Footprints of India and China’s economies

Pritam Singh

Professor of Economics, Oxford Brookes University, UK

In terms of per capita income, China and India are still in the category of developing economies, but in view of their increasing share in the global GDP, they are now major economic powers. China replaced the USA as the world's biggest manufacturer in 2010 and overtook it as the top economy in 2014 in terms of its GDP at purchasing power parity. India overtook Japan in 2011 as the third largest economy in the world. China and India together, with 2.7 billion people, encompass 36 per cent of the world's population. Given this, even if their per capita incomes are lower than the advanced economies, the size of their GDPs means a massive environmental footprint of their economies nationally as well as globally. 

China and India can no longer hide their national and global environmental responsibilities under the pretext which was perhaps partially valid a few decades ago: that they needed to develop and, therefore, protecting planet Earth from the harmful consequences of global climate change was their lesser concern. China's share of global GDP was as low as 2.3 per cent in 1980, even lower than India's at that time, but it jumped to a record 18.3 per cent in 2017. According to an estimate, if the current Sino-Indian growth rates persist, by 2050, they would be the dominant global suppliers of manufactured goods and services, respectively. 

Scary environmental implications

The impressive looking economic growth scenario has scary environmental implications. China and India are now among the top producers of carbon dioxide emissions whose implications for pollution and global warming are most serious. In absolute terms, China current carbon dioxoide emissions are more than that of the USA. In fact, China's carbon dioxide emissions are more than those of the USA and the European Union combined. After China, the USA and the EU, India is the fourth largest carbon dioxide emitter followed closely by Russia. One of the largest concerns is the rise in global warming which is defined as the rise in average temperature of the earth's atmosphere in comparison with the pre-industrial levels. It is leading to unpredictable weather changes, rising sea levels, floods and droughts, and global agricultural and energy crisis.

China has had phenomenal manufacturing growth due to low labour costs in international comparative terms. The full environmental implications of that growth are now manifesting themselves in a vicious manner. Pollution in China's urban manufacturing centres has risen to threatening levels. According to one study done on 74 cities in China, around a third of the deaths in these cities were smog related and the total number has reached 3 million. On the worst days, the  government makes it mandatory for residents to stay indoors and this has happened several times in Beijing. Delhi faced a somewhat similar situation last summer. Environmental change does not recognise any boundaries. With this smog travelling with the wind, it affects neighbouring countries too.

China's environmental initiatives

China seems to be showing some awareness of the dangers involved. Some of its environmental initiatives are worth noting and emulating by India. China now is one of the largest pioneers in the renewable energy sector and aims to have 20 per cent of energy coming from renewables by 2030. Another project to help reverse the effects of climate change relates to creating large areas of forest, which were previously used for mining and factories. China announced this January that it is planning to plant a forest of 6.6 million hectares, roughly the size of Ireland, and aims to make 25 per cent of China a forest by 2020, compared to the current 21.7 per cent. 

Also, with China's manufacturing sector being so strong, it has invested heavily in the production of solar cells, becoming the largest shareholder for solar heating. As a result of the cost-effective production, it has been able to make the electricity produced by the solar panels competitive with the cost of electricity produced by fossil fuels such as oil and gas. Also, it is now the world's largest producer of hydroelectric power which, of course, is environmentally a contested form of power, especially if based on large dams.

These environmental initiatives are challenged by the fact that China accounts for half of the global consumption of coal. Coal is the dirtiest of all fossil fuels and its consumption has to be cut drastically. This holds true for India, too.

India's progress

India has made some good progress with renewables, mainly wind and solar. Wind farms are now producing 30 per cent of the global production of wind energy. India started looking into wind energy in the 1960s. It now accounts for up to 50 per cent of India's renewables, with solar close behind. But India has still a lot to learn from China's environmental initiatives and experiences, and this is one area of fruitful collaboration between the two global giants along with the aims of reducing extreme inequalities and degrading poverty. The project of reducing inequalities is closely intertwined with environmental protection because the worst sufferers of environmental degradation are the poor, especially those dependent on agriculture and forests or living in urban slums.

The global environmental responsibilities of India and China have assumed greater significance because the USA, the other global economic power, is abandoning, under the Trump presidency, the climate change negotiation framework aimed at curbing global warming.