China’s Green Debt

For a decade, the world has wondered when China’s leaders will recognize the staggering environmental crisis confronting their country. This year, we got an answer: a new Five-Year Plan that makes environmental protection a priority. A storm of green propaganda has followed, and the government now talks about using “Green GDP” to measure development. But will all this talk amount to real progress?

While the central government admits to some of the environmental degradation caused by rapid economic growth, the picture it paints is incomplete. Consider “Green GDP.” This spring, the State Environmental Protection Administration produced the country’s first official estimate of GDP adjusted downward for environmental losses. According to these calculations, it would cost $84 billion to clean up the pollution produced in 2004, or 3% of GDP for that year. But more realistic estimates put environmental damage at 8-13% of China’s GDP growth each year, which means that China has lost almost everything it has gained since the late 1970’s due to pollution.

China’s environmental problems, complex as the causes may be, can ultimately be attributed to our understanding of Marxism. For most of our recent history, we saw in Marxism only a philosophy of class struggle. We believed that economic development would solve all our problems. In the reform period, this misreading of Marx morphed into an unrestrained pursuit of material gain devoid of morality. Traditional Chinese culture, with its emphasis on harmony between human beings and nature, was thrown aside.

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