 Fax: 202-522-1666 e-mail: [email protected] COST OF POLLUTION IN CHINA ECONOMIC ESTIMATES OF PHYSICAL DAMAGES The World Bank State Environmental Protection Administration, P. R. China This publication is available online at . Front cover photos: John D. Liu. From the film “A Green Call ” prepared by the Environmental Education Media Project in Beijing in cooperation with the World Bank. Cover design: Circle Graphics, Jostein Nygard Rural Development, Natural Resources and Environment Management Unit East Asia and Pacific Region The World Bank Washington, D.C. February, 2007 This volume is a product of an expert team from China, international experts from various countries and the staff of the World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of the World Bank of the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. The material in this publication is copyrighted. Copying and/or transmitting portions of all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopying or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, . All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected] Table of Contents v ACKNOWLEDGMENTS vii ABBREVIATIONS AND ACRONYMS FOREWORD ix EXECUTIVE SUMMARY xi 1 Overview 1 2 Health Impacts of Ambient Air Pollution 19 3 Health Impacts of Water Pollution 33 4 Valuation of Environmental Health Risks 67 5 Non-Health Impacts of Water Pollution 79 6 Non-Health Impacts of Air Pollution 111 CHINA–ENVIRONMENTAL COST OF POLLUTION iii Acknowledgments This Report is the result of a collaborative research effort by a joint Chinese and international expert team being contracted by the World Bank. In Beijing, the overall team was lead by Guo Xiaomin, a senior advisor to the State Environmental Protection Administration (SEPA). His team included Yu Fang from the China Academy of Environmental Planning (CAEP), who has handled the overall technical coordination, Zhou Guomei coordinated the Valuation of Environmental Health Risk (VEHR) study together with Zhang Kai, Zhou Jun and Wu Yuping from the Policy Research Center for Environment & Economy. Pan Xiaochuan at the Medical College of Peking University lead a team on dose response function development, which included Wang Lihua, and Jiang Jinhua. Monitoring data was provided by the China National Monitoring Centre by Zhuo Jianping, Ling Lixin, Fu Deqing and WuHuaimin. Zhao Yaoming has participated from the Ministry of Agriculture. A team from the Water Resources and Hydropower Planning and Design Institute of the Ministry of Water Resources (MWR) lead by Li Yuanyuan, which also included Zhou Zhiwei, Cao Jianting and Zhangwei provided assistance on water scarcity subjects. Gao Jun and Xu Ling from the Ministry of Health (MoH) worked on statistical health data. A team from the Rural Water Supply Central Disease Control (CDC) lead by Fan Fucheng and Tao Yong provided assistance on particularly drinking water and partly health related data. In Shanghai, a team lead by Prof. Peng Xizhe at the Fudan University, included Chen Yan, Tian Wenhua and Cheng Yuan. In Chongqing, a team lead by Ass. Prof. Chen Gangcai at the Chongqing Academy of Environmental Science included Wang Fei, Ran Tao, Zhou Zhien, Liu Lanyu, and Chen Derong in addition to Yang Xioalin, Xiang Xinzhi and Qin Lei from Chongqing CDC and Tang Guil from Chongqing MoH. International experts have included Haakon Vennemo and Henrik Lindhjem (ECON), Kristin Aunan and Hans Martin Seip (CICERO), Alan Krupnick, Sandy Hoffmann and Michael McWilliams (RFF), Bjorn Larsen and Ramon Ortiz (independent consultants). At the World Bank, the project was coordinated by Jostein Nygard, task team leader (EASRE) under the overall supervision of Magda Lovei (EASOP). Substantive inputs were provided by Maureen Cropper (DEC), Tamer Samah Rabie (ECSHD), while technical support was provided by Marija Kuzmanovic and Andrew Murray (EASEN/EASRE). The current report has mainly be written by Maureen Cropper, Tamer Rabie, Haakon Ven- CHINA–ENVIRONMENTAL COST OF POLLUTION v ACKNOWLEDGMENTS nemo, Kristin Aunan, Hans Martin Seip, Yu Fang, Guo Xiaoming and Jostein Nygard, while the extensive Chinese expert team has mainly been writing the progress and background reports that this report builds upon. The RFF, Shanghai and Chongqing teams have been writing the “Willingness to Pay for Reduced Mortality Risk Reduction in Shanghai and Chongqing” study, which is also being published as a separate World Bank discussion paper report. Mainly based upon work by Bjorn Larsen, a separate discussion paper report “China Health Effects of Indoor Air Pollution” is also being published. Peer reviewers included Chris Nielsen (Harvard University), Hao Jiming (Tsinghua University), Kseniya Lvovsky (World Bank, SASES), Rita Klees (World Bank, ENV), and Anil Markandy (ECSSD). Additional reviews and comments were provided by David Dollar, Bert Hofman and Andres Liebenthal (World Bank, Beijing), Maria Teresa Serra (EASES/ EAPVP) Julien Labonne and Jian Xie (EASES/ vi CHINA–ENVIRONMENTAL COST OF POLLUTION EASRE), Anjali Acharya and Giovanni Ruta (ENV) and Charles E. Di Leva (LEGEN). Coordination of the study within SEPA, has been made by their Foreign Economic Cooperation Office (FECO) with Wang Xin and Xie Yongming. Personnel within SEPA’s Planning and Finance, Pollution Control and Science and Technology departments in addition MoH personnel have reviewed the report extensively. The report was edited by Robert Livernash, consultant. Circle Graphics designed and managed desktopping. Production was supervised by Jaime Alvarez. Photos provided by John Liu, the Environmental Education Media Project, from a World Bank-contracted film “A Green Call”. Chinese translation was provided by the translation desk at SEPAs Department of International Cooperation. Finally, we would like to express our gratitude to the Government of Norway and Finland, which provided the main trust funds (TFESSD) to carry out the study. The study was also supported by the World Bank’s own funding. Abbreviations and Acronyms ACS AHC BOD BOH CAEP CAES CDC CECM CEVD CNHS CO COD COI COPD CSMI CV CVD DALY DC DSP ECM EU EV GDP GIOV HEI HH ICD American Cancer Society Adjusted Human Capital Biological Oxygen Demand Bureau of Health (at local levels) Chinese Academy for Environmental Planning Chongqing Academy of Environmental Sciences Center for Disease Control and Prevention Chinese Environmental Cost Model Cerebrovascular Disease China National Health Survey Carbon Monoxide Chemical Oxygen Demand Cost of Illness Chronic Obstructive Pulmonary Disease Clear Water and Sewage Mixed Irrigation Contingent Valuation Cardiovascular Disease Disability-Adjusted Life Year Dichotomous Choice Method Disease Surveillance Point Environmental Cost Model European Union Emergency Visit Gross Domestic Product Gross Industrial Output Value Health Effects Institute Household International Classification of Disease CHINA–ENVIRONMENTAL COST OF POLLUTION vii ABBREVIATIONS AND ACRONYMS IWQI MoA MoH MWR NAPAP NBS NOx O3 OPV OR PC PM PM10 PPP PSI QALY RD RFF RMB RR SCE SEPA SO2 TSP TVEs UNEP USEPA VEHR VSL WHO WTP viii Integrated Water Quality Index Ministry of Agriculture Ministry of Health Ministry of Water Resources National Acid Precipitation Assessment Program National Bureau of Statistics Nitrogen Oxides Ozone Outpatient Visit Odds Ratio Payment Card Method Particulate Matter Particulate Matter of Less than 10 μm in diameter Purchasing Power Parity Pure Sewage Irrigation Quality Adjusted Life Year Respiratory Disease Resources for the Future Chinese Currency, Yuan Relative Risk Standard Coal Equivalent State Environmental Protection Administration Sulphur Dioxide Total Suspended Particulates Town and Village Enterprises United Nations Environmental Programme United States Environmental Protection Agency Valuation of Environmental Health Risk Value of Statistical Life World Health Organization Willingness to Pay CHINA–ENVIRONMENTAL COST OF POLLUTION Foreword to the Conference Edition This is a draft edition of the Cost of Pollution in China: Economic Estimates of Physical Damages report, which will be presented at the international conference on Sustainable Development in Beijing, China on March 2, 2007. The purpose of this conference edition is to present the findings of the studies undertaken in China over the past about 3 years as well as to obtain relevant comments and feedback from the conference participants that could be included in the final edition of the report. This report traces its origin to 1997, when the World Bank published the China 2020 – Clear Water Blue Skies report. This work underscored the economic implications of environmental degradation by estimating that the cost of air and water pollution in China is between 3.5 and 8 percent of GDP. Following these findings, the Chinese government requested the World Bank to collaborate with a number of Chinese and international research institutes to develop an environmental cost model (ECM) using methodologies specific to the China context. This work includes an in-depth review of international ECM studies, and development and application of new methodologies (and software) for annual estimations of water and air pollution in China at both central and local levels. The aim of this work is to increase awareness of the economic impacts of air and water pollution in China, to provide relevant policy information to decision makers and to enable the Chinese government to make optimal resource allocations for environmental protection. Prior to the publication of this report, comprehensive comments have been received by both the Chinese Government, particularly the State Environmental Protection Administration (SEPA) and independent Chinese and NonChinese reviewers. Some of the subjects that have been carefully developed during the course of implementation, including certain physical impact estimations as well as economic cost calculations at local levels have been left out of this conference edition due to still some uncertainties about calculation methods and its application. How to possibly make use of these materials will be continuously worked on during and after the conference. Moreover, the comprehensive reference material that has been developed by joint Chinese and International expert team (including progress reports and various background reports), is going to be attached in a CD-ROM in the final edition. Wish you good reading of this edition and looking forward to receiving your comments. Report Authors February 2007 CHINA–ENVIRONMENTAL COST OF POLLUTION ix Executive Summary 䢇 In recent decades, China has achieved rapid economic growth, industrialization, and urbanization. Annual increases in GDP of 8 to 9 percent have lifted some 400 million people out of dire poverty. Between 1979 and 2005, China moved up from a rank of 108th to 72nd on the World Development Index. With further economic growth, most of the remaining 200 million people living below one dollar per day may soon escape from poverty. Although technological change, urbanization, and China’s high savings rate suggest that continued rapid growth is feasible, the resources that such growth demands and the environmental pressures it brings have raised grave concerns about the long-term sustainability and hidden costs of growth. Many of these concerns are associated with the impacts of air and water pollution. Rapid Economic Growth Has Had Positive Environmental Impacts but Also Created New Environmental Challenges Considering China’s strong economic growth over the last 20–25 years, there is no doubt that it has had positive impacts on the environment. Alongside economic growth, technology improvements over this period have created much-improved resource utilization. Energy efficiency has improved drastically—almost three times better utilization of energy resources in 2000–02 compared to 1978. As a result of the changing industrial structure, the application of cleaner and more energy-efficient technologies, and pollution control efforts, ambient concentrations of particulate matter (PM) and sulfur dioxide (SO2) in cities have gradually decreased over the last 25 years. Implementation of environmental pollution control policies—particularly command-and-control measures, but also economic and voluntarily measures—have contributed substantially to leveling off or even reducing pollution loads, particularly in certain targeted industrial sectors. At the same time, new environmental challenges have been created. Following a period of stagnation in energy use during the late 1990s, total energy consumption in China has increased 70 percent between 2000 and 2005, with coal consumption increasing by 75 percent, indicating an increasingly energy-intensive economy over the last few years. Moreover, between 2000 and 2005, air pollution emissions have remained constant or, in some instances, have increased. The assessment at the end of the tenth five-year plan (2001–05) recently concluded that China’s emissions of SO2 and soot were respectively 42 percent and 11 percent higher than the target set at the beginning of the plan. China is now the largest source of SO2 emissions in the world. Recent trends in energy consumption, particularly increased coal use, provide a possible explanation for the increase in SO2 emissions. Water pollution is also a cause for serious concern. In the period between 2001 and 2005, on average about 54 percent of the seven main rivers in China contained water deemed unsafe for human consumption. This repreCHINA–ENVIRONMENTAL COST OF POLLUTION xi EXECUTIVE SUMMARY sents a nearly 12 percent increase since the early 1990s. The most polluted rivers occurred in the northeast in areas of high population density. The trends in surface water quality from 2000 to 2005 suggest that quality is worsening in the main river systems in the North, while improving slightly in the South. This may partly be the result of rapid urbanization (the urban population increased by103 million countrywide from 2000 to 2005), which caused COD loads from urban residents to increase substantially and, hence, surpass the planned targets for 2005. Rapid industrialization probably also plays a part. pollution, it is striking that the areas with the highest per capita exposure are almost all located in northern China (Qinghai, Ningxia, Beijing, Tianjin, Shaanxi, and Shanxi). The exception is Hunan, which is located in the South. In Figure 1, the color of the provinces on the map shows the percentage of the urban population exposed to air pollution, while the bars indicate the absolute number of people exposed. Similarly, the most severely polluted water basins—of the Liao, Hai, Huai, and Songhua rivers—are also located in northern China (see figure 2 for surface water quality). North China also has serious water scarcity problems. Some provinces—including Beijing, Shanxi, Ningxia, Tianjin, and Jiangsu—seem to face the double burden of exposure to high levels of both air and water pollution. However, while air pollution levels may be directly associated with population Northern China Bears a Double Burden from Air and Water Pollution While the most populous parts of China also have the highest number of people exposed to air F I G U R E 1 . Urban Population Exposed to PM10 levels, 2003 Heilongjiang Neimeng Liaoning Xinjiang Beijing Gansu Tianjin Ningxia Shanxi Shaanxi Henan Sichuan Chongqing Guizhou Hubei 11 - 30% Population Exposed to Pollution 200,000 31 - 45% 46 - 60% 61 - 70% 71 - 80% 81 - 90% 91 - 100% xii CHINA–ENVIRONMENTAL COST OF POLLUTION Jiangsu Anhui Shanghai Zhejiang Hunan Guangdong Yunnan 0 - 10% Hebei Shandong Qinghai Pollution Exposure Jilin Guangxi Hainan Jiangxi Fujian EXECUTIVE SUMMARY F I G U R E 2 . Water Quality Levels, 2004 exposure, the same does not necessarily apply to surface water pollution. This is because populations generally have different drinking water sources that may allow them to escape high levels of contamination. About 115 million people in rural China rely primarily on surface water as their main source of drinking water. Surface water as a drinking water source is more vulnerable to possible pollution compared to other, safer drinking sources. Air and Water Pollution have Severe Health Impacts According to conservative estimates, the economic burden of premature mortality and morbidity associated with air pollution was 157.3 billion yuan in 2003, or 1.16 percent of GDP. This assumes that premature deaths are valued using the present value of per capita GDP over the remainder of the individual’s lifetime. If a premature death is valued using a value of a statistical life of 1 million yuan, reflecting people’s willingness to pay to avoid mortality risks, the damages associated with air pollution are 3.8 percent of GDP. These findings differ in two important ways from previous studies of the burden of outdoor air pollution in China. First, they are based on Chinese exposure-response functions, as well as on the international literature; and second, they are computed for individual cities and provinces. Previous estimates by WHO (Cohen et al. 2004) were based on the assumption that increases in PM beyond 100 ␮g/m3 of PM10 caused no additional health damage.( In the base case considered by WHO, CHINA–ENVIRONMENTAL COST OF POLLUTION xiii EXECUTIVE SUMMARY relative risk does not increase beyond 50 ␮g/m3 of PM2.5, which is approximately equivalent to 100 ␮g/m3 of PM10.) This assumption implies that the WHO estimates cannot be used to evaluate the benefits of specific urban air pollution control policies. Two-thirds of the rural population is without piped water, which contributes to diarrheal disease and cancers of the digestive system. The cost of these health impacts, if valued using a VSL of 1 million, are 1.9 percent of rural GDP. Analysis of data from the 2003 National Health Survey indicates that two-thirds of the rural population does not have access to piped water. The relationship between access to piped water and the incidence of diarrheal disease in children under the age of 5 confirms this finding: the lack of access to piped water is significantly associated with excess cases of diarrhe...
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