[greenyes] China's environment

["Rose Niemi" <Rose@no.address>]

From:  http://www.economist.com/displaystory.cfm?story_id=3104453

China's environment 

A great wall of waste

Aug 19th 2004 | BEIJING, GUANGZHOU, HONG KONG, SHANGBA, SHANGHAI AND TAIHE 
From The Economist print edition


China is slowly starting to tackle its huge pollution problems

PLUGGING a cigarette into his mouth, He Shouming runs a nicotine-stained fingernail down a list of registered deaths in Shangba, dubbed “cancer village” by the locals. The Communist Party official in this cluster of tiny hamlets of 3,300 people in northern Guangdong province, he concludes that almost half the 11 deaths among his neighbours this year, and 14 of the 31 last year, were due to cancer.

Mr He blames Dabaoshan, a nearby mineral mine owned by the Guangdong provincial government, and a host of smaller private mines for spewing toxic waste into the local rivers, raising lead levels to 44 times permitted rates. Walking around the village, the water in the streams is indeed an alarming rust-red. A rice farmer complains of itchy legs from the paddies, and his wife needs a new kettle each month because the water corrodes metal. “Put a duck in this water and it would die in two days,” declares Mr He.

Poisons from the mines are also killing the village's economy, which depends on clean water to irrigate its crops, says Mr He. Rice yields are one-third of the national average and nobody wants to buy the crop. Annual incomes here have been stuck at less than 1,500 yuan ($180) per person for a decade, almost three times lower than the average in Guangdong province. The solution to Shangba's nightmare would be a local reservoir, but that idea was abandoned after various tiers of government squabbled over the 8.4m yuan cost. 

Some 200km (124 miles) farther south and several decades into the future sits the Taihe landfill plant. Built for 540m yuan by Onyx, a waste-management company that is part of Veolia, a French utility, it has handled all of Guangzhou city's solid waste for the past two years. Each hour 140 trucks snake into the site, bringing 7,000 tonnes of rubbish a day from the 9.9m inhabitants of Guangdong's capital. In October delegates from 300 other municipalities will visit Taihe, promoted by central government as a role model of technology. 

Smart cards record each truck's load, since Onyx charges by weight. Unrippable German fabric lines the crater into which the waste is dumped, stopping leachate*a toxic black liquid*from leaking into the groundwater, as it does at almost all Chinese-run sites. Most landfill in China is wet (solid rubbish, such as old TVs, is scavenged), and the Taihe plant collects a full 1,300 tonnes of the black liquid daily. Chemical and filtration systems to neutralise it are its biggest cost. Expensive too is the extraction equipment to gather another by-product, methane gas, which Onyx plans to feed into generators that will supply electricity to the local grid. Finally, the waste is topped off with plastic caps, deodorised and landscaped, while a crystal-clear fountain at the entrance tinkles with the cleaned-up leachate.

The extremes represented by Shangba and Taihe explain why it is difficult to get an accurate picture of China's pollution. In a country where data are untrustworthy, corruption rife and the business climate for foreigners unpredictable, neither the cause of Shangba's problems nor the smooth efficiency of Taihe are necessarily what they seem. As with many other aspects of China's economic development, rapid progress and bold experiments in some areas are balanced by bureaucratic rigidity and stagnation in others. 

Certainly, awareness of China's environmental problems is rising among policymakers at the highest level*reflected in a new package of right-sounding initiatives like a “green GDP” indicator to account for environmental costs. So is the pressure, both internal and international, to fix them. But while all developing economies face this issue, there are historical, political and institutional reasons why it will be a long and complicated process in China. There is some cause for optimism, not least an influx of foreign technology and capital. But progress on pollution is unlikely to be as rapid or uniform as the government and environmentalists desire.

Nor should it necessarily be. China's need to lift so many people out of poverty (the country's average annual income per head has only just breached $1,000), holds the edge over long-term considerations like sustainable development. The priorities of environmental activists, both foreign and Chinese, almost never reflect this. Greenpeace lobbies for China to invest in wind farms, an unrealistic answer to the country's power needs, while environmentalists from rich countries naively tell aspiring Chinese to eschew their new cars and air-conditioners.



Nor any drop to drink
That is not to deny the huge scale of China's environmental challenges. Water and waste pollution is the single most serious issue. Pan Yue, deputy head of the State Environmental Protection Administration (SEPA), the country's environmental watchdog ministry, calls it “the bottleneck constraining economic growth in China”. Per head, China's water resources are among the lowest in the world and concentrated in the south, so that the north and west experience regular droughts. Inadequate investments in supply and treatment infrastructure means that even where water is not scarce, it is rarely clean. Around half the population, or 600m people, have water supplies that are contaminated by animal and human waste.

In late July an environmental disaster occurred on the Huai river, one of China's seven big rivers. A 133km-long black and brown plume swept along the river killing millions of fish and devastating wildlife. According to Mr Pan, the catastrophe occurred because too much water had been taken from the river system, reducing its ability to clean itself. Others say that numerous factories dump untreated waste directly into the water.

As for used water, with a national daily sewage rate of around 3.7 billion tonnes, China would need 10,000 waste-water treatment plants costing some $48 billion just to achieve a 50% treatment rate, according to Frost & Sullivan, a consultancy. SEPA found over 70% of the water in five of China's seven major river systems was unsuitable for human contact. As more people move into cities, the problem of household waste is becoming severe. Only 20% of China's 168m tonnes of solid waste per year is properly disposed of.

The air is not much better. “If I work in your Beijing, I would shorten my life at least five years,” Zhu Rongji told city officials when he was prime minister in 1999. According to the World Bank, China has 16 of the world's 20 most polluted cities. Estimates suggest that 300,000 people a year die prematurely from respiratory diseases.

The main reason is that around 70% of China's mushrooming energy needs are supplied by coal-fired power stations, compared with 50% in America. Combined with the still widespread use of coal burners to heat homes, China has the world's highest emissions of sulphur dioxide and a quarter of the country endures acid rain. In 2002, SEPA found that the air quality in almost two-thirds of 300 cities it tested failed World Health Organisation standards*yet emissions from rocketing car ownership are only just becoming an issue. Hopes that China will “leapfrog” the West with super-green cars are naive, since dirty fuel messes up clean engines and the high cost of new cars keeps old ones on the road. Sun Jian, the second-ranking official at Shanghai's environmental protection bureau, estimates that 70% of Shanghai's 1m cars do not even reach the oldest European emission standards.

Farmland erosion and desertification resulted in Beijing being hit with 11 sandstorms in 2000, prompting Mr Zhu to wonder whether the advancing desert might force him to relocate the capital. A year later, the yellow dust clouds were so extensive that they raised complaints in South Korea and Japan and travelled as far as America. A partial logging ban and massive replanting appear to have reversed China's deforestation, but its grass and agricultural land continue to shrink. 

Adding it all up, the World Bank concludes that pollution is costing China an annual 8-12% of its $1.4 trillion GDP in direct damage, such as the impact on crops of acid rain, medical bills, lost work from illness, money spent on disaster relief following floods and the implied costs of resource depletion. With health costs escalating (see article), that figure will increase, giving rise to some grim prognoses that growth itself will be undermined. “Ignored for decades, even centuries, China's environmental problems have the potential to bring the country to its knees economically,” argues Elizabeth Economy, author of “The River Runs Black”, a new book on China's pollution.

SEPA's Mr Pan is gloomier still: “Our natural resources will soon be unable to support our population.” His predecessor Qu Geping, the first head of China's National Environmental Protection Agency (SEPA's forerunner) in 1985, believes that while the official goal of quadrupling 2002 GDP by 2020 can be “healthily achieved”, if nothing is done about the environment, economic growth could grind to a halt. 

But China's relationship with its environment has long been uneasy. For centuries, the country's rulers subjugated their surroundings rather than attempting to live in harmony with them. Mao declared that man must “conquer nature and thus attain freedom from nature”. In the past two decades, the toll extracted by China's manufacturing-led development and the sheer scale of its 9%-a-year economic expansion has only increased. 



From conquest to nurture
This has spurred the government into belated action. In 1998, Mr Zhu elevated SEPA to ministerial rank and three years later the 10th Five-year Plan for Environmental Protection set ambitious emission-reduction targets and boosted environmental spending to 700 billion yuan ($85 billion) for 2001-05*equivalent to 1.3% of GDP, up from 0.8% in the early 1990s (though still below the 2% suggested by the World Bank). A legal framework has been created. And the rhetoric has changed too, with Hu Jintao and Wen Jiabao, the current president and prime minister, now stressing balanced development rather than all-out economic growth.

Beijing's good intentions, however, have so far had only limited impact, thanks to the vast, decentralised bureaucracy through which it is forced to govern such a huge country. As Ken Lieberthal, a China expert at the University of Michigan, explains: “Much of the environmental energy generated at the national level dissipates as it diffuses through the multi-layered state structure, producing outcomes that have little concrete effect.”

SEPA, the government's chosen weapon in the fight against pollution, is under-resourced despite its enhanced status, with little money and just 300 central staff. In the capital, it must battle for influence with other agencies, such as the Construction Ministry that handles water and sewage treatment. Bureaucratic rivalries mean there is no co-operation and no sharing of the (often patchy) data that are collected with limited funds, observes Bruce Murray, the Asian Development Bank's representative in China.

Around the country, SEPA's branches, known as Environmental Protection Bureaus, are supposed to monitor pollution, enforce standards and collect fines. But they are more in thrall to local governments*whose priorities are to maintain growth and employment in their jurisdiction*than to head office in Beijing. It is no rarity, therefore, to find a bureau imposing a fine on a dirty local enterprise (thus fulfilling its duty), but then passing the money on to the local administration, which refunds it to the company via a tax break. “The environmental management system needs real reform,” says Ma Jun, an environmental scholar. “The bureaus depend on the local government for their salaries and pensions. How can they enforce regulations against the local government?” Mr Pan complains that SEPA cannot effectively push through central edicts because it does not directly employ environmental personnel at the local level. Mr Sun at the Shanghai bureau says that SEPA has given him only 300 people with which to police 20,000 factories.



Make polluters pay
SEPA's impotence is one reason why penalties, even when it can impose them, remain laughably light. Mr Sun says the maximum he can fine a polluting company in Shanghai*a model city when it comes to the environment*is 100,000 yuan or about $12,000. But just as fundamental is that China lacks an understanding of the concept that the polluter should pay. “The legacy of the old, centrally planned economy is that electricity and water are treated as free goods or goods to be provided at minimal cost,” says the ADB's Mr Murray. Since the utilities cannot pass on the costs of cleaner water or lower power-station emissions to consumers, they fight any drive for higher standards and conservation tooth and nail. Even the central government is unwilling to impose price rises in basic services that could spark public unrest.

Water is an example. While customer tariffs have been raised in showcase cities, such as Beijing and Dalian in the north-east, water remains stunningly cheap in China. According to the World Bank, water for agriculture, which makes up three-quarters of the total used, is priced at 0.03 yuan (0.4 cents) per cubic metre, or about 40% of cost. More than half is lost in leaky irrigation systems. Meanwhile, the cost of more modern services, such as Guangzhou's solid-waste disposal, is entirely borne by the government.

Without the introduction of realistic pricing, China will not be able to afford to clean up its pollution, particularly the cost of enough foreign technology. Yet a system allocating the costs to the polluter will be hard to introduce and enforce. Even in Hong Kong, the territory's environment minister Sarah Liao concedes there is no tradition of having consumers bear the full costs of environmental regulations.

Ms Liao can also testify to the mainland's ambivalent attitude when it comes to letting outsiders help. She started looking into how the Pearl River delta's pollution was affecting Hong Kong back in 1999, but her requests to start monitoring emissions were repeatedly rebuffed even when she offered to pay for the equipment. Data collection finally started this year. For Thames Water, a British utility that is now a part of Germany's RWE, the experience was much worse. In June, Thames pulled out of a $73m advanced waste-water treatment plant it had built and was running in Shanghai, after the central government ruled that the fixed annual 15% return it had negotiated was now illegal. 

There is no need to be unremittingly gloomy about China's environment, nevertheless. As developing countries get richer, they tend to pollute less. Nationally in China, discharges of chemical oxygen have declined over the past three years, those of industrial dust have stabilised and sulphur-dioxide emissions had been on the downtrend until 2003 when energy shortages increased demand for sulphurous coal (see charts). Most east-coast cities are enjoying more sunny days and the pollution load in the rivers is falling. Environmentally, in many places, China may have passed its nadir.

The government is increasing environmental spending and the more concerned attitude of the top leadership could filter down the hierarchy if the performance of officials starts being measured partly on environmental criteria, as Mr Qu hints it might. But the bigger incentive is that Beijing is under pressure to do more, partly from domestic public opinion. As urban Chinese see their material wealth increase, more are caring about the environment, while the concerns of the poor are increasingly being channelled by green non-governmental organisations. Though these remain extremely weak*few have more than a handful of members and all need government affiliation*Mr Wen said recently he suspended plans for the construction of 13 dams along the Nu river in Yunnan province partly because of the concerns outlined by such groups.

External pressure is even greater. Despite reservations, foreign companies are flocking to China, scenting a fast-growing market for their environmental technologies and skills. International agencies are tying funds to environmental criteria, while foreign governments are beginning to complain about China's dust storms and greenhouse-gas emissions. All this will help spread best practices. Beijing is fast cleaning up ahead of the 2008 Olympics, moving out factories and introducing clean-vehicle technology: a new premium is being placed on global respectability. 

Of course, environmental problems and their huge costs will dog China for many years. In a country where the public is not free to speak, too many courts are toothless and environmental groups remain on a tight leash, it will be hard to know if the government's avowedly green policies are being implemented. But China deserves credit for its attempts to clean itself up. The balance between sustainable development and economic growth will have to be continuously adjusted in the future. Right now, China is probably moving in the right direction.





Rose Niemi
Merced County Association of Governments
369 West 18th Street
Merced CA 95340
209-723-3153, extension 315
rose@no.address