Liu, Xuelin; (1997) Measuring sustainable development in China: A "green" measure of net national product. Doctoral thesis (Ph.D), UCL (University College London).

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Abstract

China, currently one of the world's most booming economies, has achieved great success in its economic growth since the start of economic reforms in the late 1970s. However, little attention has been paid to its environmental problems. Constrained by limited natural resources, China's losses in the environment could offset its economic growth despite the apparently relatively high growth rate. This research project discusses the theoretical foundations for deriving the "green" Net National Product (gNNP). Empirically it applies the net price approach, the total rent approach and the user cost approach in order to examine how environmental degradation affects sustainable development. The contents of measuring gNNP consist of the following studies: 1. The thesis illustrates the economic reforms and growth in China and points out environmental degradation and natural resource depletion problems there. The procedure for data collection is presented. 2. The research focuses mainly on assessing resource rents in deriving gNNP. The economic valuation of environmental depreciation and degradation in the national accounts is investigated and modelled. And the theoretical exploration relationship between gNNP and economic growth is addressed. A brief overview of models of gNNP is presented with special evaluation of the Hartwick rent. The research sets up the theoretical framework for the thesis by extending and applying the net price approach, the total rent approach and the user cost approach. 3. Assessment of environmental degradation in China. The situation of deforestation is reviewed, and the economic loss resulting from deforestation in China is measured. By using the net price approach and the user cost approach, economic loss from deforestation in China is derived in forest accounts. 4. Measuring energy resource depletion: coal and oil. The status of China's coal and oil situation is discussed. Pricing constraints and subsidies on coal and oil are illustrated. Adjustments to GNP are shown by deriving gNNP by applying the net price approach, the total rent approach and the user cost approach. 5. Major factors leading to air pollution. The status of Air Pollution in China and present pollution control are discussed. Health damage from small particulate matter is derived and economic loss in terms of GNP is computed. 6. Overall evaluation of environmental degradation in China. The overall economic loss from forestry, coal, oil and air pollution is evaluated by adjusting GNP to gNNP. Several aspects of the causes of environmental degradation are studied: population, pricing policies and property rights. Policies and ways to sustainable development are considered. Finally the thesis summarises the research as a whole and highlights a framework for future research.

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