This past week, New York became the first state in the union to warn investors about the dangers of climate change to investments. According to an article published in the New York Times, ‘the administration of Gov. Andrew M. Cuomo has started to caution investors that climate change poses a long-term risk to the state’s finances.’
As carried in the article, ‘the warning, which is now appearing in the state’s bond offerings, comes as Mr. Cuomo, a Democrat, continues to urge that public officials come to grips with the frequency of extreme weather and to declare that climate change is a reality.’
In part the warning notes that recent storms like Hurricane Sandy, “have demonstrated vulnerabilities in the state’s infrastructure, including mass transit systems, power transmission and distribution systems, and other critical lifelines… Significant long-term planning and investment by the federal government, state and municipalities will be needed to adapt existing infrastructure to the risks posed by climate change.”
The state, which is prone to storms because of its coastal location, is in the process of developing several coping mechanisms. For example, the government of Governor Cuomo has proposed a home buyout plan for those living in the flood prone areas. Such a plan will give the state an opportunity to reconsider the development of its coastlines taking possible climate change impacts into account.
Moreover, the state budget that lawmakers are expected to approve this week also includes a provision requiring some gas stations to be wired to accept generators that could be used in the event of a power failure.
While New York is grappling with climate change, on the other side of the Atlantic China is struggling with rising environmental cost attributed to explosive economic growth in the past decades.
According to a recent report of the Chinese Academy of Environmental Planning, which is part of the Ministry of Environmental Protection, ‘the cost of environmental degradation in China was about $230 billion in 2010, or 3.5 percent of the nation’s gross domestic product — three times that in 2004, in local currency terms.’
It is no doubt that China’s explosive economic growth has had enormous impact on the country’s natural resource base. Logic would require that the government reconsider its development model with the aim of accounting for externalities as much as possible. But this has not been the case. In contrast, all forms of pollution have continued to rise. For example, early this year it was reported that air pollution in north China reached record levels, well beyond what Western environmental agencies consider hazardous.
As if that’s not enough, recent reports pointed to the discovery of at least 16,000 dead pigs in rivers that supply drinking water to Shanghai, which has raised concern over water quality. Last week, China Central Television reported that farmers in a village in Henan Province were using wastewater from a paper mill to grow wheat.
In spite of all these impacts, the government is still focused on economic expansion without changing its development model, and it officially estimates that its G.D.P., which was $8.3 trillion in 2012, will grow at a rate of 7.5 percent this year and at an average of 7 percent in the five-year plan that runs to 2015.
I don’t know what the future holds for China, in fact, no one can precisely say what China’s future will be like. But if the country continues in its current development path, then your guess is as good as mine. I know the pollution is a concern to the Chinese government, but it is high time some concrete action was taken to address the rising environmental costs, which is now jeopardizing the quality of ordinary Chinese life.