As Beijing tallies the costs of the smog that inundated the city this week, economic and social, I thought I would highlight a recent lecture I gave that explored the “Big 4” questions that people are asking these days when wondering when action will be taken.
- How big is the problem faced?
- What is the timeline?
- Who is responsible?
- How much will it cost to fix?
Meant to create a framework for my students to think about (as future leaders) what will catalyze a change that leads a government, industry, or person to change, and in the context of the recent smogageddon I would answer those four questions as:
- With documented impacts on China’s economy, environment, and the health of its citizens, the size of the problem has never been larger.
- This is a problem that is in the hear and now, and while efforts were made to mitigate the underlying issues of industry, urbanization, desertification, and transportation, those efforts have largely failed
- Responsibility lies with government and business as government, but it will ultimately be business that pays the short term costs through closures, increased costs of energy, and higher regulation
- With the estimated costs of air pollution in China already at 3% of GDP, I would expect any solution to cost at least that much if not more. China has already subsidized several industries and programs to increase efficiency investments, but it now needs to take added measures to further catalyze efficiency and clean up its energy supply
This is a problem that has certainly moved from small to monstrous over the period of a decade, and if Beijing wants to continue on its path to surpass the United States as the largest economy it is going to have to find a way of doing so without reducing China’s air to a toxic soup.
the four questions above, and their answers, should ultimately lead planners towards a single conclusion. This cannot go on much longer. Investments need to be made, systems need to recalibrate, and if the economy needs to be cooled off so that coal producers can put scrubbers on the smoke stacks, then that is a step that should be taken.