Course:ECON371/UBCO2010WT1/GROUP6/Article2
'The Great Smog of Guangzhou'
Main Page:
Website - The Great Smog of Guangzhou
Photos Retrieved from www.google.ca Keywords: Air pollution in Guangzhou
Summary
With the developing economy in China, many factories and local business arise from this land of opportunities. However, this economic boom in the local market of Guangzhou has created many problems. one of the biggest problem that Guangzhou as a province is facing right now is the air quality . Factories are located in many parts of Guangzhou. Since factories are located close to the cities, there are many negative impact done to the local residents. In the article of "The Great Smog of Guangzhou", Tang Hao has mentioned many problems that the smog brought to the local residents of Guangzhou. In this article, Hao has informed the public by using shocking facts and statistics collected in Guangzhou. The damage being done by the smog has created many controversies over the topic of air pollution in China. One of the examples he mentioned was Shenzhen, capital of Guangzhou. Shenzhen experienced a "record-break 226 days of smog in 2007." Hao compared the current situation of air pollution to the Great Smog of 1952. Tang XiaoYan a professor from the Peking University College of Environmental Science, came up with a hypothesis that the chance of Guangzhou will repeat history causing unwanted causalities to the local residents. Hao mentioned in hi article that people are unaware that air pollution is one of the major causes for breathing and lung illness. Car emission is growing in the province of Guangzhou as being the primary source of air pollution. According to Hao, there are 1.8 million cars recorded in Guangzhou and that number is growing by 150,000 cars every year. This staggering number is slowly growing into a problem that will strongly affect the environment of Guangzhou. Hao argued that although the government of China is working step by step to solve this problem, however, it is not efficient in terms that the rate of air pollution is growing twice as fast as the government could ceases this phenomenon from continue to grow.
Analysis
Negative externalities and enforceability by the government.
Although the economy of Guangzhou is growing in size, there are many businesses that creates a direct influence to the environment of Guangzhou. Factories is one of the main businesses in Guangzhou that grew rapidly in Guangzhou China. The demand for goods producing in a efficient and cheap rate is amazing. However, this directly post a problem to the air quality in Guangzhou. It could also post a problem for neighboring cities such as Shenzhen or Hong Kong. Part of the smog is trapped within the cities of Guangzhou, however, there are cases that the smog are carried by wind travelling from the north of China carrying part of the smog to neighboring cities. This phenomenon poses a problem to the local factories in Guangzhou that whether if the economical boom of factories is a positive externalities to the local and global market or it is a negative externalities that directly influences the environment of the Guangzhou and neighboring cities. Hao mentioned that the social awareness of this problem is still kept to the minimum of the general public of Guangzhou. Over time, the negative externalities of the pollution that factories is producing will cause a market failure. This market failure is the result of workers are unable to work due to illness. If this kind of air polluting continues and the government will not take actions to this problem, it would post a major problem to the social benefit for the city of Guangzhou and its market. Unlike Hong Kong, the government has full control of the environment as well as many other related factors. According to Hao, this is inefficient in terms that the government does not spend enough time to cope with the problem at hand and it will take too long to have a conclusion to many of these problems. Hao suggests that the involving of the general public and the local government should take action before the Government officials from China decide to take action. Enforceability is a method that Hong Kong government decided to use to control the environment. With a much more control and aware market, people would slowly reduce the emission they produce over time. However, the problem is to this idea is that there are too many involved in this matter. This would completely change the structure of Guangzhou locally and as well as globally.
Social Efficiency
Although it is impossible not to notice the difference in air quality within certain cities in China as compared with other cities in other parts of the world, the situation always seems to be getting worse and worse. All of the environmental experts within various fields in Guangzhoua are either reporting the severity of the situation and how it must stop, or proposing ways in which to try to reduce and control it. One of the main problems Guangzhou faces, in addition to a rather disadvantaged geographical situation, is that the pollution is at such unbelievably high levels, abatement costs could be through the roof. Also, with such a tremendously large volume of people, moral obligations to comply and efficiency issues could be major setbacks. As mentioned in the article, factories and manufacturing plants are such a cornerstone within China that they have to be constructed wherever they fit. It would be almost impossible to control pollution released from all these factories, as abatement costs could include laying off workers or even shutting down factories. This is obviously a huge negative social cost as Chine absolutely depends on its trade with the rest of the world.
It could be presumable that due to the lower income regions of China, income is an incentive to pollute more than the efficient quantity, and incentive to avoid paying any kind of tariff or environmental tax. Therefore it is likely that more strict monitoring could be beneficial in forcing such firms to comply to restrictions set fourth by the government. The fact that people in China are developing severe respiratory problems is another social cost, which ought to be considered. It seems as though China still needs to find a solution that is cost efficient, but can be enforced among over a billion people, AND can be monitored. Harder that it sounds.
Prof's Comments
You seem to be confused about what externalities are. An externality occurs when a third party, someone not involved in the economic trade, is still impacted by the trade. Externalities from the factory are air pollution, noise pollution, etc. The economic benefits that the factory generates are not externalities. Rather, those are just the profits - to factory owners, and to the workers paid for working at the factory - generated by the economic activity.
Also, while abatement may require shutting down some factories, and therefore costing some jobs, the loss of the jobs is not a part of the abatement cost. The only part of the job loss that is in the abatement costs are the cost related to the worker moving to find work somewhere else.