Development and the Environment, Forecasting the Future of Asia: An Empirical Analysis Using Learning Curves

Abstract

Forecasting the future environmental situation is a difficult task due to complex interaction among a number of economic, social, and natural factors. Among these factors, per capita GDP is the most important in determining the amount of energy and other resources necessary for industrial production and the people's daily lives. It may be the best indicator for describing the state of the environment and development. Using per capita GDP as an explanatory variable, empirical relationships (“learning curves”) for 22 factors regarding economic structure, sanitation, urbanization, media, energy, and food consumption were generated from the data of 24 countries for the last 30 years.

The factors regarding sanitation improve rapidly as the per capita GDP increases, then begin to taper off as they approach a certain level. The learning curves for sanitation show better performance in China. Chinese total fertility rate, crude birth rate, life expectancy, and numbers of physicians and hospital beds deviate from the learning curves.

Unlike the other 21 factors, per capita passenger cars does not start tapering off but continues to increase even faster as per capita GDP increases. If it continues at the present pace, passenger car ownership in 2025 in China will be 83 million, 23 times that of 1993.

Major change is foreseen in food quality as per capita GDP increases. More animal-based food is consumed as income increases, and if this trend continues, the consumption of animal food per capita in 2025 in China will be 3.2 times that of 1993. Although this forecast is based on a simple model and does not take into account fluctuation of feed price or other factors, it indicates a latent demand for animal-based foods and feed grain.