Extreme pollution levels are probably why, unlike the US (which withdrew from the agreement), China remains committed to Paris and Xi Jinping is very unlikely to allow his country to weaken its resolve.
I’ve travelled to China since 1998 and it’s been striking that air quality has become tangibly worse – the undeniable impact of massive industrialisation.
China’s extreme exposure to air pollution is well documented. Daily average levels of pollution in Xingtai, for example, (home to 7 million citizens) is more than eight times that of Bakersfield, California (the worst-offending US city), according to data from Statista.
Investors still struggle with the implications of the Paris agreement on climate change, which has now been in effect for nine months for their portfolios, but I believe it is most useful to think in terms of the layers of impact:
- How climate change affects countries we invest in
- Whether it leads to significant government policy changes (including taxation to encourage compliance)
- How company’s finances in targeted sectors are impacted
Extreme pollution levels are probably why, unlike the US (which withdrew from the agreement), China remains committed to Paris and Xi Jinping is very unlikely to allow his country to weaken its resolve. Six years ago, I met officials at Shanghai’s environment agency, who proudly proclaimed that measures in their city to combat air pollution were significantly more draconian for industry than Beijing’s.
When I was last in Shanghai, this June, the air was still grey from pollution, but I was struck by the sight (and sounds) of sparrows in some city streets – conspicuously absent on previous visits. A sign of change?
Meanwhile, a torrential downpour, which grounded Europe-bound flights as I prepared to depart, was welcomed by locals, as it implied clear skies in the days ahead. China’s ‘middle income group (alongside increased urbanisation) means these people will constitute a vocal majority – keeping the pressure on.