China Wrestles with the Toxic Aftermath of Rare Earth Mining
e360.yale.edu
e360.yale.edu
"Environmental experts and local officials say the cost of the cleanup should not be shouldered by the Chinese government alone, but also by the rare earths industry and the global companies and consumers that benefit from these technologies."
The mining companies should bear the cost, since it was a cost that they simply ignored at the time. If that cost had been factored into their business, prices for their materials would have been higher (and the consumers would have paid).
Instead, like many businesses, they took responsibility for only the costs that they had to. In general, consumers should not shoulder the burden of corporations' bad business practices.
If true costs were considered, there would be far less materialism (and corresponding pollution).
All that said, sometimes everyone has to contribute to right a wrong. However, it's not ok that everyone pay for one party's past wrongs only to see other parties continuing to repeat those wrongs.
No small problem is that of assigning value to a clean environment, or to sustainable practises. ETS anyone?
Doesn't that make you complicit if we are to follow your hard stance here?
Some of us are perfectly fine with the negative consequences because we believe the positive far outweighs the negative.
In other words, there are other ways to think about this which actually do make it useful to say.
The computer mrspuratic is using exists thanks to products from current mining... true. But it could also exist thanks to products from more sustainable mining, if the world worked differently. It's not like he was given a choice.
So your kind of argument, if you intend it to discredit criticism or making other people appear incoherent with their principles, is basically a fallacy.
Mining companies don't have more choices than the consumer. The mining companies are also forced into making the choices they do or go out of business based on the reality around them.
"Mining is a truly nasty business, and not just environmentally."
The Chinese mines are not blameless, but they are only part of the 'profit at all costs' mindset that many shareholders demand.
It’s all predicted by the free market: the mines that had higher costs because they followed environmental regulations can’t compete with those that don’t, likewise companies that purchase from more expensive sources can’t compete with those that purchase from cheaper ones, since ultimately consumers are going to choose the cheaper product.
Hence the need for regulation and perhaps even trade restrictions to force the right choices to be made.
So the failure comes back to people not actually caring about the environment in China.
> So the failure comes back to people not actually caring about the environment in China.
Some people, many people in China do care about the environment, they just have lacked the power to do much about it. But yes, again, short term interests win out when the long term consequences are far away in space or time. And then it’s just a classic prisoners dilemma: you can think long term, but your competitors will just put you out of business short term so it isn’t a workable solution.
There are systems that get closer than others. We tend to use words like fascist to describe them for good reason: the downsides are often worse than the problems. This isn't to say we shouldn't work on the problem, we just need to be careful that our ends are not worse.
It feels like we are always only including negative externalities when we talk about things we don't like and positive when it's things we do like.
We should always look at both sides.
Does anyone know good examples (family led also, but successful mostly) of pricing externalities?
I mean the alternative is regulation and/or legislation. Those work pretty well when a reasonable (ie production still happens) of harmful processes/methods. Eg banning CFCs in certain products. I know of examples where these were deployed.
Tldr: what is the best, big example of a real, functional price system for "externalities?"
I don't want to jump to conclusions, but it feels like this line of thinking is similar to state "retraining" to deal with unemployment due to economic changes. Very popular rhetorically, but very few encouraging examples.
Regarding regulation: something like a carbon tax is arguably pricing-in of an externality, but mandated by the government. That's actually what I think of when I suggest this, because I don't expect captialist actors to deal with these problems without being forced to somehow. In the free market, if an externality can be ignored to gain a competitive advantage, it will be.
Carbon tax is the biggest question on the table. A lot of economists like it because theory. I'm skeptical, tbh, even of quasi-dynamic versions (like taxing fuel), and I tend to think taxes/subsidies (for example) on the purchase of vehicles would work better.
Open to have my mind changed though, hence the question. Where have laws been used to successfully create externality price system?
We can obviously do fuel taxes. We do. That correlates pretty directly to emissions (within the domain of driving), but... we have experience here. We know that the demand elasticity to price is low in the long term and extremely low in the short term.
Ie, You need a very big/painful tax to achieve a relatively small decline in emissions.
There are questions of fairness/justice in all scenarios. Proportionality to waste is one issue. Proportionality to income is another. Different people will have different perspectives. But, before we even get to those, the question to answer is "what's our incentive?" Which (imo)needs to be answered in terms of reduced emission volume.
Notably, we are not doing this when it comes to CO2, we’re still just dumping it in the common atmosphere even though the costs to everyone will be absurdly high.
>In 2013, the UK became the first EU country to introduce a carbon price floor, now set at £18 a tonne
Some results:
>In 2012, the UK ranked 20th out of a list of 33 rich countries in terms of low-carbon electricity use. In 2017, it jumped to 7th. No other country has ever climbed up the rankings so quickly, according to a study by Imperial College London.
and
>UK power from green energy set to surpass fossil fuels in 2019
so it seems to be working at least somewhat. But:
> the UK measure has come under mounting pressure from troubled steel companies and other heavy power users who claim green levies make electricity more expensive, giving international rivals a competitive advantage.
So overall it seems successful but it's complicated. A lot of other schemes also seem to have complicated effects so it's hard to say yeah it's all good but overall they are probably an improvement on doing nothing.
This isn't an alternative, this is precisely how you price in externalities. No company in a competitive market will do it of its own volition, when it has no reason to (no punishment) and every reason against (competition).
Looking from a different perspective: an externality happens when a transaction between two parties has a hidden third party that is made to pay the price without gaining anything from it. That third party usually is "society at large", or "some subpopulation within society at large". The role of the government is to be a representative of the society. A regulatory measure like e.g. carbon tax is essentially the government stepping in on behalf of the society and saying "if you want me to accept all this negative value, you have to compensate me for it fairly". It's a proper market mechanism.
Building codes are also a pretty good example.
A complimentary strategy is performance standards. A carrot (incentive) to regulatory sticks.
The #1 uses of rare earth is chemical catalysts (used for processing fossil fuels) and pollution control (also fossil fuels)
Top uses of rare-earths in the US
Chemical Catalysts 55% Metallurgy & Alloys 15% Ceramics and Glass Making 10% Glass Polishing 10% Other 10%
Source: http://geology.com/articles/rare-earth-elements/ Batteries, solar panels and magnets are in that 'other' category.
On the other hand Apple is already a lot better than the average Android phone when it comes to the availability of software updates, especially security updates by the vendor.
However, we still have a long way to go. It looks like mobile phones will last longer now that we are seeing diminishing returns from the yearly updates.
Perhaps vendors can be forced to release the software as open source when they no longer support it with security updates?
iPhones also have industry leading ratings in recyclability[2]. That is probably the most important factor because it means the materials, including rare earths, could have an in-use life many times longer than that of the phone itself.
[1]https://www.sciencedaily.com/releases/2018/10/181016142434.h...
[2]https://www.independent.co.uk/news/business/news/apple-iphon...
How many are actually recycled though?
China was happy to ignore environmental standards in order to corner the market in rare earth minerals. American miners couldn’t compete because they were already “internalizing” the environmental costs, and were priced out of the market.
Once China had put everyone else out of business (and blocked foreign businesses from mining inside China), it started not only reducing output to increase prices, but also started to very slowly apply environmental standards it previously ignored.
The Chinese government also showed how willing they were to now use this almost complete monopoly for political purposes in 2010.
And now in 2019 they’re calling for consumers and global companies to contribute to the costs of “internalizing” the pollution?
I'm not denying the dangers. I can see how countries could fall into populist/short term positions or get involved in harmful escalating tit-for-tat increases, but this is a strawman when it comes to having moderate tariffs.
I'm not much of a free-market capitalism, but if you have to be, then a free market is not a free market if not everyone is playing by the same rules, right?
Probably ideally tariff levels should not directly made by the executive, but rather some kind of review system - (although quangos are another problem).
It probably makes sense to ignore the above for things like guns and ammo - in case the other country decides to use this monopoly on military supplies against us in war. This is a worst case though, and is rarely required in the real world.
Is it though? We're currently talking about the national security concerns coming from frickin magnets. We could have the same conversation for soybeans or steel or manure. There are a lot of things that are crucial in a country's functioning.
I'm a strong proponent of "fair" trade (not "free" trade) for this reason - I'm OK with production moving elsewhere because salaries are lower, there's more resources and/or better climate for production, but it's completely unacceptable if it's done to skirt local environmental/employment/anti-corruption laws, and should be taxed heavily.
I don't quite understand your criticism of "right wing tariff bashing" though - Trump's the one who's bent on introducing tariffs, whereas past governments (including left-wing Obama) were happy to play along...
Trump is rightwing in the same way that the german national socialists were right wing. i.e. Not really economically, or at least big business has to be aligned with the nation. I am not drawing an equivalence - he is to the Nazis what Bernie Sanders is to the Soviets i.e. not comparable in scale at all.
They don't exist anymore though. According to Australia, all of the rare earth expertise is in China now, so it's not as simple as just reopening, and in fact might be very difficult
Note that we have experts in mining and refining scattered around the country. While the specifics of rare earths are different from iron or gold, many details are close enough for round one, from there is is just improving the processes.
> Environmental experts and local officials say the cost of the cleanup should not be shouldered by the Chinese government alone.
The Chinese companies and government knew what they were doing and benefited greatly from their actions. I would argue that they are exactly the ones that should be shouldering the the cost... alone.
The article mentions that most mining operations were illegal until recently and the Longnan government only managed to shut down the last of them in 2017. Some local officials probably lined their pockets by looking the other way, but the central government likely didn't see any of those profits.
Now that the industry is controlled by state-owned companies, stricter regulations were introduced, which is exactly the opposite of what you'd expect if the government were willing to tolerate the pollution in exchange for profit.
The government probably knew what was going on and encouraged it.
1) Strategically, it cornered the market and has been able to use that dominance to great geopolitical effect.
2) Economic development: environmental regulation and ‘fair’ competition with foreign firms would’ve held back the industry in China, costing jobs and the bottom line for the Chinese state. The breakneck economic growth has been achieved in large part because the Chinese state put economic development ahead of all other concerns.
3) Internal politics. The basic balance between local and central government since the 1990s were that local governments had to fend for themselves financially, and in return central government wouldn’t bog them down with regulation and oversight. The lack of environmental regulation of what is a nationally and strategically vital industry reflects that balance.
The GOP strategy succeeds in the case of “passing GOP-sponsored laws” and in the case of “doing absolutely nothing”. The Democrat strategy only succeeds in the “passing Dem-sponsored laws” case — it disheartens the Dem base to see an ineffective government while confirming the pre-held anti-government bias of the GOP base.
Also, I would avoid this argumentation approach related to modern politics in the future; “whataboutism” which is widely recognized as a GOP propaganda technique. The Progressive agenda is not actually about getting even, it’s about fixing a system that has oppressed the middle and working class into a rent-seeking economy with little social mobility. We don’t care that it’s “always been done this way;” the “old guard” of the Democratic Party is only slightly less of a problem than the GOP.
We’re trying to fix the systemic issues in our electoral process, which also includes the Democrat “superdelegate” nomination process designed to weed out populist candidates. Like it or not, we’re in a populist era...
I don’t think they are asking companies to help with their current cleanup. (That would expose them to similar claims in other countries which serve their industries).
But your major point is right that they were more than happy to dump rare earths to corner a market and are now suffering the consequences of that policy.