Isabel Hilton2, Timo Heroth3, Susann Grune



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China's Environment: Ambitions, Challenges and Opportunities for EU Cooperation

February 2014
By Sam Geall1, Isabel Hilton2, Timo Heroth3, Susann Grune4 and Yunnan Chen5

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsibility of ECRAN and can in no way be taken to reflect the views of the European Union.




This project is funded by the European Union



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This project is implemented by a Consortium led by Steinbeis GmbH & Co. KG für Technologietransfer



1. Introduction: the challenge
The past 30 years of rapid growth in China’s Reform Era produced a remarkable and sustained economic boom that lifted millions of people out of poverty. But the environmental costs of the “pollute first, clean up later” growth model have been severe. China’s people have seen a litany of ecological disasters. Official statistics for 2012 listed 542 “national environmental emergencies”. In 2013, some of the more visible examples included: the thousands of dead pigs that floated down the Huangpu River in Shanghai; a major toxic spill in Hebei province, which the local authorities covered up for five days; heavy bouts of smog in urban areas; a massive, deadly landslide at a gold mine in Tibet; and huge explosions in Qingdao, caused by leaking oil from a ruptured pipeline, which killed 66 people.
Longer-term trends of ecological deterioration have also continued. China has long suffered from water shortages, but this situation has worsened due to over-use and uneven distribution: 80% of the water is in southern China, but 65% of the farmland and over 50% of the people are in the north, where groundwater is then exploited to an unsustainable extent. From 2000 to 2009, according to government statistics, total water reserves dropped 13% and groundwater usage, which has doubled since 1970, now accounts for 20% of water usage. The water table under Beijing has dropped by 300 metres. This situation has been exacerbated by pollution. In 2012, 57% of the groundwater in 198 cities inspected by the Ministry of Environmental Protection (MEP), was found to be “bad” or “extremely bad” and more than 30% of the country's major rivers “polluted” or “seriously polluted”.
The annual assessment published by the MEP in 2013 said that the environment in China remains “grim” and reported a “marked deterioration in China’s air, water and land quality”. Environmental problems in the countryside had worsened, the report found, where mining, domestic waste, intensive livestock and fertiliser use are all major sources of pollution. Seven of China’s nine most important coastal bays had bad water quality and 25% of monitored lakes and reservoirs suffered from eutrophication. Only 27 of 113 key cities reached air quality standards. The same year, a major global scientific study reported that outdoor air pollution contributed to 1.2 million premature deaths in China in 2010.
Soil pollution, one of China’s most hazardous and politically sensitive environmental problems, due to its potentially huge effects on food security, was not included in the MEP’s assessment, despite estimates suggesting that up to 70% of China’s agricultural land may have been contaminated by industrial pollution and the over-use of chemical fertilisers. However, the Ministry of Land and Resources announced in late December 2013 that as much as 2.5% of China's soil – around 3.3 million hectares, about the area of Belgium – was so contaminated by heavy metals and other pollutants it could not be farmed.
Other major environmental pressures include those on biodiversity – 30% of the Yellow River’s fish species have been driven to extinction by dams, pollution and over-fishing, for example – and those caused or exacerbated by climate change. In 2007, China surpassed the United States to become the world’s largest emitter of greenhouse gases by volume. The following year, two-thirds of the total global increase in emissions came from China alone. As emissions of carbon pollution have fallen in Europe and the United States, China’s have continued to climb. In 2011, China’s CO2 emissions jumped by 9%, consistent with a 14.7% increase in thermal power generation, mostly from coal. China’s coal-fired power sector is now the world’s largest anthropogenic source of CO2 emissions. This means that while in the past, China’s per capita emissions had remained well below those of countries in the industrialised west, in recent years there has been a convergence: from 1990 to 2011 in China, CO2 emissions per capita increased from 2.2 to 7.2 tonnes, while they decreased across Europe from 9.2 to 7.5 tonnes per capita, according to the Netherlands Environmental Assessment Agency, putting the average person’s emissions in China and Europe roughly on a level.

Such dire assessments of the environmental situation are well understood by the Chinese public, as China’s environmental crisis increasingly becomes a social crisis too. Chinese citizens’ concerns about the environment rose sharply in 2013, according to a Pew Research Centre survey, which found that 47% considered air pollution a “very big problem”, up from 36% in 2012. Some 38% thought food safety was a major concern too.

Chen Jiping, a government official, said in March 2013 that the country now sees 30,000 to 50,000 so-called “mass incidents” or protests every year, of which the most common catalyst is the environment. As Chen put it, “If you want to build a plant, and if the plant may cause cancer, how can people remain calm?” In 2013, local authorities in Jiangmen, southern China, cancelled the construction of a US$6-billion uranium processing plant, after hundreds of residents took to the streets in protest. Similar demonstrations have become commonplace in Chinese cities over the past five years, and have successfully halted the construction of a petrochemical plant in Dalian, a copper and molybdenum refinery in Shifang, and incinerators in Guangzhou and Beijing.

In short, China faces a number of severe and complex environmental dilemmas, inextricably related to political and social issues, which if unsuccessfully navigated, may pose real threats to the health of people and the environment, as well as future prosperity, in China and the rest of the world.



Ambition

Many in China’s central government believe that environmental problems and natural resources depletion could endanger China’s development as an economic power, not least by threatening social stability through increasing environmental protests. Government assessments have found that climate change could affect agriculture, ecosystems, water resources, coastal zones and social and economic stability. China has thus committed itself to ambitious environmental goals. Sustainable development has been enshrined as a core state policy. China was the first developing country to adopt a national climate change plan, and its most recent push for an “Ecological Civilisation” has been accompanied by an ambitious raft of top-down environmental targets, regulations and policies in the 12th Five Year Plan running from 2011, including investments in low-carbon energy technologies and a nationwide carbon intensity (carbon dioxide emitted per unit of GDP) reduction target of 17% by 2015 on 2011 levels.

China also plans to invest 2.37 trillion yuan (around 290 billion Euros) in major energy saving projects from 2011 to 2015, which is expected to save the equivalent of 300 million tonnes of coal. China doubled its rate of growth of renewable energy capacity in 2013, reportedly installing more solar energy than any country has in a single year. The country is already the world’s largest producer of wind power, and has engaged in extensive environmental policy experimentation, including municipal and provincial carbon trading schemes. China has demonstrated long-term commitment to innovation, too: for the first time, it has overtaken Europe on the share of its economy devoted to research and development, according to the Organisation for Economic Co-operation and Development (OECD). In 2012, China invested 1.98% of its GDP into R&D, compared to 1.96% for the 28 member states of the EU. Core, long-term support for clean technologies is a key element of China’s ambition to move up the “value chain” towards a more efficient, high value-added development pathway based on the creation of “national champions” in high-technology sectors, such as low-carbon technology.

As the international community prepares for key UN-led climate talks in Paris in 2015, many European countries have seemed to downgrade their support for a transition to a cleaner economy: the UK government is split on the need for action on climate change; Norway has abandoned its development of carbon-capture technologies; and Spain has ceased its once-strong support for renewables. Hamstrung, polarised debates around climate change in countries like Canada, Australia and the United States bring little hope either, so China’s continued ambition on sustainable development goals might promise a new approach and a way through the deadlock. Furthermore, while a number of prominent western politicians and public figures cast doubt on the scientific case for climate-change mitigation or the need for political action, climate scepticism – either among the public or politicians – seems to be quite rare in China.

Basic climate-change knowledge is quite high among the Chinese public: a national telephone survey of 4,169 Chinese adults, using a combined urban and rural sample, conducted by the China Center for Climate Change Communication in 2012, showed that 93% of respondents knew at least a little about climate change. Of these respondents, 55% said that climate change was caused mostly by human activities; 55% said that they were worried about climate change; and 23% said they were very worried. Only 14% were not very worried and 8% were not at all worried. While occasional scepticism does emerge – sometimes in popular opinion, and even when Xie Zhenhua, then China's top climate-change envoy, said in 2010 that he was “keeping an open mind on whether global warming was man-made or the result of natural cycles” – it has had little bearing on the commitment to climate-change action, which has been incorporated into central economic planning and is understood at an elite level as a component of innovation and green growth.
Prospects

Whether this level of ambition will be successful in achieving a low-carbon transition is a more vexed question. Many of China’s environmental initiatives are long-standing – a number of environmental goals were integrated into China’s central planning in the 1990s, and officials first talked of avoiding the “pollute first, clean up later” model in the 1970s – but structural problems have tended to hobble the shift to a cleaner development path.

While China has many strong environmental laws on its books, in practice, this is no guarantee of their enforcement, and breakneck growth at all costs continues to be the main driver of environmental degradation, particularly at the local level. Collusion between polluters and local governments – where officials are still frequently evaluated on short-term GDP growth rather than environmental quality or adherence to green laws – often trumps environmental concerns. Recent low-carbon commitments are impressive, but closer scrutiny sometimes hints at the need for caution: in September 2013, for example, it emerged that only five solar-power vendors remained in a space built for 170, called ambitiously “Silicon Xinyu,” in Xinyu, Jiangxi province. In March, the major Chinese solar-panel manufacturer Suntech Power began bankruptcy proceedings. Perhaps most troubling, China is falling short on the high-profile 17% carbon intensity reduction goal under its 12th Five Year Plan, achieving only a drop of around 6% by the end of 2013.
Throughout the past decade, a number of officials and others have encouraged the growth of civil society in China to help supervise the implementation of environmental laws and regulations at the local level. Over the past 20 years, there has been a flowering of civil society, in the form of hundreds of thousands of registered NGOs, in addition possibly millions of unregistered NGOs, which exist in a legal grey zone. Many of these are environmentally focused groups, and many hope that a stronger, independent green lobby – not only comprising NGOs, but also legal defenders and an increasingly independent media – could help hold officials to account, and improve the enforcement of green laws and regulations. However, as the state of China’s environment has become an important cause of social unrest, responses from the Chinese authorities to citizens’ engagement with environmental issues have often become repressive and censorious.

China’s sophisticated system of Internet censorship is frequently used to silence environmentally focused dissent. Words like sanbu (“stroll”) – a euphemism often used by citizens to describe a street demonstration – are often deleted from micro-blogging websites when environmental protests are expected to occur. Truthful information leaked by whistleblowers, such as the blow-out of an oil well in the Bohai Gulf in 2010, which led to a 4,250-square kilometre spill, is often initially suppressed as a dangerous “rumour”. In September 2013, Dong Liangjie, a self-described “environmental expert”, was arrested as part of a nationwide “anti-rumour” crackdown. The co-founder of a water-purifier company, Dong had more than 3 million followers on Sina Weibo and had frequently commented on environmental issues, but police said many of his posts contained sensational or false information that exaggerated the problem of environmental pollution in China.

The distrust of non-state social organisations perceived to undermine government legitimacy seems to have intensified under China’s current leadership. Civil-society groups calling for greater rule of law, transparency and accountability – components of effective, rules-based environmental governance – have come under particularly intense pressure.

In November 2013, the Chinese Communist Party published its “Third Plenum” decision on the future direction of reform in China, which indicated a framework for policy development, upon which specific policies will be fleshed out over the coming years. While Xi Jinping’s key speech contained an encouraging nod to the notion that “mountains, water, forests, fields and lakes are a living community,” the conclusion – that this living community can only be protected through proper “management” – offered little indication of a substantive change in direction. There were also suggestions in the published resolution from the Third Plenum that political evaluation systems for officials should be reformed to take account of environmental costs, though again it will be important to see how such an agenda is expressed in concrete policy. Perhaps the most striking environmental statement in this document was the pledge to “draw red lines for ecological protection”, which referred to the establishment of “national park systems” to provide better protection for ecologically fragile areas, analogous to the “red line” protecting arable land for food security in China.



International cooperation

Might international cooperation – EU-China collaboration, in particular – help to overcome hurdles and spur greener development in China and the rest of the world? China’s participation in international environmental negotiations almost coincided with its admission into the United Nations in 1971: the influential environmental official Qu Geping attended the United Nations Conference on the Human Environment in 1972, in Stockholm, and later become the first head of China’s National Environmental Protection Agency, the forerunner of today’s Ministry of Environmental Protection. But more recently, China’s role in international cooperation on sustainable development has become controversial.

After the UN climate conference in December 2009 in Copenhagen reached only a limited agreement, which fell short of the legally binding deal many had hoped for, scrutiny came to rest on China’s role in the talks. Prior to the Copenhagen conference, the Chinese government had announced an ambitious, domestically binding target to reduce the carbon intensity of the economy from its 2005 levels by 40% to 45% by 2020. However, a sticking point in the negotiations at Copenhagen became how actions would be monitored in a future agreement, an issue usually referred to as “MRV”: measurement, reporting and verification. To the Chinese government’s chagrin, two widely read articles in the UK newspaper The Guardian – one by then UK climate secretary Ed Miliband and the other by the journalist Mark Lynas – were seen as having accused China and its allies of “hijacking” the conference to prevent a substantive deal being made.

During Copenhagen, Chinese official newspapers had published limited coverage that mainly reported senior Chinese leaders’ meetings with western diplomats. But in the aftermath of the conference, a more defensive line emerged regarding the country’s role: a number of state media articles analysed why the talks had apparently failed, claiming, for example, that the breakdown stemmed from western countries’ unwillingness to cooperate or share technological information. In direct response to claims that China had undermined efforts to reach a deal, a series of articles in the state media tried “to correct the distorted image that had been created by the Western media”. These presented a counter narrative of the last days of the conference, emphasising the then Premier Wen Jiabao’s constructive approach during the summit.

The details of this disagreement and the conflicting narratives that emerged – one common consensus about the talks is that Danish officials, in particular, had misunderstood the different speeds and styles of diplomacy between Chinese and international contexts – are less important than the consequences over subsequent years, during which a stand-off between the United States and China has increasingly dominated the narrative of international climate policy. Since the US domestic debate around climate change policy throws into question its capability to make serious international commitments, it is often proposed that the EU – perhaps leading a coalition of progressive developing countries – could help to break the deadlock and create a stronger deal. Certainly, EU-China projects on climate, energy and sustainable development – as detailed below – present some promising examples of constructive and pragmatic cooperation that might help to build international action on climate.

Furthermore, in the context of rising discontent and scrutiny of environmental policy in China, particularly around urban air quality in the aftermath of headline-grabbing periods of smog in Beijing and Shanghai, the need not only for low-carbon policies that have the co-benefit of reducing urban air pollution, but also for international experience on sustainable urbanisation and transport policies – something that the EU can help to provide – becomes all the more clear. Recognising this, it is worth first investigating more deeply how China’s environment is governed, and the roles of different laws, policies, institutions and actors.



2. Plans and policies in China’s environmental governance
As mentioned above, China’s environmental governance has a history that stretches back at least to China’s participation in the UN Stockholm conference in 1972. Twenty years later, China’s attendance at the UN Conference on Environment and Development, held in Rio de Janeiro, marked the beginning of a deepened official focus on sustainable development. Throughout the 1990s, sustainable development became a key phrase in government literature, with the 9th Five-Year Plan (1996-2000) the first to include the phrase. In 1997, China published its first National Sustainable Development Report. The 15th Party Congress, in September 1997, listed the “huge environmental and resource pressures caused by population growth and economic development” as major difficulties facing the nation.
In 2007, China’s National Development and Reform Commission (NDRC) published the first national climate-change plan of any developing country, setting out six principles: to address climate change within the broader framework of the country’s “national sustainable development strategy”; to follow the principle of “common but differentiated responsibilities”; to address both climate-change mitigation and adaptation; to integrate climate change-related policies with programmes for “national and social economic development”; to rely on technological advancement for effectively mitigating and adapting to climate change; and to “actively and extensively” participate in international cooperation on climate change.
In short, this made climate change an integrated part of economic planning, but not to the extent that it trumped other national objectives. Today, the 12th Five Year Plan is the most significant government plan to build on these principles and has enshrined action on climate change and sustainable development as state policy; but a number of related laws, regulations and policies also set the framework for China’s contested, fragmented environmental governance.

Five-Year Plans
Five-Year Plans (FYPs) are centralised and integrated national economic programmes, first introduced in the Soviet Union in the late 1920s, but later introduced by most communist states and several non-communist countries, including India. China launched its First FYP in 1953, four years after the founding of the People’s Republic. The plan emphasised rapid growth and increasing government control of heavy industry, and the government judged it to have been a success: iron, steel and cement production expanded significantly. The Second FYP, from 1958-1962, spanned the period of the Great Leap Forward and was marked by the push for ever more ambitious production targets, which due to catastrophic mismanagement and the diversion of agricultural labor into industrial production, led to famine on a historically unparalleled scale.
Similarly, attitudes to the environment during the Maoist period were marked by unattainable goals for construction, production and industrial expansion, characterised by what the American academic Judith Shapiro described as “dogmatic uniformity” and “utopian urgency” – arguably still risks today, where unfeasibly utopian models for environmentally friendly development are proposed – leading then to the disregard of ecological variations and limits across China’s vast landmass and highly unsustainable initiatives, such as the rapid building of thousands of small, shoddy dams for irrigation. (As an indication of the quality of this construction: by 1981, 3,200 of these dams had collapsed – 3.7% of all dams in China.) Mass relocations for state-backed infrastructure and development projects, and the political repression of critics of such approaches to the environment, together added up to what was often described, in explicitly militaristic terms, as a “war against nature.”
China’s Third and Fourth FYPs were the final plans of the Maoist era. They were followed by the Ten Year National Economic Development Plan Outline, from 1976 to 1985, which set the stage for a new period of rapid economic growth, known as the period of Reform and Opening Up, under Deng Xiaoping’s leadership. The rapid, unchecked development that followed – helped in large part through the devolution of power away from the centre to provincial and local government chiefs – came with such marked social and environmental costs that, for the first time, Five-Year Plans began to include measures to adjust economic growth targets downward, reduce energy and material consumption, slow population growth and improve environmental protection.
The Sixth FYP, from 1981 to 1985, included a national energy conservation program.

This trend toward a more sustainable model of development became clearer in the Eleventh FYP, from 2006 to 2010, which stressed a move away from the “getting rich first” model of often highly unequal development towards building a “harmonious socialist society” through support for more disadvantaged regions and sectors of society, as well as stronger environmental and energy-saving measures.


The 11th FYP’s measures to close small, inefficient plants were largely successful, as was the Top 1,000 Enterprises Programme for industrial energy efficiency and the Ten Key Energy Conservation Projects, though the most high-profile goal in the plan, to reduce the country’s energy consumed per unit of gross domestic product by 20%, faltered in the last few months of the plan, with some localities reportedly cutting power supplies to factories, traffic lights, and even hospitals in a late rush to meet the target; China ultimately achieved a 19.06% energy intensity reduction over the Eleventh FYP.



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