Tom Friedman on China’s Environment
As he so often does, Tom Friedman got right to the heart of the matter in China in Three Colors, his recent article on China’s environment.
While by no means understating its difficulty, Tom argues that China’s transition from communism to state-directed capitalism was much easier than the transition from dirty capitalism to clean capitalism is likely to be.
Converting the economy to capitalism went as well as it has, he believes, because China’s reform program unlocked the geyser of entrepreneurialism that has always had a strong basis in Chinese culture. The transition to clean capitalism will be more difficult because it requires controlling that geyser.
And that is where the rubber meets the road in China, in Tom’s view, because the mechanisms that have been used to control the industrial geyser in other countries—transparent rules and regulations, an independent judiciary, a free press, and uniform enforcement of regulations—are not in place in China. In that sense, China holds the keys to its own future, but that future will require deeper reforms and fundamental changes to existing political and economic practices if important issues like the environment are to be addressed in a comprehensive manner. In his words, China will need to go orange—taking steps towards people power and grassroots political movements–in order for the country to go green.
Every country in the world, including the United States, has had to face up to environmental issues at some point in the course of industrial development. In cases where energy or other cost savings can be quantified, businesses will quickly adopt green manufacturing practices which reduce pollution. But, in cases where there are no bottom line savings to be had and the environmental costs are borne by society as a whole, businesses are unlikely to take these costs into account. After all, accurately calculating the full cost of pollution to society, and then assigning portions of that total cost to individual contributors, is not a precise science.
Just because many environmental costs are not immediately obvious, though, doesn’t mean that real costs aren’t being incurred. In that sense, a country which ignores the environmental costs of industrialization is not unlike a drinker who runs up a bar tab at his favorite watering hole. Because he doesn’t have to pay for his drinks every day and can put them “on the tab,” the drinker tends to lose track of how much he is actually drinking. Until the day of reckoning arrives, that is, and the friendly bartender demands that he pay up.
In the United States, that day of reckoning arrived in the 1960s or thereabouts, many years after the country first began to industrialize. Due to the scale and speed of its development, the day of reckoning is now here for China, as anyone who travels to the country can quickly see (or not see, in some cases).
For exactly the reasons cited by Tom, no one should expect quick results on the environmental front. This will be a very difficult process in China which will require political as well as economic reform. While many companies argue that “green is green” and that money can be made from creating a healthy environment, the fact is that there are heavy costs that will have to be paid, and borne by someone, to clean up China’s air and water. While some companies may benefit from the efforts to do so, many others will find that their cost of doing business will go up significantly. As higher electricity, transportation and other costs are passed on to the consumer, the burden will hit those at the bottom of the economic ladder the hardest. With the vast disparity of incomes between its urban dwellers and the 800 million Chinese who live in the countryside, this is a particularly thorny problem for China and greatly complicates reform.
To begin to move the country in the right direction environmentally means that continuing to do business as usual both politically and economically will not be sufficient in China. The importance of Tom Friedman’s article is that it calls attention to this fundamental fact.
