The consequences of neglecting environmental pollution for economic development in Beijing, Tianjin and the Hebei Region

Economic development in the Beijing-Tianjin-Hebei metropolitan cluster has brought upon many problems, specifically dealing with environmental pollution. There is an urge to have a control or management of the environmental pollution in Beijing-Tianjin-Hebei and the surrounding provinces. The research by ScienceDirect written by Yao (2022). Through controlling the levels of environmental pollution, the research measured the full cost of economic benefits and the full cost of environmental pollution control in Beijing. In order to progress with environmental control there are few requirements such as a constructed equity index, and economic costs for governments in Beijing, Tianjin, Hebei and surrounding provinces. The results of the study shows that there is a large inequality and inequity in Beijing and the surrounding areas in the process around regional trade. The developed provinces Beijing and Tianjin, however, benefited due to their industrial structure which limited their responsibility on pollution control. The industrial structures pertain to high-value added  and capital intensive industries. In contrast, the provinces with high pollution, labour-intensive industries and heavy chemicals such as Shanxi and Hebei developed their economies based on an irrational industrial structure and progressed when trading goods with the developed provinces. Based on the policy recommendations and findings, suggestions were put forward to achieve collaborative management in environmental pollution in Hebei, Tianjin and Beijing.

The economic development of Northern China relies on Beijing Tianjin Hebei metropolitan agglomerations. As economic development has been the main emphasis, environmental pollution has been neglected and is now a major issue that needs to be solved. Recently, environmental pollution has attracted the attention of scholars. For instance, the cost of various energy reduction scenarios  for the Chinese industry using the directional distance function method which was evaluated by Chen and Xia. There are many other scholars that have researched about the environmental pollution affecting China. The study by Yao (2022) focussed on seven provinces Hebei, Tianjin and Beijing and the surrounding provinces included, Inner, Mongolia, Shanxi, Henan and Shandong. These provinces are held accountable for the economic benefits of environmental pollution and cost shifting from an consumption perspective. Further, to characterize these characteristics, one needs to  construct an environmental burden inequity index (CG index).

The method of the study was as follows: the costing accounting of SO2 completing treatment which focused on “full government cost” and calculations were done to figure out an answer. The next method was the environmental inequity index that viewed the environmental burden. Lastly, the total governance cost data implied by trade was analysed which focused on, “Environmental treatment unit treatment refers to the economic cost paid for the removal of unit SO2, which varies according to the industry and pollution removal technology”. 

The results of the study formed two basis after conducting the methods, which are as follows:

1) Analysis of environmental pollution responsibility based on production and consumption

2) Inequity between cost of environmental pollution regions

The results showed that “Hebei, Shanxi, Inner Mongolia, Henan and other provinces, which mainly focus on high pollution intensive industries and heavy industries, indirectly bore many costs for Beijing Tianjin region”. Further, “Inner Mongolia, Shanxi, Hebei and Henan indirectly bore the total control costs of air pollution in other provinces, which are 5489.565 million yuan, 5268.104 million yuan, 176.5927 million yuan and 1413.907 million yuan, respectively. About 71.6% of the total cost of air pollution control in Beijing to meet the city’s consumption is transferred to other regions. In addition, Beijing, Tianjin, Shanxi and Inner Mongolia have all net inflows of GDP to varying degrees in regional trade. However, Hebei, Shandong and Henan provinces bore about 64.8% of the total air pollution control cost in the process of regional commodity trading, and on the contrary, they have net outflow of GDP to varying degrees.” The second result laid out showed, “It can be seen that Beijing and Tianjin have obvious advantages in the process of commodity trading with other five provinces, and the economic benefits to themselves are significantly higher than the pollution control costs they need to bear.” Moreover, “Shanxi and Inner Mongolia are the two provinces that suffer the most from environmental injustice in the region. The reason is that these two provinces have delivered clean secondary energy power to other provinces and cities (especially Beijing and Tianjin), but the cost of environmental governance cannot be fully internalized into the power price due to China’s thermal power price regulation”

The study concluded that “after comparing the two (Beijing-Tianjin-Hebei to the surrounding areas), it could be found that the consumer costs in Beijing, Tianjin and Shandong are higher than the production costs, while the consumer costs in other provinces are lower than their production costs. Further, the article mentions, “from the perspective of environmental inequity, Shanxi and Inner Mongolia suffered the most from environmental inequity in the process of trade with Beijing, Tianjin, Hebei and surrounding regions, and the greatest environmental inequity still came from Beijing and Tianjin. Beijing and Tianjin have caused environmental unfairness to other provinces in the process of trade with them”. The solution provided by the article is as follows: “Establish the environmental protection fund for Beijing Tianjin Hebei and its surrounding areas, inject funds from Beijing, Tianjin, Shandong and other developed provinces, and guide social capital to provide financial support for air pollution control in Shanxi, Inner Mongolia, Henan, Hebei and other provinces.”

The environment should be our first priority before economic and social factors. If we do not have clean air to breathe, clean water to drink and healthy soil to grow our crops, then the economic and social factors will be affected detrimentally. Environmental pollution needs more attention and governments should also support protecting our environment.