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The Power to Develop

Trade-offs are an inherent part of life – and an ever-present feature of the climate-change debate. And nowadays, many who live in rich countries confidently declare that the need to address global warming trumps the interest of the world's three billion energy-poor people in gaining access to electricity.

CANBERRA – Trade-offs are an inherent part of life. We all recognize this from our private budgets. To fix the roof, we may have to accept a less extravagant summer vacation. When we pick a cheaper wine, we can splurge on dessert.

Trade-offs also pervade environmental policy: Cutting more of one pollutant, for example, leaves fewer resources to address other issues. For example, coal is phenomenally polluting, but it also provides for cheap and reliable power, which drives development. Over the past 30 years, China has lifted 680 million people out of poverty, mostly through the use of coal. The average Chinese has become more than 13 times richer.

At the same time, Beijing and numerous other Chinese metropolises are experiencing debilitating smog, reminiscent of London in the 1950’s. About 1.2 million Chinese die prematurely each year because of outdoor air pollution. Measurements from Beijing show that upwards of 16% of the air pollution comes from coal. The World Bank estimates that China’s total annual air-pollution costs – based on what Chinese themselves indicate they are willing to pay to reduce their risk of dying – could be as high as 4% of GDP.

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