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The Great Leap Backward

Author: Elizabeth C. Economy, C.V. Starr Senior Fellow and Director for Asia Studies
August 24, 2007
International Herald Tribune

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China’s environmental problems are mounting and as China’s pollution woes increase, so, too, do the risks to its economy, public health, social stability and international reputation.

The coal that has powered China’s economic growth, for example, is also choking its people. Coal provides about 70 percent of China’s energy needs: The country consumed some 2.4 billion tons in 2006 — more than the United States, Japan, and Britain combined. In 2000, China anticipated doubling its coal consumption by 2020; it is now expected to have done so by the end of this year.

China’s grand-scale urbanization plans will aggravate matters. China’s leaders plan to relocate 400 million people — equivalent to well over the entire population of the United States — to newly developed urban centers between 2000 and 2030. In the process, they will erect half of all the buildings expected to be constructed in the world during that period.

And then there is the problem of access to clean water. Although China holds the fourth-largest freshwater resources in the world (after Brazil, Russia, and Canada), skyrocketing demand, overuse, inefficiencies, pollution, and unequal distribution have produced a situation in which two-thirds of China’s approximately 660 cities have less water than they need and 110 of them suffer severe shortages.

China’s environmental problems also affect the rest of the world. The country has surpassed the United States as the world’s largest contributor of carbon dioxide, a leading greenhouse gas, to the atmosphere. And unless China adopts environmentally friendly technologies, according to the International Energy Agency, in 25 years it will emit twice as much carbon dioxide as all the countries of the Organization for Economic Cooperation and Development combined.

In the view of China’s leaders, however, damage to the environment is a secondary problem. Of greater concern to them are its indirect effects: the threat it poses to the continuation of the Chinese economic miracle and the country’s health, stability and international image. Taken together, these challenges could undermine the authority of the Communist Party.

Several studies estimate that environmental degradation and pollution cost the Chinese economy between 8 percent and 12 percent of gross domestic product annually. The Chinese media frequently publish the results of studies on the impact of pollution on agriculture, industrial output, or public health: water pollution costs $35.8 billion one year, air pollution costs $27.5 billion another, and on and on, with weather disasters ($26.5 billion), acid rain ($13.3 billion), desertification ($6 billion), or crop damage from soil pollution ($2.5 billion).

Clearly, something has got to give. The costs of inaction are growing. Perhaps more important, social discontent is rising. The Chinese people have clearly run out of patience with the government’s inability to turn the environmental situation around. And the government is well aware of the increasing potential for environmental protest to ignite broader social unrest.

With the 2008 Olympics around the corner, China’s leaders have ratcheted up their rhetoric, setting ambitious environmental targets, announcing greater levels of environmental investment, and exhorting business leaders and local officials to clean up their backyards.

Unfortunately, much of this enthusiasm stems from the widespread but misguided belief that what Beijing says goes. The central government sets the country’s agenda, but it does not control all aspects of its implementation. In fact, local officials rarely heed Beijing’s environmental mandates, preferring to concentrate their energies and resources on further economic growth.

China’s leaders need to make it easy for local officials and factory owners to do the right thing when it comes to the environment by giving them the right incentives. At the same time, they must loosen the political restrictions they have placed on the courts, nongovernmental organizations and the media in order to enable these groups to become independent enforcers of environmental protection.

In short, improving the environment in China is not simply a matter of spending money or mandating pollution-control technologies; it is also a matter of reforming the country’s political culture. Effective environmental protection requires transparent information, official accountability and an independent legal system. But these features are the building blocks of a political system fundamentally different from that of China today. Unfortunately, so far there is little indication that China’s leaders are prepared to change course, so the problems are likely to get worse before they get better.

This article appears in full on CFR.org by permission of its original publisher. It was originally available here.

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