A February 1999 report from U.S. Embassy Beijing
Summary: Some areas, such as Benxi City in the Northeast, have cut pollution by involving the public. Every locality has a development strategy but these too often ignore resources, environmental capacity and markets. Pollution will continue to worsen if policy does not change and enforcement does not improve. China has good technology but can’t commercialize it. Solutions such as raising water and energy prices could sharply cut pollution and boost efficiency but official timidity sometimes blocks this solution. In part three of a summary translation of “Grave Concerns”, two Chinese Academy of Social Sciences Environmental and Development Institute researchers conclude that while no regrets policies are an easy first step, the next step must be to overcome special interests so that local and the interests of all society can be balanced and losers fairly compensated. Many lobbies and local interests oppose the necessary changes. Only through a widespread understanding of the hardships facing China and finding a way to harmonize individual interests with the long-range interests of everyone can these problems be solved.
“Grave Concerns -- Problems of Sustainable Development for China” [Shendu Youhuan -- Dangdai Zhongguo de Kechixu Fazahan Wenti] is a volume in the influential China’s Problems Series. “Grave Concerns” was published by Today’s China Publishing House in October 1998. Authors Zheng Yisheng [Standard Telegraphic Code: 6774 2496 3932] and Qian Yihong [STC: 6929 5650 4767] are the Vice Director and the Secretary-General of the Environment and Development Research Institute at the Chinese Academy of Social Sciences.
Post comment: Environmental officials in the central government recognize the problems in enforcing laws at provincial and local levels and increasingly are depending on public opinion and an informed populace to help force polluters to obey. The central government actively supports environmental education efforts and publicizes environmental NGOs and local activists. Central government controlled media provide articles highlighting contributions of individuals and local groups on a daily basis. Success in overcoming narrow economic and parochial interests will, inevitably, be a long-term, difficult process. End comment.
Page numbers refer to the first edition of “Grave Concerns” published as a volume of the China’s Problems series by the Today’s China Publishing House [Jinri Zhongguo Chubanshe] in October, 1998.
Additional background information on Chinese environmental issues can be found among the ninety unclassified Embassy Beijing reports posted on the U.S. Embassy web page at http://www.usembassy-china.gov/english/sandt/index.html Some informal translations from the Chinese press bearing on the Chinese environment are available at http://www.usembassy-china.gov/english/sandt/sandsrc.htm
SUMMARY TRANSLATION BEGINS
Careful selection of sustainable development options means looking at not just what is desirable but what is desirable over the long term and what is doable at present. Here are some examples of this in China today.
Benxi, an industrial city of 1.5 million people in eastern Liaoning Province, became known during the 1970s as a heavily polluted steel making center. Water pollution and air pollution from heavy industry were gradually brought under control during the late 1980s early 1990s. The determination of the people of Benxi that the pollution that threatened their lives and health must be reduced proved to be the critical driving factor in the changes. People reported pollution constantly to the city authorities. The authorities didn’t try to hide problems but actively criticized polluters and took pollution reduction goals into account in city planning. [Note: The willingness of local governments to be frank with the public about air pollution varies very widely. See the U.S. Embassy Beijing report The Fading of Chinese Environmental Secrecy End note]
The development of eco-agriculture in Jingshan County in Hubei Province is another example. Incomes rose after reform began there in 1981, but just a few years later ecological damage, loss of soil fertility and erosion, and the damage to the forests had become severe. Maintenance of water conservancy systems declined, floods increased and state investment in agriculture declined. During the mid 1980s, changes in farming methods including promotion of organic fertilizers, aquaculture, and agricultural byproducts helped boost farmer incomes and cut losses to soil erosion by 80 percent.
The Shanghai Minxing economic development zone established in 1983 made clean manufacturing and environmental protection among its top priorities, including environmental impact analysis, planning for the processing of the wastes of each plant and environmental monitoring.
The right sustainable development policy must be a win-win no regrets policy which is beneficial both for the economy and for the environment. Sustainable development strategies must very greatly by locality to match very different local conditions. In some cities, environmental protection and clean production are an important tool for attracting foreign investment. Especially in rapidly growing new cities, environmental considerations can be integrated into the city plan and stricter management standards. Some of these cities apply stricter environmental standards than in other areas and serve as model cities for the rest of China. This is perhaps true nowhere more than in China. China is like a “little Earth” -- in China there is every kind of geographical type and every conceivable stage of development. [pp. 206 - 218]
Nearly every city and region has a regional development strategy. Although these strategies have promoted economic development, they often ignore important issues such as resources and environmental capacity, and markets. How can so many regions leapfrog ahead of the rest simultaneously? During the early 1990s, many companies were losing money, there was considerable duplication of plant capacity and the ecology deteriorated (especially in places like the Huai River).
The problem in some cases is policy. Cotton growing policy in Xinjiang is an example. For some year policy makers have pushed cotton production in Xinjiang as the region’s motor of economy growth. Yet agricultural experts warn that the ecology of Xinjiang is very fragile and that the biggest problem in Xinjiang is short-sighted agricultural policies. Examples include applying too much fertilizer year after year (up to 2700 kg. per hectare). This results in short-term gains but in soil and fertility deterioration over the longer term and a gradual decline in economic marginal return for cotton. The widespread use of pesticides killed some insect pests but created conditions for others to flourish. Thus for the last two years tens of thousands of people have had to hunt down cotton bollworms in the fields. Many agricultural projects compete for water. A new project upstream cuts off the flow downstream, turning a field into wasteland. [pp. 219 - 220] [For some background information on the Xinjiang Uighur Autonomous Region, see Xinjiang Reading Notes: Population, Economy, Environment, Minorities Policy ]
In September 1997, the World Bank released its report “Clear Water, Blue Skies” [Translator’s note: This report, part of the World Bank’s China 2020 series, [website: www.worldbank.org] was also published in the PRC in Chinese translation and were discussed in the Chinese media. End note]. The report concludes that if China does not make major changes in its environmental policy and in the forcefulness of environmental enforcement, it will not achieve its goals for air and water pollution reductions for the year 2010. No change in policy doesn’t literally mean no change but a policy of relying on market-driven changes and current environmental policy to improve environmental quality.
For example, improvements in industrial energy utilization efficiency in China occurred as a result of companies striving to become more profitable. Between 1980 and 1995 the efficiency of Chinese industry per unit of production doubled. The World Bank concluded that this market-driven trend towards energy efficiency will not be enough to enable China to meet its environmental goals.
A World Bank study of 30 Chinese cities concluded that, if China’s present policies do not change, between 1995 and 2010 air pollution will worsen in most Chinese cities (excepting Shanghai, Guangzhou, and Wuhan which will improve significantly). Sulfur dioxide emissions will climb steadily. Carbon dioxide emissions will rise from 800 million tons in 1995 to 2.38 billion tons in 2010. Industrial pollution will become less important but the number of residential and consumer point sources of pollution will increase greatly through 2010.
The World Bank estimated the cost to human health from air pollution at 13 percent of Chinese GDP by 2010. The thirteen percent figure does not include other large pollution costs such as intelligence loss in children due to lead poisoning, acid rain, and water pollution.
The energy conservation policies of the Chinese government have played an important role in energy conservation but are no longer suitable for the rising market economy. Chinese experts say energy pricing policy is the greatest shortcoming in China’s energy conservation policy. Current pricing policy does not reflect the sulfur and ash content of coal and many small mines ignore safety regulations and environmental damage and sell cheap and dirty coal. Administration intervention has kept the price of natural gas low (price subsidies for the chemical fertilizer industry and residential use) but at the expense of depriving that industry of the capital it needs to grow in order to replace coal. [pp. 226 - 227]
The report “Research on China’s Energy Strategy 2000 - 2050 [Zhongguo Nengyuan Zhanluue Yanjiu] in Section 60 “Evaluation and Suggestions for Chinese Energy Policy” concluded:
Water is one of China’s scarcest resources but prices have not been set at the level needed to support the supply and treatment of water. The result is tremendous waste of a scarce resource. In some areas the unwillingness of officials to “take the risk” of raising prices is based on any scientific principle or discussions with the people but just a bureaucratic attitude: “if I don’t try, I won’t fail”. [Translator’s note: The price of water in northern Chinese cities is gradually rising. Water in China’s northern cities costs 1 RMB per ton [USD 0.12 per ton], just one-fifth of the 5 RMB which Chinese hydrologists estimate as its average cost. The price of water in Beijing has doubled since December 1997. See the U.S. Embassy Beijing report PRC Water: Waste A Lot, Have Not -- The Problem Is Policy, Not Technology End note] Water leakage from Chinese irrigation systems is 60 percent while the water re-utilization is half the rate of developed countries. [p. 227 - 228]
Some Chinese experts propose raising the price of coal (200 RMB per ton) to reflect the damage to health and the environment externalities which by themselves exceed 200 RMB per ton. Beijing is replacing coal with coal gas in many urban districts. The World Bank reports that if the costs assessed to air and water polluters were to be increased by five percent each year a sharp reduction in pollution could be achieved over the next two decades. If fees to water polluters were to increase by 10 percent annually, water pollution could be cut by 70 percent by 2020. [p. 228]
Vehicular emissions are a growing part of the problem. Small Chinese cars emit ten to fifty times the pollution of U.S. and Japanese made vehicles. Chinese auto emission standards for carbon monoxide are 40 times the U.S. standard and for NOx eight times. Even these standards are not vigorously enforced. [pp. 229]
The World Bank report gave Chinese energy and resource economists the benefit of an outside opinion and outlined the consequences if China does not change its policy. The report has the strengths of being practical and making proposals that don’t call for everything to change all at once. “Yet the World Bank report also has shortcomings. For example it paid far more attention to air pollution than to water pollution. The report didn’t pay any attention to the coordination of policy within and among various departments. If this is not considered, any policy breakthrough not matter how good it looks from a social standpoint, cannot succeed.” Policies which do not mesh are ineffective.
There are interest groups behind many current policies. One-use only chopsticks is an example. Japan is often criticized in China for importing wood and not chopping down its own trees, but that evades the real question: don’t blame the Japanese but the Chinese who sell them the lumber! In China, there are many departments from production to processing to restaurants that will protect each other and resist any effort to ban one-use chopsticks. This just an example. In many problems there is a small group of people who vigorously resist changes that are in the interest of society. [pp. 236 - 240]
In January 1998 the State Council approved an acid rain and sulfur dioxide pollution control plan which raised the priority of sulfur dioxide pollution control. If China’s energy efficiency were to match that of the developed countries, China’s energy consumption would fall by one-third and sulfur dioxide emissions by one-quarter. Low electricity prices reduce the incentive for energy conservation. Desulfurization equipment on industrial plants are sometimes not used because the plant (and especially high power consuming plants such as aluminum smelters) doesn’t not want to pay for electric power and other operating costs of the desulfurization equipment. Thus the “sulfur dioxide control plan” which started out as an environmental plan was taken over by a special interest group for its own purposes.
Some say that the basic problem is that China doesn’t have good pollution control technology and foreign technology is too expensive. Prof. Hao Jiming of Qinghua University disagrees, saying “Chinese technology for coal combustion desulfurization technology is already basically mature.” He explains:
It is very hard to draw distinctions between economic, resources and environment, and social policy on the one hand and sustainable development policy on the other. Sustainable development policy is formed during the process of transforming the present system to give higher priority to values of resources, the environment, and the individual interests of members of society in order to focus on sustainability. In order to achieve this, the current balance of interests in society must change. The first, easy steps are no regrets policies. Then come policies to increase the overall welfare at the expense of some members of society who should be compensated. Local interests do not necessary correspond to the interests of the whole and what is optimal today may not be optimal over the long term. [pp. 243 - 248]
Sustainable development is the enemy of people who want to make quick profits at a high long term cost. It is also the enemy of inertia and ignorance. In China today breakthroughs are badly needed in areas such as resource and water pricing, financing waste water treatment, energy conserving and clean production technology, If upstream water use and soil conservation is ineffective, people downstream will suffer badly. Wildcat mining and illegal timber harvesting are repeatedly forbidden but still continue. China needs to establish policies to halt ecological destruction caused by pollution from the township and village industries; environmental damage from big engineering projects and the illegal conversion of agricultural land to other purposes; and the domination of the consumer market by producer rather than consumer interests.
Can China find a new path to development and avoid great losses and disaster in the coming years? These choices can only be made if the many millions of Chinese share an awareness of the dangers they face. This will also depend on a devotion to the public interest and knowledge of our situation. Our experience has certainly shown that it is only people devoted to the public interest who will make the right choices. [pp. 248 - 249]
END OF PART III OF SUMMARY TRANSLATION