Apr 16, 2010

If China's economy implodes, what about Green House gas emissions?

Heard a report yesterday on the radio while driving that due to the decrease in industrial activity tied to the global recession that the level of greenhouse gases had dropped.
(According to the Department for Energy and Climate Change (Decc), the estimated decrease in CO2, from 533m tonnes in 2008 to 481m tonnes in 2009, was mainly caused by a significant fall in energy consumption as the economy contracted.-this in the UK only and from the guardian.co.uk)

Many economists and "experts" are predicting the end of the Chinese property market bubble, a possible DEVALUE(yes Secretary Geithner) of the Chinese currency, and possible insurrection as a result.

["Empty buildings are sprouting across China as companies with access to some of the $1.4 trillion in new loans last year build skyscrapers. Former Morgan Stanley chief Asia economist Andy Xie and hedge fund manager James Chanos say the country’s property market is in a bubble.

“There’s a monumental property bubble and fixed-asset investment bubble that China has underway right now,” Chanos said in a Jan. 25 Bloomberg Television interview. “And deflating that gently will be difficult at best.”Bloomberg.com]


[Overcapacity may be looming in manufacturing as well. China’s investments in new factories and properties surged 67 percent last year to 15.2 trillion yuan, more than Russia’s gross domestic product. Excess steel capacity may have reached about 132 million tons in 2009, more than the 87.5 million tons from Japan, the world’s second-biggest producer. The Beijing- based EU Chamber of Commerce report said a “looming deluge” of extra cement capacity is being built.
What if the Chinese economic miracle tanked and countrywide insurrection followed. In a manner similar to the report from the Guardian above one would think that CO2 emmissions would drop as a result in the world's biggest manufacturer and polluter. source Bloomberg.com]

What would happen to world manufacturing and to green house gas emissions if China had a severe recession and possible upheaval?

Certainly long term much manufacture would switch to other lower labor priced countries but short term we all may be in a jam from a goods sourcing standpoint.

But the reduction in green house gases as a result of a Chinese manufacturing collapse would benefit many(not all, since some species will profit as the globe warms) living things plant and animal alike as the environment would be given a short term pass from the pressure humans place on it.

Hopefully American policy makers and large industry weigh the possibility of this Chinese collapse although we personally wonder if they do. Those in control seem to only see China as a never ending source for the manufacturing capacity that powers the world.

We hope that China remains much as it is now since it is easier for the UN countries to try and change the environmental policies of a reasonably moderate country that has political stability than a country in revolution.

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