The Great Asian Dilemma: Economic Boom or Environmental Doom
Posted on : April 2, 2024Author : Annay De
Prologue
Asia has historically captured the attention of the West as a coveted destination for exploitation, plundering and resource extraction. As the Asian countries today are reeling from extreme levels of pollution it is worth noting that in recent times, some of them have volunteered in a sense that they have let the late-stage hypercapitalism of the West take over the reins of environmental destruction.
The latest World Air Quality Report (2023) by IQAir revealed that Asia is amongst the worst polluted continents in the world. While almost all the Asian countries are beyond permissible limits of pollution according to WHO standards, the article endeavours to study only the developing economies, who in pursuit of growth, have stopped caring about pollution.
Countries like North Korea, Myanmar, Nepal, Japan, Pakistan and so on, who also exceed permissible limits are not primarily driven by unsupervised environmental exploitation by the manufacturing industry. The manufacturing boom fueled economic growth, has created jobs and lifted people out of)
poverty. However, weak environmental regulations and a focus on short-term economic gains resulted in rampant industrial pollution. All this has resulted in 1% of the richest citizens living even better lives and the poorest people “pulled out of poverty”, but with nature completely exploited, potable water unavailable, breathable air polluted, the bottom strata are increasingly impoverished in every other aspect.
The economic boom and rapid growth of these countries, facilitated by allowing for lax regulations, lower costs for pollution control equipment, fewer permit requirements and bureaucratic hurdles, and limited enforcement of the few perfunctory and inconsequential environmental regulations, has raised concerns about the region becoming a “pollution haven” for dirty industries reaping in huge profits. The Pollution Haven Hypothesis, more significant today than ever, posits that stricter environmental regulations in developed countries incentivize companies to relocate production to countries with weaker regulations [Copeland, R. & Taylor, M. (1994)]. PHH is closely related to a few international economics’ theoretical models and ideas such as Comparative Advantage (which suggests that countries specialise in sectors where they have a comparative advantage, which can be interpreted to include lax environmental standards) and the Heckscher-Ohlin model (suggests developing economies with abundant unskilled labour attract labour-intensive industries, which may also be pollution-intensive).
(source: Our World in Data) The cost of economic growth rates being higher than others, is the skyrocketing emission graphs of Asia.
A World Bank report of 2011 saw an influx of capital, primarily from developed economies like the US and Europe, fuelling the growth of manufacturing sectors in countries like China and India. FDI to developing Asia surged to a record $535 billion in 2011.
(source: UN ESCAP)
A more recent study by UN ESCAP reports Greenfield investments in the Asia-Pacific have been resiliently growing by 6 per cent in 2022, and more importantly, the share of manufacturing is not only the maximum but has been growing consistently until 2022 when the share saw a slight decrease. Further for the first time, India outpaced China and became the largest destination and source of Greenfield FDI in Asia and the Pacific in 2022, receiving US$ 60 billion of inward Greenfield FDI and being responsible for US$ 35 billion in outward FDI. ASEAN member States attracted the largest share (43 per cent).
Moreover, a greater understanding of the major Asian countries with soaring economic growth-led environmental degradation requires a more holistic study of reforms, political, economical and statistical history of the very countries leading the global growth charts today.
(source: Our
World in Data) Although the time periods differ slightly, the two graphs can be used to correlate the impact of manufacturing (L) -led GDP growth with adverse effects of pollution (R)
(Source: IQ Air 2023 Air Quality Report)
The Central and South Asia region encompasses all four of the world’s most polluted countries in 2023, Bangladesh, India, Tajikistan, and Pakistan, and the top ten most polluted cities globally, including densely populated and historically polluted cities like Delhi and Lahore. A breakdown of annual average PM2.5 concentrations per city reveals that 31% of the region’s cities reported concentrations more than ten times the WHO annual average guideline value, a proportion significantly higher than any other region in the report. These cities, some of the region’s most densely populated urban centres, are home to over 44% of the region’s population. Conversely, two cities in Kazakhstan reported annual average PM2.5 concentrations below 5 µg/m3, meeting the WHO annual PM2.5 guideline.
Common sources of pollution in the region include emissions from brick kilns and other industries, agricultural waste burning, and cremation practices. Geographical and climatological factors contribute to the accumulation of air pollution in the densely populated Indo-Gangetic Plain. Pollutants generated in the region combine with those brought in by winds from the coast and become trapped by the Himalayas bordering the north. Temperature inversions exacerbate this trapping effect by reducing atmospheric mixing, leading to the worst air pollution conditions in the world. Moreover, India and Bangladesh are of particular interest because of persistent efforts to rival the “World’s Factory” (China), contributing majorly to pollution.
Following economic liberalisation in the 1990s, India emerged as a major player in the global manufacturing scene. Multinational corporations like H&M, Gap, and Adidas established operations in India, attracted by its large workforce and growing domestic market. India’s GDP reached $3.5 trillion in 2022 (source: World Bank), making it the world’s fifth-largest economy, and is projected to become the third largest economy within the next 5 years.
(Source: IQ Air 2023 Air Quality Report)
India consistently ranks among the most polluted countries globally. Cities like Delhi and Kanpur grapple with severe smog, primarily due to industrial emissions, vehicle exhaust, and the burning of agricultural waste. A 2020 Greenpeace report stated that 22 of the 30 most polluted cities in the world were in India. With New Delhi consistently topping the list, Industrial emissions, burning of agricultural waste, and vehicle exhaust were identified as major contributors.
Bangladesh, a nation that emerged from struggle, has witnessed remarkable economic growth in recent decades. Following independence in 1971, Bangladesh faced poverty, a lack of infrastructure, and limited economic opportunities. The government implemented economic reforms starting in the 1990s, focusing on export-oriented industrialization and attracting foreign investment. The textile industry, particularly RMG exports, became a major engine of growth. Bangladesh’s GDP has grown steadily, reaching an impressive $389.1 billion in 2022 (source: World Bank). This represents an average annual growth rate of over 6% for the past decade.
(Source: IQ Air 2023 Air Quality Report)
The rapid urbanisation associated with economic growth has led to a surge in solid waste generation. According to a 2021 report by the Bangladesh Bureau of Statistics, the country generates over 40,000 tons of municipal solid waste daily. Inadequate waste management systems result in overflowing landfills and improper waste disposal, leading to land and water pollution. A 2019 study by the World Bank revealed that over 80% of Bangladesh’s surface water is contaminated with pollutants like industrial waste and agricultural runoff.
In 2020 Switzerland’s IQAir reported South Asia is the most polluted region in the world with Bangladesh, India and Pakistan together home to 42 of the 50 most polluted cities. A similar picture can be seen for 2023 as well.
(Source: IQ Air 2023 Air Quality Report)
Nicknamed one of the “Four Asian Tigers” along with Taiwan, Hong Kong, and Singapore, South Korea experienced rapid economic growth in the latter half of the 20th century, driven by heavy investment in export-oriented manufacturing. Southeast Asian Nations like Vietnam, Thailand, and Indonesia are increasingly attracting FDI and witnessing a rise in manufacturing, contributing to the overall economic dynamism of the region. While the specific environmental challenges vary by country, the overall picture is concerning. For example, Taiwan, a major semiconductor manufacturer, faces the challenge of balancing water-intensive chip production with ensuring sustainable water supplies for its population. Similarly, rapid urbanisation in cities like Hong Kong and Singapore has strained waste management systems, with overflowing landfills posing potential land and water pollution threats if not addressed effectively.
The economic rise of the Four Asian Tigers brought undeniable prosperity, but also a hefty environmental price tag. Rapid industrialization led to a significant increase in air and water pollution. A 2020 World Bank report estimates that air pollution alone costs South Korea, a manufacturing powerhouse, a staggering $84 billion annually in welfare losses. Similarly, a 2019 study by the World Health Organization (WHO) revealed that fine particulate matter (PM2.5) levels in major cities across the region often exceeded safe limits by several times. Industrial waste and agricultural runoff further contaminated rivers and coastal waters, threatening marine ecosystems and water quality. These issues were exacerbated by the continued reliance on fossil fuels for energy generation.
A global manufacturing powerhouse, the “World’s Factory”, China’s economic reforms starting in the late 1970s attracted significant foreign investment, particularly from developed economies like the US, Japan, and Europe. Companies like Apple, Nike, and Volkswagen set up factories in China, drawn by lower labour costs (average hourly wages in China’s manufacturing sector in 2022 were $3.52 compared to $27.16 in the US according to tradingeconomics.com) and a business-friendly environment. China’s GDP increased from around $350 billion in 1980 to a staggering $19.9 trillion in 2022 (source: World Bank), making it the world’s second-largest economy. This represents an average annual growth rate of over 10% for four decades, a truly remarkable feat.
(Source: IQ Air 2023 Air Quality Report)
The cost of this was the infamously polluted China. A 2011 Industry Week report reasoned that Chinese companies have the advantage of being able to dump just about any odious byproduct into the air or waterways. Six of the top 20 most polluted cities of the world were in China, and China had been designated as the world’s most polluted nation in several studies. The WHO estimated that 750,000 people a year die in China as a result of the effects of pollution. However, more recently the country has undertaken several serious measures including artificial rainfall and brought down the AQI levels to acceptable levels.
(Source: IQ Air 2023 Air Quality Report)
The Association of Southeast Asian Nations (ASEAN) has emerged as a significant force in the global economy, with its member states experiencing impressive growth in recent decades. Many ASEAN member states gained independence in the mid-20th century, inheriting war-torn economies and political instability. Initial regional cooperation focused on fostering peace and security. Then the member states had varied economic structures, with some reliant on agriculture and others possessing nascent manufacturing bases. The turning point came as economic integration took the centre stage. The Bali Declaration (1976) marked a shift towards economic cooperation. Member states agreed to establish a preferential trade zone (PTZ) to boost intra-regional trade. AFTA (ASEAN Free Trade Area), launched in 1992, aimed to progressively reduce tariffs on goods traded within ASEAN. This initiative spurred significant growth in intra-regional trade.
The economic boom of ASEAN nations has come at a significant environmental cost. A 2021 report by the UN Environment Programme (UNEP) highlights the devastating impact. Rampant deforestation, fueled by land conversion for agriculture (1.78 million hectares of primary forest lost in 2020 alone) and infrastructure projects, disrupts ecosystems, threatens biodiversity, and worsens climate change. Rapid industrialization has polluted the air and water. A WHO study reveals 9 out of 10 ASEAN cities exceed safe air quality limits, while industrial waste and agricultural runoff contaminate water sources. Unsustainable practices like reliance on fossil fuels and overfishing exacerbate the issues. The World Bank estimates the annual economic cost of air pollution in Southeast Asia at a staggering $230 billion, while the FAO reports nearly 40% of fish stocks are overfished.
(Source: IQ Air 2023 Air Quality Report)
In 2023, Iraq and the United Arab Emirates ranked among the ten most polluted countries globally in terms of PM2.5 concentrations, with levels of 43.8 µg/m3 and 43.0 µg/m3, respectively. Among the top eight polluted cities in West Asia, five are capital cities: Baghdad, Kuwait City, Manama, Abu Dhabi, and Doha, indicating a similar trend as the industrial and/or urban centres of development-boosting countries.
Moreover, monitoring air quality remains a crucial issue in the region. Israel and the UAE contribute to over two-thirds of the stations providing data. On the brighter side non-governmental stations are increasing,with currently more non-government operated stations reporting data than government-operated stations, with a ratio of 54% to 46%.
Epilogue:
The consequences of air pollution in Asia are severe. The World Health Organization (WHO) estimates that air pollution causes millions of premature deaths globally every year, with a significant portion attributed to Asia. Air pollution triggers asthma, chronic obstructive pulmonary disease (COPD), and other respiratory illnesses. Contaminated water sources lead to outbreaks of waterborne diseases like diarrhoea, cholera, and typhoid. The healthcare costs associated with pollution-related illnesses strain Asia’s healthcare system. Lost productivity due to illness further impacts the economy. Furthermore, environmental degradation can have long-term economic consequences. Soil and water resources become contaminated, hindering agricultural productivity and tourism suffers as tourists avoid polluted destinations. Despite the concern about air quality plaguing Asia, a wave of initiatives is combating this challenge. India’s National Clean Air Programme targets significant reductions in PM2.5 concentrations, Bangladesh prioritises cleaner brick kiln technologies, China’s ambitious “War on Pollution” curbs industrial emissions and fosters renewable energy sources, South Korea and Japan have implemented stricter vehicle regulations and incentivised electric vehicles, while Southeast Asian nations are pursuing stricter vehicle standards, improved public transport infrastructure, and cleaner industrial practices. However, ensuring consistent enforcement of regulations, overcoming the cost barrier associated with cleaner technologies, and fostering public awareness regarding pollution’s health impacts remain crucial hurdles on Asia’s path towards clean air.
In this pivotal moment of global environmental consciousness, Asia faces a crucial decision. By prioritising environmental sustainability alongside economic growth, Asian nations can chart a course towards a greener, healthier, and more prosperous future for generations to come.
References:
- Copeland, R. & Taylor, M. (1994). Trade and the environment: Theory and evidence. Princeton University Press.
- Helpman, E., & Krugman, P. R. (1985). Market failure, trade, and economic policy. MIT press.https://www.iqair.com/us/newsroom/waqr-2023-pr
- World Bank. (2018). Clear Air and Blue Skies: The Beijing Air Quality Story. World Bank, 2018: [https://blogs.worldbank.org/voices/clean-air-blue-skies-and-healthy-lives-3-considerations-policymakers]
- (2020). Airpocalypse. Greenpeace, 2020: [https://www.greenpeace.org/india/en/publication/866/airpocalypse-assessment-of-air-pollution-in-indian-cities/](https://www.greenpeace.org/india/en/publication/866/airpocalypse-assessment-of-air-pollution-in-indian-cities/)
- com
- World Bank. (2020). Bangladesh: Towards a Resilient and Inclusive Future. https://www.worldbank.org/en/news/press-release/2023/11/23/world-bank-helps-bangladesh-improve-human-development-and-climate-resilience
- UNEP (United Nations Environment Programme). (2021). Environment in Asia and the Pacific: Past Progress, Emerging Challenges, and Future Opportunities. https://www.unep.org/regions/asia-and-pacific/our-projects/strengthening-asean-member-state-policies-environmental
- World Bank. (2021). The Cost of Air Pollution: Strengthening the Economic Case for Action. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/781521473177013155/the-cost-of-air-pollution-strengthening-the-economic-case-for-action
- Food and Agriculture Organization. (2020). The State of World Fisheries and Aquaculture 2020. Sustainability in action. https://www.fao.org/3/ca9229en/ca9229en.pdf
- World Health Organization. (2019). Ambient air pollution database. https://www.who.int/data/gho/data/themes/topics/topic-details/GHO/ambient-air-pollution
- Institute for Global Environmental Strategies. (2021). Water Security and Sustainable Water Management in Taiwan.
Annay De
Intern, Asia in Global Affairs
The views, thoughts, and opinions expressed in the text belong solely to the author, in his personal capacity. It does not reflect the policies and perspectives of Asia in Global Affairs.
Leave a Reply