MIT Professor Siqi Zheng is the Samuel Tak Lee Associate Professor of Real Estate Development and Entrepreneurship within MIT's Department of Urban Studies and Planning and Center for Real Estate. She is also faculty director of the MIT Samuel Tak Lee Real Estate Entrepreneurship Lab and author, with Matthew E. Kahn, of "Blue Skies over Beijing: Economic Growth and the Environment in China" (Princeton University Press, 2016). The book takes a microeconomic perspective on how pollution affects Chinese cities, and it recently won an honorable mention in the category of environmental science at the 2017 PROSE Awards, sponsored by the Association of American Publishers.
Zheng holds a bachelor’s degree in civil engineering from Tsinghua University, where she also earned a PhD in urban economics and real estate and taught for 10 years after doing postdoctoral work at Harvard University. On her approach to research, she says, “I realized that just studying the housing market is a bit narrow, and we need to understand housing from the urban perspective. People come to the city for good jobs, or amenities like schools, health care, museums, and other public services. In cities with cleaner air or in areas with big parks, housing prices tend to be higher, all else being equal. That was my starting point to look at environmental topics.” Zheng spoke with the School of Architecture and Planning about "Blue Skies" and today's environmental and economic realities in China.
Q: Your book uses stories about individuals to demonstrate the impact of pollution on the urban population in China. Why did you and your coauthor use this as a technique to understand advances in sustainable development and environmental planning?
A: My coauthor and I have written many papers together, published in academic journals. When we decided to write a book, we wanted to generate impact not only for academics but also for policy makers and the general public. That’s why we chose to use individual stories. The basic logic of the book builds on our papers, but we don’t have regression tables in there. We want Chinese policy makers to read this and change their minds. I also rewrote this book in Chinese and it generated some impact.
We also considered the readers here in the United States. Many Americans only hear about carbon emissions from China and how that will have negative impact for the United States, but they don’t care about local pollution in China because it has nothing to do with them. We want to change that thinking. We can’t only care about global-scale climate change; we also need to consider the local quality of life because these two things are closely related. If you want to know more about China’s future, you need to understand its local life.
Q: The debate between economic growth and sustainable development is a contested one here in the United States and in China as well. What do you think is a good way for us to think about these seemingly incompatible priorities and how to reconcile them?
A: There are two ways to think of this. One way is spatial. There is a huge variation in economic growth among Chinese cities, with rich ones on the coast and poor ones inland. Richer cities now have reached a stage where they care more about the environment because they are transitioning from the old manufacturing-dominated model to new, human-capital-driven economic growth. They need to improve quality of life in the whole city to attract highly skilled workers.
Cleaning the air is not throwing money away; it’s actually an investment to generate a return through the arrival of new human capital and its contribution to the economy. Poor cities, however, have no choice. They still need those dirty factories for tax revenue and GDP growth. They have to receive the incoming dirty factories that may be driven out of rich cities. That is the spatial perspective, and it may be one cause of inequality.
The other perspective is temporal. When China has high economic growth and everything is booming, the central government really wants to push local governments to go green and regulate the dirty industries. But when there is a downturn in the macro economy, they become hesitant because they still need those heavy industries to generate jobs. It’s like a policy cycle. Now that we are in economic decline, the central and local governments are once again investing a lot in the manufacturing sector, and you will observe that air quality in some cities has started to worsen again.
Q: The rising Chinese middle class wants a lifestyle similar to that of the middle class in other developed countries, but they are being told that they cannot have the material things that others may take for granted, because of environmental concerns. Does that makes it difficult for the environmental cause?
A: We need to acknowledge the reality that China is very big, and major Chinese cities have extremely high density. And with rising income, private car ownership has experienced a sharp increase in China, so in Beijing and Shanghai there are driving restrictions and license auctions.
Urban planners need to consider how to reconcile people’s demand for better quality of life with other constraints. Environmental constraints are one, land constraints are another. We cannot convert all farm land to urban use. That’s a special challenge for urban planners in China. We need to make more trade-offs between people’s private demand and ways to mitigate the negative externalities they create.
Let me give you three examples from the transportation sector. If we build enough public transit—especially a subway system—that would encourage people to use the subway instead of driving. In my research, I found that when a subway station opens, nearby households do increase their subway rideshare, at the expense of driving. Our suggestion for planners is to change the zoning in areas close to subway stops to increase residential density, so that those areas can accommodate more housing units.
Another of my papers demonstrates that high-income and low-income people actually have a similar willingness to pay for a square meter of housing in those good locations around subway stations. But because the size of those houses is large, low-income households cannot afford to live there. But if you build small units in high density in those places, it will help lower-income people afford those units and have a convenient commute.
The third example is about traffic management. Current urban traffic management in China is inadequate, meaning that given the same number of cars, Chinese cities experience more congestion than, for example, Tokyo. If we have more efficient traffic management, we can effectively reduce congestion and other negative externalities, with the same number of cars on the road. We cannot just restrict cars without considering our management skills and people’s driving habits.