Much has been said in the past year about China's unprecedented pollution problem. So much, in fact, that both China and Goldman Sachs have noticed, because it goes without saying that it is not easy to conduct a healthy investment climate in a city in which one needs a mask just to go outside and enjoy the lack of sun. Which is why we were amused to see the latest gimmick conceived by the Goldman reality adjustment wizards who have come up with a new metric: pollution per unit of GDP.
This is how they explain it:
As part of the efforts to reduce China’s carbon footprint, the Chinese government announced in 2011 its goal to reduce carbon intensity (CO2 emission per unit GDP) by 17% in 2015 from 2010 levels. Based on IEA’s estimate of China’s CO2 emission in 2010, we estimate that China’s 2015 carbon intensity target could be around 149g/Rmb, compared to 179g/Rmb in 2010. If China is successful in reducing its carbon intensity not only would it be more comparable with the rest of the world, but it may also serve as a strong catalyst for other countries to taper their emissions
In other words, while you may be drowning in unbearable smog (don't believe us? just check @BeijingAir), all those unknown toxic particles you are inhaling are actually not that bad when one divides them by the epic housing bubble and ghost cities you call GDP. Visullay this looks as follows:
Taken to its absurd extreme, should China build an infinite amount of empty cities in the Gobi desert, or break enough windows and thus push its GDP to somewhere just why of positive Keynesian infinity, China's GDP problem should melt away.
Joking aside, if one were to measure pollution in its conventional way, in terms of PM2.5 concentration per volume of air, China is really not all that bad. According to the WHO there are at least 6 countries that will need to take some pointers from Goldman on how best to fudge their GDP so their Pollution/GDP ratio also gradually drifts away to zero.
Presenting: the most polluted countries in the world.
Source: WHO and Goldman Sachs