China & Its Region: Grim Tales

Grim tales

Mar 29th 2007
From The Economist print edition

The more growth, the more damage to the environment

“THESE days,” says Pan Yue, China's deputy minister for the environment, “most Chinese missions go abroad to talk about securing energy, whereas most foreign missions come to China to talk about our environmental impact. It's a paradoxical diplomacy.”

For China's neighbours, the country poses an environmental threat on several levels. In late 2005 an explosion at a chemical plant in north-eastern Jilin province sent a slick of toxic benzene 80km long into the Songhua River. Local authorities attempted a cover-up, but the city of Harbin was forced to shut down its water supply. With Russia downstream, the spill became an international incident.

In South-East Asia, China's plan to double hydropower by 2010 is causing concern. Several large rivers that run through the region—the Salween, the Irrawaddy and the Mekong, among others—have their source in Tibet, and dams in China already diminish their flow. In India, policymakers and environmentalists are alarmed at reported plans by China to build a dam and divert the upper reaches of the Brahmaputra to dry parts of north-western China, though a Chinese specialist on South Asia says that engineers consider the plan unfeasible.


As for airborne troubles, South Korea and Japan both suffer from sandstorms exacerbated by desertification in China. The country is also the world's biggest emitter of sulphur dioxide. The resulting acid rain is damaging Korean and Japanese forests. Even Japanese fishermen are affected by China's pollution: giant Nomura's jellyfish, which spawn off the Chinese coast before drifting towards northern Japan, spoil catches of salmon and yellowtail and break nets and gear. Some of the recent huge increase in their numbers is thought to have been caused by nutrient-rich run-off (on which the larvae feed) from farms and industry in China.

Even when China takes steps to deal with environmental challenges, neighbours can feel unintended consequences. In 1998 the then prime minister, Zhu Rongji, imposed a total logging ban after floods in southern China that had been exacerbated by deforestation. The ban has been remarkably well enforced and forest cover in China is increasing, albeit of a monoculture of Chinese red pine rather than of mixed native species. Yet with Chinese demand for timber unmet, one outcome of the ban has been increased forest destruction in West Africa, Indonesia, Papua New Guinea, Myanmar, Laos and Cambodia (see article).

Bye, bye bicycle
The rate at which China uses up natural resources is simply not sustainable. Start with its oil consumption. Domestic crude production is rising only slowly, so imports are growing by more than 30% a year. China is already the world's second-biggest oil importer, behind America. There is little prospect of slowing the growth in China's oil consumption, because the government is committed to a car-led policy of development. The World Bank's Mr Dollar has recently described this as “a very questionable development choice”—though it had earlier been conceived with the World Bank's backing.

Already the idea of China as a nation of cyclists seems quaint. Some 45,000km of expressways have been built or are under construction. Through cheap petrol and other means, the government is supporting a domestic car industry, which it sees as an engine of future economic growth. The number of cars in China has leapt from just 4m in 2000 to 19m in 2005. That translates into eight cars per 1,000 people, compared with 500 cars per 1,000 in America. Goldman Sachs thinks the figure will more than double by 2010 and reach over 130m by 2020. But even then China will still be way below American levels of car ownership today.

Oil is only part of the picture. China is the world's biggest producer of coal (as well as of coal-mining fatalities), digging out 2.2 billion tonnes in 2005. Today coal accounts for four-fifths of China's energy use, and there is enough for at least another century.

It is both a blessing and a curse. China is breaking new ground liquefying coal to make oil substitutes, which may in the long run help change its energy mix. Yet abundant use of coal means that China will overtake the United States as the world's biggest producer of carbon emissions by 2009. Its current share is 17% of the world's total, against America's 22%. Last year alone China added the equivalent of California's entire current generating capacity, nine-tenths of it coal-fired.

Unsurprisingly, coal is also the main (though certainly not the only) source of air pollution. Twenty of the world's 30 most polluted cities are in China. According to a new book by the World Bank, “Dancing with Giants: China, India and the Global Economy”, air pollution is causing 427,000 extra deaths a year.

It is possible to find a few glimmers in the murk. Because energy demand is growing so fast, China has more incentive than countries with slow growth to adopt new technologies. It is already the world's largest user of alternative energies, including windpower.

With World Bank support, China has been trying since 2003 to cut its emissions of greenhouse gases through a mechanism set up under the Kyoto protocol. Companies from signatory nations are committed to capping their greenhouse-gas emissions. If they want to exceed their quota for emissions, they can buy carbon “credits” from companies in developing countries that have invested in cutting their own emissions. China has lots of emissions of carbon dioxide and other more noxious gases, and now accounts for three-quarters of all carbon credits traded under Kyoto's clean development mechanism for developing countries.

One reason for hope is that China's leaders appear to understand the scale of the environmental problem. In the government's latest five-year plan, which runs to 2010, it committed itself to increasing forest cover, cutting the discharge of the main pollutants and reducing China's energy intensity (the amount of energy consumed for every unit of GDP) by 20%. Energy intensity fell between 1990 and 2003, but has since risen sharply as heavy industries such as steel and cement have surged.

On the other hand, environmental regulators, by Mr Pan's own admission, are weak and divided. At the State Environmental Protection Administration, he cannot even appoint staff at the provincial level. That is up to the provincial governor, who is usually more interested in growth than in the environment. The true cost of China's environmental mess is hard to assess, but the official government figure, which puts it at about 3% of GDP, is certainly a gross underestimate.

Mr Pan thinks growth should be sacrificed for resource conservation and environmental protection. That sets him sharply at odds with the Communist leadership. “People talk about the peaceful rise of China,” he says, “with all that implies for continuing rates of growth and resource utilisation. But the earth cannot support it. China should control its growth and slow down its development, and the international community should do everything it can to support China if it does.” China's leaders know the calculations. But they are not in a hurry to sacrifice growth and thereby risk social unrest.