Thursday, December 21, 2006

Coal for your stockings

There's a lot of coal to go around in China, lots and lots of it. In 2005, China topped the world in coal mining, digging up more than double the amount of coal than the U.S. did (China mined 2226 megatons of coal, the U.S. 951, while 3rd place India mined 398. . .check the World Coal Institute online for more coal stats)

It's possible that China and the world are paying a price for this. In China, human lives are wasted and economies slogged down in a lightly-regulated industry that relies heavily on corruption to boost provincial GDP, especially in particularly poor regions of China like the Chinese northeast. The world may be paying a price thanks to the huge Co2 emissions from China's gluttony of coal-burning power plants. These problems are not quickly overcome, but they seem paramount to both China's development and solving the world's energy crisis.

China is already second behind the United States in greenhouse-gas emissions. Burning raw coal, like what is mined from the above mentioned notorious coal mines, is possibly the very worst of all polluting activities (see this article in the NYTimes, here). Fortunately, this problem is more easily alleviated in the short term via nuclear energy. A solution to the total problem, though, will take more than authoritarian decision-making.

China's coal-mine deaths each year are appalling. The official number given by the Chinese government (via the People's Daily newspaper, the official government mouthpiece) is 6,000 deaths per year in coal mines. That is over 16 deaths per day, 365 days per year. Even more unsettling is that 6,000 is undoubtedly much lower than the actual number of coal deaths, given the CCP's habit of understating or blatantly covering up domestic problems. Maybe there are 10,000 deaths a year. Maybe 20,000. It's impossible to get the exact number. Still, the fact that the government is addressing the problem speaks to the frank absurdity of the number of deaths. Compare this to America: the Sago Mine explosion, which killed 12 Virginia miners in 2006, was the third-worst mining disaster in the US since 1968 and subsequently has a 13,000 word Wikipedia page dedicated to it. In China, more than 12 people on average die in coal mines every day.


Off to work we go. . .

According to an article in the People's Daily, "death contracts" are a common occurrence in Chinese coal mines. Workers sign a deal that guarantees their family compensation should they be killed in the mines; workers cannot work for the mine unless they sign this contract (the article is available here in Chinese from Xinhua, the CCP media company/regulatory commission/spy agency. Translated the title is "Cheap labor does not mean a cheap life"). The idea of compensation is reasonable; the compensation figures, however, are not. Workers are generally given 40,000-60,000 RMB life contracts: the equivalent of $5,000 - $8,000USD. In some cases, according to the Shanghai Star, compensation is less than 10,000RMB; $1,250USD.

If you type in "China coal mine death" into the New York Times search engine, the results from the past few years read like an obtuse joke: "33 Dead in Chinese Mine," "166 still missing from Chinese mine blast," "Blast kills at least 20 children in Chinese mine," "Chinese mine toll reaches 151." These articles don't even go back two years, and no special effort was exerted during this search.

Some would argue these morbid numbers, and the corresponding "death contract" compensation amounts, are merely the real prices of life based on local market conditions, and the market should be obeyed even if it's unsettling. But what these free-market rationalizers happily overlook is the gross lack of a free market everywhere else in the system. Coal is subsidized by the government to encourage coal production, which is a byproduct of bribes given to national agencies by provincial officials and coal owners (often one and the same). Worse, simple humane regulations governing mining are overlooked due to political clout and new legislation is hindered due to a backwards political system. In addition, provinces are pressured to keep up with China's whopping 10%+ GDP growth per year, and laggard provincial leaders eager for promotion don't want to fall behind. Worse still, there lacks a real check on political power on China - the press isn't free, and there is no opposition party to point out the rulers' mishaps - which benefits short-term GDP, but ultimately may hinder sustainable growth (output per unit of input).

Neither of these problems (emissions and deaths) are easily solved. However, progress is probably quicker improved on the emissions front via nuclear power. To my delight, China recently approved a bid by a U.S. consortium led by Westinghouse to build four new nuclear reactors to be used for energy (NYTimes article here). To my chagrin, Hu Jintao (the current undisputed leader of China) is cracking down on journalists and human rights activists in China, signaling that my desire for reform of the Chinese political system (and the plights of those in China's mines) are still off in the distance.

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