New Guard: New Hope for Pollution?

By Debra Tan, Ying Shen 8 March, 2013

Will the new guard usher in a new age of pollution control in China? We take a closer look

Unlike previous transitions, a clear line drawn between the old and the new this time around
China’s blogosphere has been awash with pollution exposés in the run up to the NPC & CPPCC meetings
Various NPC delegates making the 'right' noises on environmental protection & questioning GDP-first-policy

This month brings the annual meeting of China’s legislative and consultative bodies where major policies are decided and key government officials appointed. The National People’s Congress (NPC) at 2,987 members is the largest parliament in the world and gathers alongside the People’s Political Consultative Conference (CPPCC) whose members represent various groups of society.

Unlike previous leadership transitions, there has been a clear line drawn between the old and the new this time around.

This year, the NPC confirms the new leadership of President Xi Jinping and Premier Li Keqiang. This one-in-a-decade leadership change emerged from November’s Communist Party congress with a strong reform mandate and promising a more sustainable China, balanced growth and emphasis on environmental protection.

Also selected during the legislative sessions will be at least half the cabinet and among those could be Pan Yue as environment minister.  Currently vice minister and an outspoken advocate for environmental protection, Pan Yue is among the more liberal members of the Chinese government. His appointment would be a strong indication that the government intends to lead the country toward environmental reform.

“The new administration wants a new start … They want to make clear that the current environmental challenges are not their fault.”

Ma Jun

Speaking to the legislative body, Xi Jinping said the government should play a stronger role in advancing reform and opening up. Unlike previous leadership transitions, there has been a clear line drawn between the old and the new this time around.

“The new administration wants a new start,” Ma Jun said. “They want to make clear that the current environmental challenges are not their fault.”

Still, many question whether the recent attention to reform represents simply the early days of a new leadership in China and that the old patterns will eventually regain control.  “This is what officials usually do after taking up office,” wrote one Weibo micro-blogger. “The society will relapse in three years and then those officials will be even more greedy and corrupt to compensate for what they lost. Famished wolves will never become vegetarians.” (read CNN’s Jaime FlorCruz’s blog on Xi’s first moves in office here)

There is reason to believe, however, this raft of famished wolves might just see the benefits of a new diet built on environmental protection. Indeed, with public anger at unprecedented levels, they might not have a choice.

There is open and increasingly angry public disappointment over the previous administration’s failure to make good on those promises or to stem nationwide environmental degradation that is almost unfathomable.

The World Bank estimates that environmental challenges, the loss to the nation of natural capital and resource depletion, amount to 9 percent of GDP, which almost cancels China’s economic gains of around 10 percent annually over the past decade.

over 70% of both shallow and deep groundwater in the North China Plain is unfit for human touch

Ministry of Land & Resources Survey on Groundwater in the North China Plain

A brief environmental portrait of the country tells the shocking story: An estimated 25 percent of China is enveloped by continuous smog that affects the health of a population of 600 million. Meanwhile, an estimated nine-tenths of the country’s groundwater is polluted, while over 10 million hectares of arable land are contaminated by heavy metals, according to a recent Xinhua article.

In addition, a recent study on groundwater quality in the North China Plain released by the Ministry of Land and Resources indicated that over 70% of both shallow and deep groundwater in the North China Plain is unfit for human touch. (more here). This level of pollution of groundwater is particularly worrying as the North China Plain is one China’s most important agricultural region, producing corn, sorghum, winter wheat, vegetables and cotton. It covers much of Henan, Hebei and Shandong and northern Jiangsu and Anhui provinces. Incidentally, Shandong, Henan Jiangsu and Hebei are the top four farming provinces of China accounting for around 30% of national agricultural output value.

“Clearly, it’s not a choice between economic growth & environmental protection .. China needs to protect its environment if the country is to grow.”

Manish Bapna, Mananging Director, World Resource Institute

“Clearly, it’s not a choice between economic growth and environmental protection,” World Resources Institute’s Manish Bapna said at an environmental forum in Beijing recently. “ China needs to protect its environment if the country is to grow.”

Indeed, the challenge for the incoming leadership and the focus of attention of the NPC delegates and CPPCC members will be how to balance economic growth and environmental protection.
Prime Minister Wen Jiabao delivered his last government work report on March 5th, promising that the new government will take action to solve environmental problems relating to contamination of the air, water and soil. He said the new leadership was determined to safeguard people’s health. “We will let the people see the hope”, he said to fervent audience applause.

Reforms underway already

The shifts away from the emphasis on economic growth to the exclusion of all else began in earnest perhaps with last year’s promulgation of the 12th 5-year plan, which called for balanced growth. But November’s report of the 18th National Congress of the Communist Party of China deepened that trend, emphasizing the country should pay more attention to ecology less to GDP.

Perhaps sensing the opening, as well as the deepening public frustration with inaction, there has been continual outcry on air pollution, particularly in Beijing, where the numbers of pollutants in the air have been quite literally off the charts.

At the WRI event in Beijing, one local citizen, stepped to the stage and delivered an unprecedented impassioned and angry speech on the need for environmental protection in China. Such outbursts directly challenging the government previously were not common or even allowed.

Ministry for Environmental Protection recently officially acknowledged the existence of “cancer villages” along waterways in China

At the same time, in a significant shift, even official Chinese news outlets for the first time are carrying reports on groundwater and soil contamination. In another first, the Ministry for Environmental Protection recently officially acknowledged the existence of “cancer villages” along waterways in China and their location was discussed in press articles. (more on this here)

China’s leading environmental activist, Ma Jun and others have recently felt comfortable speaking out about a government refusal to disclose information about environmental contamination they said they believed was material to health.

The Ministry of Environmental Protection last week refused to publish findings of a high-profile national survey on soil pollution, stating that this was a matter of “state secrecy”. The survey tested 200,000 samples of soil, ground water and farm produce nationwide, resulting in about 5 million pieces of data, the ministry said in 2011.

Ma Jun quickly said this decision was irresponsible and put public health at risk, a comment that was unusually picked up by the People’s Daily and Xinhua, among other news sources that aren’t usually inclined to publish remarks critical of the government.

“Previously, the comment would have been removed from microblogs”

Ma Jun

“Previously, the comment would have been removed from microblogs,” Ma Jun said in Beijing recently. “But the issue of information disclosure is being allowed to be talked about and debated and discussed. The public is behind this.”

So has China reached a turning point? Will public pressure allow a greater opening in China and for environmental protection to finally step to the forefront?


A glance at the CPPCC and NPC

A look at matters before the two legislative bodies this week provides a hint and shows that, indeed, environmental protection is a recurrent theme. The main proposal before the CPPCC is related to strengthening green agriculture. The focus here is on waste and on degradation of natural resources, increasing agricultural pollution and the low energy efficiency of China’s agricultural development.

In another initiative, Deputy Director of the Hunan Provincial Environmental Protection Office, delegate Pan Biling, declared that environmental rights and ecological protection should be written into the constitution. He also asked to ensure annual environmental protection input is higher than the growth rate of fiscal expenditure.

Vice mayor of Danzhou city, Hainan province delegate Zheng Gang proposed establishing a Special Ecological Administrative Region. Here, protection of natural capital would be the overwhelming indicator of success.

Several NPC delegates and CPPCC members suggested speeding up environmental legislation to improve the quality of enforcement and pushed for a detailed timeline for solving the environmental problems.

“It is time for us to consider seriously whether we want GDP as the number one priority or our health?

Zhong Nanshan, NPC delegate

Delegates submitting the proposal estimate that it will cost China at least RMB10 trillion over the next decade to ensure investments in environmental protection amount to between 2% and 3% of GDP.
Also clearly emerging from the legislative gatherings is a sense that environmental pricing must change, that the cost of violations must climb, as must the prices of electricity, water and sewage treatment, among other environmental services.

“It is time for us to consider seriously whether we want GDP as the number one priority or our health?” said NPC delegate, Zhong Nanshan. “Bluer sky will help the government to get support from the people.”

The new leadership opens to the door to environmental policies

This is a trend that began late last year. Over the last two months, several new laws and standards have been quite suddenly announced, effectively beefing up environmental protection. These include a focus on quality over quantity with money being set aside to implement this improvement by the Ministry of Environmental Protection – more on this here.

There are also guides for Chinese companies working abroad to help them make sure they are not polluting, pilots on compulsory insurance for seriously polluted industries, new investment in water treatment, new fuel standards and air quality regulations. (See our review Eco-Compensation: The Way Forward? and Professor’s Wang Canfa’s candid take on environmental laws & enforcement)

Guide for Chinese companies abroad
Among the recent directives is the, “Environmental Protection Guide for Investment and Cooperation Abroad”, which was jointly issued by the Ministry of Commerce and the Ministry of Environmental Protection. In late 2011, there were over 18,000 overseas companies held by Chinese shareholders in 177 countries and regions around the world. The direct investment in these businesses was US$424.78 billion and they held total assets of US$2 trillion.

The guide is designed to help these Chinese companies with operations abroad to standardize environmental behavior. At the same time, the guide educates businesses in identifying and preventing environmental risk, actively considering social responsibility for environmental protection and supporting sustainable development in the host country.

The guide encourages companies to learn from international experience of environmental principles, standards and best practices.

New emissions standards
In another move to curb pollution, the Department of Environmental Protection has issued the 5th standard draft of emission limits and measurements for light vehicles. Compared to previous standards, the new version dramatically reduces emission permits for new light vehicles. The monitored miles for emission of a single vehicle increases from 80,000 kilometers to 160,000 kilometers, which puts the new standard on par with the European equivalent.

Mandatory environmental insurance
The Ministry of Environmental Protection and the China Insurance Regulatory Commission jointly issued guidance regarding the piloting of mandatory environmental liability insurance. This further expanded pilot work on establishing compulsory liability insurance for heavy metal, petrochemical and other similar enterprises where environmental risk is considered high.
More than 10 provinces, autonomous regions and municipalities are on the pilot list, with over 2,000 enterprises involved and nearly RMB20 billion insured. The government has indicated it is keen to solve pollution damage via a market-oriented approach.

Businesses are encouraged to strengthen management of environmental risks and to reduce pollution incidents. By applying the mandatory environmental liability insurance, a quicker response to pollution incidents is expected as well as adequate and timely compensation for victims, the government believes.

The guidance also describes the incentive and restraint mechanisms that will accompany the application of mandatory environmental liability insurance. Those companies that should be insured but do not purchase a policy, will face, for example, suspension of certificates, permits and subsidies.

According to the pilot, local government will share insurance records with banks and other financial institutions for credit management, loan approval and customer ratings. The guidance, however, also proposed positive incentives such as priority for compliant companies in receiving dedicated funds for environmental protection, recommendations for loans etc. There is as of now, no timeline for fully implementation.

Information disclosure, and public awareness and the rise of micro-blogging

China’s 11th Five-Year Plan approved in March 2006 set binding targets for energy consumption per unit of GDP, chemical oxygen demand and sulfur dioxide. The 12th Five-Year Plan approved in October 2010 added 5 additional targets as a ratio of non-fossil energy in primary energy consumption, carbon dioxide emissions per unit GDP, ammonia nitrogen and nitrogen oxides.

But despite these binding targets, pollution continues to soar countrywide. Now, however, the public via micro blogs in particular has started to act as an independent and determined force to push for transparency around environmental information. Almost every pollution incident can be thoroughly shared and commented using social media.

“Even animals don’t dare swim in these rivers, much less officials”

Deng-Fei, micro-blogger

Ahead of the meetings this week, China’s blogosphere has been awash with pollution exposés and environmental discussions. Challenges with monetary rewards were issued to provincial/county heads of Environmental Protection Bureaus – the most notable being the US$32,000 challenge to issued to the Zhejiang Environmental Protection Chief Bao Zhenming by a local entrepreneur causing ensuing comments like “Even animals don’t dare swim in these rivers, much less officials” from well-known micro-blogger Deng-Fei.

Incidentally Deng-Fei also posted information about potential groundwater contamination in Shandong province. He claimed that chemical and paper plants in Weifang city, Shandong province, had for years been injecting large amounts of industrial waste water deep underground to evade regulation. The wide press coverage of the claims, despite the fact that they have not yet been confirmed, is a big change in itself.

The wide press coverage of [pollution] claims, despite the fact that they have not yet been confirmed, is a big change in itself …

… prompting comments from the Minister of Water Resources & the Deputy Head of the NDRC

Perhaps the biggest change this has brought is the acknowledgement of during the NPC meetings this week by Chen lei, the Minister of Water Resources, who said that groundwater pollution due to industrial wastewater emission has alerted high attention recently and that that the Ministry of Environmental Protection jointly with the Ministry of Land and Resources MLR would enforce policy implementation regarding preventing and controlling such water pollution.

Du Ying, the Deputy Head of the National Development Reform Commission,  also made assurances on the safety of drinking water drawn from groundwater. He acknowledged that pollution of groundwater is a problem not only in cities but also in rural areas, and is spreading from shallow aquifers to deeper aquifers. He said that China’s cabinet together with the provincial government have sent out teams to investigate the pollution claims.

So it appears that China is making great strides forward.  Allowing greater freedom of the press to report environmental incidents is part of a trend toward greater disclosure that began with the new Measures for the Disclosure of Environmental Information, adopted by MEP in 2008. Still, there has been a reluctance on the part of the government to release real-time data – something for which NGOs have been pushing.  “Disclosure is an important tool,” Ma Jun said recently. “When the government discloses information then the data can’t be manipulated.”

“When the government discloses information then the data can’t be manipulated.”

Ma Jun

Still, it is clear from the gradual opening on environmental pollution incidents, the open and discussion across both social and traditional media, that disclosure is the name of the game in China for now. It remains to be seen whether this is a passing fancy or a real trend that brings real change in China.





Additional Reading:

  • Need a 101 on water policy in China? Check our our sumary on of key water policies since the No. 1 Document on Water in 2011-2013 Key Water Policies
  • All about China’s environmental law from Professor Wang Canfa, who has been involved in the drafting and revision of over 30 laws, regulations and decrees in his interview with China Water Risk – Time to Enforce China’s Environmental Law
Debra Tan
Author: Debra Tan
Debra heads the CWR team and has steered the CWR brand from idea to a leader in the water risk conversation globally. Reports she has written for and with financial institutions analyzing the impact of water risks on the Power, Mining, Agricultural and Textiles industries have been considered groundbreaking and instrumental in understanding not just China’s but future global water challenges. One of these led the fashion industry to nominate CWR as a finalist for the Global Leadership Awards in Sustainable Apparel; another is helping to build consensus toward water risk valuation. Debra is a prolific speaker on water risk delivering keynotes, participating in panel discussions at water prize seminars, numerous investor & industry conferences as well as G2G and academic forums. Before venturing into “water”, she worked in finance, spending over a decade as a chartered accountant and investment banker specializing in M&A and strategic advisory. Debra left banking to pursue her interest in photography and also ran and organized philanthropic and luxury holidays for a small but global private members travel network She has lived and worked in Beijing, HK, KL, London, New York and Singapore and spends her spare time exploring glaciers in Asia.
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Ying Shen
Author: Ying Shen
Ying is China Water Risk’s consultant based in Beijing. She conducts research & analyses on water related issues and writes editorial content for website. Prior to joining China Water Risk, Ying was the Chief Representative Officer of a European consulting firm in Beijing. She has worked on a wide variety of climate change, environmental and loan/technical assistance projects funded by the National High Technology Research and Development Program of China, the National Basic Research Program of China, European Commission, the World Bank, the Asian Development Bank and British Embassy in China amongst others. Ying has a Master’s degree in Environmental Engineering from Chinese Academy of Sciences and a Bachelor’s degree also in Environmental Engineering from Beijing Jiaotong University.
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