project on environmental scarcities, state capacity, & civil violence

According to studies produced by Professors Wang Hongchang and Ning Datong, and by Mr. Xia Guang, the annual economic cost of environmental degradation in China can be illustrated in terms of income lost as a result of deforestation, environmental pollution, and degradation of natural resources.

For the purposes of these studies, “loss” was defined as the deviation between potential and actual economic income resulting from environmental damage.

The following tables summarize the sources of economic loss in 1992 Renminbi (billion yuan).

 
Note that while some of the calculations in Prof. Ning’s paper represent long-term losses, in the above table the figures represent annual losses only.

 
It should be noted that some duplication occurs among the studies. For example, both Professors Wang and Ning calculate the impact of reservoir siltation and loss of soil nutrients. However, the causes for these losses differ. Whereas Prof. Wang attributes the losses to deforestation, Prof. Ning attributes the losses to excessive grazing, and cultivation, and to wind erosion. Due to the difficulty of distinguishing among the many causes of specific cases of environmental degradation, such duplication is unavoidable. Nonetheless, we have decided to retain the calculations as they appear.

An examination of these tables reveals deforestation as the greatest source of economic losses – almost double the total losses arising from environmental pollution and degradation of natural resources combined.

The approach adopted by the authors to study economic losses resulting from the above factors raises one obvious question: How do we calculate the income that would have potentially been accrued were there no environmental damage? In addressing this question, the authors relied heavily on assumptions as a basis for their calculations.

Professor Wang’s study exemplifies this point. His calculations rely on a comparison of existing conditions with an ideal situation in which no deforestation has occurred whatsoever. Due to the difficulty of finding a more accurate substitute for comparison, this idealized base-line, though not necessarily precise, is adopted.

The final outcome is quite stunning. On an annual basis, economic losses to China as a result of environmental degradation equal 382.61 billion yuan. This figure represents 18.9 of China’s total national income (2022.3 billion yuan in 1992). This loss is attributable to; natural resource degradation — 1.9%; environmental pollution — 4.9%, and; deforestation — 12.1%.

At first glance the significant losses attributed to deforestation seem exaggerated. However, a close study of Professor Wang’s research demonstrates the accuracy of his calculations. The disturbing results of this study should serve to awaken all Chinese to the extraordinary importance of afforestation.