Approval of foreign investment in China to be linked to environmental index

In a notable step, China's Commerce Ministry announced late last week that approval of "foreign-funded enterprises" will now be based in part on an "environmental protection index" and a "land-use intensity index." According to Xinhua, the environmental index "will include capital input in the areas of environmental protection, annual sulfur dioxide emission and chemical oxygen demand." The land-use intensity index, meanwhile, "will include gross fixed-asset investment and the total area of land used, as well as a breakdown of how that land is used -- for example, for buildings, residential facilities or 'green' areas."

This new regulation, announced jointly by the Ministry of Commerce (MOC) and the Ministry for Environmental Protection (MEP), requires foreign-funded enterprises to submit assessments on these factors prepared by local environmental protection departments. Again according to Xinhua, the regulation is intended to "tighten scrutiny of energy-intensive and polluting facilities funded by foreign investments."

It's a little hard to read this particular regulation. Broadly, it seems like a promising step, but there are obvious difficulties with ensuring uniform enforcement of the regulation. The fact that local governments will prepare the environmental index assessments does nothing to address the rampant corruption that usually attends foreign investment approval at the local level. Nonetheless, given the level of foreign investment in China, the regulation could have a significant impact in terms of forcing foreign investors to pay more attention to China's environmental regulations. The capital input criterion is a clear reference to China's efforts to create a low-resource-intensity economy. The land-use intensity requirement may also help to reduce tensions in areas where industrial development is eating up valuable farmland. At a deeper level, this regulation, and the coordination between MOC and MEP, seems to bode well for MEP's stature relative to other, more established state ministries.

On two points, the regulation is a little disturbing. Most importantly, it says nothing about greenhouse gas emissions, though this isn't surprising given China's hesitancy to take any action that may disadvantage its own industry. Second, the regulation, in applying only to foreign-funded firms, carries a whiff of green protectionism. CGS would never, of course, argue that such firms are entitled to shirk Chinese environmental regulations, but one would hope that this regulation does not signal any less stringent enforcement of environmental regulations for state-owned enterprises or private domestic firms.

New Signs of Concern for Pollution in China

China's State Oceanic Administration recently announced that about 83% of China's total sea area, or about 14000 square kilometers, suffers from pollution, especially eutrophication, a condition in which sea life are deprived of necessary oxygen. The new figures represent an increase of approximately 5% from last year.

This sobering bit of news well illustrates the reality behind another recent report indicating that public concern for pollution is growing rapidly in China. A survey conducted by the China Environment Culture Promotion Association (CECPA) reported that 76% of respondents described environmental problems as "very serious" or "relatively serious." Respondents also listed the severity of pollution third among a set of issues, behind rising prices and food security. The survey, which this year was administered to 10,000 individuals in 31 provinces and municipalities, further found that

About 32 percent of the respondents felt "very unsatisfied" with air quality and 28 percent "very worried" about water quality, making them the top environmental worries for the public in 2008.

The news report did not describe the results of previous annual surveys, which have been conducted 2005. However, CECPA's Secretary-General was quoted as candidly saying the survey results "show that environmental protection efforts have not been able to keep pace with the fast economic growth and improved living standards."

In fairness, they rarely have, in any country. But the survey is indicative of a shift in the politics of environmental protection in China. There are many signs, small and disparate, but visible, that China is taking environmental issues more seriously. In particular, government officials now talk about a "new road to environmental protection" (more on this tomorrow) that sounds like it will require transformation of the economic structure. It's unclear how much should be made of this new-found seriousness, but this survey is just one more indication that the environmental picture in China is changing more rapidly than many of us can keep up with.

Greening Cityscapes

Way back in 2009, China Greenspace wrote about the utility of a co-benefits approach to simultaneously reduce both greenhouse gas emissions and improve air quality. A great new post on the blog Climate Progress details one such co-benefit strategy: urban heat island mitigation.

The post itself is worth reading in its entirety, but briefly, urban heat islands are local and regional surface temperature anomalies that occur as the result of surfaces and processes associated with urbanization. For example, asphalt, which covers urban roadways, parking lots, etc., has a lower albedo (reflectivity) than grassland, absorbing more heat. Urban areas can thus be on the order of 5 degrees Fahrenheit higher than surrounding rural areas. Given the degree of urbanization on the planet, the urban heat island effect contributes measurably to global warming.

Urban heat island mitigation seeks to minimize this contribution by using high-albedo surfaces (painting roofs white, for example), planting trees, etc. Because higher urban temperatures also aid in ozone and smog formation, urban heat island mitigation also helps to improve air quality.

Perhaps most importantly, urban heat island mitigation is relatively low-cost. As the Climate Progress post notes, residents of some desert cities are still required to paint houses white. And for China, urban afforestation may be particularly appropriate. China's countryside plays host to the world's largest afforestation program (the Sloping Lands Conversion Program, see previous post), which could logically be extended to urban areas as well.

Now there's an idea worth mulling over in the new year. A happy one, by the way!

Co-Benefits for Air Quality and Climate: a little more to the story

Geoff over at China Green Buildings made an excellent point regarding CGS's recent "Air Quality in Beijing: Progress and Prospects" post. Geoff, in a great post on the Asian Brown Cloud, noted that according to the UN Environment Program, Asian Brown Cloud phenomena likely offset a rise in global temperatures as a result of greenhouse gas emissions by 20-80%. Working too hard to reduce air pollution might actually have substantial implications for the rate of global temperature increase. The message, I suppose, is that a co-benefits approach can't be pursued in isolation: the end goal still must be concrete, measurable, and verifiable reductions in the global GHG emissions budget.

Air Quality in Beijing- Progress and Prospects

During CGS's recent trip back to the States, many people asked about air quality in Beijing, given the government's herculean efforts during the Olympics to improve it. Despite CGS's affiliation to a research group at Beida that specializes in air pollution control, it's not something CGS knows a great deal about. So a recent post from our friend at LiveFromBeijing, David Vance Wagner, provides some welcome quantitative rigor to CGS's bumbling answer, "well, the sky sure looks a lot bluer..."

Vance's data shows that

Although the air quality since 9/21 hasn't been as good as it was during the Olympic period, the average particulate matter concentration in the air this fall has been over 20% lower than the same time period last year and almost 40% lower than the same time period two years ago.

Jiayou, Beijing. Vance notes that PM10 concentrations in our favorite northern Chinese megacity, which are particularly important for environmental health, are still above those recommended by the World Health Organization, but hey, progress is progress.

Speaking of which, we need some serious progress on those climate negotiations in Poznan. Last week CGS wrote about the need to block the climate deadlock. The recent book CGS referenced, Can Asia Change the Game?, intelligently emphasizes the need for climate negotiations to focus on co-benefits for developing countries between fighting air pollution and climate change with policy measures that do both.

Air pollution is a more concrete and (in political terms) more pressing environmental issue than climate change for many developing nations. Its impact on human health is established and direct, and air pollution impacts the denizens of large developing cities in innumerable, very visible ways.

A co-benefits approach that emphasizes measures to reduce both air pollution and greenhouse gas emissions would focus on reducing trips by private autos, favoring the use of mass transit, bicycles, and even walking. It would also focus on the adoption of sustainable construction practices (this is where our man Geoff at China Green Buildings comes in), and a shift away from fossil fuel combustion in electricity generation.

The co-benefits approach stands a good chance of gaining traction with developing nations eager to please domestic constituencies (and let's face it, they all are) by focusing not just on the abstract notion of "climate change," but also environmental problems that more directly impact everyday life. We just want to avoid an American-style political sleight of hand where politicians stand in front of some mountain range declaring that the air is clean and then fly away in a jumbo jet.

China's Environmental Regionalism

Last Thursday, Beijing played host to the 4th Regional Air Quality Management Conference, a joint initiative of the Ministry of Environmental Protection and the US Environmental Protection Agency. CGS was in attendance for the first day of a conference that, true to its name, emphasized the necessity of regional approaches in combating air pollution. This seems pretty straightforward: air pollution doesn't respect municipal boundaries, so in major metropolises it is usually a multi-jurisdictional concern. But in China, discussions about environmental regionalism serve to highlight continuing gaps in the country's environmental governance structure, and so are worthy of our further attention.

American experts highlighted the trend in US air pollution control policy towards increasing regionalism. Art Williams, a consultant with the Regulatory Assistance Project, noted the growth in Regional Planning Organizations as a result of the Clean Air Act Amendments of 1990, which serve as an important forum for federal-state cooperation. Metropolitan Planning Organizations have a similar function, but focus on urban areas instead of large geographic regions. Nonetheless, these MPOs are important because, according to Williams, they help to focus transportation policy-making and coordination, and because federal transportation spending is tied to sound planning processes by these MPOs. These kinds of regional approaches, American experts agreed, were crucial to successfully reducing air pollution while also expanding regional economies and populations.

China has also given rise to some successful regional air pollution control efforts, most notably in the Pearl River Delta, which includes Hong Kong, Macau, and Guangdong Province. A representative of the Guangdong Provincial Environmental Protection Bureau described the creation in 2003 of a regional air pollution management plan, and joint daily air quality monitoring since 2005. In 2008, the "Guangdong-Pearl River Delta Atmospheric Pollution Mitigation Joint Conference" (广东省珠江三角洲大气污染防治联席会议) pledged to develop a regional control scheme for atmospheric pollutants, as well as measurement and verification systems for pollution control. The Bureau outlined a regional strategy based on four pillars, joint policy, research, emissions reduction engineering, and regional mitigation technology. The Conference will remain the primary coordination body, with a subsidiary Office and Research Center, each overseeing policy and research expert networks.

Such structures represent a good start towards genuine environmental regionalism. However, these structures are not as robust as their American counterparts, principally because they lack some of the legislative buttressing. Yan Gang of the Chinese Academy for Environmental Planning offered a compelling vision of regional air pollution management in the Yangtze Delta region, centered around Shanghai. Gang called for a regional air quality management board, chartered and overseen by the Ministry of Environmental Protection, as well as a regional center for pollution forecasting and policy development, accompanied by a regional monitoring network. Perhaps most boldly, Gang called for a single platform to integrate energy-air quality policy.

This far-reaching vision raises wider questions of what greater environmental regionalism might mean for China. In America, as Mr. Williams pointed out, regional consortia have been used to develop policy leadership in areas such as climate change, where central government action has been perceived as being behind the curve. Environmental regionalism might help to ease policy coordination between the central, provincial, and municipal levels of government, and might make enforcement simpler. It may also help to circumvent the entrenched local political interests which so notoriously undermine environmental policy enforcement throughout China, and may provide a more accessible structure for local stakeholders to access and engage. Perhaps most importantly, however, greater environmental regionalism might create the necessary political space for local policy entrepreneurship. As several of the Conference speakers pointed out, there are three obvious candidates for greater environmental regionalism: Beijing-Tianjin, the Shanghai/Yangtze River Delta area, and the Pearl River Delta. All face more complex environmental challenges than the nation as a whole, including severe air and water pollution combined with a high concentration of greenhouse gas intensive industries. Given both political support and freedom by the central government, consortia in these regions may well develop innovative solutions to their environmental problems.

There are stumbling blocks, to be sure. Regional structures would most likely require significant financing from the central government, and certainly would need to operate with a degree of political cover from the center. Central government agencies would perhaps sense threats to their own power and influence. But it does seem that many of China's most pressing environmental problems would be better addressed by a regional governance structure. US and other foreign assistance in the environmental area could be shifted towards regional actors; EPA might make it a priority, for example, to help establish a Yangtze Delta air pollution control consortium. Regardless, CGS came away from the conference convinced that both China and its friends abroad should work to strengthen environmental regionalism throughout the country.