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    China Business
     Nov 3, 2005
'Green GDP' reflects shifting priorities
By Antoaneta Bezlova

BEIJING - Increasingly aware of the deteriorating state of China's environment, the Chinese leadership has decided that it wants the national economy to not only grow fast, but grow green. They have asked state planners to develop a new indicator to measure the country's growth, a "green GDP", which would account for the costs of environmental impact and resource consumption.

The emphasis on "green GDP" reflects China's slowly shifting priorities from sustaining growth at all costs to realizing more sustainable growth.

Beijing has just unveiled a draft blueprint for the country's economic development in the next five years, which stresses the need for conservation of natural resources. The two indicators that have defined China's economic miracle for the past 20 years - economic growth and the increase in disposable incomes - will no

longer be enough to assess the performance of government officials. By making local leaders accountable for resource squandering and pollution, Beijing hopes to put the brakes on rapidly unfolding environmental destruction. But in their "go green" quest, Chinese leaders face a growing challenge: how to enforce environmental standards without crippling the economic growth. Consider just a few of the difficult dilemmas.

Saving the country's rivers has become a rallying cry for both environment-friendly government officials and green activists, as the nation comes to grips with the reality that more than half of the water in China's seven largest rivers is contaminated. But saving China's rivers means that the energy-hungry country would continue to rely on the coal-fired power stations that currently supply more than two-thirds of its energy, spewing out vast amounts of pollutants in the process.

Pollution levels in China could more than quadruple within 15 years if the country doesn't curb its rapid growth in energy consumption, Zhang Lijun, a senior environmental official, warned recently. China's emissions of sulfur dioxide were the highest in the world last year, causing acid rain across 30% of the country, a report released by the State Environmental Protection Agency said.

Developers are eager to boost power generation any way they can and argue that the solution lies with developing more hydropower, which they have promoted as "green". Last year, Minister of Water Resources Wang Shucheng predicted that construction of hydropower plants in China would peak in 20 to 25 years, as the water resources of the remaining few untamed rivers in the country are tapped.

No fewer than 46 new, large dams are now being planned or are under construction in the Yangtze River basin alone, according to the International Journal on Hydropower and Dams. Although planned to control devastating floods while producing emissions-free power, many of them are being built at least partly in order to prevent silt build-up at the Three Gorges Dam, the world's largest hydropower project.

Damming the rivers means not only altering the natural environment of their ecosystems but also the displacement of thousands of people. Chinese researchers have estimated that about 10 million of the 16 million people displaced by large hydropower plants since the communist victory in 1949 were still poor - despite officials' claims that hydropower raised living standards. This has added a social dimension to Beijing's dilemma. Peasants in impoverished rural areas are no longer a silent driving force of China's unbridled growth, and are increasingly protesting against the dams, contaminated water and deforestation.

Driven by sometimes clashing agendas, it comes as no surprise that officials are issuing contradictory pro-growth and pro-green announcements. The same water resources official who championed large-scale hydropower development said recently China needed to limit the development along its major rivers and restrict the utilization ratio to protect the environment. "Our primary task is to maintain the natural environment and healthy life of rivers, not [to] exploit water resources at any cost," Wang Shucheng told a forum on river conservation held in Zhengzhou, Henan province in October.

In fact, Beijing faces such uneasy tradeoffs in nearly every ambitious aspect of its green pronouncements. Air pollution and autos provide another good example.

As newly rich Chinese citizens demand the consumerist trappings of their counterparts in the developed world, China's car fleet has exploded, choking large cities' traffic and air. After growing 50% on average in each of the last three years, car sales are projected to rise from 4.4 million annually in 2003 to 13 million within 10 years, according to official forecasts. China's roads are expected to be clogged with 130 million vehicles by 2020, by which time China will have surpassed the United States in total car ownership.

But environmental concerns have risen in parallel with the phenomenal growth of China's automotive sector. The country is already the world's second-largest producer of greenhouse gases, which contribute to global warming and the devastation of the climate. If they remain uncontrolled, the growth of China's carbon dioxide emissions over the next twenty years will dwarf any cuts in emissions that the rest of the world can make.

Last year, the government announced plans for tough new fuel-economy standards for domestically produced cars and trucks. Proposals are discussed to introduce new taxes on vehicle purchases too. But limiting the prodigious growth of China's automotive market is not only difficult but also politically explosive. China's car industry, the world's fastest-growing, has become one of the pillars of the country's economy, providing jobs and bringing large tax revenues. For China's expanding middle class, acquiring one or two cars has become a symbol of the country's aspiration to match the living standards of the developed world.

Environmentalists reckon that shattering China's middle-class dream would be as difficult as persuading government officials to give up their fondness for staggering growth figures. "China can no longer afford to sacrifice environmental concerns," says Xue Ye, executive director of Friends of Nature, China's largest civil environmental group. "The problem is that the government's policy on growing green hasn't become a law yet, and there remains difficulty with its local enforcement."

On paper at least, the government has promised during the 11th five-year plan for 2006-2011 to boost environmental spending to 1.3 trillion yuan (US$169 billion) over five years, representing some 1.6% of GDP, up from just 0.8% during the early 1990s.

But an investigation by the State Environmental Protection Agency in 2004 found that local authorities throughout the country failed to realize the green targets set during the previous five-year plan. Officials admit that many emissions-reduction schemes fell short of their targets, and that construction of some 700 major projects aimed at cutting water pollution - half the total planned by Beijing for the 2001- 2005 period - had yet to begin.

(Inter Press Service)

Striving for sustainable development (May 10, '05)

Wrangle over green GDP (Mar 16, '05)

The state of pollution (Mar 16, '05)

China to set up 'Green GDP' index system (Jan 29, '04)


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