The outline of China's looming environmental challenges may be familiar, but the details are so staggering that they bear recounting: The dark side of being the world's factory for three decades is a landscape of rivers, fields, and smoggy cities now so degraded that the World Bank estimates pollution damages annually siphon off 5.8 percent of China's GDP. The poor are disproportionately affected, and 242 million rural residents -- roughly the entire population of Indonesia -- lack access to clean drinking water. Cancer is the country's leading cause of mortality, implicated in nearly one in four deaths.
China's major cities remain cloaked in smog. And though environmental officials have successfully shuttered many polluting factories, the fast-multiplying number of vehicles in the world's top auto market poses another air-quality challenge. Likewise, the environmental ministry knows that dangerous levels of heavy-metal pollution contaminates a tenth of China's farmland (prolonged exposure causes organ and nerve-damage, among other problems), but cleaning up is another matter.
If only China had the luxury of just focusing on existing problems. But water scarcity -- China is home to a fifth of the world's population, but just 7 percent of available freshwater resources -- is likely to become more dire, as another 350 million people transition from rural areas to urban lifestyles, and bustling metropolises rise in the country's arid west. Proposed engineering solutions, like the massively ambitious South-to-North Water Diversion Project, threaten to do as much environmental harm as good. The aquifer under the North China Plain, the country's breadbasket, is fast being depleted. Some 243 lakes have vanished in the past five decades.
With national energy demand rising steeply, China's coal consumption tripled between 2000 and 2010. Eighty percent of China's electricity is now generated from coal, which is also responsible for 85 percent of the country's acid rain-causing sulfur-dioxide emissions and a major contributor to its greenhouse-gas total. A central government-led push to develop renewable energy -- including the expansion of wind, solar, hydropower, and nuclear energy -- has complemented but not offset the growing appetite for coal. And now the country's plans to expand large western coal bases seem poised to collide with regional water shortages (the operation of coal-fired plants is highly water-intensive), as HSBC concludes in its September report, "No Water, No Power."