Valuation Study

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Health Impact of Air Pollution from the Ceramics Industry


Medium: Health and/or Human Capital

Country: China

Analytical Framework(s): Dose-Response Approach, Economic Analysis

Study Date: 2009

Publication Date: 2010

Major Result(s)

Resource/Environmental Good CNY, million currency units
net benefit of treating all spray-drying towers to standard 705.57
net benefit of relocation without dust-catching 1,460.16
net benefit of relocation with dust-catching 1,464.51
net benefit of treating all spray-drying towers with containment 1,222.89

Study Note: The study pays attention to domestic pollution havens in the case of industry migration. In China, central and local government put forward industry policies that can effectively influence industrial development. As has been noted, domestic industry migration has been actively encouraged because it is regarded as a way of balancing regional economic development.

Study Details

Reference: Liu Li and Li Bin. 2010. Environmental Cost Analysis of the Relocation of Pollution-intensive Industries Case Study. EEPSEA Research Report, No. 2010-RR2.

Summary: Industry relocation has occurred more and more frequently in recent years, both regionally and globally. In Guangdong Province, China, industry relocation is a key way to balance the regional development gap. The relocation of manufacturing is usually accompanied by the transfer of accompanying pollution. This research looks at the environmental costs/benefits of the relocation of the ceramic industry, a pollution-intensive industry, from Foshan City to Qingyuan City in Guangdong Province. The study focuses on the health costs/benefits of the change in air quality due to the relocation of ceramic production. The cost of illness, the human capital approach and years lost due to disability were used to evaluate the health costs/benefits. Pollution abatement technology was also considered in order to discover the least costly way to control air pollution in Foshan. Using scenario analysis, it was found that the transfer of the ceramic industry from Foshan to Qingyuan would be an effective way of reducing the negative effect of the industry's air pollution due to the great difference in population density between these locations. The suggested technology should be adopted to reduce the health cost of pollution from the ceramic industry.

Site Characteristics: Guangdong Province has experienced rapid economic growth in last three decades but an imbalance exists in the regional economy of the province. Guangdong Province has experienced 30 years of rapid growth since Chinese Reform and Openness. Its Gross Domestic Product (GDP) increased to over 3 trillion yuan in 2007 from over 2 trillion yuan in 2005, which is now one-eighth of national GDP and is more than that of Singapore, Hongkong and Taiwan individually. From the viewpoint of economic development, a great gap exists between different regions in Guangdong. According to its natural geography and social and economical status, Guangdong is divided into four regions, which consist of the Pearl River Delta (PRD), the East, the West, and the Mountainous region located in the north. A great gap exists between the PRD region and the other three regions. Both the East and West of Guangdong Province economically lag far behind PRD, as does the Mountainous region. To fill the gap in economic development between the PRD region and the non-PRD regions in the province, the Guangdong provincial government has made great efforts to encourage industry relocation between these regions. The study sites, Foshan and Qingyuan, belong to the PRD region and the Mountainous region in the north respectively. Their economic status differs greatly. Foshan City covers a total area of 3,848 km2. In 2007, the population in Foshan was 5.9 million, ranking sixth out of the 21 cities of Guangdong. The GDP of Foshan in 2007 was 358.8 billion yuan, ranking third in the province. Guangdong's major industries include the manufacture of electronics, textiles, plastics and leather, ceramics, household electrical appliances, building materials, silk, chemical fibers and garments. Qingyuan has a population of 3.6 million. It is surrounded by mountainous areas and covers an area of 19,160 km2. In 2007, the GDP of Qingyuan was about 59.7 billion yuan, ranking thirteenth out of the 21 cities of Guangdong. Qingyuan is northeast of Foshan. It is about 130 km from Chancheng District, Foshan, to Yuantan Town, Qingyuan. The GDP per capita of Qingyuan in 2007 was only about a quarter of Foshan's.

Comments: The authors noted that the study will check the rationality of the ceramics industry relocation in two ways. Firstly, it will compare the health benefits in Foshan with the health costs in Qingyuan. Secondly, it will compare the health costs of air pollution in Qingyuan with the technical cost of using cleaner technology, assuming that Foshan reduces its air pollution by transferring its ceramics industry to Qingyuan or by adopting cleaner technology.