BEIJING – A 1 percent reduction in pollution, without compromising industrial production, could boost China’s GDP by 0.079 percent, a report said Tuesday.
The report “Air pollution and manufacturing firm productivity: nationwide estimates for China” by the Cheung Kong Graduate School of Business (CKGSB), Xiamen University and Hong Kong Polytechnic University studied the effects of pollution on labor productivity and its consequences for the economy.
“Lowering pollution is good for health but also for labor productivity,” Brian Viard, professor of strategy and economy at CKGSB, told reporters in Beijing.
The study pointed out that pollution also affects the health of workers, including mental health, and leads to a loss of productivity.
Taking into account all these factors, a reduction in PM2.5 particulate matter – with a diameter of less than 2.5 microns – would have a positive impact on the performance of Chinese companies.
In its attempt to tackle high levels of pollution, Chinese authorities have sought to reduce PM2.5 levels between October 2017 and March 2018 by a least 20 percent as compared to last year in the Beijing-Tianjin-Hebei region, the most polluted in the country.
China has also toughened environment regulations and closed down companies that were not adhering to them.
Consultancy firms such as Capital Economics have warned that these government measures against pollution would cause a 1.0 percent decline in industrial production and 0.5 percent reduction in the GDP during winter months.
Viard added the study doesn’t recommend shutting down factories to reduce pollution, but rather urged authorities to look at alternate measures.
“This could include reducing other pollution sources like road dust, automobile exhaust and power generation,” he said.
While the study focuses on the manufacturing sector, experts believe a reduction in PM2.5 particulate matter would result in better productivity of workers in other sectors as well, especially the services sector, where many workers, such as delivery men, work outdoors without masks for prolonged hours, making them vulnerable to health problems caused by the bad air.
“It’s fair to say that productivity in service sector will also improve if pollution is reduced,” said Anke Schrader, researcher at the China Center for Economics and Business.