It is hard to do anything other than welcome the recent pledge by China and the USA, the world’s top carbon emitters, to work together to combat climate change. But in China’s case there are grounds for scepticism as well as hope.
Elizabeth Economy has chronicled China’s environmental history in her 2004 book ‘The River Runs Black’. She points to the terrible environmental price China has paid for transforming its economy from a poverty stricken nation into an economic powerhouse.
Apart from greenhouse gas emissions, this environmental price includes desertification, water pollution and scarcity, deforestation, air pollution, and susceptibility to flooding (due to deforestation and destruction of wetlands).
Economy maintains that China’s current environmental situation is not just the result of the “modern policy choices” which have facilitated integration into the international economy and multinationals locating pollution intensive industries in China.
She points to a centuries’ long drive towards economic development involving plundering of forests and mineral resources, poorly conceived river diversion, water management and intensive farming that has degraded the land. According to Economy “China’s leaders from emperors to Mao Zedong relied upon… few environmental regulations and no codified environmental laws…”
Contrary to common Western impressions, much of China’s limited system of environmental protection has always been, and remains, highly decentralised. The system relies upon local officials to safeguard the environment. These local officials are susceptible to corruption and, in any event, tend to favour economic development over environmental concerns as the most effective way of preserving social stability and gaining personal promotion.
There are now reportedly hundreds of thousands of Chinese people dying each year from pollution related diseases. This has led to sporadic local protests and demonstrations regarding environmental issues and against land seizures.
The top Chinese leadership has responded by recognising the environmental costs associated with economic growth. It has adopted ambitious targets for energy efficiency and carbon intensity targets into its latest (twelfth) five year economic plan. At one stage the government officially promoted “Green GDP” which attempted to formally offset environmental cost against economic growth.
But local officials regarded the Green GDP project as a threat. This led to it being discontinued as an official project. Moreover, because local officials still tend to be promoted more on the basis of economic and employment growth, there are questions over whether pollution reduction targets will be met, or how deeply the underlying behaviours destructive of the environment will change.
The latest five year plan introduces emission trading as one of the new policy tools to be tested through pilot projects. The pilots are to be implemented in five municipal areas and two provinces.
The document ‘China’s Policy and Actions for Addressing Climate Change’ also sets out conservation measures, increased carbon sinks, re-forestation plans, enhanced international exchange and measures to engage the participation of the whole society in environmental issues.
The government has established feed-in tariffs for wind and photovoltaic solar power, imposed an additional fee on all electricity end-users to fund renewable energy development and has made it mandatory for grid operators to produce electricity from renewable sources. Renewable energy state-owned enterprises are supported through local content rules to the displeasure of some international competitors.
An Asian Development Bank report on China’s environmental challenges indicated positive achievements over the preceding five years in relation to:
- A 10% reduction in sulphur dioxide emissions;
- Increased municipal waste treatment capacity;
- Forest coverage increase with land degradation and desertification stopped, if not reversed;
- Energy intensity per unit of GDP reduced by 19% since 2005;
- Increased deployment of renewable energy.
However the report also finds significant remaining problems particularly in relation to:
- Water pollution and lack of availability of safe drinking water;
- Air quality (fewer than 1% of cities meet WHO standards);
- Solid Waste management;
- Land degradation, reduced biodiversity and inadequate forest resources.
The Bank assessed the full economic cost of environmental degradation at a massive 13.5% of GDP.
Similarly former US Vice President and climate change campaigner Al Gore has described a mixed picture in relation to environmental reform in China. Gore says that the bad news is that the Chinese are building a new coal plant every 10 days or so and that pollution is so bad hospital admissions for respiratory ailments have multiplied. But he says that the protest movement is growing and the new leadership appears committed to environmental reform.
Whatever the intentions of the new Chinese leadership, it appears it will have to deal with structural difficulties associated with effective implementation and enforcement of environmental regulations in China.
According to Alex Lo, lecturer at the Griffiths School of Environment, the emissions trading pilot schemes face considerable challenges in setting up robust monitoring, reporting and verification mechanisms.
Lo points to previous Chinese experience with emissions trading schemes which he describes as “not very encouraging”. For example, the country’s sulphur dioxide emissions trading schemes are predominantly based on self-reporting. Emissions are not regularly monitored. The regulatory infrastructure is far from complete and is not up to international standards.
Lo also queries whether the price of emissions permits under the ETS pilots can actually reflect market variations to electricity prices in circumstances where these prices are regulated by a central authority. He raises doubts that the Chinese ETS will be build upon a “mature free market” and “transparent regime”.
Lo says that if electricity prices remain regulated for political reasons, (which presumably include facilitating the country’s economic development and keeping prices affordable for lower income earners), then synchronization of “carbon prices across continents would be impractical” or would result in emissions trading schemes becoming “just another venue for political struggles among participating countries”.
And Xin Qiu and Honglin Li have pointed out that central regulation of energy prices means “energy prices are lower than their value, making it impossible to solve the problems of waste and overconsumption of energy”.
Discrepancies between monitoring of Beijing’s air pollution by the US embassy and less dire official figures, as well as Chinese authorities’ complaints about the embassy’s insistence on independent monitoring of the air pollution also add to concerns about transparency in China’s official monitoring of pollution.
Finally it is important not to underestimate the close ties between the Chinese Communist Party leadership and China’s state owned fossil fuel energy giants and the ability of the later to influence policy.
Internationalization of the Chinese economy has created a demand for political elites with experience of operating in the global economy. The state owned companies, including the energy giants, are a recruiting ground for new Communist Party leaders.
“The casual observer of China’s oil industry might easily think that the ultimate authority over China’s state-owned oil companies is the Chinese state…The companies’ political power, financial clout and technical expertise provide them with considerable influence over energy projects and policies in China”.
This article is an extract from a longer article ‘Answering the Environmental Crisis’.