Two Sessions 2020 – Ecological Roadmap

By Yuanchao Xu 18 June, 2020

COVID-19 isn't deviating China from its roadmap to eco-civilisation. CWR's Xu highlights 3 key takeaways from China's Two Sessions

China’s 2020 “Two Sessions” (两会, lianghui) has finally been held after having been postponed for more than two months due to COVID-19. China’s growth slowed further from 6.6% in 2018 to 6.1% in 2019 due to uncertainties from the US-China trade war. This is a new record low since 1990 and given COVID-19, China’s 2020 growth is expected to remain depressed. But what about its environmental efforts – is China slowing down on this too?

No 2020 GDP target set; first time ever…

…but GDP targets have been falling out of favour since 2012

We said earlier in March that China was likely to deprioritise GDP further; and they did. Recovering from COVID-19 shocks, China has given priority to stabilising employment and ensuring people’s livelihoods, with no specific GDP target set for 2020.

Although this is the first time that GDP targets have not been set, it is not the first time that they have been deprioritised. Remember, GDP targets have been falling out of favour since 2012 when China moved to balance the economy and environment in its march towards a “Beautiful China”.

Meanwhile, there are valid concerns over relaxing restraints on coal, but overall we believe that China is still going green – see a more detailed analysis here.

Also, let’s not forget that China will stay within its 13FYP coal target. The target coal consumption cap in the 13FYP was 4.1bn tonnes – experts estimate numbers to come in at around 3.8bn tonnes by the end of 2020.

2020 fits and starts … but China’s still sticking to the ecological roadmap …

Although the pandemic has been generally controlled in China, there are still sporadic cases/outbreaks reported and the economy is far from being back on track. So it’s a relief to note that the Two Sessions did not “move the cheese” for green development. Despite challenges acknowledged in this “special period”, nothing has changed – China’s still “resolutely tai-chi-ing” toward green development, pollution control and environmental protection.

Yangtze & Yellow river basins highlighted in key speeches & vital policies

Water plays an important role and ecological protection is still the focus for key river basins. The Yangtze and Yellow river basins were both highlighted in key speeches and vital policies such as the ‘Yangtze River Protection Law’ and ‘Plan for the Ecological Protection and High-quality Development of Yellow River’ are underway.

On the river front, some progress was made in 2019 with an overall river quality improvement, albeit at different rates – more water quality stats on groundwater, rivers and lakes in the latest state of environment here.

Generally, satisfactory progress has been made during the 13FYP – already, seven out of nine mandatory environmental targets for 2020 were achieved a year in advance at the end of 2019.

That said, Huang Runqiu, the Minister of Ecology and Environment (MEE) is not satisfied. He stated that the overall ecological and environmental condition of China is still at a low level; acknowledging three basic facts:

• China’s industrial structure is still based on heavy chemicals and its energy mix is still based on coal;
• Environmental pollution is still severe; and
• Environmental accidents are still occurring frequently.

So while there have been some environmental gains, there’s still a long way to go and we expect to see the 14FYP further embed ecological protection into China’s core governance structures thus cementing its ecological roadmap.

We have highlighted three key takeaways from this year’s Two Sessions that give clear signals of this direction below.

These three action areas are ambitious and their implementation during COVID times is not for the faint-hearted – there will be fits and starts; it will be slow but it’ll not stop. As you will see below, China is sticking to its ecological roadmap…

1. Modernisation of the environmental governance system

During the “Two Sessions”, Minister Huang Runqiu confirmed that China aims to achieve a holistic environmental governance system by the end of the 14FYP. This builds on the ‘Guiding Opinions on Building a Modern Environmental Governance System’ released in March 2020, the State Council and the CPC Central Committee. According to this document, the following seven systems are to be established or improved to support holistic environmental governance including:

• accountability system for government official;
• accountability system for enterprises;
• public awareness and participation system;
• monitoring and supervision system;
• market system for environmental services;
• credit system for environmental performances of enterprises; and
• regulatory system.

We expect China to complete this reform in governance across the above seven systems during the 14FYP. It is important to understand the significance of this “revamp” – these new environmental governance systems will not only enable better enforcement but also benefit other environmental innovations.

With the MEE now turning its focus on governance, expect institutional innovations to expand

Since China started its journey toward ecological civilisation, a series of institutional innovations have been made to the governance system – these include the river chief system, property rights system, carbon/water right trading, ecological compensation and so on. While they have greatly contributed to China’s improving environmental performances, they are not effectively coordinated. With the MEE now turning its focus on governance, expect these institutional innovations to expand from their pilot phases as the MEE’s management of the environment becomes more effective and holistic in the future.

Meanwhile, enterprises will likely face even more challenges to stay compliant in this shifting but more stringent regulatory landscape with tighter governance.

2. Toward zero waste cities & cleaning up after COVID-19

China’s high growth has had unwanted consequences – lots of urban waste. As we wrote last year, China generates the largest amount of solid waste in the world – 10bn tonnes each year.

In March 2019, China initiated its trial on zero waste cities, with 11 cities selected as pilots including mega-cities such as Shenzhen and Chongqing. On top of this, three months later, the Ministry of Housing and Urban-Rural Development (MoHURD) released a notice aimed at promoting waste sorting and treatment/ recycling to all cities by 2025.

By the end of 2019, 237 cities had initiated work on waste sorting and collection. Of these, 18 cities including Shanghai, Guangzhou and Shenzhen have already achieved satisfactory results with over 70% of residential communities sorting their waste.

Waste continued to be a hot topic; dissatisfaction on progress

In this year’s “Two Sessions”, waste continues to be a hot topic as various delegates voiced their dissatisfaction with the methods and progress. Delegate Choy So-yuk recommended that domestic waste treatment should focus more on waste source sorting/collection and reduction instead of simply burning and sending it to landfill. Delegate Lu Tianxi suggested that legislation on waste sorting should be promoted as China is behind in this aspect compared to developed countries.

Medical waste now also a focus due to COVID-19…

…need much more work to overcome challenges

Medical waste was also on people’s mind thanks to the COVID-19 outbreak. Delegate Cai Xueen proposed a monitoring and supervision system for medical waste to deal with issues which surfaced during the pandemic such as the classification and management of medical waste; punishment for selling used masks; and appropriate fee charges for medical waste treatment. See our lowdown on China’s medical wastewater treatment for COVID-19 here.

China has been making headway but more challenges remain. There will be continued focus on waste as COVID-19 has not only brought about better hygienic habits in China, but also higher demand for a clean and green living environment. And of course, opportunities can also be expected in the waste sector.

3. Striving for targeted and scientific pollution control

Improving enforcement has contributed to China’s noticeable progress in ecological protection. However, shutdowns and “one-size-fits-all” measures are still common and in some cases, these can harm local economies and lower the efficiency of environmental governance.

In the 2020 government working report, targeted and scientific pollution control was proposed to address these issues. Minister Huang Runqiu expanded on this – he suggested that future pollution control enforcement should be tailored based on five specific factors – the “Five Targeted” in pollution control proposed are:

• targeted issue;
• targeted time;
• targeted location;
• targeted objective; and
• targeted measures.

To support the “Five Targeted”, scientific methodologies and advanced technologies need to be adopted. Here, Wang Jinnan, an academician of China Academy of Engineering (CAE), commented on the increasingly important role of technology in pollution control and that more investment should be made in tech for ecological protection.

Future enforcement should be tailored based on five specific factors

Delegate Xu Hengqiu, the head of the Department of Ecology and Environment of Anhui, shared Anhui’s future plan to build a big data centre and a smart monitoring platform for ecological protection.

“New Infrastructure” has become stimulus for China’s economy. Advanced technologies such as Ultra-Low-Voltage (UHV) power transmission, big data and AI all have a role to play in building a Beautiful China – so expect more action in this space in the 14FYP.

Further Reading

• Two Sessions: Reform – Transform – It has been a tough year but President Xi is staying true to his resolution to build a Beautiful China – what transformations can we expect? Find out in our review of this year’s Two Sessions
• Becoming Beautiful: Property Rights For Natural Resources – The Ministry of Natural Resources is creating a landmark rights system for each natural resource, from coal and gas to forests and water. What does this mean and where are the pilots? Find out in our review
• Greening The Yellow River For A Beautiful China – As President Xi reiterates the Yellow River’s importance, Dr Zhanfeng Dong from the Chinese Academy for Environmental Planning expands on policies for “黄河宁，天下平” – a stable Yellow River, peace in China
• Too Big To Fail! Protect At All Costs – Multiple policy innovations have been unleashed to protect the Yangtze River as it is too big to fail – corporates and investors need to get on top of the YREB to avoid regulatory shocks
• 5 Trends For The Year Of The Rat – Will the rat bring more outbreaks or will we get sunk like a drowned rat by water and climate risks? Or can we stay ahead with our wits and cunning to win the rat race? Find out what the lunar new year has in store for us in our 5 trends

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