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China Is a Rich Country?

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Wednesday, 09 July 2014 04:11

That's what millions are asking after hearing Morning Edition's top of the hour news segment (sorry, no link). The segment referred to negotiations over emissions caps for greenhouse gases. It said that China argued that it should not be subject to the same rules that apply to other rich countries.

China was presumably making the argument that it was not a rich country and therefore should not be subject to the same rules as rich countries. While China's economy is now larger than the U.S. economy on a purchasing power parity basis, since it has four times the population, on a per capita basis it is about fourth as rich. This means both that it has fewer resources to cope with the problem and that the average Chinese person is far less responsible for global warming than the average person in the United States.

It is also worth noting that in an era of secular stagnation, like the one we are in now, spending to slow global warming would increase employment and output. It is not a drain on the economy.

Comments (8)Add Comment
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written by James, July 09, 2014 6:39
Dean, your statement: "This means both that it has fewer resources to cope with the problem and that the average Chinese person is far less responsible for global warming than the average person in the United States." is flat out wrong!!!! China's leadership has courted American outsourcing for years and supplied the necessary expansion of coal-fired plants to keep them humming. What you are pointing out goes against what is well known in the business community. Outsourced factories in Chicago or Detroit did not happen by accident. China unconscientiously took the pollution with them and everyone pays the price.

Also, you need to quit trying to frame the climate debate around political blame! Everyone knows China (and India) is the largest global C02 emitter and will be that way for many decades to come. The point you need to be making as a top economist is C02 emitters, whom ever they are in the world, should look for ways to reduce them. Now or its game over. NPR was totally correct. Capping C02 is a concern for everyone across the globe no matter the pollution source. We need top economists such as yourself to be making that point very clear.

Recommend you read up on the science on climate change.
Solyndra - the American Failure that Was Not a Failure in China and Globally
written by Last Mover, July 09, 2014 6:51

China is on the verge of leaping past America to achieve major reductions in emissions with solar power on a massive scale and speed which can only be implemented through its central command and control government. On some days large buildings cannot be seen from several hundred feet away due to smog.

American energy companies and their sock puppets whine endlessly about "subsidies" China provides to produce solar power and panels sold in America. But they are not subsidies given the pollution that cripples China.

Paying the higher early cost for solar amounts to a penalty fee on negative externalities produced by fossil fuels, except production of the latter is not continued and replaced by solar.

Because the higher early cost is financed partly by government the market price of solar appears globally as a "subsidy". It is not. It is a "pollution neutralized price" by China which benefits by selling it globally to take advantage of scale economies.

Solyndra failed because it faced a lower competitive efficient global price from China, not a "subsidized" price from China in the sense of selling below true cost when negative externalities are included. Solyndra wasn't "subsidized" too much, it wasn't "subsidized" enough to match China's lower efficient price.

Solyndra failed because the economic predators who control American energy production reject the principle practiced in the past, of including negative externalities in the cost and price of energy while ignoring their own massive subsidies and cheerleading themselves as "job creators".

America has been brainwashed by its economic predators to believe "regulation" and "government interference in free markets" is the problem. In fact, it is the very essence of China's central command and control hybrid capitalist system that enables it to effectively respond to global emissions with efficient cost and price solutions.

America also has its own version of central command and control to get things done. Unfortunately it's wholly owned and operated by the economic predators themselves who despise efficient cost and price solutions as they preach "free markets" for everyone but themselves.
Per capita carbon
written by W.T. Eff, July 09, 2014 7:05
James, China is number 55 versus the US 'a number 12 on the list of per capita carbon footprint. True, it is about 45% not 25% of the US per capita, so Dean is off by a factor of 2, but then so are you, by calling him "flat out" wrong. Keep cool. I bet you are far wealthier than the average Chinese and you are allowed to have more than 1 child, amongst other things: why would the Cinese listen to you?

Here is the per capita footprint list
China's exports means U.S. is more to blame
written by Dean, July 09, 2014 8:33
James,

reread what you wrote -- if China is exporting stuff to us (it is), then we are ultimately responsible for those emissions, since we are the consumers. The blame matters because someone has to pay the price, there is no way around that fact. I don't know what you think in the literature implies otherwise.

W.T. EFF -- I was referring to per capita income, not emissions. My number was right.
all the better
written by W.T. Eff, July 09, 2014 3:57
Thanks, Dean, for pointing out the hastiness of my reply and for not re-reading your statement more carefully. Are you underestimating? I ask, since GDP per capita in the US is 7.8 times as much as China (using IMF estimates), and GDP (PPP) per capita is almost 6 times as much. It is quite plausible (and even likely), given these numbers, that the average US consumer contributes more to China's carbon footprint than the average Chinese citizen.

Maybe this would be an interesting point to help gather support of lowering the trade deficit?
American Kabuki
written by John Parks, July 09, 2014 7:30
is how American "negotiations over emissions" can be described.
There are no real negotiations. The US goal is to insist on terms that they know the Chinese can not and will not accept and allow the US press to blame the Chinese for being intransigent.

The Chinese on the other hand know that they are talking with lackeys with no ability to follow through with any promises. The owners of our bought and paid for representatives can merely place a phone call and any uncomfortable EPA regulations are gutted. The Chinese also know that we are only an election away from eliminating the whole agency.

There also should be some allowance for previous CO2 emissions that benefitted the developed nations
written by John Wright, July 09, 2014 10:59
I believe the developing countries have a case that the current baseline CO2 is high because the developed countries dug up the coal/oil/natural gas and burned them over the last 100+ years.

So mathematically , we need to integrate prior CO2 production by country as part of the CO2 cap negotiations.

Some of that CO2 resulted in the improved infrastructure of developed countries that the developing nations would like as well.

So for the USA to tell China/India to restrict their future CO2 production is like a fat guy caught raiding a now near empty cookie jar and suggesting people share the remainder with him out of fairness.

The developing nations will understandably push back against restrictions.
Isn't there a need for a little more flexibility here?
written by Rachel, July 10, 2014 12:55

If China does not have to pay for any excess pollution, then isn't there the chance that cheaper corrections will go unmade? At the expense even of China's own population?

There is also the problem that although China is much poorer than the US on average, many people in China are extremely weathy. And many, many people here live bleak and restricted lives. Isn't it then unreasonable to assume that our whole nation profits for past pollution? So that imposing pollution-taxes that weigh most heavily on the near-poor is still somehow fair?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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