146-China Losses Due to Environmental Pollution-September 2006

**Losses Due to Environmental Pollution**
In 2004, environmental pollution in China caused losses equivalent to 3.05% of GDP, estimated at approximately 511.8 billion yuan. Water pollution accounted for the largest share, reaching 55.9% of the total, followed by air pollution at 42.9%.

These economic losses include not only direct environmental cleanup costs but also indirect impacts such as health damage, agricultural effects, and industrial production declines. The government invested about 1.18% of GDP in countermeasures, which is less than half of the required investment.

Water pollution is a particularly severe problem across China, with rivers and lakes becoming increasingly contaminated. Improper treatment of industrial and domestic wastewater has led to the pollution of water resources, significantly affecting agricultural and drinking water supplies. Additionally, air pollution, especially in urban areas, has resulted in high concentrations of PM2.5 and SO2, leading to an increase in respiratory diseases.

These losses due to environmental pollution are a consequence of short-term economic growth, highlighting the need for stricter regulations and sustainable countermeasures. It is crucial to enhance incentives for environmental protection and establish a system where businesses and citizens actively engage in conservation efforts.