A May 2000 report from U.S. Embassy Beijing
Summary: The chairman of the environment committee of the National People’s Congress recently told visiting USEPA experts China would need to spend US$ 40 billion to meet air quality standards in 46 key cities. He said he was confident that revisions to the air pollution control law would be approved this year. He said China hoped to avoid the U.S. experience of polluting first and cleaning up later. But given China’s heavy reliance on coal, he said improving air quality would be a long and arduous process. Nonetheless, he said China would aim to cut its sulphur dioxide emissions in half by 2010.
Qu Geping, chairman of the NPC environment and natural resources committee and considered the patriarch of Chinese environmentalism, held an audience April 27 with a group of foreign environmental experts in Beijing for a workshop on air quality management. An Embassy EST officer accompanied the experts.
Air Quality Legislation to be Strengthened
Qu told the visitors weak penalties and lax enforcement severely hampered China’s pollution control efforts. For example, discharge fees are too low, making it cheaper for polluters to pay the fees than to reduce pollution. He said many localities simply ignored the law. Qu said his committee had approved a package of amendments to China’s air pollution prevention and control law that would make the law much stricter (these amendments were adopted April 29). The law was last revised in 1995. The new amendments reportedly include stiffer penalties, broader definitions of pollution sources, expanded use of discharge fees and other market-based incentives, stricter permitting and monitoring requirements and total load targets (caps on the total amount of pollutants entering an airshed). The EST Section is studying the text of the new law and will report on it separately.
Stricter Standards for Specific Localities
Qu said he had originally opposed a provision to allow Beijing and other localities to impose emissions standards stricter than those required by national law (Beijing already does in some cases, for example by charging a much higher SO2 discharge fee). He said he was concerned that a proliferation of local standards would lead to regional protectionism — cities would tailor standards to benefit local manufacturers by excluding products from out-of-town competitors. But he agreed to a compromise that would allow localities to go beyond national standards if and only if the State Council approves. Qu compared Beijing’s situation to that of California, which was able to impose stricter auto emissions standards beginning in the 1960s because it was a large market with a particularly severe pollution problem.
Progress in Reducing Vehicle Emissions
Qu said China had already banned leaded gasoline in 50 cities and would ban it nationwide as of July 1. He said steps were being taken to improve the quality of Chinese gasoline and vehicle emissions controls were in the process to making the leap from 1970s technology to 1990s technology. Current national standards for new cars parallel the Euro I standards. Beijing follows the stricter Euro II standards.
But Coal Dependence Is Major Obstacle
Qu said the toughest obstacle to overcome in improving China’s air quality was the country’s dependence on coal. Coal currently accounts for about 75 percent of primary energy supply. Qu said reducing its share even to 50 percent would require many years, because domestic supplies of oil and gas were limited (experts in official research institutes talk about reducing coal-dependence to 50 percent by 2050 — see report: China’s Energy Future: Oil not Coal, on this webpage). He said the smokestack scrubbers currently used on some Chinese coal-burning plants were not very effective and imported technologies were too expensive. China was looking for a more affordable flue-gas desulphurization technology and welcomed international assistance.
Nonetheless, Qu said the current goal was to reduce total SO2 emissions by 50 percen by 2010. (Other Embassy sources have reported that the current draft of the 10th Five-Year Plan calls for reducing SO2 emissions 10 percent from 1998 levels by 2005. Total emissions in 1998 were 18 million tons.
Nonetheless, Qu said the current goal was to reduce total SO2 emissions by 50 percent by 2010. (Other Embassy sources have reported that the current draft of the 10th Five-Year Plan calls for reducing SO2 emissions 10 percent from 1998 levels by 2005. Total emissions in 1998 were 18 million tons. SO2 emissions are already down compared with 1998, according to official statistics, and are well below the target established in the 9th Five-Year Plan.)
A Long, Tough Road to Haul
Qu said China hoped to avoid following the U.S. example of polluting first and cleaning up later. (It is too late; China is already severely polluted.) But he said improving China’s air quality would be a long and arduous task. For Beijing alone, he said, improving air quality to China’s level II standard (average annual concentration of SO2 no more than 60 micrograms per cubic meter, NO2 no more than 80 and respirable particulates no more than 100) would require investments of RMB 35 billion (US$ 4.2 billion). To reach the same target for all 46 urban areas currently designated as "key cities" would cost US$ 40 billion, he said. Qu said some NPC members wanted to add more cities to the key list. He did not think that was fiscally feasible.
Other Embassy sources have told us Beijing would spend RMB 78 billion to clean up its air between 1999 and 2003. This figure includes municipal expenditures as well as central government inputs. Beijing is clearly a special case as seat of the national government, window to the outside world and aspirant for the 2008 Olympics. Funding for pollution control in other Chinese cities is much less generous.
A 1997 World Bank report, China 2020, estimated China would have to spend 2.1 percent of GDP annually just to reach U.S. air quality standards of the early 1980s by 2020. China’s level II standards are stricter than that. China’s GDP in 1999 was RMB 8.2 trillion (US$ 1 trillion); 2.1 percent of that would be US$ 21 billion. Qu’s US$ 40 billion estimate may therefore be overly conservative. However, the same World Bank report estimated air pollution cost the Chinese economy US$ 25 billion a year in health expenditures and lost labor productivity alone. Viewed through this lens, US$ 40 billion is not an unreasonable price to pay. But Qu and others who care about air quality in China face the unenviable task of making this case to a political leadership that confronts numerous other urgent, deserving and under-funded priorities.