23237 August 2001 Air, Land, and Water environmental priorities for a new millennium CHINA: AIR, LAND, AND WATER environmental priorities for a new millennium Copyright (C 2001 The International Bank for Reconstruction and Development / THE WORLD BANK 181S H Strcet, NWV. Washington, D.C. 20433, USA All rights reserved MI.-ictured in the United States of America T irst printing August 2001 1 2 3 403 02 01 The findings, interpretations, and conclusions expressed in this book are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations, or to members of its Board of Executive Directors or the countries thev represent. The World Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use. The boundaries, colors, denominations, and other information showvn on any map in this volume do not imply on the part of the World Bank Group any judgmoent on the legal status of any territory or the endorse- ment or acceptance of such bouindarics. The material in this publication is copyrighted. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. Permission to photocopy items for internal or personal use, for the internal or personal use of specific clients, or for educational classroom use is granted by the World 13ank, provided that the appropriate fee is paid directly to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone 978-750-8400, fax 978-750-4470. Please contact the Copyright Clearance Center before photocopying items. For permission to reprint individual articles or chapters, please fax a request with complete information to the Republication iDpartment, Copyright Clearance Center, fax 978-750-4470. All other queries on rights and licenscs s111?LJ1d be addressed to the Office of the Publisher, VVorld Bank, at the address above or faxed to 202-522-2422. Cover design by Studio Spark Library of Congress Cataloging-in-Publication Data has been applied for. ISBN 0-8213-4937-6 Fo ew r ... .. .. .. .. .. .. ... .. .. .. .. .. .. .. ... .. .. .. .. .. .. .. xi Foreword .......................................xi Acknowledgments.xii Executive Summary .xiv i. Economic Growth and the Environment ............................... 1 Changing Industrial Structure ............................................ 2 Urbanization and the Environment ........................................ 5 Agriculture, Poverty, and Natural Resources Management ....................... 9 Lessons for the New Millennium .......................................... 11 2. Management of Land Resources ...................................... 17 The State of Land Degradation ........................................... 17 Management Issues in the Main Land Systems ..... .........9.............. .1 Conclusions and Recommendations ........................................ 34 3. Water Resources Management and Water Pollution Trends .... ............ 47 Water Quality Trends .............. .................................... 47 Water Resources Availability, Consumption, and Demand ....................... 51 Trends in Pollutant Emissions ............................................ 54 Conclusions and Recommendations ........................................ 62 4. Air Pollution . ..................................................... 77 Main Pollutants, Emission Sources, and Emission Trends ........................ 77 Ambient Air Quality Trends ................... .................... 79 Indoor Air Pollution ....................................... 81 Acid Deposition ....................................... 83 Global Environmental Concerns ....................................... 84 Key Air Pollution Issues, Policy Implications, and Recommended Actions .... ....... 85 iii 5. Environmental Management ........................................ 99 Developments in Environmental Administration ............. ................ 99 Approaches to Environmental Management . .................................. 102 National Priority Programs .0......................................... 9 New Challenges ......................................... 112 Future Management Needs and Priorities .. ................................. ils 6. Portfolio Review . ......................................... 123 The Portfolio ......................................... 123 Environmental Dimensions of the Portfolio ............... .................. 124 Strategic Directions in the Assistance Program ............. ................... 127 Opportunities for the Bank Under the 10th FYP ........... ................... 127 7. An Environmental Strategy for the New Millennium ...... ............... 135 The Challenge ......................................... 135 A Strategy for the New Millennium ........................................ 135 The Role of Donors ............. ............................ 141 Bibliography ....................... 145 iv Tables in Text Table 1.1 Urban Growth, 1991-99 Table 4.1 Trends in Ambient Air Quality in Small Cities, 1990-98 Table 1.2 Wastewater Flows and COD Loads, 1991 and 1999 Table 4.2 Sources of Total Suspended Particulates in Selected Cities Table 1.3 Average Annual Increases in Registered Civilian Motor Vehicles, 1990-99 Table 4.3 Fine Particulate Concentrations vs. TSP Concentrations in Selected Cities, 1998 Table 2.1 Additions and Losses of Cultivated Table 4.4 Levels of Indoor Air Pollutants Land, 1987-95 in Chinese Residences Table 2.2 Reductions in Cultivated Land by Cause, 1987-95 Table 5.1 Developments in Environmental Table 2.3 Net Increases in Cultivated Land Administration, 1974-98 Table 5.2 Current Framework for Pollution Table 2.4 Extent of Grassland Degradation Management and Control in China, 1998 Table 5.3 Elements of Regulatory Table 2.5 Trends in Forest Resources, 1934-93 Development Required in China Table 2.6 Change in Forest Area by Table 5.4 Urban Environmental Forestry Region, 1976-93 Management Initiatives Table 2.7 Change in Timber Forest Area by Forestry Region, 1976-93 Table 6.1 The 1990-2000 Environmental Table 2.8 Nature Reserve Staffing Levels, 1997 Portfolio by Sector Table 6.2 Portfolio Linkages to the 1992 Table 3.1 Water Quality Trends in the Seven Environmental Strategy Paper River Basins, 1991-98 Table 6.3 Factors Preventing Action on Table 3.2 Annual Average Water Quality Certain Dimensions of the Bank's Trends in the Three Lakes, 1992-98 Environmental Strategy for China Table 3.3 Average Renewable Water Table 6.4 Preconditions for Wider Resources, 1956-79 Bank Participation in the Environmental Agenda Table 3.4 Trends in Industrial Waste Discharges, 1989-99 Table 6.5 Actions Required to Strengthen the World Bank's Environmental Program Table 3.5 Selected Urban Statistics, 1991 and 1998 Table 3.6 COD Discharges from SPH and Commercial Pig Production Enterprises, 1996 and estimated 2010 v Figures in Text Figure 1.1 Trends in Industrial Output and Figure 3.1 Incidence of Coastal Red Tidcs, PoDlution Emissions, 1989-99 1950s to 1990s. Figure 1.2 Sectoral Contributions to Figure 3.2 Trends in Water Consumption GDP, 1970-99 by Sector, 1980-97 Figure 1.3 Sectoral Contributions to Figure 3.3 Projected Sectoral Distribution Employment, 1970-99 of Water Demand, 1993-2050 Figure 1.4 Structure of Agricultural Figure 3.4 Projected Urban and Rural Production, 1970-99 Water Demand in the 3-H River Basins, 1997-2050 Figure 2.1 Trends in Land Moderately Figure 3.5 XVastewatcr Discharges to Severely Affected by Water Erosion, 1975-96 Figure 3.6 Pollution loads and GIOV Shares in Main Indtustries, 1998 Figure 2.2 Cultivated Land Losses Due to Construction, 1987-95 Figure 2.3 Sources of New Cultivated Figure 4.1 Trends in Industrial Particulate Land, 1987-95 Emissions, 1989-98 Figure 2.4 Trends in Grassland Figure 4.2 Trends in Annual Emissions Degradation, 1989-97 of Major Air Pollutants, 1989-99 Figure 2.5 Area of Nature Reserves, 1956-99 Figure 4.3 Growth of Energy-related CO2 Emissions, 1990-98 Figure 5.1 Industrial Waste Treatment Rates, 1990-98 vi Boxes in Text Box 1.1 Industrial Terminology in China Box 4.1 Some Issues with Air Emission Standards for Stationery Sources Box 4.2 Strategies to Curb Emissions Box 2.1 Non-equilibrium Models and their from Small Stationarv Sources Relevance to Chinese Pastoral Systems Box 4.3 Large Cities Can Set the Pace in Box 2.2 Management Regimes Regulating Motor Vehicle Emissions in China's Forests Box 4.4 Main Poliey Measures Under the "Two Control Regions" Strategy Box 3.1 The Case of Dianchi Lake and Potential Problems in Yunnan Province Box 5.1 Environmental Permits in OECD Countries Currency Equivalents (as of April 2001) Currencv Name Reuminbi (RMzIB) Currency Unit = Yuan (Y) 1 Yuan = 100 fen Y 1.00 = $0.12 $ 1.00 = Y 8.28 vii Abbreviations and Acronyms ADB Asian Development Bank GHG Greenhouse Gas Bcm Billioni cubic meters GIOV Gross Industrial Output Value BHC Ben'zene hexafluoride GVAO Gross Value of Agricultural Output BOD Biological Oxygen Demand H RS Household Responsibility System CAF Chinesc Academy of Forestry IBRD International Bank for Reconstruction and Development CAOE County and Above County-r Owned Enterprise ICAMA lnstitute for Control of Agro-chemicals CAS Chinese Academy of Sciences IDA International Development Association CCAP Chinese Center for Agricultural Policy CDM Clcan Development Mechanism 1PM Integrated Pest Management CITES Convention on International Trade ISO International Standards Organization in Endangered Species IUCN International Union for Conservation of Nature CO Carbon monoxide co 2 Carbon dioxide Integrated River Basin Management COD Chemical Oxygen Demand Kg/ha Kilogram per hcctare Km2 Square kilometer CP Cleaner Production I/c/d Litcrs per capita per dav CRAES China Research Academy of Environmental Sciences LGPR Leading Group on Poverty Reduction DDT Dichloro diphenyl trichloro ethane m3 Cubic mctcr EA Environmental Assessment MFMP Multilateral Fund for the Montreal Protocol EIA Environmental Impact Assessment EMP Environmental Management Plan mg/I Milligram per liter MOA Ministrv of Agriculture EPB Environmental Protection Bureau MOF Ministrv of Finance EPO Environmental Protection Office MOFTEC Ministrv of Foreign Trade and FGD Flue gas desulfurization Economic Cooperation FYP Five Year Plan MURCEP Mlinistry of Urban atd Rural g Gram Construction and Environmental Protection GDP Gross Domestic Product MWR Ministry of Water Resources GEF Global Environment Facility MWWTP Municipal Waste Water Treatment Plant viii NAAQS National Ambient Air SEPA State Environmental Quality Standard Protection Administration NAP Non-Agricultural Population SEPC State Environmental Protection Commission N EPA National Environmental Protection Agency SETC State Economic and Trade Commission NEPB National Environmental Protection Bureau SLA State Land Administration NFPP National Forest Protection Program SOE State Owned Enterprise NGO Non-Governmental Organization SO2 Sulfur dioxide NOx Nitrogen oxides SPH Specialized Production Household OC Organochlorines SSB State Statistical Bureau ODP Ozone Depleting Potential TA Technical Assistance ODS Ozone Depleting Substances TOR Terms of Reference OECD Organization for Economic TSP Total Suspended Particulates Co-operation and Development TWAP Trade Waste Acceptance Policy OP Organophosphates TVI E Township and Village Pb Lead Industrial Enterprise PLF Pollution Levy Fee UNDP United Nations Development Program PM1O Particulate matter with a UNEP United Nations Environment Program diameter of less than 10 microns UNIDO United Nations Industrial POPs Persistent Organic Pollutants Development Organization PPS Plant Protection Stations US United States of America PRCEE Policy Research Center for WHO World Health Organization Environment and Economics WLS Working Level Standard QA Quality Assessment WTO World Trade Organization QC Quality Control I ' 3-H Huai, Hai, and Huang rivers RBC River Basin Commission (pg) Microgram RMB Renmimbi SDPC State Development Planning Commission SEIA Strategic Environmental Impact Assessment ix 70 'KS 90 100 HO' 20' 30' ~~~~~~~~ ~~~~~~RrUSS XNIANG ? KAZAKHSTAN CH ..-. UZ BEKISTAN T REPUBLIC XINJIntratinal REP.aie OfS !\ I T AM \0jYmG2 - so~~~~~~~~~~~~~~~~~~~~~~~~~~HNNs CHINA~~~~ONOA T a Province Capitals tWrBn Croup, ayjNational Capital or any acce eProvince Boundaries sc Y X. - International Boundaries 1 A -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0 0 200 A00 O00Iion.4 I,J I LAO PEOPLE'$ 000 20 300 400M # t.QOAINAN' This map was produced oy the Map Design Unit of the World Bank. The boundlaries, colors, denominations and any other information shows on this map do not imnply, on the part of The World Sank Group, any judgement on the legal status of any territory, or any acceptance of sort boundaries x This report represents a further chapter in the The objectives of the update included successful and creative dialogue between the reassessing the environmental situation in World Bank and the People's Republic of China and using this analysis to chart a China about how to both promote economic course for improving environmental quality growth and protect China's environment. in China in the coming decade, particularly In 1992, the Bank and the National over the period covered by the government's Environmental Protection Agency (NEPA) 10th Five-Year-Plan. The team achieved collaborated to produce an environmental these objectives. More importantly, they did strategy paper for China (World Bank so through collaboration with a large team 1992), which was crucial in the development of colleagues in China who are directly of a multiyear World Bank program of engaged in the day-to-day struggJe to of a ultiyar Wrld Bnk pogramof ahieve environmentally sustainable devel- environmental assistance to help the govern- ac ment address priority problems. The Banks opment and have first-hand knowledge of program was substantially delivered, and the situation and challenges on the ground. the government implemented many of the The Bank is building on the experience of strategy's policy recommendations. client countries such as China in developing At the beginning of 1999, when I was serv- a new corporate environment strategy that ing as Director for Environment and Social will transfer good practices among countries Development within the Banmes East Asia and improve and better integrate environ- andevlPment wihion, the Bank' EastroAsia mental considerations into the Bank's core and Pacific Region, I asked Environment mission of poverty alleviation. Preparing this Minister Xie Zhenhua whether the time hasi povertyandvitherintris had come to update that earlier study. He report has provided us and other countries Concurred come wee fate thatearlier stud e with an opportunity to learn from Chinas concurred. We were fortunate in securing prciaexren.Inetn,whoeht the generous and timely financial support of practical experience. In return, we oe o that the Government of Norway. The work that we have been able to transfer some of our own experiences from elsewhere in the we set in motion was continued through the world to help China on the road to sustain- good offices of Minister Xie, Vice Minister abldevelpmento Zhu Guangyao, and my successor, Mr. Zafer able development Ecevit, who was responsible for the original 1992 strategy paper. Kristalina Georgieva Director World Bank Environment Department xi This report is the result of a collaborative The Bank's team was comprised of staff research effort by the staff of the World within the Environment and Social Bank, the Policy Research Center for Development Division of the East Asia and Environment and Economics (PRCEE) of Pacific Region, which is directed by Zafer the China State Environmental Protection Ecevit. The report was written by Robert Administration (SEPA), and the Chinese Crooks (Task Manager), Jostein Nygard, Research Academy of Environmental Zhang QOngfeng, and Liu Feng, with the Sciences (CRAES). A wide range of other assistance of Jia Lanqing and Li Guo. Indra technical and research institutions within G. Raja provided secretarial assistance. The China also participated in this effort, includ- team reviewed the general literature and all ing the China National Environmental technical reports commissioned for the Monitoring Center (CNEMC), the Center study. In addition, they conducted extensive for Chinese Agricultural Policy (CCAP) of discussions with relevant government agen- the Chinese Academy of Science (CAS), the cies in China, other donors, and NGOs. Chinese Research and Development Center for Cobatin Desetifiction t the As part of the research process, three work- fCheAademy oesetryicaF), and shops were held in Beijing. The first, in stafnoete Wordemyo Wildlife CAFud Chna April 2000, included representatives from stafff the Grailadlf Mana ent government agencies and foreign donors; Program Office, the second, in July 2000, included represen- Division of the Livestock and Husbandry Bureau of the Ministry of Agriculture, the Wetland Resources Monitoring Center of the third, in February 2001, included the State Forestry Administration, and the representatives from government agencies, Institute of Geographic Science and Natural foreign donors, and NGOs. Government Resources Research of the CAS. Case stud- agencies attending the workshops included S . EPA, the State Development Planning ies were prepared by Professors Chen Jining Cm si, the State D eonomc Pand and Hao Jiming of Tsinghua University and Commission, the State Economic and Trade Commission, and the State Forestry Zang Yuxiang, former deputy director Administration, as well as the Ministries of general of SEPA's Pollution Control Agriculture; Construction; Finance; Foreign Department. All of the technical papers pre- Trade and Economic Cooperation; Land pared by these collaborating institutions are R a included as annexes to this report (see F'romth Und Naions, Tecworkshop attached CD-ROM). From the United Nations, the workshops included representatives from the United Nations Development Program and the United Nations Industrial Development xii Organization. From foreign governments, Soderstrom, Sun Chongwu, Geoffrey Read, there were representatives from Australia, Wang Hancheng, Wang Hua, Wang Jinnan, Canada, the European Union, Germany, Wang Xin, Mark Wilson, Xia Guang, Yu Italy, Japan, Norway, Sweden, Switzerland, Xiubo, Zhang Jianyu, Zhang Zhun, and the United Kingdom, and the United States. Zhou Guomei. NGOs included Environment Defense, The report was edited bv Robert Livernash Global Village, The Nature Conservancy, and Wetlands International. We are grateful Washinton Dce did te dSig Spark, Washington DC) did the des' n and for the many comments and observations 1v provided by all those who attended managed the desktopping. Production was provlddb l hsewoatne supervised by Nicola Marrian and Thaisa Ysonde Tiglao (External Affairs Department, The preparation team would particularly World Bank). Photos have been provided like to acknowledge its great debt to the staff by the World Bank Photo Library and Curt of SEPA's Foreign Economic Cooperation Carnemark, Dan Miller, and SEPA. Office for their organizational and adminis- Finally, we would like to express our deepest trative assistance throughout the study. In gratitude to the Government of Norway, particular, the team would like to acknowl- w edge the work of Messrs. Lu Huangsheng, which provide the fundst Liu Yi, Liu Chunyu, Luo Gaolal, Xiao Xuezhi and Wang Xin, and Mmes. Zhou Guomei and Yu Lan. Peer reviewers included Professor Ma Zhong (People's University, Beijing), Dr. Alan Krupnick (Resources for the Future), and Dr. Susmita Dasgupta (Development Research Group, World Bank). Additional inputs, comments, and review were provided by Brian Brandenburg, Cao Fengzhong, Carter Brandon, Helen Chan, Songsu Choi, Zafer Ecevit, Feng Dongfang, Daniel Gibson, Gu Lixin, Daniel Gunaratnam, Guo Xiaomin, Cees de Haan, Luo Gaolai, Jing Lixin, Todd Johnson, Ma Keping, Robin Mearns, Akihiko Nishio, Douglas Olson, Neeraj Prasad, Richard Reidinger, Susan Shen, Sari xiii During the 1990s, China continued its The report does not cover every environ- remarkable transformation, moving from a mental issue in China. We focused on the command or planned economy to a market- main generic issues-land, water, air, and based and increasingly less-planned economy, related topics such as environmental admin- and from a predominantly agricultural econ- istration-expected to be addressed in omy to a mixed economy with substantial SEPA's 10th Five-Year-Plan (FYP) for industrial and service sectors. Perhaps most Environmental Protection. The 10th FYP importantly, China dramatically reduced the covers the period 2001-06, and commenced social, economic, and human cost of poverty preparation at about the same time as this by halving the number of people living Strategy. Thus, this report does not discuss under the poverty line. nuclear environmental management or China is now a very different place than it biosafety (genetic engineering), which were Chma~ ~ ~ ~ ~~~~~~w new reposbiwte ass very tofe SEPA ha was in 1992, when the World Bank formu- two new responsibilities assigned to SEPA lated and published its last environment following the government reorganization of strategy (World Bank 1992). The range and 1998. Nor does it address solid waste man- agement or the management and disposal of significance of environmental issues have toianhzrduwse,wicae increased. An updated environment strategy toxic and hazardous wastes, which are fror China was needed to take account important issues in China, but at the time of these changes, to assess how they are thiS work was initiated were not frontline affecting the environmental agenda, and thematic issues expected to be addressed in to identify environmental management strategies and priorities. This updated strategy is based on research underwritten by the Government of Norway Con d it ion s through a generous technical assistance China has done many things right in the grant. It was a collaborative effort, involving enionmental area over the past decade, the staff of the World Bank, the State including large-scale afforestation and Environmental Protection Administration massive investments to reduce air and water (SEPA), and a wide range of universities and massive Butmentsano reduceconomic other research institutes who are working on pollution. But in many respects, economic environmental management problems in growth in China is overwhelming investment in conservation and environmental protec- China. Although researched and discussed tion. Land degradation is worsening; natural collaboratively, the recommended strategy forests are declining; biodiversity resources and the contents of the report are solely the arestress; biodiversity riorces responsibility of the World Bank. are under stress; water quality is deteriorating xiv in most areas and new threats are developing, Finally, almost all of China's unique and such as discharges from intensive livestock globally significant biodiversitv resources are operations; and the explosive growth of under stress. Many species in China are seri- motor vehicles presents a significant new ously threatened. Up to one fifth are now problem in air pollution control. endangered, and nearly one fourth of the species listed in the Convention on LAND, FORFSTS, AND B[ODIVERSITY International Trade in Endangered Species (CITES) are found in China. Both figures Much of the weight of growth and develop- are disproportionately high. A substantial ment in China is falling on its land systems. national system of nature reserves, which As a result, land degradation is widespread started and increasing. China has some oftheworst startedfrom nothing in 1956, has been developed to improve blodiversity protec- water erosion problems in the world; the tion. In general, however, the sy7stem iS highest ratio of actual to potential desertified uin an , over , and patch in underfinanced, overextcnded, and patchy in land in the world; and rapidly degrading is coverage grasslands. These problems are doubly serious, since the worst of them tend to be The government is well aware of these prob- concentrated in areas that support China's lenms and has dcvoted considerable financial poorest and most vulnerable people. In and other resources to address them. So far, addition, some of China's best cultivated however, these efforts have not produced the land is being lost to expanding urban and results that are needed, and new approaches industrial areas and a developing network of are required. roads and railways. The state of China's forcsts presents a WATER mixed picture. There is little doubt that Water availability and quality continued to China has successfully turned the tide of be a critical problem throughout the 1990s, deforestation after its huge investments in particularly in northern China, and the issue plantation and shelterbelt development. is likely to worsen over the next decade. This was an unprecedented achievement for Water quality in rivers, lakes, and groundwa- a country that, in terms of population ter will continue to deteriorate in many, if distribution, is still predominantly agrarian. not most, areas. In addition to industrial On the other hand, China's natural forests wastewater pollution control, which was the have been in a continuous state of decline prime concern of the 1990s, the next decade for 50 years, and there are no signs that will require decisive action on the growing the corner on sustainable management of problems of municipal wastewater dis- natural forests has been turned. charges and agricultural or "nonpoint" xv sources, notably including emissions from coal and oil suggests that efforts to mitigate intensive livestock production units. The acid deposition and carbon dioxide emis- combined effects of these problems will be sions will get tougher in the future, as felt most acutely in the rivers north of the demands for both forms of energy continue Yangtze, where water quality is already to increase significantly. Fundamental severely degraded. improvements in air quality and in mitigat- ing carbon dioxide emissions will require, in There are techi-iical dimensions to these the short term, substantial reductions in coal problems that are outlined in this report and consumption by small and dispersed end need to be addressed. But these will not be usersm and lsignd sufficient to solve the problem. Progress also uction in the eono rehance on cal. is needed on the administrative and regula- reduction in the economys reliance on coal. tory level; on economic factors impinging on water use and efficiency; and on the devel- ENVIRONMENTAL MANAGEMENT opment of new decisionmaking procedures, AND REGULATION which can equitably resolve the often- China's repertoire of environmental laws, reg- conflicting claims on water resources made ulations, and standards is quite comprehen- by different entities. sive and has been continuously updated and expanded to improve effectiveness and cover AIRi emerging issues. Among comparable devel- oping nations, China is unquestionably in the Air quality control was a m-alor and largyelv ' I D,'front rank, but it cannot become complacent. successful focus of government attention ' during the 1990s. National emissions of The demands it faces are unprecedented and it cannot settle for being among the best in its major air pollutants, such as sulfur dioxide class. It needs to measure its performance (SO2) and particulate matter, have declined . 4 . > . ~~~~~against the best OECD countries in the since 1996. But new issues are emerging. wvorld. By this standard, it still has a long Emissions from motor vehicles, which were ' ~~~wav to go. It bas to work harder on legal and not an issue at the start of the 1990s, have w worsened considerably in ma~'jor cities, and administrative measures, on getting the fun- damentals of development policy right, and private vehicle ownership is only starting to r . 1 , D ~~~~~on human resources development. Most spread. Indoor air pollution resulting from onphuman reoucs development os household consumption of solid fuels still .imortantly hastoimove theconcept poses potentially high health risks to most e s d rural households and many urban house- onto the frontpage of all policy documents. holds. The economy's continued reliance on xvi The Challenge for the Second, the systemic fiscal and budgetary problems facing the countrv as a whole are N ew MI ill en n i u m making it difficult for environmental There are three cross-cutting issues that institutions to do their work. There is a keep recurring throughout the analysis. growing gap between assigned responsi- bilities and the resources provided to carry These issues characterize the environmental management challenge over the next decade: out those responsibilities. This applies not only to environmental protection agen- First, the environmental agenda is becom- cies, but also to other ministries and units ing so complex and large that it cannot be within them, including the agricultural adequately managed by one agency- research services, agricultural extension SEPA and its counterparts at lower services, nature reserve management units levels-working on its own. Effective within the State Forestry Administration, solutions will require the combined and and so on. This issue is of particular coordinated efforts of many different importance in the context of continued branches of government and the re- market reform, where the government's thinking of many development policies. fundamental role as a "steward and protec- This is particularly true with regard to tor of the national estate" needs to be natural resources management, or the strengthened to offset the inability of green environmental agenda, which market-based systems to deal with envi- emerged as an increasingly critical issue ronmental and social externalities. Of over the last decade. Much of the environ- course, this is a problem that extends far mental degradation in China can be beyond the question of environmental attributed to implementation of policies management and protection, but it that were either directly inimical to envi- provides one more reason for continued ronmentally sustainable development, or aggressive reform of government tax and inadvertently had the same effect. New financial management procedures. development concepts need to be applied that provide a better balance between hdversir, the approachent as t ci and the development and environmental protection, take account of the nonfinancial benefits environmental tools it uses to provide a of natural resources, and incorporate better fit between the solutions developed the views of community groups whose and the problems being experienced in different parts of the country The "one- thoseareis mou s, closely associated with size-fits-all" approach, as exemplified by those resources. various mass environmental campaigns, xvii played a useful role in the past, but is prov- Institutions. The new and developing envi- ing increasingly inadequate to meet cur- ronmental challenge, as already recognized rent demands. The concept of developing by both the government and SEPA in many tools to deal with many problems is particular, is to promote environmentally particularly relevant for the management sustainable development of China's natural of natural resources, where greater atten- resources. Making progress will require the tion needs to be paid to addressing the full attention of government and coordinat- underlying causes of problems, not just ed efforts by all relevant agencies, xvhich their symptoms. in turn will require changes in the ways that all relevant institutions of government STRAIrEGIC PRIOR ITI ES approach their work. Priority tasks include: To meet future challenges, the government's Mainstreaming. Government agencies, main strategic priority should be to revise particularly those concerned wvith eco- development policy to improve the fit nomic and/or spatial planning and natural between economic and social development rcsources management, need to adjust and environmental sustainabilitv. It made their policies and objectives to incorporate several moves in this direction during the the concept of environmentally sustain- 1990s, but the intentions expressed in broad able development into their development policy instruments are not being adequately objectives and programs. translated into concrete action on the Cross-seetoral coordination. Most sustain- ground. The challenge for the new millenni- able natural resources management issues um is to correct that problem, and deliver on . . . ' ~~~~cut across normal lines of administrative environmentally sustainablc development. . Ct responsib litv. Chmna needs to find a way To do this, concrete actions are required in to coordinatme the vork of different agen- three main areas: cies, reduce overlaps and contradictions, The institutional arrangements for dealing maximize synergies, and adjudicate dis- with environmental issues putes. An effective coordinating function has to be established that (a) is located The instruments applied to achieve envi- at.. a. sutal hihbyn miiteil at a sultablv high-bevond ministerial- ronmental obJectives,X'. . . r level; (b) is provided with sufficient The investments made to undervrite the resources, most notably an effective environmental program. secretariat, to alloxv it to pursue an active agenda; and (c) can effectively resolve interdepartmental deadlocks. xviii ReJorm the approach to hiodiversity The institutional situation governing the conser-vation. Given the importance of basic work of pollution management and China's biodiversitv resources and the control is much better, but there are several level of threat they are facing, an impor- things that need to be done to increase tant priority is to significantly strengthen effectiveness, including: the approach to biodiversity protection and management. A cent'ral element Increase EPB capacities and effectiveness, wz'th particular enzphasis at the local level. should be establishment of an independ- 11 Technical capacity and resources made ent, state-level "Nature Reserves Service" available to EPBs, partictlarlv at the lower to manage nature reserves of national and a i global significance and become a center of levels such as counties and townships, need * ~~~~~~~~~~~~~to be significanitly inicreased. At the samie excellence for nature reserve management. to be sgfiat inreased t the same Thereare mny oter thngs tat ned to time, more effort iS required to resolve con- There are many other things that need to trdcinbewnhoznalndvtcl tradictions between horizontal and vertical be done on biodiversity conservation, but responsibilities at all levels. Options avail- this is the kev. I able include (a) delegating more regulatory Push forwar-d with in tegrated river basin authority to provinces and municipalities inanagenment in water-scarce regions. There and away from counties; and/or (b) increas- is a wide acceptance among technical ing supervision of lower levels by higher experts that a more integrated, river-basin levels through performance audits and approach is required to sustainably man- public reporting; and/or (c) developing a age water resources in the most heavily regional structure for SEPA, along the conflicted catchments, which are mostly lines of the People's Bank of China, to in north China. But no significant strengthen supervision by the state. progress is being made toward achieving that bjecive. his ituaion neds o be Strengthen the legal system. An essential pil- thatobjecteThe s governent sholds crae lar of the approach should be development corrected. The government should create of a strong body of environmental law new and separate river basin management b backed up byT an impartial judiciary to institutions, whose governance structure makes adequate provision for effective interpret the laws and adjudicate legal . . . ~~~~~~and regulatorv7 disputes. Given the participation of key stakeholders- . G numerous conceptual, social, and technical tein dcl ing provernen i dimensions, the task will not be simple, but it should be a priority. xix Continue to promote public participation Keep working on supplementary control in environmental decisionmacking. One strategies. Command and control instru- of the strongest elements of SEPA's envi- ments played a key role in determining ronmental strategy has been its work on industrial pollution trends during the public participation, public dissemination 1990s. On their own, however, they may of environmental information, and envi- not be sufficient to meet future challenges, ronmental education at all levels. This particularly those due to the effects of work has to continue, with emphasis on changing industrial ownership patterns. extending the environmental constituency Work has to continue on development beyond wealthier urban areas in the east. of the three other pillars of the control strategy; economic, voluntary, and public Instruments. China already has many of the sclsue insments. basic policies and instruments necessary to achieve a high level of effectiveness in the Command and control strategies will not management and control of point-source provide an answer to natural resources man- pollution. Main priorities for the future agement problems; a much more compre- should be: hensive approach will be required. It needs to be based on a clear understanding of the A new approach for point-source polluti'on underi onacaeso roblestand the control. New approaches have to be devel- y g o opcd to deal with the growing number and ation of incentive frameworks to encourage diversity of point-source discharges sustainable development of natural resources. and to eliminate some contradictions in Continue price reform for environmental the existing system, particularly in relation improvement. Reform of resource pricing, to the pollution levy fee system. This particularly energy and water, has to report advocates adoption of a permitting be continued, broadened, and acceleratcd, system under which all significant point so as to allow prices to reflcct scarcity sources of pollution, regardless of who and environmental externalities and owns them, must secure a permit or license to increase the price-responsiveness to operate, and must pay an administrative of demand. fee to cover the costs of issuing the permit. A schedule of graduated and increasinglv punitive fines for breach of permit condi- degradatlon connection. Chinese researchers punmtlveC fines for breach of permit condi- have establishcd a clear geographical link tions wvould also be required. between rural poverty and rural land degradation, and it is also likely that there are causal links. China has an extremely xx effective poverty alleviation program cial resources, running the risk of dissipat- implemented through the Leading Group ing their energies over too broad a range on Poverty Reduction (LGPR), and many of issues and reducing their effectiveness. of the program components target under- EPBs need to maintain their focus on pol- lying causes of rural land degradation. lution management and control, but they Institutions concerned with "ecological have to be careful and selective in identi- environmental" issues need to get more fying their role when expanding into the engaged in the LGPR program, and iden- "green" or eco-environmental agenda. rift ways of working collaboratively to Priority should be given to monitoring increase its environmental benefits. and reporting to government on the state of the natural environment, and assessing Re-orient natur-al resources development and reporting on the implications of policies. The degraded state of natural p g proposed government policies on the state resources in China is a result of develop- of the environment. ment policies that focused on maximizing output at the least cost to the rest of the Increase environmental expenditures in real economy. Policy needs to focus on promot- termns. The projected environmental ing production levels consistent with the investment for the 10th FYP is about long-term maintenance of the resources in 1.3 percent of GDP. This needs to be question. Policy needs to be based on rele- increased, probably to around 2 percent vant research, which should be increased of GDP on air and water pollution and made more cross-disciplinary to control through 2020, and much greater ensure that adequate account is taken of allocations need to be made for basic both the social and ecological dimensions capacity building. of natural resources management. Linprove the effectiveness of investments in Investments. The work on institutional and ecological construlctioni and conservation. The policy development provides the framework government is allocating substantial for environmental improvement, but invest- resources to "ecological construction" ment is the driving force that achieves work, but their effectiveness could be results. Certain steps are needed to increase substantially improved by placing more the impact of environmental investments: emphasis on addressing the underlying social and economic causes of land degra- Keep s onpriorityissus. Tdation, and lcss on treating the symptoms. environmental responsibilities assigned to SEPA and the EPBs is expanding at a far greater rate than their staff and finan- xxi Mllore and smarter investments in urban THE ROLE OF DONORS environmental infrastructure. Financial commitments for construction of basic The envilronmental challenge under the sewcrge an soli wast manaement 10th FYP will bc substantial, as "Vill the gov- sewerage and solid waste management eietsne o ehia n iaca ernment's need for technical at-d financ'al infrastructure have to be significantlv, if u hassistance. The World Bank and other for- increased to meet the challenge of eign donors could significantly enhance increased urbanization. But investment their contribution by focusing assistance on also has to get "smarter." For example, .. also.has to get "smarten" For example, the three main strategic prioritics discussed municipal sewage treatment standards above, within the following framework: need to be adapted to local circumstances, rather than being based on a single, Enhance donor coordination. The govern- national standard. There also may be ment and donors need to increase work to opportunities to develop industrial estates eliminate redundancies, reduce overlaps, with centralized wastewater collection and and better match donor participation to treatment, which could provide cost-effi- their respective strengths in areas such as cient solutions to the growing problem of loans; grants; technical partnerships and small- and medium-sized enterprises with collaborative arrangements; technical high water pollution emissions. strengths and experience; program size; and administrative procedures. Less haste and more thought on environmental imp rovementprograms. The effectiveness of Donors should take more account of the gov- many environmental improvement pro- ernments five-year environmentalplanning grams can be improved by (a) spending priorities. The government's five-year more time and resources on feasibility stud- plans provide clear guidance on domestic ies; (b) paying more attention to the cost priorities over the planning period. All effectiveness of investment; (c) reducing donors need to take much more explicit emphasis on investments in physical capi- account of these plans in setting their tal, and increasing investments in human priorities and identifying assistance capital development; and (d) avoiding the opportunities. temptation to broaden the agenda before prort prbesar.ovd In creased use of collaborative approaches. pr,oriry problems are solved. An integrated approach to environmental problems often requires a variety of assis- tance needs, which may extend beyond the vehicles available to any particular donor. In such circumstances, collaborative approaches between different donors may xxii provide a way forward, provided that All foreign institutions interested in the the potentially formidable administrative environment and development agenda in difficulties can be overcome. China have a role to play in helping to underwrite the huge investments needed to Increase role and use oftechnicalpartnerships. meetteniron enta shlengs neChina. This could be an area in which bilateral But eiroamenat contrin will donors would have a distinct comparative ggrg always be small in relation to the need. advantage. Areas for beneficial partner- awy esal' eaint h ed advasinta de. Aeas forthr benefalopantnr o Based on the review underlying this report, ships include (a) further development of adtkn con ftegvrmn' and taking account of the government's environmental instruments such as EIA e and Strategic EIA; (b) integrated river eniomtasrtgyfrhe1h and Strtegc EA;b)nteratdrver FYP, investments likely to be of particular basin management; (c) nature reserve basinmanagementandpro n; (c) n ure rse environmental value include (a) rural devel- management and protection; (d) sustain- opment projects that combine poverty able agricultural land management; and . ale ° ageri .cul al land ng. alleviation with environmental protection (e) general technical training. and/or sustainable natural resources manage- Private sector participation. Another new ment, with particular emphasis on grassland and developing area, which may be of par- areas, hilly and mountainous areas, and ticular interest to bilateral agencies, relates priority areas under the "Three Regions" to private sector participation in environ- policy; (b) urban pollution control and mental management and control. In addi- environmental management, including tion to development of environmental support for sustainable development of infrastructure, the private sector could urban environmental infrastructure, as well also make a contribution in education and as increased private investments in specific training, technology transfer, policy investment projects; (c) biodiversity conser- formulation, and public awareness. vation and development of new approaches that integrate rural development with bio- Role of NGOs*Envirnmea diversity conservation; and (d) development just starting to develop in China. As inter- of new approaches to management of est in and awareness of environmentalr wastes from small-scale rural enterprises by, issues increase, their role can be expected for example, establishment of industrial to increase substantially in the future. This development zones with centralized waste is another area in which foreign donors c 19 ~~collection and treatment. could play a role through training and technical assistance, brokering partner- ships with external NGOs, and provision of material support. xxiii - - | - - ls s _Z lE * * :E - r E111 l I K ! I K _l K 11 1|11 111 1|1 EIKE g CA t111 1!E -1 Sf-\ DS bA eR\5E_ l l _ _ _1 l_ 11 ! Illi lil 500000fff03t I I * - _E g | 11 g 1-- | ! r_ l 0 g E g I i _ i g S ^ ^ '.ED; .,.SuCt,00.; ty g g g g g 070-V00000 f I M M X g ff f; f . I f 81 E a_ _ - - E g - _s _ - ws W Poverty declined dramatically. The popula- tion living under the government's poverty line dropped from about 260 million in 1978 to about 42 million-5 percent of the rural population-by the end of 1998. Population continued to grow. It reached about 1.27 billion in 2000, which was substantially higher than any other nation in the world, although the fertility rate During the roughly two-decade period from dropped below the replacement level. -L128 to ,998, China's gross domestic prod- Because of the large number of women of uct girew at an average annual rate of about childbearing age in the population, the 9.6 percent. This was about four times faster total population is expected to grow to than high-income countries, which as a about 1.48 billion by 2025, but will level group grew in the 2.2-2.4 percent range off rapidly thereafter. annually during the same period. This Pressure on natural resources increased. growth was accompanied by a variety of China's large population and increasing political, economic, demographic, and envi- ronmental changes. For example: per capita consumption increased the pressure on all of its natural resources, but The structure of the economy changed. China particularly land. In 1997, the amount of changed from a planned and essentially cropland per 1,000 people was estimated supply-driven economy to a much more at 109 hectares, which was a 7 percent market oriented and demand-driven econ- decline from 1987 and only about 42 per- omy. Industrial output is now more diver- cent of the world average. sified, and most industrial growth is being Environmental awareness and protection generated by non-state enterprises, which currently contribute about three fourths of improved Chmia's environmental protec- gross indutrial outut value.tion capacity grew during this period, but gross industrial output value. at the same time environmental problems The rural sector changed. Farmers are became more complex and often expressed increasingly responding to consumer themselves at a larger scale. demand rather than state production plans These changes, and particularly the trend and, as a result, output has been diversifying toward a mixed, demand-driven economy, significantly. At the same time, the sector have substantial implications for the nature declined as a source of employment and in terms of its relative economic contribution. 1 Economic Growth and the Environment available to deal with it. The agenda is being logical innovation and resource use particularly affected by changes in (a) indus- efficiency, alloxving more industrial growth trial structure; (b) urbanization; and, (c) rural to be achieved at less environmental cost. development, including changes in agricul- While thcse trends in gencral havc beii tural production and the continuing problem bhil eseirends lin gen have been of rural poverty. The net effect of these beneficial environmentalW they have also increased the regulatorv challengre. changes is to widen the agenda and make it t increasingly more difficult for the govern- GROWTH OF NON-STATE ment to achieve its environmental objectives. ENTERPRISES Changing Industrial Non-state industrial enterprises (see Box 1.1) dominated industrial groxvth in China Structure over the past 20 years. In the last decade Changes in China's industrial structure have alone, these enterprises accounted for abotit had major iLmpacts on industrial potlution 90 percent of growth in gross industrial out- put valtie (GIOV). Thev now account for and the regulatorv environment. Three trends are particularly signif : about 72 percent of GIOV, compared to 45 trcnds are particularlv significant: percent in 1990 and only 14 percent in 1980. First, the role of non-state enterprises, which dominatcd idustrial expansio Prior to 1996, pollution from TVIES was largely unregulated. Between 1990 and 1995, during the last 15 vears, increased signifi- te i " . * ° ~~~~~~thev increased their combined polltitaiit cantly, while the role of state-owned enterprises declined. emissions bv about 120 percent, while emis- entcrprises declined. sions from SOEs actLally declined by 9 per- Secondl, growth has been uneven among cent. In 1996, the central government adopt- various industrial sub-sectors, with some ed drastic new pollution control measures for of the most polluting industries experienc- TVIEs, and launched a national campaign to ing relative contractions. This structural close down some 72,000 highly polluting reform made a notable contribution to TVIEs in 15 sub-sectors. About 65,000 were industrial pollution control. actually shut down. Some 20 to 30 percent switch tarestarted, either illegally or after bringing Tbir-d, the switch to a more eompetitivc Thirdemand,drvenindustrialsecto the- their enterprises into compliance with rele- demand-driven industrial sector iS result- vant discharge standards. Even so, there is ing in increased earnings retention and little doubt that the program had a major re-investment. This iS increasing rechno- impact on total industrial wastewater emis- sions.' The fact that such drastic action had 2 China: Air, Land, and Water to be taken is a reflection of the difficulty Box i.i Industrial Terminology in China that environmental protection bureaus have been encountering in controlling this sector The discussion of the industrial sector in this report distinguishes between two basic indus- trial groupings: (1) County and Above Owned Enterprises (CAOEs); and (2) Town and Village UNEVEN GROWTH IN Industrial Enterprises (TVIEs). Up to 1998, envi- INDUSTRIAL SUB-SECTORS ronmental statistical data discriminated between these two categories, although the Changes in industrial structure have reduced distinction has mainly been eliminated. industrial pollution intensity per unit of out- The distinction is partly historical; TVIEs were put value and narrowed the primary sources originally commune-based industrial enterprises of industrial pollution. Many industrial and were administered through the Ministry of sub-sectors that are important sources of Agriculture. But it also reflects differences in the intractable pollution (such as machinery, tex- institutional, legal, and other factors that used to tiles, pulp and paper, refining, and smelting) govern their operation. For example, different- bilee,pulpand gaperowi refining,ates sigficant partly less stringent-pollution control targets have been growing at rates signcanty were set for TVIEs in the gth Five Year Plan. lower than the all-industrial average. At the same time, less-polluting industries (such as The CAOE industrial grouping comprises State- same tim, less-plluting ndustrie (such,a Owned Enterprises (SOEs) and collectively electronics, communications, and household owned enterprises at the county level and appliances) have been growing at propor- above. In 1999,this grouping comprised approx- tionately higher rates. Not all the "new" imately 61,300 SOEs and (nominally) 1,045,000 industries are without pollution problems,2 collectively owned enterprises. but growth and development seem to be In the same year, the TVIE grouping included favoring industries that tend to use fewer raw about 6.7 million industrial enterprises,of which materials and tend to produce less pollution 615,000 were collectively owned enterprises per unit of output. Figure 1.1, which com- at the township and village levels. The remainder were household cooperatives and pares indexed trends in GIOV with indexed invduletri5s emissions of three pollutants (chemical oxy- gen demand, sulfur dioxide, and soot) during the 1989-99 period, shows that industrial pollution loads increased at much lower rates than industrial output, and actually declined after 1995. Some of the observed effects are due to increased regulatory effectiveness, but there is little doubt that industrial restructur- ing also played an important role. 1 Economic Growth and the Environment 3 Figure 1.1 Trends in Industrial Output consequences of this trcnd has been an and Pollution Emissions, 1989-99 improvement in rcsourcc use efficiency xvith- 500 in the industrial scctor. For example, ovcr the 400- last 10 years, industrial energy intensity a 300- >5zO- declined by 50 percent. More efficicnt tech- _nologv is estimated to account for about one x200- third of the improvement. Howcver, there is 100o 3=istill considerably more room for improvement. O K 0 N e \ O N Bv upgrading technologics in power genera- tion and in sevcral major industrial encrgy G-OV Index -0--Industrial COD activitics to industrialized-countrv lcvels, O ndustrial SO02 Industrial Soon 5ource:ZTN (2000); ZHN (1997, 1995 i999it has been estimatcd that China could cut Nygard ard CLO (2001) 20 percent of its projected coal consumption. There is even morc potential for improve- Industrial rcstructuring also has narrowed the ment in industrial water use efficiency, which primary sourccs of industrial pollution. As of has traditionally becn very low in China, 1998, just eight industrial sub-scctors were partly duc to low water prices. Oft-quoted discharging about 85 percent of all industrial cxamples include the chcmical and paper pollution. In several cases, these sub-scctors manufacturing scctors, which are the leading are also making only modest contributions watcr-polluting industries in China.' In some to GIOV. For example, the pulp and paper areas, particularly north China, increased sector generated about 46 percent of indus- water scarcity is leading to increased prices trial chemical oxygen demand, but only 1.8 and an increased interest on the part of enter- percent of GIOV. The industrial structure prises in water-saving technology and othcr still is tilted toxvard relatively polluting clean production (CP) strategies. upstream manufacturing, but as industrial reform continues, the share of downstream, RESTRUCTURING AND INDUS 'I RIAI less polluting, and high value-added manu- POLLUTION CONTROL facruring is exYpected to increase. These dramatic changes in ownershsp struc- TE,lciiNOLOGICAL PROGRESS ture, sectoral structurc, product mix, and technological innovation are creating many To stay competitive, industrial firms are find- new challenges for government regulation of ing it increasingly necessary to retain earnings the industrial sector. and invest in new and improved technology. One of the most important environmental 4 China: Air, Land, and Water Traditionally, China's industrial pollution be done on supplementary approaches, regulation focused on medium and large including economic incentives, voluntary enterprises that were for the most part instruments, and public participation. owned or controlled by county-level and above governments and were the core of the U r b a n i zat ion a n d centrally planned economv. Because these were government enterprises, it was possible the E nvi ron me nt to exercise an element of control over them China's urban population is vast and growing by administrative or non-regulatory means. Te 1990s saw corntnuedgimprovemeans rapidlyv The current "official" urban popula- The 1990s sawv continucd improvements in pollution control at medium and large enter- tion of 400 million people-30 percent of the population-is roughd equual to the total prises, and administrative measures were an important factor influencing this trend. population of Western Europe. Each year Grwngavaees folin pduring the 1990s, it grew by about 10 million Growing awvareness of pollution problems .'' fronm TVIEs prompted a serious crackdown people, equivalent to the population of fro TVIEs prompted a, serious crackdown Greece. Impressive as thev are, these data on small enterprises in 1996-97, and this in emis- understate the situation. Most analysts agree that the actual urban population is much sions from this sub-sector. However, this was * l only achieved through the use of "extra- l 4 regulatory" methods-the campaign to shut the total population. down 15 kinds of small enterprises. This was The official statistics indicate that the most socially disruptive, and did not reallv provide dramatic increases in urbanization during an acceptable basis for a long-term approach. the 1990s occurred in medium-sized and smaller cities which are generallv less well- ,.s the inustrial setor become esmnlmor l'es t, domtheinatedbyprivalsectorbecrmes ainitrae equipped with financial and human resources domenasuesdw beco pr ogatcfires,adminisiv les to deal with rapid growth or its environmen- measreswRI become progress'velv less effective, and"exraregn . tal consequences (see Table 1.1). However, effective, and "extra-regulatorv' campaigns will becoe ul d . In t closer examination shows that an even wi bcoe nacetal dsrptve I ti greater challenge may be developing at an context, one of the main challenges for the future wil be to significantly strengthen reg administrative level below the city; that is, in future will btthe "administrative towns." These increased ulatorv effectiveness, so as to maximize the ' ' . . ~~~~~in number from about 10,000 in 1991 to benefits of the laws and regulations alreadv in I more than 17,000 in 1999.7 place. At the same time, more work needs to 1 Economic Growth and the Environment 5 Table 1.1 Urban Growth,1991-99 URBAN ENVIRONMENTAL QUALITY 1991 1999 Priority environmental issues in China's urban Numberofdesignatedcitiesofwhich: 479 667 areas include air pollution, municipal waste- -Super large (>2 million) 9 13 water treatment, solid waste management, -Very large (1-2 million) 22 24 and urban encroachment on arable land. -Large (0.5-1 million) 30 49 -Medium (0.2-0.5 million) 121 216 Air pollution. The most prominent urban -Small (<0.2 million) 297 365 environmental problem in China is air pollu- Number of administrative townsa 10,000 17,341 tion, particularly fine-particulate pollution, Note: I Adm r stratve towns refers to the urbarize part of the which is generated mostly by burning fossil admin strat ve un t known as a township asd are ana ogous to a county seat within a couritylTownships are the lowest leve of fuels. China has been successful in promot- governmerte amninistration. ing the use of gaseous fuels in urban residen- Source: ZTN (1992 arld 20CO); ZCJ FN (1999) tial and commercial sectors, especlally in The State Development Planning Commi- large cities. As a result, concentrations of ssion (SDPC) hopes to maintain urbanization S02 and TSP in many cities have declined growth rates at 0.5-1.0 percent per annum significantly. during the period of the 10th Five Year . . . Plan. Based on recent experience, this may as an urban air pollution issue. Unlike the be low. Nevertheless, even if the SDPC s other urban issues, it was not even foreseen at projections are correct, there will still be a the beginning of the 1990s. As shown in substantial increase in urbanization over the next 10 years. The demand for urban envi- T . d - . . . ~~~~~~motor vehicles increased significantly. The ronmental infrastructure, alreadv high, will m v i icae coig. hs ile e biggest increases were in privately owned anoters significntl en ironenl challenge passenger vehicles and motorcycles, which fnorther sigonment, were a rarity in the early 1990s. China is only for the government. Table 1.2 Wastewater Flows and COD Loads, 1991 and 1999 Wastewater Source Flow COD Load (million cubic meters) (million tons) 1991 1999 1991 1999 Industrial 27,089 19,730 10.4 6.9 Municipal 10,020 20,377 4.0 7.0 National Total 37,108 40,107 14.4 13.9 Source: ZTN )1992 and 2000' 6 China: Air, Land, and Water at the very beginning of its development as municipal sources (see Table 1.2). Industrial a privately mobile society. Given current wastewater flows and loads declined signifi- industrial development policies, there is likely cantly, while municipal flows and loads to be continued explosive growth in personal increased. In 1999, municipal wastewater vehicle ownership and associated environ- flows and COD loads exceeded total indus- mental problems in the foreseeable future. trial flows and loads for the first time. The The environmental consequences of this treatment rates and treatment efficiencies growth are amplified by the fact that vehicles of municipal wastewater are only a fraction in China produce higher emissions than in of industrial rates, largely because of the other countries. For example, it is estimated inability of urban governments to keep pace that an average motor vehicle in Beijing with growth. These trends are likely to grow emits four times as much carbon monoxide significantly in the foreseeable future, and (CO) and seven times as much nitrogen city managers can expect that the difficulties oxide (NOX) as an average vehicle in Tokyo. they are currently experiencing with sewage One positive note is the government's collection and treatment demand will rapid and successful phaseout of lead in increase significantly. gasoline. The four-year program, which Urban encroachment. Between 1987 and started in 1997, has eliminated a major public 1995, nearly 1 million hectares of cultivated health hazard. land were lost due to urban infrastructure Table 1.3 Average Annual Increases in Registered development and expansion. This represent- Civilian Motor Vehicles, 1990-99 ed about 20 percent of all cultivated land lost Vehicle category Avg. Growth Rate (%) or converted during the period. About one Passenger vehicles: 19 fourth of the total was located in the eastern Privately owned 33 parts of the country, where urban economic Other ownership 14 growth has been booming. These losses are Trucks 7 particularly serious because much of the Privately owned 17 land near urban areas is highly productive Other ownership 4 Opeclth onerhiples 7 agricultural land, well served with water, and located close to major markets. Much of this Passenger Vehicles & Trucks 12 land was replaced bv newly developed land in Motorcycles 26 other parts of China, but it was generally of Source:ZTN (2000) lower quality, had less access to water, and Wastewater. During the 1990s, a significant was located much further away from the switch occurred in the balance of wasea main domestic markets. As urbanization switch occurred in the balance of wastewater flows and COD loads between industrial and increases, the problems of maintaining a cul- tivated land base will worsen considerably. 1 Economic Growth and the Environment 7 URBAN GROWTH: PRIORITY ISSUES incentive for suppliers to maintain adequate services. Many prices presentlv set for urban The scale and speed of urban renewal and services do the opposite. expansion in China is unprecedented. About half of all residential and commercial build- Increased investment will be necessary but ings in urban areas were built in the past 10 not sufficient to meet the challenge. years, and the urban building stock is expect- Improved planning, increased sectoral ed to double again in the next 10 to 15 years. integration, and increased human resources Some planners believe that the urbanization development all have equallv important parts to play Environmental master plans provide rate should increase to around 40 percent topa,Evrnealmsrpaspo'd rtsoliceeprc a good way for cities to systematicallv ana- bv 2015 from the current actual rate of v lv,ze their environm-ental problems and seek 36 percent. This would bring the total urban I cost-effective solutions, but few Chinese population to about 670 million. This . tremendous growth will significantly cities have them. There is an urgent need for increase the challenge of urban environmen- all Chinese cities to make environmental tcrease mnemchaent. f further chlenge i provisions an integral part of their urban urban enviroment.A management isDthat development plans, including zoning restric- urban environmental managemcnt iS that a sbtnilaonofubngot tions, requirements for sewer connection or a substantial amount offurban wheis alternative wastewater disposal methods, occurring at levels below of ficial cities, where cnrl nsrw,oe pc rvsos therc is virtually no capacity to deal with andos on. - ~~~~and so on. planning problems. ,> ~~~~~~~~~~Municipal or county environmental protec- Substantial investments will be required to I tion bureaus have been primarily dealing improve urban environmental qluality.p impriories irbancl extnsironmof sewers an wvith industrial pollution problems, and are Priorities includc extension of sewers and not well prepared and positioned to tackle increases in wastewater treatment capacity, the multi-dimensional, cross-sectoral urban fuel switching, water and energy conserva- environmental issues. They tend not to tion, and mass transit systems. The financing . S . ~~~~participate lll munilcipal planning, which iS and the cost-effectiveness of these invest- c ment wil t a lrgeextnt dpen onthe carried out by planning departments, and as ments will to a large cxtent depend on the a rcsult the role of prevention is minimized. transparency and market-driven nature of Uraeniom tlpobmsedtoe the pricing of urban environmental services, addressed retrospectivelv and onlv whcn thev energy, and other infrastructure servbces ein Prices need to strike a balance betwveen the bcm e'u.Evrnetlaece Prics ned t stikea baanc beteenthe need to increase their participation in the incentive for users to reduce demand and the urba plning pr andicrease the urban plannmng process and increase the emphasis on minimization and avoidance. 8 China: Air, Land, and Water Agriculture, Poverty, Figure 1.3 Sectoral Contributions to Employment, 1970-99 and Natural Resources Management E l l * In a country such as China, where even today C 40 the majority of the population lives in rural l * areas, the state of the rural environment- 2 that is, of the land, the life that is dependent 0 _ _i on the land, and the water that flows from N0 0' the land-is substantially influenced by the @ Agriculture EIndustry _Services state of the rural economy. As the rural econ- Source: ZTN (2000) omy changes, so too do the natural resources management issues that have to be addressed. ingly being freed from direction by the state and permitted to respond to consumer CHANGING PATTERNS OF demand, which is changing the structure of AGRICULTURAL PRODUCTION agricultural output. Production of crops has been declining, while the livestock, fish, and Of all the sectors that are changing in the hotcluestrsavbeniraig Chinese economy, agriculture is changing (see Figure 1.4). the most. Its economic contribution is declining in relative terms, as is its role as a These changes have many environmental source of employment (see Figures 1.2 and implications, some of which are positive 1.3). At the same time, farmers are increas- and others negative. On the positive side, Figure 1.4 Structure of Agricultural Production, 1970-99 F:igure 1.2 Sectoral Contributions to CDP, 1970-99 "19g!!!~~~~~~~~~~~~~~~~. 0'0 N0' 131 Crop production cI Forestry/Horticulture ~JAgriculture I:3ndustry iServices 18Livestock EFishery/Aquaculture Source: Huang vs al (1999) Source: Huang etial. (1999) 1 Economic Growth and the Environment g diversification out of grain crop production domestic consumption of pesticides will not could reduce land development pressures; in only represent an increasing risk to the many cases, conversion to cropland in the last health and safety of farmers using them, but 30 years has been a source of considerable elevated pesticide residues in food products land degradation, in part because much of could act as a barrier to entry to important this land is only marginally suitable for culti- export markets for high-quality food. vation. It could also reduce irrigation Livestock is another rapidly growing part of demands, since much of the diversification is . . . the ruiral economy, and this trend will con- occurring in eastern China, where irrigation is most developed and water-use conflicts are most acute. Fertilizer demands and the of meat products rise. The bulk of increased production, particularly pork, will bc met bv adverse effects associated with their misuse p may also be moderated, since grain producers medium- and large-scale intensive animal are the biggest consumers of fertilizer. They production operations, which are potentially significant water pollution sources. Pro- are also the most prone to over-apply fertil- . 1 l . j~~~ections summariz;ed in Chapter 3 suggest izer, thus contributing to eutrophication ji su pollsevere in that, wlthin the foreseeable future, their sig- problems whihmrenificance could be comparable to the current eastern China. . .. . combined impact of industrial and municipal Diversification also poses two potentially water pollution sources. This matter will significant adverse environmental conse- present a major challenge to environmental quences: (a) increased production of horti- protection agencies and relevant units of the cultural products and cash crops such as Ministry of Agriculture. vegetables tend to be associated with increases in pesticide applications, particularly the POVERTY AND NATURAI. more hazardous types; and (b) increased live- RESOURCES MANAGEMENT stock production can result in increased . . . ~~~~~~~As the poverty problem retreated during emissions of organic pollutants. the 1990s, it became increasingly caught up China may already be the largest producer with the issue of land degradation. Of the and consumer of pesticides in the world.8 roughly 42 million people still living under There are many reports that farmers are the government's poverty line, the great overusing them and are unaware of the health majority arc living in rural areas that are par- risks associated with their use. There are also ticularly susceptible to land degradation, reports of substantial local production of and xvhich is unquestionably the major rural trade in banned and environmentally haz- environmental issue confronting the country ardous pesticides. Increased production and today. In the central and eastern regions of China: Air, Land, and Water the country, there is a high degree of overlap ties. Poor land resources thus lead to poverty, between ecologically sensitive land and which leads to further degradation of land counties with high poverty rates. Similarly, resources, which leads to increased poverty. thcre are concentrations of poor people in the grassland provinces of western China andegradtionin Cn is srous an that are prone to desertification." appears to be worsenng on most fronts i spite of strenuous government efforts to In some respects, there is a circular relation- combat it. A coordinated attack on land ship between poverty and natural resource degradation needs to be a central theme in degradation. Part of the reason that the peo- the government's strategy. Past strategies will ple are poor is because their land is of poor not be sufficient; new approaches need to be quality, and/or the climate is variable and developed. The close connection between subject to extremes. These are the same fea- rural poverty and land degradation may pro- tures that make the landscape susceptible to vide a way forward. An important compo- degradation. The farmers'problems are com- nent of the strategy could be the poverty pounded by remoteness and lack of access to alleviation campaign spearheaded by the government services, infrastructure, markets, Leading Group on Poverty Reduction and credit. Their lives are risky, and they lack (LGPR), since it attacks the underlying confidence in their ability to access markets. causes of poverty, which ultimately are also In turn, this makes them unwilling to diver- important causes of land degradation. sifv production away from basic staples, prin- cipally grain or small livestock. Thus, even Lessons for the New when they have the knowledge and ability to diversify production, they may be reluctant to MI ll en n I u m take the risk. Under such heavily constrained The issues discussed above will be elaborated circumstances, it is not surprising that many poor farmers attempt to increase their in succeeding chapters, but there are some incomes by making use of the only produc- general conclusions that can be drawn from the last 10 years' experience that are useful in ton factors available to them either freely or .. .' th~~tinking about bow to confront the newv at low cost: (a) unutilized or underutilized environmental challenges. land, which is likely to be even more degrad- able than the land they are already using; and When China's economy took off two decades (b) their labor, which has low opportunity ago, three emerging conditions changed the cost because of the shortage or complete character of growth and subsequent environ- absence of off-farm employment opportuni- mental impacts. First, the economic system was set on a reforming path to increase its 1 Economic Growth and the Environment ii responsiveness to market mechanisms. pelling evidence that strengthened pollution Second, the country opened up to interna- management has increased incentives for tional trade, knowledge, and norms. Third, a industrial pollution control. nascent environmental protection system was put in place and sloxvly but progressively In short, there has been an encouraging con- increased in strength. The first two factors vergence of events governing industrial pollu- ibuted to the spectacular economic tion, which provides considerable reason for contrihuoe the spectacuar confidence about future prospects on that growth of the last 20 years, xvhile the third front. At the same timc, hox%vever othcr helped prevent environmental conditions dimensions of the environmental agenda arc from deteriorating even more than thev have. emerging. Urban environmental manage- It would be easy to be pessimistic about ment is now a hu-ge challenge, notvithstand- China's environmental prospects over the ing the government's massive investments in next 10 years. The scale of expected growth environmental infrastructure. The deteriorat- and development, the complexity of issues to ing state of the natural ernironment is not be addressed, and the already over-stressed only impinging on the health of the rural state of the environment present an intimi- economy, but is also intruding into the lives of dating prospect. But there is also consider- the urban community through dust storms able room for optimism. Political and public and other indirect effects. In this context, the awareness of environmental degradation is challenge for the next 10 years vill be how to already high and increasing. A solid frame- maintain the momentum on industrial pollu- work of environmental laws and regulations tion control and broaden the attack to cover has been put in place, and there is little doubt emerging environmental issues without about the government's capacity to deal with undermining the economic growth that has complex management problems. While it is provided the motivation and space to address not yet true that China has won the battle environmental problems in the first place. against industrial pollution, it has created man oftepeodtosfrscesadi Meeting that challenge will require more many of tercdithan the best efforts of SEPA and its coun- definltelv making progress. Emissions of several major pollutants, such as COD and terparts at lower levels. This is a challenge particulate matter, have been stabilized or that requires the attention and coordinated evenrticulated materig have ber stabild ou- efforts of all relevant branches of government even reduced during a period of strong out- to achieve much better integration betveen put grovrb. Statistics and analtsis show that economic and environmental policies. Economic policies and institutions need to contmnuouslvT reduced the pollution intensitv I be designed to provide the right incentives to of Chinese industries, and there is com- protect the environment. Environmental 12 China: Air, Lard, and Water management needs to focus on the full cycle The following chapters of this report explore of any economic activity, not just waste the detailed dimensions of the environmen- disposal. The integration of economic and tal challenge in relation to the management environmental policies is a two-way street. of land, water, and air, and to environmental Economic policies and institutions need to administration. In the concluding chapter, be reformed to improve or introduce envi- we return again to the issue of a crosscutting ronmental signals that are received by differ- environmental strategy, and discuss further ent economic actors. Environmental policies how the concepts mentioned above could be and institutions also need to be reformed to put into action. harness the efficiency of the market and the synergistic opportunities offered by growth. The problem of achieving economy-environ- ment integration in China is compounded by the growing assertiveness of local govern- ments and their unwillingness to be bound by environmental constraints in the rush for growth. This is a transitional problem, as evidenced by the increasing attention paid to environmental issues by governments in the eastern provinces, but the government needs to push the pace of transition through edu- cation, incentives, and peer group pressure. These are difficult concepts to put into oper- ation, and no country can legitimately claim to have fully succeeded, although many are trying. China will have to work out an approach suited to its own situation, but it is already clear that a key element in the solution will be to develop a mechanism to better integrate economic and environmental policies and to coordinate the efforts of different agencies."' 1 Economic Growth and the Environment 13 Notes 6. This inicludes (a) the "11011-agricultural populittionl" of Chliiia's 667 designated cities, whichl is thc nsarrowest dcfiniitiotn of uirban1 poptilatioin (thcy total about 380 million 1.sThegimpact nc aigurerissinsnsavno ' people anid constittite the "official" urban population); (h) significant (see Figure 1.1). isircgisrered urbain rcsidenits (rainhly migrant workers); aid 2. One of the indiustries favored by structural reform is (c) people livinig in "peri-ulrbani" towits, rhat is, towns rihat leathier tiaining, whici is a sCrioirs soiircC of pslItitiolr. bavc bccr svvallowcd Lip hr expiaindinig urban arcas bitt are - .ot ret coumitcd as being part of the citv. 3. Thcy arc mining (cering coial, fcrrouIs and iiosifcrrotus metals and non-metil minerals), clcctricity gencration, 7. The total poptilatiois of Clinia's 17,341 aidministrative nona-miietal miieral prodLiction (IncludinIg ccniciit and townis in 1999 was about 116 inilllisi pcople, of vvhom aboLIt brick miiaking), chcmical production, fisod processing and 48.8 nillioin sverc registered as nron-agricUltural population n uaitfactiuring, pulp and paper production, textiles, anld (NAP). Therc arc ani additiosnal 15 mlillioni people classified ferrous smelting atid processitig. as NAP lining in what the Minlistry of Constrrictionn classifes 4as "town conicentrationis" (i.c. informeal sirbans arcas wvithin 4. Statistics show that else valor added by' the Chi ese man townships, whicl hsvie tio fosrnsal administrative StrtIcttirc). &faCtifrirIg scctors is derived as filloAvs; 36 percent frossr light All of thc NAP of rhothi orgartized towns aisd torwn corsiccit - manufactuiring, 32 percent from raW Material mantifacturing, trations could reasoniably he coTIsidered as urban poptilatiori. anid 32 percent from downstream processing and assernbly 'ligether dies represent shout 16 pererist of'the 'utrba" The average coretribution olf these sub-sectors in the USA, poptulation ctrrcintlv registered as liviiig in desigrzatcl citics. Japan, and Frarnce/Germanr is 30 perceit, 26 pcrcent, and 44 pcrcent, respectivcly (CASS 2000). 8. IDloinestic produictiorT in 1997 is estirmatcd to halvc becn sOi the order of 450,000 torus of active inigredietits, vhich 5. Fist axccotpin, civl based ammoesnia pidioCtirin t'slatoisgy vas the second highcst in thee worild at the timue- It previous which acsiscints for rier 75 percenat if China's amrnmonia r growts) trcnds were suistained ins stibscqpicut years, China dcore uss 500-l 1000 toins of water per nrau rif gammibas would noun bc the biggest producer iii the wvorlci (HHianig pocmpared Cvith inIy' 12 tions of water in natiral gas-based et al. 2000). Ahbost 93 percenit of domcstic produ(ction is princesses. Chinese paper mssills retlisire 20th tss 4(10 rins ofi rolisunicd lsalIv. ivatcr to produice 1 ton of paper product, swli lc state-iof thc- art mills in industrialized countries LISC as little as 60 tons 9. The proportioin of thc rutral populatiosn living belom the per toss. Over 80 percent of China's caustic socia, a miajor gOVCrnmenit's poverty Itic (1996) in thc majior grassland industrial rar inatcrial, is produced through tise diaphragm prosvinces is as follows: 'l'iet-l 0 percent; Ihincr XIiIoigolia process, which is both energy intensive and highly sater -9.3 percctit; Xinjiianig 27.4 percent; Qitjglai-17.7 percent; pollitiirig. Tle nsenubraise process, a relatively nlew bu t Sicsutian-7 percctst; GansUi-22. 7 perceit; and YTunisan-22 9 nsatLire techinology, requircs 30 percent less cncrgy; percent. These are all wiell ibovc the rsiatioiial average of eliminates additives such as asbestos, leaid, or haeavy 6.3 percent. Xinjiang is niotable for being the otilv provinre in nMetils; arid cans cut swastewvater volume sy a factor of 15. the cosulitry urhere poverty isscreissed over the 1988-96 period; the percentage of poor rural hsottseholds in Xinjiang increased frinn 8.8 perceirt tO 27.4 percent. (XIVorld lBank 2000). 14 China: Air, Land, and Water 10. The concept of environmclitally sustainable developmenit has already been incorporated into the national planning process. The Szustainable Developnieste Strategy was formulated in 1997 and has beeni developed further for the 10th Five Year Plan. It is intended to achieve a harmonious balance between population, resources, and the environment, but most of the focus is on setting targets. Further work is need- cd to address the underlying complexities of economic and cnvironmental integration and move the economy toward these ambitious targets. 1 Economic Crowth and the Environment 15 M g 11 W j 11 | i * l i l ! | ll | ! s gs x gill | t S: ,,-s _ s | W;Ut hs | 7'S-- - R X = . Et t--< D k.>. - . . . =-: -.. BE-El: t-- iib T2 --i s = l= = =!= 2 S, doubt that the problem has accelerated. China is now considered one of the most seriously eroded countries in the world (Huang 2000). Based on an analysis of satellite images, the Chinese Academy of Sciences estimates that in the early 1990s some 375 million hectares-nearly 40 percent of the country- was affected by moderate to severe erosion.2 China's,growth and development is having a The biggest problems are water and wind significant impact on its land systems. Partly erosion, followed by salinization. as a -result, land degradation is widespread and increasing. WATER EROSION This chapter summarizes recent trends in the Over the 20-year period from 1975 to 1996, main observable results of land degradation, the total area of land moderately to severely including water erosion, desertification, and affected by water erosion increased by an salinization. It then considers trends in the estimated 20 to 30 percent, which is equiva- status and management of the three main lent to an annual rate of increase of about terrestrial land systems: cultivated lands, 2 percent.3 grasslands, and forests. Together, these grasystemds,c abdfouests. 82 gepere these In the extended Loess Plateau region, which systems cover about 82 percent of the istemtsucpbltowerrsonn national area.1 The chapter also discusses iS the most susceptible to water erosion in natheinagaremente chandprtection ,o Cis the nation, increases were less than a quarter the management and protection of China's o h ainlaeae(iue21Ti considerable biodiversitv resources. The of the national average (Figure 2.1). This concluding section outlines the main recom- suggests that the government's massive ero- mendations for addressing these issues. sion control campaign on the Loess Plateau is succeeding and, more generally, that the water erosion problem can be beaten given The State of a nd the right combination of control strategies. Degradation China is prone to land degradation, and particularly erosion, due to its climate and geography. In part because of China's rapid growth over the last 30 years, there is little 2 Land Resources 17 Figure 2.1 Trends in Land Moderately the national total), Inner Mongolia (34 per- to SeverelyAffected ByWater Erosion,1975-96 cent), Gansu (9 percent), Tibet (7 percent), 200- and Qnghai (5 percent). lSO- Data on which to assess desertification trends at the national level are rather limited. 100 They suggest that desertification has been 50- worsening progressively over the last 50 years, o- and the rate may have accelerated during At' '' '° 0 Ae both the 1980s and the 1990s. Loess Plateau National Total There are two main geographical areas where significant desertification is occurring: Source: Adapted frorn Huang (2000)sgn (1) the agro-pastoral transitional zone in northern China, prcdominantlv in Inner Apart from the erosion on the Loess Plateau, n m Mongolia but extending into five other rain plaerved eron mr inal cultievaed land ad provinces to some degree; and, (2) areas sur- rounding agricultural oases on the internallv "barren lands," whlch does not threaten the r r t o productivity of China's prime cultivated land i g , . ~~~~~~China, predominantlv in Xinjiang and resources. The main immediate victims are Chna, promina i a n the generally poor farmers who are forced to cultivate the poorer quality areas. Water ero- The worst and most intractable problems are sion also has significant off-site effects, occurring in the agro-pastoral zone in north- including reducing the hydraulic capacitv of ern China. In this area, there is little doubt important river systems. that the most significant contributor to desertification over the last 50 years was DESERTIFICATION excessive land reclamation during the 1960s and 1970s, combined with an excessive An estimated 331 million hectares-roughly id- in livestck nubr in thes19vs build-up in livestock numbers in the 1960s. a third of China's total area-is prone to Both were driven by the overnment's drive desertification.' Of this total, desertification r f for food self-sufficiencv. Generally, it appears iS actuallv occurrnng on abouit 262 million i actually occurring on about 262 million that the desertification trend throughout the hcctares. This iS believed to be the highcst region has progressively worsened through ratio of actual-to-potential desertification of the 1980s and pzossiblv into the 1990s, any country in the world. The problem is n g c notwithstanding government control effiorts mainly restricted to just five provinces/ - -~~~~ in the latc 1980s and 1990s. autonomous regions: Xinjiang (42 percent of is China: Air, Land, and Water SALINIZATION tion and remediation. Several factors are Saln.atonis mainly a problem associated contributing to this success, including (a) the direct and obvious link between salinization with poorly designed and/or managed irriga- a p n ~~~and production losses, which makes farmers tion development in arid and semiarid zones. Salinization is also a natural phenomenon; areothpobmanpoaly oe pansi in receptive to advice on what they can do to there are vast areas ot natural salt control it; (b) the fact that engineers in the western China. WVater Resources bureaus understand the The area of salinized land is estimated at causes of the problem and techniques for 82 to 100 million hectares, including about avoiding and/or remediating it; (c) the com- 7-8 million hectares in areas of cultivated bined impact of focusing on both reducing land. According to data compiled by the the extent of new salinization and remediat- Ministry of Water Resources, the area of ing already salinized areas; and (d) the sub- salinized cuiltivated lanid increased by about stantial financial resources applied to the 10 percent over the 20 year-period ending in problem. The last point is a necessary com- 1996, but the rate declined quite noticeably ponent of the control strategy, but experience during the late 1980s and into the 1990s. with other problems suggests that money Most of the salnedcultivatedlanalone is not sufficient to solve the problem. Most of the salinized cultivated land in China is located in three geographical The other elements also need to be in place. regions: the North (30 percent of the total), the Extended Loess Plateau (26 percent), Management Issues in and the Northeast (16 percent). Of these, the the Main Land Systems area of major national significance is the North, which includes the north China Plain Key land management issues in China and the provinces of Beijing, Tianjin, Hebei, include losses of cultivated land, grassland and Shandong. degradation, the declining state of natural forests, and increasing threats to biodiversity The government has developed and imple- resources. The causes are many, but there is mented a range of programs to control salm- D 1 D ~~~~~little doubt that the government's narural ization and reclaim salinized land through ledoubt thate ment 's nat investments in improved irrigation and reouc mngee tol v drainage, improved irrigation management, important contribI and altered cropping patterns. The program has been very successful, with consistent net gains since 1988 due to simultaneous progress in both the prevention of saliniza- 2 Land Resources ig CULTIVA-TED LANDS primary production, most notably horticul- The net reduction of cultivated land is ture, forestry, grassland, and fishponds (see Table 2.2). These changes are mainlv a directly linked to the government's national result of agricultural restructuring, including food securltv concerns. The available data" farmers' greater exposure to the market and sugct that from 1987 to 1995 the area of cultivated lan inChia eclned ~ greater freedom to make their own produc- showntinat Table 2., thea talinet decline tion decisions, but also partly to conversions shon i Tale .1,th toal et eclne promoted under governmnent environmental over that period wvas about 1.7 milllion prmtdlne gvrmnevio eta hvecrthar includings about .1. million programs. Thev do not represent absolute hectares, including about 3.1 million l . . ~~~losses of cultivated land. It is at least hectares in gains and 4.8 million hectares in arube, f an envrnet int of losses of cultivated land. arguable, from an environmentat point of viexw, that some conversions may be beneficial, Losses. Of the 4.8 million hectares in losses, particularly if the converted land is marginal about 60 percent was due to conversion for food production. Of land from cultivation to other forms of Table 2.1 Additions and Losses of Cultivated Land, 1987-95 Year Total Increase Decrease Net Change (1,000 HA) (1,000 HA) (1,000 HA) (1,000 HA) 1987 132,835 372 676 -304 1988 132,530 388 417 -29 1989 132,501 446 346 +100 1990 132,601 425 448 -23 1991 132,578 412 707 -295 1992 132,283 302 625 -323 1993 131,960 347 785 -438 1994 131,522 389 798 -409 1995 131,113 - - - Total - 3,088 4,804 -1,722 Source: AQarped ro::] Heilig (1999) 20 China: Air, Land, and Water Table 2.2 Reductions in Cultivated Land by Cause, Figure 2.2 Cultivated Land Losses 1987-95 Due to Construction, 1987-95 Source of Reduction Area (1,000 HA) Loss due to Construction 979 Loss Due to Conversion for: Horticulture 1,218 Forestry 965 Grassland 552 -250 -200 -150 -100 -50 0 Aquaculture 232 ' . C Int- Total Conversion 2,967 North E Northwest fl Northeast Ut d East Central B Plateau Loss Due to Flood/Drought/etc. 865 C] Southwest [ South Total Reduction 4,804 Source: Huang et al (1999) Note: Losses are cumulat vs for the per od Source: Ada pted from Helig (1999) Finally, about 0.8 million hectares of cultivated About 20 percent of cultivated land lost over land were lost due to natural disasters, includ- the 1987-95 period was due to the effects ing floods, fires, erosion, and desertification. of infrastructure and urban construction, Losses such as erosion and desertification are particularly in the North and East regions more or less absolute, while others such as (see Figure 2.2). This is a direct reflection of floods may only be transitory. the massive metropolitan area developing in the lower Yangtze Basin between Shanghai Addltionsd The major source of new cultivat and Nanjing, and also from extension of the ed land was land reclamation (see Table 2.3), Beijing/Tianjin urban area. The land in the which accounted for about 2.2 million lower Yangtze is some of the most inherently hectares (70 percent) of all new cultivated . . 1 1 1 , . . ~~land, much of it in the arid and semiarid productive agricultural land in China, is well served with water, and is located close to areas of the Northwest region (see Figure major urban markets. Its loss represents a real .3). Some of this new cultivated land was and substantive loss to agriculture. developed at considerable environmental cost. For example, about 224,000 hectares was reclaimed in Inner Mongolia; at least some of this reclamation was not successful and resulted in significant loss of high quality grasslands. Another 267,000 hectares was reclaimed in Heilongjiang. Much of this was 2 Land Resources 21 located in the "Three Rivers (Sanjiang) Figure 2.3 Sources of New Cultivated Land, 1987-95 Plain" area, an internationally significant wetland. The largest area of reclamation was _ in Xinjiang (317,000 hectares), and much of this was located in the Tarim Basin. The 600 increased water demands generated by some 3 of this reclaimed land have been blamed 200- by local experts for detcrioration of the 0 so-called "Green Corridor" on the lower ,o 4' ,/9 '5 reaches of the Tarim River. 50 let on Table 2.3 Net Increases in Cultivated Land by Cause, 1987-95 1 Reclamation Drainage Rehabilitation Conversion Source of Increase Area Note: Tota s are cumu ative for the period. (1,000 HA) Source: Adapted from Hei ig (1999) Reclamation 2,197 Drainage u8 GRASSLANDS Rehabilitation 349 Grasslands cover about 40 percent (400 mil- Conversion 414 lion hectares) of China's land arca, making Total 3,082 China second only to Australia in the cxtent Note: ncre-ses .lr :mu,lrve tor tfe per crd of its grassland resources. The majority of the Source: Adapted 'ro Hel g (1999, grasslands are found in onl- a few provinces or autonomous regions. The most important Dinagcrwased cultivatland inpotheEast stae o are Tibet, Inner Mongolia, Xinjiang, and increased cultivated land in the East statisti- Onhi netmtd37mlinhcac and t to ha soe aders env- OQng,hai. An estimated 317 million hectares cal region, and it too had some adverse envi- of grassland, or about 80 percent of the total, ronmental consequences. The largest area is considered usable for livestock grazing drained was in Guangdong Province (16,400 (Li 1998). hectares), and it is bclieved that much of this was at the cxpense of coastal wetlands in and In general, China's grasslands are not highly around the Pearl River estuary. The next productive. About two thirds of the total largest area of drainage was in Jilin Province have an annual dry matter production poten- (14,700 hectares), which may also have tial of less than 1,000 kilograms per hectare, involved coastal wetlands. placing them in the low-yield class. 22 China: Air, Land, and Water China has 260 pastoral counties accommo- ing forage and fodder. Many of these develop- dating about 39 million people (Zhou 1990), ments were responses to economic objcctives. including some of the poorest people in In many cases, they have conflicted with the China. Many are nomads who obtain their goal of maintaining grassland ecosystem sta- livelihoods from grasslands and are very bility. In addition, they may not always havc susceptible to changes in the health and been consistent with the herders' own goals. prousctivt of nrasslands productivity of grasslands." Trends. As shown in Table 2.4, the Mlinistry In much of China's pastoral region, traditional of Agriculture (MOA) estimates that about livestock production and grazing manage- 34 percent of all grasslands in China are ment strategics have been greatly altered in moderately to severely degraded and about the past several decades, as the nomadic/pas- 90 percent are degraded to some degree. toral way of life has been transformed to one Inner Mongolia, Xinjiang, and Gansu are more oriented toward a market economy. In experiencing degradation levels well above recent decades, the government's goal for live- the national average. stock production in most pastoral areas has Grassland degradation not only results in been to increase livestock off-take, which has been promoted through privatization of herds loss of productive capacity, but also reduces and grazing land, sedentarization, intensive other grassland benefits, including (a) biodi- versity values, which have declined in terms grazing management strategies, and introduc- o tion of rain-fed farming techniques for grow- of the number, variety, and range of wild Table 2.4 Extent of Grassland Degradation in China, 1998 Grassland Area Moderately Province Grassland Area to Severely Degraded (MILLION HA) (MILLION HA) (PERCENT) Tibet 82.4 21.4 26 Inner Mongolia 79.1 45.9 58 Xinjiang 56.4 26.0 46 Qinghai 36.0 10.8 30 Sichuan 21.1 6.1 29 Gansu 17.6 8.4 48 Yunnan 15.2 0.5 3 Other Provinces 117.8 17.7 15 Total 393.6 136.7 34 Source: inistrv of Agri cu Ure (1999) 2 Land Resources 23 animals on the grasslands of China; (b) self-sufficiency policy. There are various watershed protection;7 and (c) air quality in estimates of the amount of land converted eastern China.' during this period. Data published by the State Environmental The most commonly cited figure is about Protection Administration (SEPA 1998a), 6.7 million hectares (Li 1998 and Yu and Li which are illustrated in Figure 2.4, suggest 2000). Much of this conversion occurred on that the total area of degraded grassland state farms, which were established in the increased by about 95 percent between 1989 boundary provinces/autonomous regions of and 1998, with a notable acceleration in the Inner Mongolia, Xinjiang, and Heilongjiang. middle-to-late 1990s. Much of the investrment provided only short-term bcnefits, and many of the con- Figure 2.4 Trends in Grassland Degradation,1989-98 verted areas subsequently became salinized or otherwise degraded. 140 - 120 - Eg, . By the early 1980s, the central government 100- ~~~~~~~~~reconsidered its approach and substantially withdrew its support for grassland conver- sion, redirecting policy toward promotion of 20 - ~~~~~~~livestock and animal husbandry in grassland 0 111t1 a11:;,~ thc provide an unbiased sourcc of information cultural systems they havc & for~~~~~~~~~~cutrl Oilcm -e hacleveloped for for national lea(crshill o A MO's progress. sustam.tbly rnariaS,lgin thiclr ciivironmclltts. Widen the scopc of the Environm-ental Comiissoio environmnctal economic Assessment rcgulatiolns to cover land aomalss of e ngnroposed gasnd reclamation in general and reclamation i analyses of existing andi proofosed grassland 1 1 1 1b- '11 rm~~~tianag,ctneiit strategires and rangzc-baised grassland areas in particuilar. If possible, anld riven the seriousness o)f the problem, livestock production systcllls to provlxe a com-rprehenisive assessment ot the real cco- a regulation should be prepared requiring nomi c implications of these trcat a that all land reclamation activitics beyond systemis, including envi roninental amd a certain size (such as 1,000 hectares) will ocial externalities. This votild provide a require approval of at least a provincial- better basis for dccisionmaking. level environmental protection bureau. Guidelines should also be prepared to F 0 R EST MA N AC GM I N'I- indilcate the circumstances undcr which O reclamation should not be approved, and A N I) PR OlE CT N to define recommendcd procedures and A proccss of forest sector reform has practices for carrying out cnvironmcntally coinmenced and needs to be continued and acceptable reclamation. broadcened to cover thc cltire sector. In XVork collaborativcly with relevanit units the state-managed scctor, thc government of MOA, partictilarly the Grasslands needs to Managcment Division of the Livestock and I{usbandry Division, and other rele- 40 China: Air, Land, and Water Impose a "pause" on logging operations in ecosvstem services. These multiuse objec- all areas to prevent the situation from tives should be applied in all forests of the deteriorating further (the current ban is national forest estate, not only in protection only partial). forests and other specially designated non- timber forests. Provide interim funding in the form of a "social safety net" to permit workers and A clear and explicit distinction between enterprises in the industry to sustain the functions of "stewardship" of the themselves while reform decisions are national forest estate and exploitation and being considered. use of the national forest estate needs to be established. The State Forest Decide. onacore fcmpeenie Administration should concern itself solely reform. with the stewardship function; that is, Iniplenient the reform gradually, at a pace ensuring that the forest estate is managed that provides adequate time for the sector in ways that will achieve the government's to adjust, accepting that transitional costs overall objectives for the resource and the will continue to be incurred while reform is sector. To the extent that government taking place. A phased approach is partic- decides that the forest estate contains ularly important from an environmental resources that can be exploited in an envi- point of view, as rapid reform and inade- ronmentally and socially acceptable way, it quate social safety nets could spark a round should issue exploitation rights to account- of cnvironmental degradation far worse able "third parties"; that is, entities separate than has been experienced to date.2 from but accountable to the State Forestry Administration. These rights should be exercised in accordance with rules, regula- The State Forestry Administration needs tions, and standards prescribed by the to formulate a series of explicit manage- Forestry Administration. At the same ment objectives for the national forest time, the government ought not concern estate that emphasize the long-term sus- itself with regulating matters that have tainable utilization of domestic forest no bearing on the achievement of its resources and integrated management of all overall objectives." beneficial aspects of the forest resource, In rviding access to resources , . ,, In~~ return for prov'd'n cest eore mncludmn- not onlv long-tcrm sustamnabl ., including na within the forest estate, the government production of timiber and non-timber should cfficiently extract resource rents forest products, but also~ protection and from users of the forest estate at levels con- nmaintcnance of blodiversitv and other . .. manenne*fbidvestyad te sistent with its overall short- and long-term 2 Land Resources 41 management objectives and in ways consis- dence among farmers that, when policies tent with the necds of forest resource users, affccting forest management do change, given their financial circumstances, access to they will change gradually and predictably.23 credit, etc. Harvesting operations in collectively man- Other reforms specific to the collcctively aged forests are controlled by quotas managed sector include: administered by the State Forestry Administration. Logging and transport are The majority of collective forest areas are also regulated, and timber procurement is being "de-collectivized" following the restricted to designated firms. Substantial model of the rural HRS. This creates an ele- n . 1 ~~~~~~~and perhaps excessive rents are extracted ment of tenure uncertainmt as vilage leaders are entitled to re-allocate household throughout the process, which according to ...l'tv land for var' some commentators is limiting the abilitv responsibility land for vaious reasons. Some leaders exercise this authority judi- of farmers to profit from regular forest ciously and ifoperations. As a result, a substantial black clouslv, and infrequently, but others do not (LI 19. market has developed in some areas. It has (Li 1999). This mav create uncertaintv and I . . 2 been said that the black market is account- act as a disincentive for farmers to make ing for as much as 20 percent of total forest long-term forest investments in, for exam- ° . . ' ~~~~~~~~transactions in collectivelv managed areas. ple, replanting and maintenance. On the pie, replanting an maintenancThe government should extract resource question of participation, there are numer- . . ~~~~rents from forest users, but it needs to sim- ous accounts of farmers' opinions on forest plifjv the way in which it is done and set the types and species selection being ignored in rental value at a level that does not stifle the design of large-scale, government-spon- development of the sector or promote the sored afforestation programs. In areas where there was adequate participation of farmers in planning, less deforestation has occurred (Shi and Xu 2000). A major challenge for BIODIVERSITY PROTECTION the future will be in providing the security Biodiversity protection has to be addressed of tenure for "household responsibility" on many levels, but all efforts will be wasted forests, to ensure that their custodians will if there is inadequate in situ protection, espe- make the long-term investments necessary cially in reserves created and managed specif- to sustain the forest resource. Another ically for that purpose. Key deficiencies in the important objective should be to maintain current approach on nature reserves are (a) policy consistency and to develop confi- too much emphasis has been placed on the number of nature reserves created, rather than their quality and utility; (b) the system is 42 China: Air, Land, and Water seriously underfinanced and understaffed at nature reserve managers in China; provide all levels; (c) there are too many institutions on-the-job training for managers and engaged in nature reserve management, technicians from lower level reserves; and which is dissipating the limited funds actual- raise management standards for significant ly available; (d) state-level institutions are nature reserves up to international levels. insffiienlven gaged in the direct, day-to- insufficiently e Develop a nature reserve classification day management and operation of nature a system, modeled on IUCN's nature reserves, to the detriment of the system as a reserve/protected area categories but adapt- whole; and (e) there is no system of classify- in nature reserves in accordance with their ed to Chinese circumstances, to provide a ing na.u reseresinaccodancewitbasis for classifying all existing nature different characteristics and management 7' . ~reserves in the country. This would provide a objectives so as to provide a basis for rational starting point for development of a rational, needs-based system of financing nature The system needs to be reformed. Key reserves at all levels and also assist in ration- elements of the reform process include: alization of the network of reserves through- r . ~~~~~~~~~~~out the country. Establish and adequately finance a state- level, state-funded, and state-staffed Develop improved funding mechanisms Nature Reserves Service, which will be for nature reserve management. The most responsible for management, operation, secure and effective method would be (in and protection of nature reserves in China addition to establishment and underwrit- that are of international and/or national ing a state-level Nature Reserves Service) significance. It would generally be expect- to develop a system of tied central-govern- ed that these would fall within IUCN's ment financial transfers to underwrite nature reserve categories I -I' Because establishment and management of nature of the vested interests inherent in the cur- reserves at provincial and lower levels rent system and the difficulty of reaching of government. A counterpart funding agreement as to which institution should arrangement also needs to be developed to house the new Nature Reserves Service, it ensure that any state transfers are matched may be necessary to establish it as a com- by a counterpart contribution. pletely new institution with no allegiances Based on the preceding two activities, to any existing state-level institution. Among other things, this institution would function as a "center of excellence" engaged in nature reserves management for developing strategies to deal with the should be reduced. innumerable practical problems facing 2 Land Resources 43 Notes average of 6.3 percent. Xinjiang is notable for being the only province in the country where poverty increased over the 1988-1996 period; the percentage of poor rural 1. National land area is 960 million hectares, of which culti- households in Xinjiang increased from 8.8 percent to vated land accounts for about 132 million hectares, land 27.4 percent. (NVorld Bank at al 2000). designated as forest land accounts for 263 million hectares; and grasslands account for 392 million hectares. 7. The grasslands of the Qinghai Tibetan Plateau are the headwaters for many of Asia's major rihers, so the condition 2Anneninltdudrandrg themiof these grasslands has potentially important implications (Lynden and Oldeman 1997) concluded that the total area for nsillions of people downstream. There is also a widc- of modcrate to serious erosion due to all causes was about spread view among Chinese environmentalsrs that degrada- 160 million hectares (17 percent), although it also concluded tion of high-elevation grasslands in the Qinghai-Tibetan that the total area affected by any soil erosion at all (including Plateau region is adversely affecting fiowvs and the incidence "negligible" and "light") was about 466 million hectares and severie} of floods in the Yangt and Yellow Rivers. (48 percent). 8. The state of the grassland areas has implications for 3. The data on wvhich the discussion is based are derived suspended particulate levels in eastern China, particularly from a nowv-discontnued database maintained by the in Beijing, where the incidence of dust storms increased Ministry of Water Resources, based on annual ground notably in the late 1980s and earl) 1990s. survey assessments undertaken by provincial and county- level 'NVater Resources Bureaus. 9. For example, surveys by the Ministry of Agriculturc in 34 counties in East Inner Mongolia (Wo7u and Li 2000) 4. Desertification has been defined by the UN Convention indicated that betveen 1986 and 1996 a total of 970,000 to Combat Desertification as "...land degradation in arid, hectares of grassland (about 1 percent of the grasslands in semi-arid and dry ssb-huniid areas, resultingfrom varisns that region) were converted to irrigated crop production, factors, including climactic v'ariations and hzuman activities." with most of the work done by state-owned farms, state- 5. It is now widely acknowledged that data on cultivated owned forestry enterprises, other state-owned enterprises, land published b' the State Statistical Bureau (SSB) in the or for-cign joint ventures. Government's Statistical Yearbook, at least up until 1996, 10. According to the CAS, rescarch expenditures havc were inaccurate. A better and improving database is being recently incrcased, but the problem of limited research devcloped by the State Land Administration (SLA), using findinigs has still not been resolv'd. analysis of remote sensing data and other direct sources of information. The analysis in the text is based on an ii. The rest supports shrub, scattered trees, seedlings, analysis of the SLA databasc undertaken by the International and new.ly planted trees, or is classified as "barrcn land." Institute for Applied Systems Analysis (Heilig 1999) as 12. Timber forest (which in other countries would be more part of its projcct entitlcd Modeling Land Use and Land commonly referred to as Production Forest) is intended to Cover Changes in Europe and Northern Asia." SSB did provide raw materials for papermaking, construction, and not publish cultivatcd land data besveen 1997 and 1999, other manufacturing processes. but it recommenced publishing data in 2000. These data were based on the 1996 agricultural censtus and developed 13. The data for the northern region in the first census are using the SLA approach. not credible; it was probably not surveyed. If it is assumed that the actual area of timber forest in the northern region 6. The proportion of rural populatiiins living below the at the time of the first ccnsus was on the order of 13 million government's poverty line (1996) in the major grassland hectarcs rather than the 2.7 million hectares recorded, the provinces is as follows: Xinjiang 27.4 percent; Yunnan- decline in total timber forest area over the four census 22.9 percent; Gansu-22.7 percent; QOnghai-17.7 percent; periods would have been about 23 percent. Tibet-10 percent; Inner NMongolia-9.3 pcrcent; and Sichuan-7 percent. All arc all well above the national 44 China: Air, Land, and Water 14. Statistical analysis in Rozclle et al. (1999) showed that 20. Rescarch from Aftica suggests that mort intensive there is a statistically significant relation,hip betwccn pastoral production (as advoscated by the Ministry of trends in forest cover dur-ing the 1980s and the tnanagemeiit Agriculture) does fiot always nmaximize output per uniit regime. In areas where the collective sector was stronger, of land or labor when all outputs of pastoral production forest cover rose. In areas where the state-owned sector svas (stuch as erosion control) arc taken into account. stronger, fi,rest cover fell. A similar relationship was foiund in respect to forest area. An important factor influencing by WTO accession. this outcome, of course, is that forestry enterprises wvere established as logging units, not forest management units. 22. As a particular case in point, there seems to be no real Interestinglh, the same analysis sho-wed that government benefit from a forest management perspective in maintaining forest policies also had a small but negative effect on forest the state's marketing monopoly in the collectively managed cover; in other words, during the period analyzcd, forest fiorest areas. In fact, it is even arguable that this arrangement policy that was intended to control forest degradation is detrimental to sustainable forest management. actually, may have had the opposite effect. 23. There xvere a series of rapid policy changes affecting 15. Convention on International Trade in Endangered farmer-foresters during the 1980s. MIany of these were wvcll- Species. intentioned, but the overall effect was to create widespread uncertaintv, and there are anecdotal reports suggesting this i1. Nature reserves:.ce supposed to be managred througrh cesvvlaigo oet mnav havc led to excessive clearing of forest. an interdepartmental structure at each administrative level, which would make the diverse owvncrship of reserves less 24. Category la is Strict Nature Reserve; Category lb of a problem. But, in reality, this does not always appear to is Wilderness Area; Categorsy II is National Park; and be the case. Categosry III is Natural Mlonument. 17. Only three of the state-level reserves are actually staffed by personncl of the state-level institutions, cven though they may be funded by those institutions. The remainder are staffed by lower levels of government, under wvhat is essen- tially a subcontracting arrangement. In short, China has no functioning "national" Nature Reserves Service, which is an extraordinary deficiency given the size anid international significancc of both China and its biodiversity resources. 18. Even though a reserve may be the responsibility of a lower level of government such as a province or municipalitv, it wvill be the responsibility of the countcrpart of a state ministry at that level. For example, a provincial-level reserve that falls within the responsibility of SEPA will be managcd by the provincial Environmental Protection Bureau, which has a technical line of responsibility to SEPA but gets most of its funding from the provincial government. 19. For example, a land classification svstem devised by the Chinese Academy of Social Sciences to reflect the "ecological sensitivity" of land in the central and eastern regions showed that there is a very high degree of overlap between ecologi- cally sensitive land and poverty counties located in the same regions (Zhou et al. 1997). There is a similar relationship in the provinces suffering from significant desertification alnd grassland management problems. 2 Land Resources 45 | | W l e | | - l lli B llil * l | l l l | l _ | | | I | I | 1 I | I | * l | I | I I | I I | | l | | 1 | _ | I 3 | I E I ! , ! | 1 _ _ _ _ t t-,;t_ _ i_ _ ja,, SS . _ a_, i.5<4, / g '.dwiW gw 0X''"'',',''.'"', '; 3 Water Ouality Trends The chemical and biological quality of China's water resources-rivers, lakes, groundwater, and coastal waters-is gener- ally poor. Over the last 10 years, there has been improvement in some of the larger rivers, but the remainder deteriorated. There are no signs of improvement in China's most threatened freshwater lakes, the quality of Rapid economic growth in China has been coastal waters has continued to deteriorate, "cCompanied by a substantial increase in and there are signs that groundwater pollu- demand for water and significant changes in tion may be increasing. The most ubiquitous the relative importance of different sources pollutant is readily degradable organic mate- of wate pouion Bewn 1980 ad 1993, pluat1 edl erdbeogm ae ofba waterpllton.uBetween 1980eaned 1993 rial from domestic and industrial sources. urban water consumption increased by Other important pollutants include indus- 350 percent and industrial water consump- trial hydrocarbons and plant nutrients. In tion doubled. Irrigation use declined by addition, light lubricating oil and heavy about 4 percent, even though irrigated area metals are important in some limited parts increased by about 10 percent. of water bodies. Bacteriological pollution is As demand has increased, so too have prob- not regularly monitored, but is probably lems with water shortages, pollution, falling widespread and substantial. groundwater tables, and flood/drought dam- ages. These problems are rapidly approach- TRENDS IN RiVER WATER QUALITY ing crisis proportions, at least in some parts IN THE MAIN DRAINAGE BASINS of the country, and they are likely to get Table 3.1 shows water quality on the seven worse before they get better. The problems mablers' during the seven are particularly acute in northern China- main rivers during the 1991-98 period, that is, north of the Yangtze River-and measured in terms ofthe percentage of water even more so in the catchments of the Huai, qualty monitoring sections in water quality Hai, and Huang (Yellow) Rivers, which are classes I/II (good), II/IV (moderate) often referred to as the "3-H" catchments. and V/V (poor). The data illustrate the The 3-H catchments account for about significantly lower quality of rivers in northern 35 percent of total GDP and include the China. In general, the incidence of Class economicall and poli y iV/V+ river sections tends to be about three economically and poliically important times higher in the north. This can be attrib- uted to several factors: 3 Water Resources Management 47 The southern rivers have far greater flows Nationally, the incidence of both good qual- (assimilative capacity) than their northern ity and poor quality river sections increased counterparts, and the level of exploitation over the 1991-98 period, while the incidence of their water resources tends to be lower. of moderate quality sections declined. In the southern rivers, the reduction in moderate Population pressures in some provinces in qualltv monitoring sections was associated south China are lower than in north China. with an increase in the number of good qual- Most industrialization in the southern ity sections, suggesting that there was an river basins is concentrated in their lower improving trend. In the northern rivers, the reaches, hence avoiding or reducing con- reduction in moderate quality sections was tamination of their middle and upper accompanied by increases in the incidence of reaches. In the north, industrialization both good and poor quality sections. The encompasses both the lower, middle, and detailed data on the northern rivers (not in some cases upper reaches. presented) highlight the following trends: Table 3.1 Water Quality Trends in the Seven River Basins, 1991-98 Percent of Samples in Each Water Quality Class Water Quality Classes 1991 1992 1993 1994 1995 1996 1997 1998 A. All China Class I and 11 3 5 9 11 10 16 16 18 Class lIl and IV 64 57 64 62 51 44 53 42 Class V and V+ 33 38 26 27 39 40 30 40 B. North Chinaa Class I and 11 4 0 6 7 6 3 7 12 Class III and IV 56 49 61 57 41 44 53 38 Class V and V+ 40 51 32 35 53 51 40 50 C. South Chinab Class I and 11 2 17 17 20 21 43 39 31 Class IlIl and IV 82 76 72 74 75 43 53 54 Class V and V+ 16 7 11 6 4 14 7 15 Notes: WIFe 3-H Rivers uius Songhua and Liao. Yerigtze and Fear Rivers Sour-e: PRCEE CNFMC, end CRA1ES i2OE'b 48 China: Air, Land, and Water In the Songhua, the incidence of poor The Huai River showed signs of improve- quality sections increased significantly, ment, particularly after 1996. The incidence while the incidence of moderate quality of poor sections stayed about the same, sections declined accordingly, suggesting while the incidence of moderate sections that overall quality declined. decreased and the incidence of good sec- tions increased. The Huai River Action Conditions in the Liao appear to have Plan commenced around the middle of the improved steadily with a steady decline in decade. SEPAs monitoring data suggest the incidence of poor sections and increas- that positive results may have been es in moderate and good sections. This achieved, although other analyses may primarily be a reflection of major pol- (World Bank 2001 and MWR 2001) do lution control investments in Shenyang not necessarily support that conclusion. City, the major industrial and domestic pollution source in the catchment. WATER QUALITY TRENDS Conditions in the Hai and Yellow Rivers IN THE THREE LAKES deteriorated. The incidence of good sec- tion staed ore r les cnstat, wile It is estimated that about 25 percent of all pioor seaycti increaorlesed constant,while lakes in China are adverselv affected by poor sections increased. cutrophication. Three of the most critically Table 3.2 Annual Average Water Ouality Trends in the Three Lakes, 1992-98 1992 1994 1996 1998 (mg/l) (mg/I) (mg/I) (mg/l) Tai Lake Total Phosphorousa 0.08 0.13 0.11 0.07 Total Nitrogen' 2.98 1.73 2.62 1.84 Chao Lake Total Phosphorous 0.25 0.34 0.25 0.36 Total Nitrogen 3.83 4.19 3.46 2.88 Dianchi Lake Total Phosphate 0.23 0.30 0.23 0.41 Total Nitrogen 2.14 3.00 2.53 4.76 Note: 'As a gio totd N o 5 mg/i arid totil PI 0)5 mg/I e., rcucra yth, thre-hnoDS i5eor 1 whih cutr.orr, Cal rn Lecorn,s a vistb pgot Fri Py O D uriterra a vseter bodyis considercc to he itrophi wiclr iota Pt alls F t Irange w O 5-01 - rii/ arnrJhypor--rrr nI cwheri t sXcec: , c0I rgi Source: Adapted ironr PRCEE, CNFME ni I CPAE' POPlin 3 Water Resources Management 49 polluted are Tai Lake (Jiangsu-Zhejiang Figure 3.1 Incidence of Coastal Red Tides, Provinces), Chao Lake (Anhui Province), 1950sto lYYs and Dianchi Lake (Yunnan Province). These 400- have been the main focus of pollution control 350 - 300- work during the 1990s. As shown in Table 250 3.2, there are few signs of substantive 200- 150- improvements. Conditions in Chao and Se 1, C Dianchi Lakes, both of which were hyper- 50- eutrophic throughout the 1990s, appear to 0& , have deteriorated. N N Source: PRCEE, CNEMC, and CRAES (2001b) WATER QUALITY IN TIIE COASTAL SEAS Virrually all of the coastal seas are moderately GROUNDWATER QUALITY to highly polluted, with about 70 percent of There are no comprehensive time-series sampling points being classified as Class III groundwater qualitv data available, so infor- or worse. The most serious pollutant is inor- mation on groundwater quality trends is ganic nitrogen, followed by phosphate and anecdotal. Nevertheless, there seems little oil. Over the period when data were avail- doubt that quality is deteriorating, particu- ablc, there were no obvious signs of improve- larly in near-surface aquifers and in the ment in the quality of seawater. An indirect vicinitr of major cities. For example, a 1994 indicator of eutrophication in China's coastal groundwater assessment of 69 cities in five areas is the incidence of red tides, which northern provinces and autonomous regions4 increased significantly during the 1990s (see plus the Hai River Basin indicated poor Figure 3.1). The Bo Sea (in north China) is groundwater quality in the majority of areas. particularly vulnerable to red tides due to its shallow depth and low tidal exchange; the The most common groundwater pollutants trend in red tide incidents there paralleled are nitrate, nitrite, and ammonia. The main the national trend. No doubt some of the sources are leaking sewers and overflowing extraordinary increase in incidents recorded septic tanks. There are no systematic data on during the 1990s is due to increased moni- contaminants such as pesticides, herbicides, toring and surveillance, but there is clearly a heavy metals, or other potentially toxic com- significant underlying upward trend. pounds. Anecdotal information suggests that problems could be occurring in some areas. For example, an investigation in the early 1990s (Li 1991) detected organo-chlorine 50 China: Air, Land, and Water residues in groundwater in three provinces of trends over time. The data on which to base southeastern China. In one case, levels were such an assessment do not exist. Rectifying about 50 percent higher than the European that data deficiency is a first priority. Community standard. Finally, some aquifers, particularly in near- W ater Resources coastal areas, are being contaminated by Ava iI a b il ity, salinity intrusion due to over-exploitation of the resource and drawdown of the ground- Cons u m pt ion, water table. and Demand Groundwater usage in China, as in most other countries of the world, is poorly WATER RESOURCES AVAILABILITY controlled and overextraction is becoming a China has substantial water resources, but serious problem, particularly in the North they are unevenly distributed. Per capita China Plain. Any strategy for protecting ChiundwatPla quAniy hastrate fo s prot ng a water resources availability is high in south- groundwater quality has to be based on a comprehensive assessment of the chemical ern China and low in northern China, and state of the groundwater environment and of rainfall is highly seasonal. Table 3.3 shows the Table 3.3 Average Renewable Water Resources, Average 1956-79 Renewable Water Resources Water (Billion ml/Year) Availability Surface water Groundwater Total (mr/person/year) Northern Rivers Song-Liao 165 62 193 1,704 Hai-Luan 29 26 42 358 Huai 74 39 96 505 Huang 66 41 74 750 Southern Rivers Chang 951 246 961 2,388 Zhu (Pearl) 468 112 471 3,327 Southeast 256 61 259 3,938 Southwest 585 154 585 31,914 Interior Basins 116 86 130 5,271 China 2,711 828 2,812 2,343 Source: Wor d Bank (2001: 3 Water Resources Management 51 net renewable water resources available in arguable that even if all point sources in the each of the nine major externally draining catchment were trcated to comply with river basins and the internally draining rivers. national discharge standards, the river systems would still be enmtironmentallv overloadcd. As shown, surface runoff is the main supply source in all basins. Groundwater resources . . . . ~~~RECENT WATER are signficant only in the northern river are sign . 1CONSUMPTION TRENDS systems, particularly in the lower catchments of the 3-H rivers. Figure 3.2 illustratcs the changing balancc of Per capita water availability in the "southern water consumption over the 1980-97 period. rivers* -south of and including the While agricultural use is still the dominant Yangre-is'almstffordtiesltatno the use by far, its share has decreased, while lYangtze-iS almost four times that Of the . northern rivers. \Vater availability in the domestic and industrial water uses have been T . , ~~~~~~~~increasing rapldlv. Domestic water con- Hal-Luan basin is particularly low (355 w en m3/headlvear). Availability in the Huai and sumption in urban areas has been rising in I I both absolute and relative terms due to a Huang basins is higher, but stfill below the .. .. o n ..... ~combinatio)n of (a) increased urbanization; internationally accepted definition of water scarcity (1,000 m3/head/year). (b) increased per capita consumption of urban residents (from around 113 lc/d in The northern rivers have far less assimilative 1980 to about 230 Ueld in 1997); and capacity than their southern counterparts (c) increased water use efficicncy within the due to their gcnerally lower flows. This fac- industrial sector. tor is exacerbated by the greater variability of flow of these rivers and the greatcr water Figure3.2 Trendsinwaterconsumptionl1980-97 demand. The net cffect in these catchments is that frequently the bulk of their flow 100- comprises wastcwater. These problems arc so- compounded by the fact that the northern 60- rivers tend to be highly regulated. Average 40- storage capacity in the 3-H basins is equiva- 20 lent to about 90 percent of average annual l l runoff, whcreas the average for China as a whole is only 17 percent.' E aDomestic (urban/rural) Industrial It is probable that the total assimilative g capacity of some, if not all, of the northern Source:Worm Bansetao.(20W);Hyarosult 1999 river basins is already being exceeded. It is 52 China: Air, Land, and Water UTse as a proportion of the water available is Irrigation use is projected to decline from well above average in the 3-H Basins. Use in around 73 percent of total consumption the Hai-Luan basin excecds sustainable yield (1993) to 50 percent in 2050. Consumption due to overexploitation of the groundwater for urban and industrial purposes will resource, which supplies about 60 percent of increase significantly. Both of these forms of total consumption. Water resource usage in consumption lead to emissions of polluted tbe southern rivers is quite low-typically on water, so it is likelx that water pollution pres- the order of 20 percent. sures also will increase substantially in the foreseeable future. WATER DFEMAND PROJECTIONS Increased water consumption and waste- The latest national demand projections, pre- water generation will be of particular impor- pared in 1999 by the Institute of Water tance in the 3-H basins, which are already Resources and Hydropower of the Ministry the most degraded. The most recent projec- of WVater Resources, indicate that the balance tions covering the period 2000-2050 high- betveen irrigation and other consumptive light the significant increases in demand that uses ill continue to changc in the future can be expected from both the urban and (see Figure 3.3). industrial sectors (see Figure 3.4). Urban and industrial wastewvater production in the 3-H basins will increase in parallel. If these pro- Figure 3.3 Projected Sectoral Distribution of WaterDemand,1993-2050 Jections materiall.e, water cluality prospects in these catclmenits are poor. 100i 80 - Figure 3.4 Projected Urban Water Demand in the 3-H River Basins, 1997-2050 60~~~~~~~~~~~~~~~~~~6 40; _5!: W ; _ ; ; <,640 20 - iank-- ra/nuty -0-tr eIdsr 0~~~~~~~~~~~~~~~~~~~~1 t Lrban Rural o 2 , X i= industrial MM Irrigation Source:Vvord sank et ..... (200r, Hyorosu t(1999) + Urbn/ndstok ry5 re Rural Life/industry eta (20/ti), Hytros. t 195i1 -0-- ~Livestock/F sheries Source: Vvodd Bstnk eta (2001) 3 Water Resources Management 53 Trends in Pollutant TVIE-generated wastewater flows, which increased by about 120 percent from Emissions 1989-95, and then decreased by about The 1990s saw a progressive change in the 50 percent through 1998. Increases in nature and relative scale of water pollution discharges from CAQEs were generally sources inChina. This pro s of c e i much lower in both absolute terms and in source iChn. Thi prcs of chnei comparison to the increases in thclr Gross likely to continue. The number of environ- mentally significant sources will increase, as Industrial Output Value (GIOV). will the complexity of managing and control- ling these sources. Figure 3.5 Wastewater Discharges by Source, 1989-98 INDUSTRIAL WASTEWATER 303- DISCHARGES 25- 20 As shown in Table 3.4 and Figure 3.5, the C 15- total volume of industrial wastewater 10- discharges declined significantly during the s 1990s, particularlv after 1995, when action o was taken to deal with the relatively unreg- Na A NA ulated growth of TVIEs. TVIE-generated -o- CAOEs -T- rIVEs All Industry COD increased by nearly 250 percent Source: Nygard and Cuo (2001) between 1989 and 1995, followed by a reduction of about 50 percent from 1995 to 1998. There were similar trends in Table 3.4 Trends in Industrial Waste Discharges, 1989-98 1989 1995 1997 1998 Wastewater Flows (Bcm) CAOEs 25 22 19 17 TVIE 3 6 4 3 All Industry 28 28 23 20 COD (Million tons) CAOEs 8 8 7 5 TVIEs 2 6 4 3 All Industry 10 14 11 8 Sources: ZTN iglgeC.1996); HTN 0999'; 2HN (1996 199821999) PRC[F and CRAES (200'r) 54 China: Air, Land, and Water These trends wvere partly due to economic wastes complying xwith relevant discharge factors, including the economic slowdown standards declined, indicating that the regu- and industrial restructuring, but also due to latory system was not working as intended. increasing regulatory effectiveness and the application of emergency measures in SECTORAL POLLUTION IMPACTS response to a major pollution incident in the Huai River in 1994. As in earlier periods, a disproportionate share of total industrial pollution load was The government enacted a series of emer- generated by a comparatively narrow section gency measures,' including one that facilitated of the industrial economy (see Figure 3.6). banning, closing, or stopping production of 15 The pulp and paper sub-sector was most types of small-scale TVIEs that were knowvn notable, accounting for nearly half of total tobe major sources of pollution.This occurred industrial COD load, while contributing not only within the catchment of the Huai only 2 percent of GIOV. By 1998, six indus- River, but throughout the entire country. trial sub-sectors"] accounted for 87 percent There can be little doubt that the emergency of total industrial COD load but only shutdown program had a measurable impact 27 percent of GIOV. on industrial wastewater emissions, but there is equally little doubt that this approach had Figure 3.6 Pollution Loads and GIOV Shares potentially serious adverse social impacts and in Main Industries 1998 also generated an element of uncertainty that, if it were to become a routine regulatory - tool, could be detrimental to industrial 9&Uo2 investment and development. There appears to have been less progress on more conventional approaches to industrial water pollution control during the 1990s. In 0I I fact, the data suggest that certain endemic P00 4 00t industrial water pollution problems contin- ued more or less unabated during the decade. M Proportion Total COD U Proportion CIOV A disproportionate quantity of industrial Source:ZTN (19991, ZHN (1999) pollution load continued to be emitted by a small sector of the industrial economy. Many of the enterprises in the pulp and Quantities of treated industrial wastewater paper and food processing sectors are small- increased, but the proportion of treated scale and usually locally owned. They are 3 Water Resources Management 55 frequently owned by county and township and textile industries, and close to or less governments, and are perceived as being than average in the pulp and paper and important generators of local emplovment, chemical industries. even though they may be technically bank- rupt. It is difficult for local environmental MUNICIPAI WASTEWATER protection bureaus to shut these enterprises DISCIIARGES down, or to force them to comply with In absolute terms, China has the largest urban population of any country in the WASTEWATER TREATMENT RATES world, and urbanization has been increasing. The official annual growth rate of the urban Among CAOEs, industrial wastewater treat- population through the 1990s was about ment ratios-that is, the proportion of total 3.1 percent, while the actual rate was proba- wastewater generated that passes through a bly considerably higher. Urbanization is treatment plant-progressively increased expected to accelerate even further over the through the 1990s. At the same time, next 10 to 20 years. wastewater treatment effecti-veness-the Table 3.5 summarizes some key indicators of proportion of treated wastewater meeting urban development between 1991 and 1998. relevant national standards-declined. This observation supports the view that, while the te cities increased bv about 40 percent to 668. regulatorv system provides good incentives for installing waste treatment facilities, it Total water consumption in dcsignated cities for nstllig wstetreamen failiics it increased at a rate of about 8 percent pcr provides far less incentive to operate them or t 8 to perate themIeffectively;sincepollution year, but installed wastewater treatment levies are set too lo, capacity increased at an even greater ratc- about 19 percent per year. The length of sew- There are also considerable differences ers increased at only about half that rate. betxveen industrial sub-sectors in terms of This highlights an issue facing somc munic- wastewater treatment rates and treatment ipal wastewater utilities-sewage reticulation effectiveness. Treatment rates in the four systems are not kceping up with treatment sub-sectors, which are the major sources of capacity, resulting in underutilized waste- water pollution,' were all significantly lower water treatment capacity than the all-industrv averages for 1997 and The combination of a rapidlv increasing 1998. Treatment effectiveniess was signmficantlv7 1998. Treatment essxvssinifiurban population, increasing urban water higher than average in the fod processing supply service levcls, and increasing per capita urban consumption are producing 56 China: Air, Land, and Water Table 3.5 Selected Urban Statistics, 1991 and 1998 Statistic 1991 1999 Annual Growth (percent) Official urban population (million) 305 389 3.1 City-based non-agricultural population (million) 148 202 4.0 Number of designated cities 479 667 - Built-up city areas (kM2) 13,791 21,525 5.7 City-based domestic water use (million m3/year)a 10,626 18,969 75 City-based per capita domestic water use (m3/year) 71.8 94.1 - Municipal wastewater treatment capacity (million m3/year) 1,703 5,779 19.1 Treatment capacity/domestic water consumption (%) 11 21 N.A. City-based sewer length (km) 61,601 134,486 10.3 Note: a This figure ricludes all non-indjustria trien cipa water supply, inc uding nstitutional demands, urban Irrigation. etc. t equates to per cap ta aonsumpt on of about 25a liters per person per day, which is disproportiorately high. a good part of the h gh consumpt on level s believed to be due to high rates of leakape from a d and poordy nainta ned municipal water supply systems Source: ZTN (1992 and 2000) compounded increases in municipal waste- wastewater received secondary treatment in water flows and pollutant loads. This has 1998, representing only about 10 percent of significantly changed the water pollution the total discharge. This is a significant balance over the last 10 years. The sum of improvement on the 4 percent rate achieved municipal and industrial wastewater flows in 1991, but clearly there is still an enormous and COD loads remained substantially backlog. Only about 70 percent of installed unchanged over the 1991-99 period, but the municipal wastewater treatment capacity is significance of municipal flows and loads as a being utilized, so there are opportunities to proportion of the total nearly doubled. make immediate short-term improvements According to SEPAs data, total wastewater by (a) increasing investments in sewage flows and loads from municipal sources now collection systems and rehabilitation; and exceed those from industrial sources.t2 (b) improving operation and maintenance of existin(r treatment plants. Despite double-digit growth of municipal en wastewater treatment capacity over the last Nevertheless, given municipal water demand decade, Chinese cities continue to be under- projections, current municipal wastewater served by sewers and wastewater treatment treatment capacity will have to be nearly plants. It is estimated that only about quadrupled over the next 20 years just to 2 billion m3 of non-industrial municipal maintain the current level of municipal 3 Water Resources Management 57 treatment service. If the level of service were efficiency of nitrogen and phosphorous to be doubled over the same period, and applications, requiring larger applications making no allowance for increased accept- than necessary to achieve a given yield ancc of industrial flows, installed capacity response and also increasing losses from the would have to increase by six- or seven-fold, field into rivers and lakes. Other factors con- which will require massive investments. tributing to nutrient runoff include the poor qualitv of fertilizers, inefficient application NONPOINT WATER POLLUTION methods, and excessive soil erosion. Nonpoint water pollution due to fertilizer Nonpoint sources of nutrients are significant runoff, pesticide runoff, and discharges from sources of eutrophication, which is occurring intensive animal production enterprises is an in many lakes throughout China and also in issue that is producing visible effects in cer- near-shore marine areas that are shallow tain areas and can be expected to increase and/or experience limited tidal flushing. For even further in the immediate future. example, it has been estimated by researchers atTsinghua University that nearly 70 percent Nutrent runoff Increasing fertilizer use has of the total nutrient load flowing into been a major factor i the remarkable increase Dianchi Lake in Yunnan Province is derived in grain and food consumption in China over r arcta rn l S on C tJ r~~~~~~~~~~rom agricultural runoff." Studies on Chao the last 50 years. Total fertilizer consumption Lake in Anhui Province indicate that about increased bw; more than 500 percent between 75 percent of total P and 60 percent of total 1980 and 1998, bv which time it amounted N is derived from agricultural nonpoint to about 41 million metric tons a year. Con- sources (Ecology and Environment 1999). sumption in 1999 was equivalent to about 317 kilograms per hectare (kg/ha) of culti- There are no quick and simple solutions to vated land, or about 264 kg/ha of sown area. the control of nutrient runoff from agricul- Application rates in some central and south- tural land. In fact, as the economy opens up eastern coastal provinces can be 400 to 500 and the government's role in directing the percent higher than the national averages.'3 agricultural economy continues to decline, the problem will get more difficult to control. W'hile there is some debate whether current The governmentXs cpct to direct farmers application rates in China are excessive, there Th oenetscapaciryty ietamr isalmostuniversateslmChi agreement thatfertiere to grow particular crops and adopt particular iS almost uiersalagreen tat frlz practices is declining almost to the point of applications are unbalanced. Potassium and, disappearance. In the future, it will have to to a lesser extent, phosphorous are underap- rely much more heavily on education and plied. Deficiencies in potassium reduce the awareness to encourage farmers to change 58 China: Air, Land, and Water their habits. This requires re-invigoration of chemicals." Together, these accounted for the agricultural extension service, which has about 70 percent of all pesticides and 95 per- been progressively declining for many years. cent of all insecticides produced in China. Domestic production of most of these toxic Tem gov ernent ise awareo tefprob compounds was banned in 1983. Thereafter, lem and has been focusing its control efforts total domestic pesticide production declined on three lakes, which are the worst affected pe p in the country.15 However, the strategy has by about 60 percent, to 211,000 tons in 1985. not had the desired results for several As production recovered through the late not ad te deiredresuts fr seeral 1980s and 1990s, the range of chemicals pro- reasons, including poor targeting of invest- ducd cangd1 , t not ver mad an sly ment strategies, problems with funding coor- duced changed, but not very advantageously dination, and insufficient attention to the from an environmental point of view. Two of non-engineering the top three insecticides produced in 1996 institutional and other non-engineering institutional~ adote were WHO Class 1chemicals.'7 In any event, dimensions of the problem. These problems could be reduced by devoting more time to the ban was not completely effective, and there remains a substantial domestic trade, understanding the causes of the problem anpehsalordutn,ftespo- before embarking on investment decisions; O . . ' c~~~~dly banned chemicals (Thiers 2000). improving interagency coordination; apply- ing already existing regulatory procedures; Domestic consumption nearly doubled, from and improving local government capacity 730,000 tons in 1990 to 1.32 million tons in and effectiveness on issues such as land-use 1999 (ZNTZ 1999). There are numerous zoning and control (see Box 3.1). case study reports supporting the conclusion Pesticides. The.other. major inputs that have that overapplication of pesticides is a problem Pesticides. The other major inputs that have in at least the wealthier provinces of China.'2 played a part in the agricultural sector's There are two main environmental effects growth in output are pesticides. In the early ci " . ............ . ' ~~currentlv evident from overuse of pesticides: 1950s, total domestic pesticide production was only about 1,000 tons. By 1999, this had Pesticide residues in crops. The occurrence of increased to about 625,000 tons, by which excessive pesticide residues in Chinese time China had become the second largest food crops is believed to be serious and producer and consumer in the world. Since widespread (Morton 1999). Some local then it may well have moved into first place dietary surveys (reported in Huang et al. (Huang et al. 2000). 2000) have detected elevated residues in a variety of foods, particularly vegetables, Domestic production reached similarly high fruit, meat, and eggs. This is a matter of levels (537,000 tons) in 1980, at which time a significance from the domestic public high proportion ot pesticides produced were g classified as "high-toxicity, high-residue" health and environmental poits of view. 3 Water Resources Management 59 Box 3.1 The Case of Dianchi Lake in Yunnan Province INTRODUCTION RESU LTS Lake Dianchi is located in southwest China, nearthe Notwithstanding the large investment (about 2.5 Yunnan Provincial capital of Kunming. The lake suf- Billion RMB), the only noticeable improvement has fers from serious eutrophication, in part (a) because been in Chao-Hai, a small sub-section of the lake. it is inherently susceptible due to its shallowness, Water quality in Wai-Hai-the larger sub-section the warm temperatures, the seasonal rainfall of the lake-has continued to deteriorate. Even pattern, and its low hydrological exchange; and in Chao-Hai, the main improvement has been aes- (b) because of the extensive agricultural, industrial, thetic and in phosphate concentrations,which were mining (including phosphate mines), and urban reduced up to 41 percent. NH4-N and total N have development in the catchment. increased, and Chao-Hai technically remains hyper- eutrophicated. In Wai-Hai, BOD, NH -N total N Control Strategies. Sporadic attempts to control , N, and total P are steadily increasing, and it is at or water pollution began in the 1980s, but an integrat- close to hyper-eutrophic. ed approach only started in the 1990s. There were five main components to the strategy: (1) legislative COMMENTS AND CONCLUSIONS and regulatory; (2) increased treatment of urban In summary, the strategy has had limited success. and industrial wastewater; (3) selective removal of The main complicating factors include (a) accelerat- nutrient-rich water; (4) sediment dredging in a sub- ed economic development in the catchment, which section of the lake (Chao-Hai); and (5) control of caused pollutant discharges to consistently out- algae and macrophytes. pace the control effort; (b) delays in getting the integrated control effort started (the problem was The strategy included legislative/regulatory actions intified inthe ear t s erous cnr to provide a legal basis for attempts to control efforts only began in the 19905); (c) too much important nutrient sources (including cage-fish emphasis on short-term control of "symptoms" farming and mining operations) and tightening epai nsottr oto f"ypos fapprmin an mining properats;ions)d tightmening o such as sediment dredging, and too little effort on approval of new projects; increased treatment of the control of underlying sources of the problems; uenrbanlinedustr wastewater oeatmenstrucantian oour (d) virtually no attention given to control of agricul- centralized wastewater treatment plants; an indus- tural point source emissions (the major source of tajoria of polution control plan,twhchmt btoug t- nutrients); and (e) insufficient attention given to majoity f surce inthe atcmentint comli- developing an integrated, cost-effective approach. ance with relevant standards; selective removal of nutrient-rich water, which involved construction Source: J. Chen (2000) of a channel to withdraw nutrient-rich waters from part of the lake during the wet season; and mechanical harvesting and chemical control. 6o China: Air, Land, and Water In addition, it could affect access to inter- particularly in urban areas, while the con- national markcts for fruit and vegetables, sumption of animal products has increased many of which are very sensitive to food significantly These trends are expected to purity issues. continue in the foreseeable fuiture as urbaniza- B..diversity linpacts. Pesticides influence tion increases, disposable incomes increase, Bio,iversity impacts. Pesticides influence and food distribution systems in rural areas blodiversitv by (a) applying selection pres- sure to the pests being controll , w h improve. Domestic lIvestock production wi n ovler thim also increase, as will the proportion of rends to increase their resistance over livestock raised in intensive production units, thus reducing the effectiveness of the pes- thus rdeducing the effectivenon-gesfth pses which can be significant sources of both solid ticides; and liquid wastes, as well as odors. species, many of which may be pest preda- tors that would otherwise benefit crop The livestock sector in China is already large. plants; and (c) killing or adversely affecting Within the livestock sector, pork production the health and/or reproductive success of is of major importance. The pork production non-insect species, particularly (in China) sector produces 70 percent of all meat pro- fish and frogs. There is at least indirect duced in China, and 50 percent of the pork evidence to suggest that some of these produced in the world (Agriteam 1998). effects are already occurring." Medium-scale producers, or Specialized There is no convincing evidence that general Production Households (SPH), maintain as contamination of soil and/or water is a major many as 10 sows and account for about 5 per- or widespread environmental problem at this cent of total production. Commercial farms stage, although the database on which to typically maintain between 100 and 1,000 make an assessment of this issue is almost sows, although some have as many as 5,000 completely lacking. sows, and account for about 15 percent of Emissions from Intensive Livestock total production.2' Both are expected to Emissions from Intensive Livestock Production. A notable change in the struc- increase in importance over the next 10 years. Pureoductio Arnotablechangmver the lastrc It is predicted that SPH and commercial ture of the rural economy over the last rouescldaontfrsmchs 30 vears has been the increased contribution 40 percent (20 percent each) of total pig pro- made to the gross value of agricultural output 4 (GVAO)byllvestoc poduction, which d duction by the vear 2010 (Agriteam 1998). (GVAO) bv livestock production, which dou- bled its contribution from 14 percent in 1970 The calculations in Table 3.6 are intended to to 31 percent in 1998. This reflects changing provide some perspective on the current and domestic dietary habits. Per capita grain con- potential significance of the wastes that sumption has been progressively declining, might be discharged from an intensive pig 3 Water Resources Management 61 production sector of the size implied by the Con cI usio n s a n d above growth projections. The numbers are obviously speculative, but they support the Recommendations view that the environmental dimensions of this sector could be potentially substantial. INTRODUCTION It is assumed that 80 percent of piggeries are At the beginning of the 1990s, the dominant located in the three statistical regions (Central water pollution issue in China was industrial South, Southwest, and East) that presently point source pollution and, more particularly, contain 80 percent of all pigs. In these three pollution from industrial point sources locat- regions, the Bank estimates that the COD ed within the state-owned sector. These load in untreated piggery wastes was about sources became the focus of the pollution 2.6 million tons in 1996 and will be about control effort. SEPA and the lower levcl 8.2 million tons in 2010, representing 28 per- EPBs used a variety of instruments to cent and 90 percent respectively of current address the problem, including command- urban plus industrial COD loads. One recent and-control measures, "administrative" study estimated that, in certain study areas measures, economic instruments, and public within the Huai and Hai River basins, current awareness. The available data suggest that COD loads from all livestock already amount these measures contributed to the rcversal of to between 30 percent (in Zhangjiakou) and industrial water pollution emissions observed 80 percent (in Chengde) of industrial COD around the middle of the decade. loads (World Bank et al. 2001). While environmental administrators were There are insufficient data upon which to focusing on CAOEs, the TVIE sector erupt- base similar estimates regarding the intensive ed as a new and even more significant source cattle and chicken production sub-sectors, of industrial pollution. When corrective although it can reasonably be assumed that action was eventually taken, commencing in they too are significant and will become even late 1996, the control strategy-shutting more significant over rime, down 15 types of small enterprises-also appears to have been effective. Water pollu- tion emissions from TVIEs declined signifi- cantly during the second half of the decade. These improvements were probably enhanced by the general slowdown in economic activity following the regional financial crisis in 1997, combined with industrial restructuring, 62 China: Air, Land, and Water Table 3.6 COD Discharges from SPH and Commercial Pig Production Enterprises, 1996 and estimated 2010 1996 2010 Assumed national pig population (million head)a 335 525 Proportion of population in medium and commercial production units (percent) 20 40 Pig population in medium and commercial production units (million head) 67 210 Annual COD production/pig (tons)b 0.123 0.123 Average proportion of wastes discharged untreated per production unit' (percent) 40 40 Resultant untreated COD discharge (million t/y) 3.3 10.3 Intensive piggery COD discharge (proportion of 1998 national industrial + municipal COD loads) (percent) 22 69 Notes: a AsLJries the pig popi ataor increases at abait 3 percent per andLM, m wh Cri compares w th the rate of 2 percent per annum aclh eved over the per od 19B1-9S The base '1996) frgure s derived from the 1996 agr cu tura census. Based on 282 g/n volatife so.idscpig/day and 1.2 mg COD/mgvolatile solids (Cloyna 1371 Ass imed treatment rates basee on survee data in Zharig et al 11999) covering 6c large-sca ep C. ch:cken, ared :att e pr,ductivrr enterprises n fo,LroroJ1ncvs Source: Wrorid Barry Staff which favored growth in industrial sub-sectors MViost of the growth in industrial output in that tend to use less process water and/or the future is likely to be wvithin the non- produce less water pollution per unit of output. SOE sector, which SEPA and the EPBs have the least capacity to regulate due to This conjunction of events is unlikelv to con- deficiencies in the current command-and- control svstem. Recent positive trends in control will become much more complex over the control of industrial point source emis- the next 10 years, and it is likelv that water sions may not be sustained, and mav even quality in rivers, lakes, and groundwater will be reversed over the next five years. continue to deteriorate in many areas. The major factors influencing this outlook are: Increasing urbanization, increasing per capita urban water consumption, and Recovery of the industrial economy, which possible continuing difficulties in adjusting could reverse some of the gains made on " . ~~~water and sewage tariffs to financially control of industrial point-source pollution over the last few years. sustainable levels, could lead to a further widening of the gap between the need for and supply of sewage collection and 3 Water Resources Management 63 treatment capacity in urban areas. If this INTEGRATED RIVER BASIN occurs, there "Vill be a significant increase MANAGEMENT STRATI EGIES of pollutant loads from this source. Integrated river basin management (IRBM) is Nonpoint water pollution, and particularly not a new idea. Numerous reports have advo- wastewater emissions from intensively cated adoption of a comprehensive river basin produced livestock, is already significant planning and management approach as a and is likely to become more significant in means for rationalizing water resource man- the foreseeable future. agement. It also has the potential to provide a better fit between water management strategy most acutely in the rivers north of the and local climatic and geographic conditions, Yangtze including the 3-H rivers and the which are extremely variable in China. The Song.iao River, wherc water . qua.ltv is already State Council, as well as operational agencies S,ongliao Rive r, wherc water qualty IS already such as the Ministry of Water Resources and severelv degraded. From a water quality severely degraded. Prom awaterquality SEPA, support the concept. The problem is point of view, thesc parts of the country have how to move the idea toward implementation. reached the stage wvhere deterioration of the wvater resource base is threatening the foun- This topic has been addressed in consider- dations of growth. The immediate need in able detail in a number of recent reports the northern river catchments is for develop- (Hydrosult et al. 1999, World Bank et al. ment and application of an integrated water 2001). However, in terms of general princi- resources management strategy applied at ples, the most pressing need is to develop the river-basin level that addresses all aspects new institutional arrangements for integrated of growth and development impinging on river basin management, with particular the water cycle. The ensuing discussion emphasis on increasing the effective partici- outlines some key issues that necd to be pation of stakeholders other than the addressed in applying an integrated water national government.2' management strategy at the riVer-basin levet Three basic "design options" for a river basin This is followed bv suggestions on how par- agency have been tried around the world pculroblem gts to be ttad d either ap rti (Stapleton et al. 1999). The weakest interven- problem ought to be addressed, either as part tinsa omte,whccorntChi- of an integrated river basin management tion Is a committee, which coordinates high- of an integrated riverbasinmanagement level policv and strategy but has no role in strategy, or as disaggregated strategies in daily operation. The strongest intervention is parts of thc countrv wherc *vater manage- diyoeain h togs ncvnini partsIofthecountr wherewatermanage an authority, which absorbs all or most water ment issues are not quite so pressing. and related functions in the basin regardless of wvhich level of government they belonged to in 64 China: Air Land, and Water the first instance. A third option is a comnmis- China already applies charges to cover the siion, which deals mostly with policy, strategy, cost of supplying a service such as water planning, data collection and management, supply, and applies water resource charges for monitoring, specification of standards, and the scarcity or opportunity cost of supplying related matters. It may also have some operat- a natural resource.22 For various reasons, these ing functions for very large works, such as charges are not as effective as they could be. major dams, or for inter-provincial issues. In . . Water resources administration would be terms of influence, this option is somewhere btwee th ifirstand thise options. greatly improved if (a) water rights and alloca- tions were made transferable and enforceable; The commission model is becoming more (b) appropriate pricing policies were applied frequently used internationallv-examples for water services, including bulk water sup- include the Murray-Darling Commission in ply and flood control; and (c) resource man- Australia and the Delaware River Basin agement fees were applied, or included as a Authority in the US-and may be adaptable line item in relevant government budgets, to to the Chinese situation. cover the costs of system management. WATER PRICING In many cases, a relatively steep increase in current wvater charges may be required to In general, water is used wastefully by virtu- have a real impact. This is socially difficult, ally all consumers in China. Overcon- but in the severely conflicted catchments such sumption is partly due to the fact that water as 3-H it may be far more palatable than the is generally underpriced or, in some cases alternatives, including large-scale failure of such as groundwater, not priced at all. This urban and industrial water supplies. Some of situation is progressively changing, particu- these problems are already occurring in the larly with regard to municipal and industrial current very dry year in northern China. supplies, but progress is slow. Appropriate charging for both surface and groundwater, WATER QUJALITY MONITORING in all its uses, may be the most effective AND WATER QUALITY STANDARDS single method to overcome many water shoragle aniethd watooerpollutionyp lems i China has substantial financial resources, but China. Almost all other regulatory tools- many developmental problems to solve. It can- not afford to waste scarce financial resources. water use permits, water pollution permits, or levies-and water savings activities will be et wate grat pnsitomingtais tw ation- more efectiv when upportd by . al water quality monitoring systems that sub- atre watercharghesand supporices appropri- stantially overlap and duplicate each other. In addition, it has not recently reviewed its water 3 Water Resources Management 65 quality standards to ensurc thcy are relevant sample collection and analysis. In addition to to currcnt economic and technical conditions. further defining the division of labor betwveen Both issues need to be addressed. quantitative (MWR) and qualitative moni- Water quality monitoring. SEPA and the toring (SEPA), they should agree on data- sharing standards and procedures and idenifir Ministry of Water Resources maintain paral- r c an . lel,and n rnnv rspecs ovrlaping, opportunites for Jomnt research and analysis. l Cost savings from adoption of a more collab- national water quality monitoring systems. orative effort could help resolve some of the Fiftecn out of 37 surface watcr qualltv mndi- . FoeIty mdi- most fundamental problems with the existing cators monitored by MWR are also moni- m u monitoring system, notablv inadequate tored by SEPA; in the case of groundwater, the figure is 17 out of 27. River flow, which sampling frequency. is essential for calculating pollutant loads, is Water quality standards. To achieve cost not monitored by SEPA, but is monitored by effectiveness in managing pollution, the MWR. SEPA is authorized by law to pub- design of pollution control facilities needs to lish water quality data, while MWR data is be based on ambient and emission/discharge mainly for internal use. There is little coordi- standards that are economically rational as nation or cooperation between SEPA and well as environmentally acceptable. In many vIVWR, and the parameters monitored do of the severely stressed river basins in China, not necessarily reflect the particular needs in particularly the northern catchments, there is individual river sections. Data is not available a huge gap between ambient standards for in a common database, and there appears to the main designated water uses and the actu- be little if any sharing of data or collaborative al standards that are likely to be achievable analysis of data. In fact, the relationship within any reasonable planning time-frame. betveen MWR and SEPA appears to be These ought to be reviewed, particularly the more competitive than cooperative. This sit- minimum quality standards for river water uation is not tenable and, furthermore, is suitable for raw water supply for municipal compromising the analytical value of the systems (Class II/III). Not only do these rep- national water quality database.2 resent an unachievable goal in many catch- ments, but they mav not take adequate As a matter of priority, SEPA and MWR .. . . ~~~~account of recent developments in drinking should establish a joint, high-level committee water treatment technology.24 These stan- to rationalize their monitoring systems, dards need to be reviewed, with a view to including station locations; frequency of sam- assessing the utility of using the existing pling/ observations; selection of monitoring stnadas"ol"ndetigwrkg parameters; and sharing of responsibilities for 66 China: Air, Land, and Water level standards" (WLSs) applicable to the and administrative support to concerned existing status of economic development, for provincial and lower level EPBs. More a period of perhaps 10 years. The standards generally, EPBs at all levels should focus could be revised every new decade, setting their greatest efforts on monitoring and the WLSs at levels representing the maxi- regulation of the industrial enterprises that mum standards that can reasonably be met at produce the bulk of total pollution loads in the time, wvhich could be accepted by indus- their jurisdictions, including industrial try in a constructive manner that would enterprises below the county, level. prompt compliance rather than evasion. SEPA should assist lower-level EPBs to make better use of the environmental INDUSTRIAL WATER impact assessment system as a tool in POLLUTION CONTROL total water pollution load control. Most of the initiatives needed to strengthen Environmental assessments for industrial industrial water pollution control are of a enterprises need to assess incremental cross-cutting nature and are covered in water pollution loads attributable to pro- Chapter 5. But there are a number of things posed developments. These should be used that are of particular relevance to industrial to determine how developments can pro- water pollution. For example: ceed without increasing total loads. Pollution levies have to be increased suffi- SEPA and lower-level EPBs need to ciently to provide a true disincentive, so cooperate with finance bureaus and plan- that it is cheaper for enterprises to install ning departments to promote the concept and operate wastewater treatment plants of industrial estate development for rural than to remain in noncompliance and pay industrial enterprises, combined with the levy.25 centralized wastewater collection and treatment, as a contribution to resolving EPBs need to strengthen the general appli- pollution problems with small-scale cation of existing regulatory instruments, rural enterprises. particularly the "three simultaneous" policy. In urban areas, municipal governments EPBs need to be far more strategic in the an EPbs need tencuage rgenof focus of their industrial regulation work. prE-trea eed t ralewaste ate o pre-treated industrial wastewater into From a national perspective, SEPA needs municipal sewers. to continue its focus on priority catch- ments by providing technical assistance The national Cleaner Production (CP) program should continue to be supported and strengthened (see Chapter 5). 3 Water Resources Management 67 MANAGCEMEN r AND CONTROI OF The performance of municipal wastewater URBAN WATER POLLUTION treatment plants is generally poor, capacity is frequently underutilized, and treatment The cornerstone of any strategy for dealing - ° . . O ~efficiencv is often low. SEPA needs to with the growing problem of municipal extend the scope of its pollution control water pollution has to be the creation of a regulations to cover primary and secondary firm and sustainable financial basis for the treated emissions from municipal waste- operation of municipal water and wastewater 1 1 ~~~~~~~~~~water treatment plants (MVWWTPs). This utilities. Kev elements include (a) adequate iS not a simple mnatter from a technical, pricing of municipal water and wastewater administrative, or practical point of view. services; (b) extending service charges to Nt cover all service beneficiaries, including insti- tance of such emissions, a control strategy tutional consumers; and (c) increasing fee needs to be developed and agreed upon as collection efficiencv. soon as possible. In developing a strategy, The capital investment requirements to meet SEPA will need to (a) assess the geograph- foreseeable urban water and wastewater serv- ical and size distribution of MWWTPs; ices will be enormous, and it is likely that (b) assess the current performance of a private sector participation will be necessary stratified random sample of such plants; (c) to help bridge the financing gap. However, assess experience and procedures for regu- private sector participation does not elimi- lating discharges from MWNAV TPs in nate the need to address the fundamental other comparable countries; (d) identify a problem of raising service charges. In fact, range of regulatory approaches tailored to private sector participation will not be feasible the urban structure within China; and (e) unless service charges arc raised to financially evaluate the staffing and cost implications viable levels. of its implementation to form a basis for discussion with other relevant agencies of From a purely "pollution control" point government particularly the Ministry of of view, there are several actions that SEPA government, partlrl therMion of and the Ministry of Construction should C higrher levels of government. consider to increase the pressure for h l g improvement in the collection and treatment of municipal wastewater, and to help improve the finances of municipal xvaste- water management utilities: 68 China: Air, Land, and Water Develop a model "trade waste acceptance Promote adoption of "appropriate" munic- policy" (TWAP) and related regulations ipal wastewater treatment technologies to and procedures with a view to encouraging reduce costs and provide a better fit water polluting industries to discharge between the financial and technical capac- pre-treated wastes into municipal sewers itv of different city administrations and rather than directly into the environment, realistic environmental goals. For example, The benefits include (a) improved opera- in regions where land is not a constraint tional economies of scale for the water and and climatic conditions are suitable, oxi- sewerage utility, which would charge an dation ponds could replace activated acceptance fee for receiving the pre-treated sludge systems. wastewaters; and (b) reduction in the number of industrial point sources, which MANAGING NONPOINT POLLUTION have to be monitored and regulated by the environmental protection bureau. If imple- Nonpoint pollution is the most difficult of all mented, EPBs would only have to monitor water pollution management and control and regulate the discharge from the challenges. There are few if any countries in MWWTP, rather than all the individual the world that can claim to have all dimen- discharges from the contributing enter- sions of the problem under control. The prises. This approach is not new in problem will be particularly difficult to China-boThi approneh third no inst address in China because of its geographical China-about one third of installed municipa .astewater treatment capacity is scale, the lack of effective land use manage- municipal wastewater treatment capacith; iS already hniment controls, and all the problems that alreadv handling industrial wastes- r bedevil other dimensions of pollution man- but the suggested actions would help agmn n oto.Tegvrnetad encourage this trend, and also assist in gement and control. The government, and minimizing adverse effects on collection SEPA in particular, need to be discriminating aind mezint srst femts. in the problems thev choose to attack, giving and treatment svstems. preference to (a) those elements where there is at least some hope of making progress both technically and administratively; and (b) interventions with a substantial "win-win"' element, where benefits additional to pollu- tion control can reasonably be expected. 3 Water Resources Management 69 The discussion below focuses on nutrient increasing availability of compound fertil- runoff, pesticides, and discharges from inten- izers, improved soil erosion control, and sive livestock production. The issue of soil increased afforestation-into the overall erosion control is treated as a land manage- control plan. ment problem and is discussed in Chapter 2. Strengthening the application of existing Nutrient runoff. As described earlier, laws and regulations, including pollution eutrophication of the coastal lakes and seas control and land use planning/zoning in China is a serious problem. It has been regulations, before developing new ones. recognized for at least 10 years. The govern- ment's strategy has focused on cleanup of the Restricting ctha n to devaelomen three prioritv lakes. There is little evidence ac the problems."' that the control strategies adopted to date have had any measurable effect. Pesticides. Improving the ways in which pes- ticdes are produced, stored, transported, and For the future, the control strategy should tici ' ° . . ~~~~used requires strengthening the regulatorv continue to be focused on the three prioritv but2 more emphasis has to be placed on: system, which seems to be characterized by lakes,26 'but more emphasis has to be placed on: complexity, overlapping responsibilities, con- Improving environmental monitoring, flicts of interest, and under-resourcing of the including monitoring of nonpoint sources to institutions responsible for maintaining min- improve understanding of underlying causes. imum standards of quality, toxicity, and safe- ty. Notwithstanding some rcgulatorv reforms Improving coordination of the efforts of diffrentgovcnmen ageciesand,morc introduced in 1997 '21 further work is required different government agencies and, more to strengthen pesticide regulations and particularly, on the timelv and coordinated farmer e n. For examptle ' ~~~~~~~~farmer education. For example: flow of funds to permit each agency to carry out its assigned tasks at the right The government has already promulgated time. Formation of ad hoc management new regulations to rationalize pesticide structures-a leading group or a special- management, but they did not go far ized project management group with the enough in defining the roles of the various authority to co-opt the participation of rel- actors or separating regulatory and other evant line agencies-may be required to functions. In any event, the new regula- achieve this objective. tions have not been applied nationwide. Clearly, there is a need to further strengthen Incorporating "non-engineering" control the regulatorv function. The best wav to do activities-increased agricultural extension this would be to centralize regulatory and other forms of farmer education, 70 China: Air, Land, and Water responsibilities within an institution such farmers. Thus far, there is no substantive as the MOA (such as the Institute for evidence that it significantly increases the Control of Agrochemicals-ICAMA), risks of catastrophic pest attacks. The provided that the Ministry also withdraws MOA needs to give more support to IPM, completely from the pesticide retailing particularly in sub-sectors-rice, cotton, business at all levels, including particularly and certain types of horticulture- the county level. that appear to be suffering from excessive There is a need to improve the awareness pesticide application. of farmers on alL aspects of pesticide use The MOA has the primary responsibility and management, and the quality and for implementing most actions needed to effectiveness of advice being provided by improve the management and use of pesti- Plant Protection Stations (PPS) on mini- cides in China. However, SEPA also has a mization of the use of pesticides. There are role in developing a better understanding many simple things that could be done in of the environmental effects of pesticide this regard. For example, while most if not contamination through a targeted program all pesticides sold in China must include of both ambient environmental monitor- hazard and safety information on their ing (including groundwater and surface labels, these are only provided in Chinese, waters with limited mixing and/or assim- making the messages meaningless to the ilative capacity, where residue problems are minority farmers who do not read Chinese. most likely to occur); testing for residues in food products; and monitoring of applica- There are many good things about the nolelsaoctdwihheberd ecolgicl asect ofthe nfomatin ad ton levels associated with the observed te ae o th e ambient levels and residue levels. training provided by the PPS in China,2 but it is also clear that it needs to adapt Wastes from intensive animal production. to new circumstances. Integrated Pest Given the existing and future significance of Management (IPM) has been successfuilly emissions from intensive animal production tried in parts of China on crops such as units, there is little doubt that it will be nec- rice and cotton, but it is not clear that the essary to include at least the larger produc- plant protection community as a whole has tion units within the point-source-pollution fully accepted it as an approach that is fea- regulatory system. Some provinces appear sible in the Chinese situation. There is little already to be taking regulatory action on doubt that the IPM approach resuLts in their own account.," significant reductions in the use of pesti- cides and improvements in the health of 3 Water Resources Management Given the actual and potential future scale of and dissemination of best practices this issue, it is recommended that SEPA and through animal husbandry bureaus of the MOA actively develop a national policy on Ministry of Agriculture, which already regulation of this sector. Some key elements promulgates standard designs of house- should include: hold-level production units. Enrironmental specialists should review these designs to The strategy should involve elements of g .p both prevention, such as prohibiting see if there are opportunties for improve- development of certain types of intensive ments. It should be noted that the govern- . p ~~~ment has already developed small-scale livestock production units in certain areas, lest prod ystems, whichlo . . ' livestock production svstems, which not and regulation, such as applying emission o controls to operating enterprises. Inypolewy frccigaia wastes, but also incorporate straw ammo- For practical reasons, the initial regulatory niation technologies that avoid the need to approach should be restricted in scope. It burn off crop residues, thus reducing TSP should focus probably on either geograph- emissions. This is a classic wvin-win tech- ical areas having particular concentrations nology that produces direct economic of intensive animal production units, benefits to farmers and reduces both air and/or areas that are particularly sensitive and water pollution. to high levels of animal waste discharge, including densely populated urban areas or catchments with limited assimilative capacity. As mentioned, some jurisdictions are already taking action in this regard, and this may continue to be a matter to be addrcssed by local (provincial) EPBs, depending on their own circumstances and provided that the implications of inaction do not affect other provinccs. In such cir- cumstances, SEPA's role would be to pro- vide guidance on regulatory options and dissemination of best practices. For the great majority of the sector-the 70-80 percent who are backyard producers or Specialized Production Households- the focus of effort should be on education 72 China: Air, Land, and Water Notes 7. 'l'he 1997 per capita consumption level is about twice a, high as ratre in cities in other countries of similar inomec (World Bank et al. 2001). Part of the apparent high conl- 1.nThea, seven main (Hot-flowing river stems Chare thsumption levcl may he a conbequence of underestimation (YaSnhtz) iao,d Zhu (Paarl)uThcse rivers drlin ahout of the populations served by municipal water coumpinies, 45ancree)t (-f land Zhu (Pearl). ''hese rivers t drain ahiiut and part mav' be attributable to lcakag e, which is often 45 percent of China's land area anid acciunt fur ahout hlgh in) Clhna (as muich as 30-40 percenit in some older 54 percent of its tirc>lns'ater resources.uhasytm) urlhan systems). 2. The data need to he treated svith soimc skeptici,m. 8. Box 1.1 provides further information in industrial Thee also show, for example, that there scre no class 1/11 groupings and terminology in China. monitoring sections within the Songhua throughout the l990s, which is not crediblc. 'The monitoring sections. may 9. These included "Tcmporary Regulation for Water by focused around the maui development ccnters, and henice Pollution Prevention in Huai River Basin" (1995), the may not be representatise of the river system -i, a whole. "Huai River Basin WEater Pollution Control Plan' (1996), and general State Council-issued "Decision on the Issues 3. Ma5VTR ivater quality tiara for the Hiiai River Basin ofEnvironmental Protection" 11996). showv that in 2000, 85 percent of monitoring stations were classified as V/V+ svhllc the remainder svere Cla.ss Ill/IV, 10. Pulp and paper, food processing, chemical produiction, indicating ci,iciderablc deterioration in 1998 and 1999. textiles, leather tanniieries, and niniiig. 4. Xinjiang, Gansoi, Ojuighai. Ningxit, aiid Inncr MIongolia. 11. Pulp and paper, food processing, chemical indtustry, and textiles. 5. Ahour 35 percent of China's lanid areit and 27 percent of its runioff is conitained within foiur large, internally draining 12. SEP'.s national data are not necessarily supportcd hv (closcd) hasins, all of which are located in the we stern part nore detailed stirveys in river basins such as the Huai and of China: Xinjiang, Gansu-Inncr Mongolia, the Qaidam Hai xvhich suggest that the industrial COD contribution Basin (in Qinghai Province), anid northern 'Tibet. SurpLus is still outweighing the municipal contribution. "Back of runoff in thcse basins is either lost as evaporation (Sr soaks the envclope" estimations tend to supp. rt SEPA's vicw into the dcsrer, swhere it recharges groundwater. 13. Fir examplc, detailed asscssments in the catchment of 6. In heavily pilluted ensiroimuents, reservoirs accumulatc Chao Lake in Anhuii Province indicate that farmers in some pollitants, which may then he released in large "slugs" areas are applying chemical fertilizcr at rates as high as wvhcn the rcscrvoir contents are discharged under eithcr 2,000 kg/ha./year (Ecology and Environment Inc., 1999). normal operating proccdures (such as for irrigation nr 14. Yunuan EPB's estimates are Iosec hut still significant; power gencratiinl or under emergency' conditisns (SuLch as 33 percent fir'N and 41 percent for P. during flood cvcnts). The greater the degree of regulatii 3n, the gLcater thc potential fir adverse impacts duc to the 15. Dianclhi J.ake in Yunniatn province, Chao l ake in Anhtui relcase of pollutant slugs. pro'ince, ind Tai Lake in Jiangsu province. 3 Water Resources Management 73 16. Primarily organophosphates (OPs) and organochlorincs MbIijistry of Watcr Resources anti are inot gcicrally perceived (OCs) such as benzenr hcxachloride (BI IC), dichlorvos. as adequately represcnting the interests of all parties to dimethoatc, and DlIT wvater rcsoturces mnanagemrnt wvithin thcir areas of operation. 17. Highly to cxtremely hazardous. 22. Thc '\Vater T aw and its regulations make provisiolo for 18. Morton (1999) rcports cases of cottot farmers (ill application of a water resouirces chargc, making China otue i8. Moton (999) eport casesof coton frmers(its f oils' a few couintries in rise svorld swith suich provisionis. Shandonig) spraying 14 to 20 timiies per scason ftr conitrol of cotton bollsvorm in 1995 (uip froom 3 to 4 sprayings in 23. It is virtually i npossible to establish asty rclatioetship the late 1980s). Huang ct al (200(0) utidertook dctailcd bhevccn changes in pollution discharges anid trettds in sturveys in Zhjiiang Province, which indicatcd that farmers ambicnt water quality in any of thc river basins in Chiia. sverc applying pesticides tivo to threc times niore frequientlh T his is inidicative of deficicncics in the msonitoring systems. than their counterparts elsesvherc in cithcr cast or souLth Main contribittitig factors includc insuifficient mioiitoring Asia, and were applyitng between 40 percent and 70 perccnt frcquenlcy; lack of flov monitoring, anid iiiadequate OA/QC more pesticide than cotuld be justificd in purely ecotuotuic procedures. tcrms. Other wtork, among rice farmers in Sichuan Proviice 2 (Miangan and Maingan, 1998), showed that farmers could i Aii gsrriaticd cofntresere t has heen carried ot its toh reduce spraying frcquency by about 40 pcrccnt withiosit improve perforrmance tf the rapid sand filtration svstems, having any impact on yields, reinfitrcing the view that which are cuimmonle used fir treating raw svarers to prtduee many farussers have aoi Iexaggeratedl view otf the risks wihaccmol sdfrtetn a aest rdc an cffluicnt of drinkinig water qchality Rescarcis has focused posed by pcsts and, as a result, over-apply pcsticidcs. Oll the tisc of ncw flocctilatioii ageiits. As a resiilt, it is no", 19. For examplc, the tnumber of pcsticide-resistant itsect feasible to produce quality drinking svatcr utsiitg rasv water of species in China is reportcd to havc increased sigoiificaustlv corusiderahly lower quality thani, say, in 1950. Ambicnt stan- Over the last 60 years, as follosvs: 1938-7, 1948-14; dards in Chitia have not bccn adjissted to reflect this realir 1963-157; 1971-225; 1980-432. 25. The levy cuLrrentl' amounts to about 20 percemt tt 20. The reiisainder of prodstctiort corutes frotu susall-scalc 50 percent of thc treatmcnt cost, anid cani bh as lotv as holstsehold units, typically swith less thani tAvo soAvs, who 10 perccnt for some induistries (WNorld Bank et al. 2001). generally recycle their prolduction wastes rlsrotgls the 26. As fir the questiott of citrophicatioiu if the coastal seas hot.schold farming systcris, pcscntilg no major trcat the strategy has hasically becn to improve t-roisitoring. There to thc cruvironment. is little if auvything that can bc done to directly control the 21. Clsina already has sevens River Basini Comtieussiosts problcm. Vhc coastal seas are shallow, the trajority are quite (RBCs),which its theory should provide the means for swarun, anid tidal excisausgc in many is low, so they are predis- ensuLrinig integrated managcment otf mrulti-proivincial rivcr porsed to eutrophication. They rceive aboust 45 percent of the basins, btt svhich in fact do not. One of the kcy failings of total ruisoff of Chinia, swlichs contaiiis not osily the nutrictie the RBCs is that the)y are adnuinistraative departmcuts of the etutissiotss frosis the oversvhelsiting tualjority of the national agrictilttrral prodLictiost, lut also thosc contained in the com- lined htuman svastes of perhaps 400 to 500 milliois trhan and semi-surbahi residents. It is difficult to insagiie svwlat strategy cousld bc dcvised to have a measurable imuipaict oti this prob- lem. Improuveimsenit is likely uto be very sli'w astd incremetntal. 74 China: Air, Land, and Water 27. As one example, consideration should be given to devel- Opillg a policy to restrict the phosphate content of household detergcnts mantifactured and/or sold in China. The issue is not sufficiently clear-cut to justify an outright han, but there svould certain8' be value in considering applying wholesale rcstrictions, with perhaps outright prohibitions in high- priority regions such as the catchments of the three lakes. 28. Through a new set of "Regulations on Pesticide Control" 1 1997), which cstablished new guidelihues on pesticide manufacture, transportation, sale, and use with the aim of"protecting agricultural and forestrv productinn anid ecological environment and safeguarding human and animal health" (Article 1). 29. The Ministry of Agriculture discourages calcndar spraying through its comprehensive pest monitoring system, promotes safe application approaches (such as painting certain pesticides onto the stems of plants rather than spraying), and encoLurages ecological approaches to pest control (stuch as planting "guard crops," usC of sex pheromones to attract and trap femalcs insects, and promotion of eco-agriculture to increase soil biodivcrsirsy and plant health). 30. For example, a survey of 94 large to very large intcnsivc animal production enterprises in four provinces (Zhang ct al, 1999) showed that, on average, about 10 percent of the surveyed cnterprises were being levied charges for discharge of pollutants and about 13 percent had been required to prcpare plans and propose deadlines for bringing their pollutant discharges into line xvith relesant standards. The survey also showvcd that quite a large proportion of solid wastcs gcncrated by thcsc enterprises, typically in the order of 55-65 percent, was being treated or re-uised in somc way, either being sold as fcrtilizer or used for biogas production. 3 Water Resources Management 75 :0000: :f- | at 1|fi I I I I ,.. 1|1 . 0 g 0 § ' 2 | E X | g < | g E g | | fi !.10 il1 l gas_ - Main Pollutants, Emission Sources, and Emission Trends Measured by the frequency and degree of non-compliance with standards, total sus- pended particulates (TSP) are China's most significant air pollutant, followed by sulfur dioxide (SO2). A more accurate measure of Air pollution i. a major health issue in particulate pollution is fine particulate mat- China. Studies have linked the high mci- ter-that is, particulate matter with a diam- dence of premature deaths in China to seri- eter of less than 10 microns, or PM10. PM10 ous ambient and indoor air pollution m d (Word Bnk 997) In199, ony oe tird monitoring data are scarce in China, so it iS (World Bank 1997). In 1999, only one third difficult to definitively assess the problem. of China's 338 monitored cities were in Based on correlations between PM10 and compliance wh te nTSP in other data sets, PM1O is the most ambient air quality criteria.' Indoor air pollution is also a serious problem: about terms of frequency and range of violations of 80 percent of China's people still use solid Ntoa min i ult tnad fuels such as coal, firewood, and crop stalks Na AQ bient the most daangar for cooking and space heating, which pollutant I terms of health costs. More can lead to serious indoor air pollution in recent, ai teasi of motor,veh.ile inaeqatly enilte bulig. recently, rapid expansion of motor vehicle fleets in large cities has heightened ambient Air pollution is a major ecological issue in pollution by carbon monoxide, nitrogen China. About one third of China's territory oxides, and related pollutants. is affected by acid rain, which can retard for- Energy consumption, especially coal est and crop growth and endanger aquatic consumption, is the main source of anthro- life. China's growing energy demand and its p p reliance on coal pose difficult challenges to Mostnsulfur dioxide emissions cm from Most sulfur dioxide emissions come from improving air quality and reducing acid dep- . . ~~~~~~~~~~tnis source, as do all soot emissions, which osition, as well as its efforts to reduce carbon .. .. . . ~~~~~~account for more than half of particulate dioxide emissions, the main contributing . factor to glbal warming.emissions. National survey data show that throughout the 1990s there were continuous improvements in emission control among 4 Air Pollution Control 77 medium and large industrial enterprises Figure 4.2 Trends in Annual Emissions of (essentially CAOEs). Small industrial Major Air Pollutants, 1989-99 enterprises (essentially TVIEs) also made 25z improvements during the decade, although 20 - not to the same degree as the larger enter- prises. As shown in Figure 4.1, they are now E 10 the main source of particulate emissions 5 (soot plus industrial fugitive dust). Medium and large industrial enterprises dominate 0 I S02 emissions, primarily because of the inclusion of power plants within this 402 5Cc Soot -0- Fugitive Dust category. Residential and commercial emis- Sources: ZTN (1999); PRCEE, CNEMC, and CRAES (200a). sions, while relativelv small compared to industrial emissions, usually cause much 4.2). Part of this was due to declining coal more significant pollution effects because of consumption, but improved pollution their low emission height and proximity to control was also an important factor. The residential areas. two factors can be differentiated by compar- ing reductions in S02 emissions prior to Overall, national pollution survey data also 1998, when they were not regulated, xvith show that total emissions of major air pollu- reductions in soot and fugitive dust, which tants such as sulfur dioxide, soot,3 and indus- xvere regulated. The 10 percent reduction in trial fugitive dust peaked in the mid 1990s total SO2 emissions bctween 1995 and 1999 and have been falling ever since (see Figure (see Figure 4.2) can thus be attributed to reduced coal consumption and other non- Figure 4.1 Trends in Industrial Particulate regulatory factors. The greater reductions in Emissions, 1989-98 soot (38 percent) and fugitive dust (33 per- 40 - cent) can be attributed to the incremental 35 - effects of regulatory pressure. 30 - 21 25- Coal-burning still is the chief contributor to o is- air pollution in China. But air pollution 10- from motor vehicle emissions, nrainly a s- problem in verv large cities at the present 0- E .,2 e e time, is growing fast and is likely to become a major and much more widespread urban pollution problem in the next 10 years. Sources:ZTN (1999); PRCEE,CNEMC,and CRAES(2001a). Despite rapid gasification in many urban 78 China: Air, Land, and Water areas, indoor air pollution due to domestic 1991 and 1998.2 An equivalent decline in use of coal or solid biomass still affects hun- S02-related health damages is likely, assum- dreds of millions of people, most of them ing a linear dose-response relationship. among the urban poor and the rural popula- Ambient TSP levels dropped slightly, but tion. Notwithstanding the importance of remained high in most urban areas. The pollution regulation and control, substantial isin ambient and indoor air median concentration level in the 32 largest quality Will also depe-d on improvements cities dropped from 334 to 324 plg/mi3 qualityawillnalsordepend on imp rovement between 1991 and 1998, while the median being made ins, an energy eny consump- concentration in the 28 smaller cities tion patterns, and energy efficiency. declined from 260 to 215 pg/m3. In a few large cities, there were significant increases Ambient Air in TSP. For example, annual average TSP Ou a I ity Trends concentrations in Beijing and Tianjin rose from 307 and 247 pg/m3 in 1991 to 379 and Ambient air quality in many urban areas 339 pg/m3 in 1998, respectively For the 60 showed signs of improvement between 1991 cities as a whole, the total human exposure and 1998. Reported monitoring data for 60 to ambient TSP pollution above the Class 2 medium and large cities show that 40 cities standard actually increased by about 2 per- experienced reductions in concentrations of cent between 1991 and 1998. This was due TSP, and 50 saw lowered S02. The number to the fact that the increase in population of cities meeting Class 2 NAAQS for TSP outweighed the reduction in ambient levels. anid SO2 also increased.4 Nitrogen oxide (NOx) levels worsened, Ambient S02 levels declined significantly. reflecting the growing impact of vehicular The median SO, concentration in 32 cities emissions. Fewer cities were in compliance with more than 1 million non-agricultural with the class 2 NAAQS for NOx in 1998 population (NAP)' dropped from 100 to 62 than in 1991. From 1991 to 1998, the medi- micrograms per cubic meter (pg/m3) an concentration in the 32 largest cities between 1991 and 1998." For the other 28 increased slightly from 55 to 57 pg/m3. The medium and large-sized cities, with an NAP 28 smaller cities also experienced minor between 281,000 and 971,000, the median increases, rising from 34 to 37 ug/m3. In concentration dropped from 50 to 32 general, NOX pollution is relatively low, but pg/m3 For the population in these 60 cities in a few large metropolises-such as Beijing, as a whole, the total human exposure to Shanghai, and Guangzhou-concentrations ambient S02 pollution above the Class 2 of NOX exceed the Class 2 standard by a fac- standard dropped by 45 percent between tor of 2 or more. Among the 60 cities with 4 Air Pollution Control 79 reported monitoring data, total human It is important to emphasize the serious TSP exposure to ambient NOx levels above the levels prevalent in all Chinese cities. The Class 2 level increased almost 60 percent problem is becoming more pronounced as between 1991 and 1998, with virtually all of ambient S02 levels decline, especially in the increase occurring in the 32 largest cities. large cities. The persistence of high-level TSP pollution also suggests that there are In general, small cities are no better off in tem of amin ai qu.t hn ag n important contributing factors other than terms of ambient airqalcoal consumption. For example, TSP com- medium cities. This is because small cities p . . . ~~position st-udies have shown that dust from are more reliant than large cities on coal in O . ~~~~construction sites and wind-blowvn soil is an thclr residential and commercial sectors. The data suggest that air pollution levels in important contributing factor in some cities The ata ugget tht al polutlo levls m (see Table 4.2). general have risen slightly in small cities (see Table 4.1). From a human health perspective, fine par- ticulates are the most damaging airborne Table 4.1 Trends in Ambient Air Ouality polat1e Limite montoring atabsuge in Small Cities, 1990-98pollutant. " Limited monitoring data suggest in Small Cities, 1990-98 that the level of fine particulate pollution 502 TSP NOx in urban areas is high (sce Table 4.3). 1990 65 327 26 Unfortunately, the cffort to monitor fine 1998 71 330 33 particulate pollution has only just begun, Note: Data a,, anma arithmetnc means (pjg'r3 of arencrnt and a general profile based on comprehen- mcnitor rg data for 35 ounty-leve Cit es Source:PSiDLE, CNSEC, a rm CRAFS I20Da) sive monitoring information is not yet available. However, if it is assumed that Ambient levels of other pollutants such as about 60 percent of TSP comprises PM10, carbon monoxide (CO), ozone (Q3) and fine particulate pollution levels in Chinese lead (Pb) are not systematically monitored cities are vrery high in comparison to national and the trends are not known. However, Class 2 standards. gasoline-related lead pollution has been effectivcly dealt with in the past three vears Interpreting the ambient data for urban as the ban on sales of leaded gasoline areas is complicated by the fact that the air exp d n. quality monitoring network has not been cxpanded nationwldc from major cities. l According to the government's schedule, a adjusted to reflect the changing patterns of completc national ban on production and urban development. For cxamplc, China's X rr ~~~~~~built-up area grew by 50 percent between sales of leaded gasoline became effective on July 1, 2000. 8o China: Air, Land, and Water Table 4.2 Sources of Total Suspended Particulates in Selected Cities City (season) Percent Contribution to TSP Coal-burning Smelting Construction Soil Other Xian (1997 summer) 20.6 6.0 22.7 42.2 8.5 Xian (1998 winter) 38.3 2.6 18.0 37.2 3.9 Taiyuan (1991 summer) 14.3 6.9 16.4 58.8 3.6 Taiyuan (1991 winter) 40.8 10.2 10.0 35.2 3.8 Changzhou (1992) 24.9 2.5 25.8 29.4 17.4 Source: Xiaii dara fom rXian Environmental Protection Research nstitute,1998 Ta vuan data from Journa of Hygiene Research,Vo 24, No.4,1995 Changzhou data from Narrjing University Academiccurral,Vol 32 1996. 1991 and 1998, but the number and location Indoor Air Pollution of ambient urban monitoring stations remained unchanged. The monitoring data There is a substantial lack of monitoring thus reflect conditions in the inner cities data or statistical information about indoor rather than the cities as a whole. The moni- air pollution, but improvements in fuel toring data may not adequately account quality suggest that indoor air pollution for possible migration of certain sources of caused by fuel combustion may have pollution to the suburbs as a result of inner- declined significantly. As of 1998, there city clean-up campaigns and industrial were over 156 million urban residents using relocation, or for the development of new, gaseous fuels for cooking and water heating, small enterprises in "pern-urban" areas. up from about 40 million in 1991. The fuel mix used by rural households also improved due to increased use of coal briquettes Table 4.3 Fine Particulate Concentrations vs. TSP concentrations in Selected Cities, 1998 (annual averages) PM10 TSP City Ambient Class 2 Multiple Ambient Class a Multiple concentration standard of the concentration standard of the (pg/im3) (pg/m3) standard (pg/m3) (pg/mi) standard Shijiazhuang 201 100 2.0 349 200 1.7 Tangshan 228 100 2.3 352 200 1.8 Guangzhou 143 100 1.4 205 200 1.0 Source: PRCEE, CNEMC_ ard CEAES (2001), 4 Air Pollution Control Si Table 4.4 Levels of Indoor Air Pollutants in Chinese Residences Class 2 NAAQS Parameter Fuel Type Used Urban Households Rural Households hourly average TSP Coal 210 - 2,800 10 - 20,000 Not available Gas 150-510 190 Biomass 170 - 2,600 PM10 Coal 160 - 2,700 120 - 26,000 Not available Gas 140 - 450 Biomass - 830 - 22,000 co Coal 580 - 97,000 700 - 87,000 10,000 Gas 220 - 36,000 2,400 Biomass - 500 - 16,000 so2 Coal 10 - 5,800 10 - 23,000 500 Gas 10 -1,300 20 - 70 Biomass - 10 - 9,100 NO, Coal 10-1,800 10-1,700 150 Gas 10 - 880 30 - 50 Biomass - 10 - 320 BaP Coal 30-19,000 530-1,900,000 Not available Gas 470 - 9,300 Biomass - 370 - 310,000 Note: <'amt are arit-rne C moans 'pgcm3) over single marni- rig peiolds ior r div dn, unschro ds sing difereris oohi g and heat rig fuels as reported n a range of publishier reearch artc es. Source: S[rto,r eta (1995, and gaseous fuels (biogas and liquefied consequences of indoor air pollution due to petroleum gas) and dccreased use of raw combustion of coal and other solid fucls coal and solid biomass. have been documented in major case studics in China (He and Yang 1994), and by Nevertheless, hundreds of millions of people studies in other countries (Smith 1993).li arc still using solid fuels for cooking and/ It has been estimated that up to 700,000 or space heating. The serious health premature deaths pcr year in China could be 82 China: Air, Land, and Water attributable to indoor air pollution (World The area affected by acid rain increased sig- Bank 1997, Murray and Lopez 1996). The nificantly between the early 1980s and the lack of a national assessment makes it difficult mid 1990s. In addition, the geographic dis- to truly gauge the severity of indoor air tribution of acid deposition changed. The pollution in China, but there are some southwest hotspots, represented by cities indicative data (Table 4.4) suggesting that such as Chongqing and Guiyang, experi- indoor air pollution in households using solid enced some moderation in the acidity of acid fuels still constitutes a serious health risk. rain. The central China region, represented The level of indoor air pollution attributable by cities such as Changsha, Zhuzhou, to fuel combustion is determined mainly by Ganzhou, and Nanchang, surpassed the fuel quality, burner technology, and ventila- southwest in acid deposition levels and became the most severely affected region. tion. Studies have shown that whenburning Because of the decline in overall acid solid fuels with good flue gas ventilation, d indoor air pollution levels can be reduced by .sti nc the mid-199si over 90 percent (He and Yang 1994). This inference can be drawn from the wide range Human-induced acid deposition in China is of measured concentration levels in Table mainly associated with S02 emissions, 4.4. Switching to electricity or gaseous fuel which are a function of the predominance of may be the best (and most expensive) option, coal in the fuel mix and the prevalence of but large, low-cost reductions in indoor air coal with relatively low-temperature com- pollution can also be achieved through simple bustion characteristics. The balance between strategies such as improving ventilation. sulfuric acid and nitric acid is about 85:15, which contrasts with the US and Japan, Acid Deposition where sulfuric acid accounts for 50 percent or less of total acid. The level of acid deposition 2 peaked in 1996 and fell thereafter, following the ..depstonmiti avitieshe futre trajectory of overall coal consumption. But Lepoints ,ain coal-fied poer this short-term trend by no means indicates plants, have become the largest source of rgo Cnstc emissions, and will probably become the deposition. The "two control regions"" dominant contributors to acid deposition in program was launched in 1998, and most 11 the next 20 years as the share of end-use coal work to date has been in planning and c c t . prcpartion or impementtion.consumption continues to decline. Because of the long-distance transport potential of power plant emissions, the geographical area 4 Air Pollution Control 83 affected may increase. There is also likely to global share of CO2 emissions increased be an increase in the share of nitric acid in from 10 percent to 12 percent during the total acid loading because of increasing NOX 1990s. The USA also increased its global emissions from high-temperature combus- share during the 1990s from 23 percent to tion in newer power plants. 24 percent, while the rest of the world reduced its contribution commensurately Global Environmental (sce Figure 4.3). Concerns Figure 4.3 Growth of Energy-Related In terms of air emissions, China's two most Co2 Emissions, 1990-98 important global environmental concerns are CO2 from burning fossil fuels and the production and consumption of ozone- i 3500- depleting substances (ODS). China's long- o 2500- held policy in energy conservation has made -p a real and significant contribution to reduc- f 1500- ing global CO2 loading relative to growth in _ _ _ either CDP or energy consumption. Fuel 1990 1998 diversification has also reduced the carbon MMChina USA Rest of World intensity of China's energy mix. Through its participation in implementing the provisions Source: E A (2000) of the Montreal Protocol, China also successfully froze ODS production and con- sumption in 1999 at the average of the levels Almost all recent reductions in coal achieved between 1995 and 1997. consumption-as much as 55 million tons of Growth in energy demand, particularly coal coal equivalent-occurred in end-use sectors - . ~~~~~(Sinton and Fridley 2000). Structural demand, increased rapldlv during the first changes, fuel switching and technical half of the 1990s, but turned negative improvements are all working to moderate between 1996 and 1999. As a result, growth the momentum of future growth in coal of energy-related CO2 emissions was signif- ° X , D ~~~~~~~demand, especiallv for final users. In the next icantly less than had been previously project- 14 ' . , , 1 2 r J ~~20 years, the power scctor could becomne the ed,' although still significant-a 21 percent d i t power sccould bome te increase from 610 to 740 million tons of dominant coal user, accounting for 50 per- carbn beween199 and1998 Chia's cent or more of total coal consumption. Unless there is a major shift in transportation 84 China: Air, Land, and Water technology from internal combustion engines mandates that will enhance future air quality to fuel cells or other low-carbon alternatives, management, including the endorsement of China's oil demand could double in the next emission fees and emission permits, both of 20 years. If these developments materialize, which are potentially important regulatory most of the future growvth in CO2 emissions instruments. China has also made significant will come from these two sectors. gains in adjusting its fuel mix due to large China's consumption of ODS grew by more investments in residential fuel switching, and than 12 percent per annum from 196 to min energy efficiency through technical inno- than 12 percent per annum from 1986 to 1994, peaking in 1995 at 105,070 tons of vation and structural adjustment. These pro- ozone depleting potential (ODP).. After environment energy policies have provided ODS in developed countries were phased significant support to the air quality ODS m developed countrimproementeaghenda out by 1995, China became the world's improvement agenda. largest ODS producer and consumer. Nevertheless, China still faces great chal- Production and consumption in 1997 were lenges. Many of its cities have concentra- 95,760 tons of ODS and 87,620 tons of tions of fine particulates and sulfur dioxide ODP: in 1999, they were supposed to be that are amongst the world's highest. frozen at about 88,660 tons of ODS and Hundreds of millions of people are affected 91,250 tons of ODP. China could still by indoor air pollution due to the use of achieve its original commitment to phase out solid fuels for cooking and heating. The ODS production completely by 2010, but impact of acid rain, while tempered a bit in there are still issues that could cause delays. recent years, has the potential to increase One source of uncertainty is the emergence again if mitigation efforts fail to protect crit- of ODS in previously unidentified sectors."' ically affected areas. Continued reliance on coal and other high-carbon fuels will further Key Air Pollution Issues, increase China's share of global CO2 emis- sions. Speeding up the phasing out of ODS Policy Implications, and will require persistent efforts and additional Recommended Actions China has progressively built its capacity in In this context, China's air pollution man- 11 1 r n1 agement strategy must achieve multiple air pollution management. The first air pollu- g tion law went into effect in 1987. It has since objectives, icluding: been amended twice-1995 and 2000-to Reducing ambient air pollution in add teeth and cover newly emerging issues. urban areas The 2000 amendment includes several new 4 Air Pollution Control 85 Lowering indoor air pollution emission reduction as well as cost reduction Mitigatin th impact of aciddepositio (see also Chapter 5). The government M g aId deposit should also build emission reduction incen- Addressing global environmental concerns. tives into energy prices by levying pollution taxes on haighly polluting fuels, such as coal, To achieve these obiectives, Chin ms j iv ina must or fuels in high demand, such as gasoline. attack its air pollution problems on two fronts: (1) strengthened pollution regulation REDUCING AaIBIENT AIR resulting from improved regulatory effec- tiveness and efficiency; and (2) continued POI.LUTION IN URBAN AREAS pursuit of pro-environmental energy policies Fine particulate matter. The predominant to promote development and deployment of ambient air pollutant in Chinese citics is cleaner and more efficient energy sources suspended particulate matter, about 60 per- and energy technologies. cent of which is PM1'0, the main source of EDnergy mix and energy efficiency play key associated health problems. Airborne fine roles in China's ambient and indoor air pol- partcles come from primary emissions, such lution, acid deposition, and carbon dioxide as soot, fly ash, and fugitive dust, as well as emissions. Fundamental improvements in secondary pollutants such as sulfates and those areas will involve, in the short term, nitrates that are products of many atmos- substantially reducing coal consumption in pheric chemical processes, including gas-to- small and dispersed end uses, and in the long particle conversion. There is no available term significantlv reducing the economy's analysis of the composition of fine particu- tcrm signi I s ~~~~~lates in urban China. Based on emission Pat- reliancc on coal. In the short term, the tran- tes in main Bas of emission pat- sition from a coal-based energy system to a cities are likely to include combustion of coal low-carbon energy system will require rapid expansion of the use of natural gas. In the and other fossil fuels in industrial, commer- longer term, large-scale utilization of renew- cial, and residential applications; industrial able encrgy sources and new energy tech- production (fugitive emissions); and internal nologies will have to be incorporated into combustion engines, particularly diesel the strategy; engines. Contributions from other sources such as construction and natural airborne Building on the momentum of the newly dust are probably small, although these amcnded Air Pollution Prevention and sources are important contributors to TSP Control Law, the government should move as a whole." to implement its total emissions control through a permit system that encourages 86 China: Air, Land, and Water Although the median concentration levels those from small stationery sources, will have of TSP in 60 reported cities decreased to be tightened significantly in order to sub- modestly in the 1990s, the total human stantially reduce fine particulate emissions. exposure over threshold value has actually Emissions of Sc2 from combustion, a major increased slightly, suggesting that the health source of sulfates, are largely uncontrolled. damage due to fine particulates has probably The utility sector, which accounts for not been reduced." Since health damage 50 percent of combustion S emissions caused by fine particulate pollution dominates fromrsurveyed mentis, remo ssonl health costs of all other ambient air pollution about 8 percent of its emissions. SO2 emis- forms, reducing ainbient fine particulate concen- s tration levels should be the center of attention in industrial boilers, furnaces, and stoves are a Chinai uirban air polluition contr-ol agenda. particular influence on urban air quality due Past control efforts have focused on TSP to their generally low stack heights. Since emissions from coal combustion and fugitive ambient S02 is also an important source of industrial dust emissions, and are credited fine particulates, ambient S02 pollution for the significant reduction of ambient TSP control should be an integral part of efforts levels observed in the 1980s. But these to control fine particulate pollution. efforts have not controlled most fine partic- ulate emissions. Based on analysis of 1998 In order to address fine particulate polluton national industrial emissions survey data, the more effectively, key actions iclude: average industrial soot removal rate, exclud- Rapidly increasing monitoring capacity ing the power sector, is only 70 percent, and for ambient fine particulates so that regu- the average industrial fugitive dust recovery latory agencies can improve their knowl- rate is 74 percent. Both are low and unlikely edge and understanding of the nature and to have much effect on fine particulate emis- patterns of this pollution problem. sions. More than one third of all industrial soot emissions come from industries with Clearly identifying reductions in ambient less than a 30 percent removal rate. These fine particulate pollution as the foremost industries are probably, dominated by, small objective of urban air quality manage- firms. T.e cement industry, wbicb emits 78 ment. A national effort, similar to that of firms. T he cement industry, which emits 78 percent ofalidutilfuithe "two control regions" program for percent of all ndustrial fugitive dt should be initiated. Participatingl recovers 68 percent of its fugitive emissions cities should be required to submit their (ZTN 1999). These numbers indicate that cit sue req as required in the the control of industrial emissions, especially cep j two control regions" program. 4 Air Pollution Control 87 Box 4.1 Some Issues with Air Emission Standards for Stationery Sources China's air emissions standards are quite compre- POLLUTION LOAD CONTROL VS. CONCENTRATION- hensive and cover a wide range of conventional BASED EMISSIONS STANDARDS. Most airemission emission sources, such as boilers, furnaces, kilns, as standards are defined in concentration form under well as industrial fugitive emissions. SEPA recently standard conditions without specifying excess updated and tightened emission standards for air coefficients. This allows operators to dilute industrial boilers (GWPB 3-1999) to come into concentrations by increasing air flow. Using con- effect on March 1, 2000.There are a few issues that centration-based emission standards also makes it may hamper the enforcement of the standards, or more difficult to manage local airshed pollution may undermine the objective of overall emission loads, which directly relate to ambient pollution reduction goals. levels. Mass-based emission standards are more THE COMPLEXITY OF EMISSIONS CALCULATIONS. appropriate. The emissions calculations prescribed in national RELAXED REQUIREMENTS FOR OLDER EOUIPMENT standards are unnecessarily complicated, and the AND POORER QUALITY FUELS. Different standards accuracy of the calculations is heavily dependent are applied to old and new equipment (based on on meteorological data such as average wind installation date) and to coals of different quality speed and air stability, which cause great difficul- (based on ash and sulfur contents). The relaxed ties for emissions estimation and verification. requirements for older equipment and poorer qual- An alternative would be to specify emissions per ity fuels do not encourage renovation and use of day per unit equipment capacity. higher quality fuels and should be phased out as part of the effort to move to a mass-based pollu- tion load control program. Source: World Bank Staff Focusing control efforts on coal-burning Furthering the effort to curb emissions activities. Experience in other countries from industrial coal-combustion. SEPA and China's own experience in the 1990s needs to review existing emission standards demonstrates that reducing coal con- for boilers, furnaces, and kilns, w.ith a view sumption is the most effective way of to tightening them where technology improving ambient air quality. It is criti- permits and the economic case is justified cally important that cities in China make (see Box 4.1). every effort to minimize coal use in urban Focusing on coal-fired space heating in areas, especially in residential and com- mercial~ aplctos an .oitrdc n northern China, which is the most impor- merala,alteinati 2(e tant air pollution source in this region. develop cleaner energy alternatives."' While Beijing's effort to convert coal-fired hcating boilers to natural gas is an excep- 88 China: Air, Land, and Water tion for now, northern cities should start and demand management (Walsh, 2000). planning to follow its lead. In the mean- The critical issue now is to implement the time, they should take immediate steps to strategy in a timely and effective manner. curb emissions from coal-fired heating Early signs have been encouraging because boilers by improving heating-coal quality of the strong push by large municipalities and improving space-heating energy effi- to implement the strategy ahead of the ciency (see Box 4.2). national schedule. Beijing, Shanghai, and Motor vehicle emissions. Motor vehicle Guangzhou, the three cities with the most emissions have become a major source of ambient air pollution in a few super large cities, including Beijing, Shanghai, and Guangzhou. On average, mobile sources account for 45 to 60 percent of NOX emis- Box 4.2 Strategies to Curb Emissions x ~~from Small Stationary Sources sions and about 85 percent of CO emissions in typical Chinese cities (Walsh 2000). CONTROL COAL OUALITY. Pilot programs Given current projections of urban trans- should be introduced to experiment with a heat- portation growth and analysis of urban air ing coal distribution system in which only emission sources, motor vehicles, especially licensed fuel companies are allowed to deliver passenger cars, will be one of the main prepared low-ash and low-sulfur coal to heating passenger cars, w. rboilers. The fuel companies then must comply sources of urban air pollution in the future. with minimum coal quality standards specified Chma's fast-growing fleet of diesel-driven for different size/type of boilers. This also is a trucks and buses in Chinese cities should defensive measure against the possibility of also be a matter of concern for air pollution inferior coals being channeled to small users regulators. Soot emissions from diesel when tighter TSP and SO, controls push up engines are a serious health concern because demand for high-quality coal by bulk users such as power plants. Boiler operation efficiency may they are carcinogens. they are carcino be improved by introducing energy service com- The government has already developed a panies that seek boiler operation and mainte- national strategy for reducing motor vnance outsourcing contracts from boiler owners. national strategy for reducing motor vehicle emissions based on international experiences PROMOTE INCREASED ENERGY EFFICIENCY. and China's situation. Key components Major policy reforms will be needed to unleash include phasing our leaded gasoline; tight- sustained energy efficiency improvements in space heating. Cities will need to work with the ening emission standards for all categories of central government to implement policies to new vehicles; upgrading vehicle inspection reform heat pricing and billing and to promote and maintenance programs; adoption of construction of more energy efficient buildings. cleaner fuels; and implementing traffic 4 Air Pollution Control 89 serious motor vehicle pollution in the coun- benefit of the national environment. A case try, are also moving aggressively to control in point is Beijing's vehicle retrofit program motor vehicle emissions. (see Box 4.3). The importance of the leadership role of China is getting to the stage wvhere a signif- large cities in controlling motor vehicle icant number of urban residents are able and emissions cannot be understated. These willing to purchase cars. International and cities represent the bulk of China's automo- domestic manufacturers are also jockeying bile market. Their actions directly affect the for position to market affordable cars to wvhole automobile industry, which indirectly private citizens. Conceptually, a tightly affects the rest of the country. By focusing planned city with highly efficient public on major municipalities, the government not transportation systems would serve both only tackles the pollution problem where people and the environment xvcll. But realiz- it is most serious, but also lcverages the ing that wvould require a convergence of market influence of those cities for the multiple government policies and market forces. As general principles for reducing urban congestion and motor vehicle pollu- Box 4.3 Large Cities Can Set the Pace tion, large Chinese cities should strive to in Regulating Motor Vehicle Emissions make mass transit systems the priniarv urban people movers; should plan and In early March 1999, the Beijing Environmental develop in patterns that can most efficientlv Protection Bureau instructed car manufactur- ers with sales outlets in Beijing that they u should be responsible for excessive pollution of ment policies that discourage private car use their cars.All domestically produced cars sold in for commuting to and from work. Beijing between 1995 and 7998 must be retro- T fitted with a manufacturer-developed kit Tm designed to meet Euro 1 emission standards. from the narrow perspective of vehicular Manufacturers were required to complete the emission control. A division of labor and work by December 1999. The program will responsibility between national and local require retrofitting of approximately 200,000 agencies concerned with vehicular emissions vehicles. Similar programs are being imple- c i mented in some other cities. Beijing has also taken the lead in implementing Euro 1, catalyst- national agencies should focus on managing based emission standards for all new cars. The manufacturers of motor vehicles and regulation went into effect on January 1,1999, fuels through: 15 months ahead of national schedule. Source: Walsh (2000). go China: Air, Land, and Water Setting emission standards for all cate- Planning for and developing more effi- gories of motor vehicles and ensuring that cient urban transportation systems, and manufacturers comply with them. working with the national government on appropriate financial incentives to support Setting quality standards for fuels and such efforts. ensuring that refineries and importers comply with them. LOWERING INDOOR AIR POLLUTION Setting vehicle fuel efficiency guidelines Even without an orchestrated national and promoting compliance, and encour- aging research and development of program, the government has managed to cleaner and more energy efficient motor reduce nmdoor air pollution from household vehicle technologies. fuel consumption on a large scale, largely by expansion of gaseous fuel supply. There are Building institutional capacity for stand- good reasons to believe that serious indoor ards enforcement, including clarification air pollution will fade in the next 20 years as of administrative responsibilities of living conditions continue to improve. That concerned national agencies and local thought, and the fact that most households agencies, provision of financial support, in large cities are not affected by indoor flue and establishment of testing and inspec- gas, may have given policymakers the illu- tion procedures and facilities. sion that indoor air pollution from fuel com- Assisting pro a abustion is no longer a public health threat. Assisting provincial and municipal gov- ernments to build capacity for implement- Such optimism would be premature, since ing national or local standards. there are still hundreds of millions of people using solid fuels for cooking and/or heating, and the population exposed to serious Enforcing emission standards for operating indoor air pollution may be correspondingly vehicles through normal vehicle registration large. The lack of updated research and procedures that require periodic inspec- extensive monitoring data obscures the scale tion and maintenance of motor vehicles and severity of indoor air pollution in China, preventing the development of an Monitoring local air pollution and usinlg It aleito statgy as guldance for devising measures to con- trol motor vehicle emissions, using options The first order of business for indoor air such as traffic management through pollution control is to carry out a national regulation and/or economic incentives survey of the status and nature of the prob- lem so that a clear policy agenda can be put 4 Air Pollution Control 91 togcther. This could be one of the areas the government steps up the implementa- where immediate actions and persistent tion of the "two control regions" strategy for efforts can have a profound impact on S02 emissions. public heath, since those who are exposed China has focused its S emissions mitiga- to high-level indoor air pollution are most tion efforts in areas where environmental likely to be poor urban and rural households. inoo ai .olto a h and health damages are considered most sig- Alleviating . a . nificant. The current strategy aims to control double advantage of improving heath and e b bringing environmental equity to the poor oemnssions by regulaocng both the supple nda an les forunte consumption of coal through a blend of command and control, administrative, and Indoor air pollution has traditionally been economic measures (see Box 4.4). Imple- dealt with by government agencies in public mentation of the national strategy has only health and agriculture, and is not on SEPAs just begun, and most participating local agenda at all. With other public health issues governments are only at the planning stage. overwhelming the public health agencies, and Based on an initial assessment, China's acid xvith the agricultural agencies facing rede- deposition control should: fined missions, indoor air quality is in danger of being left off the government agenda com- Emphasize imnact reduction, compared pletely. As China's top environmental agency, with emissions reduction. This would SEPA should lead efforts to coordinate activ- require improved understanding of ities in addressing indoor air pollution. source-receptor relationships and impacts themselves. An impact reduction strategy MITIGAT ING TIIE IMPACT is more likelv to lead to national and OF ACID DEPOSITION regional cost savings. Since mitigation activities are implemented locally, it is also Recent declines in coal consumption provided a short-term gain for China's S02 emissions . . - p ments to identify the most economic control program, but coal consumption is expected to grow in the next 20 years, even if at a lower rate than previously projected. Stress cost-effcctivencss in selecting Without irnplementing mitigating policies, abatement measures. SEPA should begin S02 and NOx emissions will increase, and to study and plan for an emissions trading the impact of acid deposition will get worse. program among coal-fired power plants, The next five years represent a critical period and should prepare to implement such a for China's acid deposition control effort, as program in the next five years. 92 China: Air, Land, and Water Box 4.4 Main Policy Measures Under the "Two Control Regions" Strategy and Potential Problems There are three main policy measures embodied in CONTROLLING EMISSIONS FROM COAL-FI RED the "two control regions" strategy. These measures POWER PLANTS. Newly constructed or renovated are a good starting point to avoid drastic ramping coal-fired power plants using coals with sulfur con- up of control costs at the beginning, when experi- tent greater than X percent must install sulfur ence is lacking. But they are unlikely to ensure a scrubbingfacilities. Existing coal-fired power plants steady reduction of SO2 emissions as anticipated by using coals with sulfur content greater than 1 per- the government. cent must adopt SO, emission reduction measures including flue gas desulfurization (FGD). A direct CONTROLLING THE SULFUR CONTENT OF COALS S U PPLI E D. Construction of new collieries based on impact of this regulation is that power plants are coal with a sulfur content Of 3 percent and above' is switching to low-sulfur coal to avoid installing FGD facilities. The average sulfur content of power plant prohibited. Existing collieries mining similar coals sacol dereaserome1.2 prcentin 19 o i.o will face production restrictions or be gradually steam coal decreased from 1.2 percent in 1996 to 1.0 phased out. Coal mines producing coals with sulfur percent in 1998. Since coal-fired power capacity is projected to grow substantially, this regulation will content greater than 1.5 percent should construct not be able to contain S02 emission growth of the washing facilities matched to their mining capaci- power sector. ty. Supply-side control is perhaps a necessary and effective measure for emissions control when end COLLECTING SO2 EMISSION FEES. An expanded user regulation is lagging and relatively difficult to trial of SO2 emission fees began in 1998.The current implement, but eventually such regulation will fee level of RMB 200 per metricton of SO emissions become redundant when consumers begin to put iswidelyconsideredtobelessthanthecostsof many a premium on the quality of coal as a result of pol- available abatement options. Switching to lower lution regulation. sulfur content coals is expected to be an immediate impact of the fees on coal users. There is much uncertainty about which levels of fees can produce the desired amount of emissions reduction. Source: World Bank Staff Consider expanding SEPA's acid deposi- Put more emphasis on large point tion regulation to cover NOx emissions sources. SEPA should consider reconfig- from power plants, because of the increas- uring the "two control regions" program ing importance of large point sources so that acid deposition control is more and the growing contribution of NOx focused on large point sources, and should emissions in acid deposition. consider integrating ambient SO2 pollu- tion control into the urban air quality management program. 4 Air Pollution Control 93 Amend some of the loopholes existing in Economic reform. Continued economic the current "two control regions" program. reform is critical to China's long-term con- One apparent problem is the threshold tribution to mitigating global environmental sulfur content value for coal-fired power damages and to improvements in the overall plants (see Box 4.4). Instead of setting efficiency of resource allocation. Successful coal sulfur content limits as the trigger for economic reforms accelerate structural installation of scrubbers, power plants changes and foster technology innovations, should be licensed and managers given the which are key factors influencing future flexibility to make their own decisions emissions of greenhouse gases (GHG), the about how best to comply with regulatory phasing out of ODS, and the control of requirements. This would also pave the other global pollutants associated with gen- way for introducing an emissions trading eral economic activities. China's accession to program among coal-fired power plants the World Trade Organization (WTO) will when conditions are right. Emission speed up the pace of economic reforms in reduction in the power sector is critical to China, and should be welcomed by the the success of China's acid deposition con- international community. trol program because the power sector will Er . . he the main source of future growth in gnerGH eficiency improvements To mi SO2~~~ ~ an O msin. An emsson gate GHG emissions, improvement in the permit NO progrmisshoul bemintodu technical efficiencv of energy use should be permit program should be introduced as soon as possible to ensure the power among China's highest priorities. In the as sooaposshort- to medium-term, efforts should focus sector meets its abatement goals. on the following areas: ADI)RESSING GLOBAL Promoting cost-effective industrial energy ENvIRONMENTAL CONCERNS conservation, including more efficient The governmcnt' policie ineutilization of heat, steam and electricity, T he government's policies in economic a ela ypouta as well as by-product gas. reforms, energy efficiency improvements, and alternative energy development have all con- Developing, manufacturing, and effectively tributed to its objectives in terms of globally marketing more efficient energy consuming significant air pollutants such as CO2 and equipment, including electric appliances, ODS. These policies and efforts need to be motors, boilers, and engines. continued in light of improved economic efficiency. International assistance should continue to tap into these synergistic areas. 94 China: Air, Land, and Water Improving the quality of coal through to adopt an aggressive program to push alter- pricing and regulatory measures. This native energy development, particularly in would encourage the supply and con- the areas of renewable energy technologies. sumption of screened or washed coal Promoting alternative energy sources that graded to meet specific uses. are currently cost-competitive with coal, Improving the energy efficiency of resi- particularly in the supply of natural gas, also dential and commercial buildings, espe- deserves strong support. China&s plan to sub- cdally in space heating and cooling. stantially increase natural gas consumption, Reforming the existing floor-area-based including coal-bed methane, should be heat tariff and billing system is a prerequi- encouraged. International capital, technology site to sustainable space heating energy know-how, and market development knowl- efficiency improvement. There is also an edge will help to accelerate the consumption urgent need to educate and train practic- growth of natural gas in China. ing and future architects, construction . . . ' ~~Experiences from implementation of engineers, and building inspectors on how Montreal Protocol and Global Environment to integrate encrgv efficiency considera- to integrate energ efficienFacility projects in China have shown there tions into their respective professions. * is much to gain for China as well as the Finally, in anticipation of the huge poten- international community from active coop- tial for growth in automobile demand, eration and well-targeted assistance.21 China striving to gain access to more advanced should be open to innovative ideas in sup- and more energy efficient automobile port of international environmental cooper- technologies. ation. It should explore new ways to tap into international capital, knowledge, and tech- Alternative energy development. Greater inologytioenhanceitsl capacitygt anddres nologTv to enhance itS capacity to address support for the development and deploy- global environmental problems. ment of low- or non-carbon energy tech- nologies is urgently needed now if China is to vastly reduce its reliance on coal in the long term. Given the abundance of low-cost coal resources in China, the govern- ment cannot rely solely on market forces as a basis for encouraging adoption of alternative energy technologies. The government needs 4 Air Pollution Control 95 Notes 10. China has only just startcd to monitor PM10, the tradi- tional threshold for fine particles. But a more stringent defi- nition is P1'123. Particles larger than 2.5 microns, if inhaled, 1. That is, Class 2 of the National Amhient Air Quality are removed in the head or upper respiratorv tract. Smaller Standard (NAAOS). Details of the NAAOS are provided particles can reach the alveolar region, which has no protec- in the statistical Annexes in the CD-Rom attached to ewve mucus layer and from wvhere the clearance time osf this report. China has a total of 667 classified cities, deposited particles is much longer, increasing the potential 2. A micron is one-millionth of a meter. Industrialized for adverse health effects. Fine particles also are a major countries, such as the US, have moved to regulate PM215, contributor to visibilitv reduction through light scattering. fine particulates with the most damaging health cffects. 11. Another stdy (Hughes and Dunleavy 2000) showed that 3. Called smoke dust in Chinese terminology. in India there was a substantial decrease in infant mortality associated with the use of clean cooking fuels, with the effect being greater in rural households (35 percent reduction) commercial districts, as well as general rural areas (refer than in urban households (20 percent reduction). In China, to statistical Annex in the CD-Rom). According to a similar pattern (42 percent reduction in rural households the NAAQS, the annual average limit for Class 2 TSP and 12 percent reduction in urban households) was found concentration is 200 pg/m3, for SO2 60 ug/mi3 and in recent studies applying the Indian methodology to data for NO, 50 pg/in3. from the 1992 Children Survey of China. J. The definition of the size of cities in China is based on 12. Acid deposition-more commonly referred to as non-agricultural population (NAP). Large cities have NAP acid rain-is caused by emissions of sulfur dioxide and above 500,000, medium cities have NAP between 200,000 nitrogen oxides, which are converted in the atmosphere and 500,000, and small cities have NAP beloxv 200,000. into secondary pollutants such as nitric and sulfuric acids, 6. Bv the end of 1997, there were 34 cities with NAP at or both of which dissolve easily in watcr. The resulting acidic above 1 million. Of these, 32 were listed in the official air water droplets can be carried long distances by prevailing quality monitoring report. These 34 cities represent 50 percent wvinds, returning to earth as acid rain, snowv, or fog. of the registered urban population in China's 667 cities (1997). 13. China's national 502 emission control strategy aims 7. The other 28 cities accounted for 11 percent of the regis- to reduce ambient SO2 pollution in designated cities tered urban population in China's 668 cities in 1997. Together (SO2 control region) and reduce acid rain impact in with the 32 largest cities, they provide a relatively complete designated areas (acid rain control region). urban air quabty profile in China's medium and large cities. 14. In all likelihood, China's energy consumption and CO2 8. In Chongqing and Guiyang, two of the most S02-polluted emissions in 2000 will be lower than even the most conser- cities in the country, SO2 levels declined substantially from vative projections made in the early 1990s. For example, 351 and 341 pg/m3 respectively in 1991 to 183 and the high-efficiency scenario in a 1994 \Vorld Bank study 178 pg/m3 in 1998. projected a total energy demand of 1,474 million tons of coal equivalent (Mtce) in 2000 (Li et al. 1995). Expected 9. Using the class 2 NAAQS as thresholds, total human actual energy demand in 2000 will be around 1,350 Mtce. exposure is defined as the product of the concentration over the threshold and the affected population. 96 China: Air, Land, and Water 15. ODP is derived from the physical tonniage of diffcrent Ol)S, adjusted to account for teicir different effects on ozone. 16. For example, inclusion of CTC applications in chemical feedstocks and additives in 1998 caused a huge junmp in ODS production and consumption statistics. 17. In some northern cities, the prccntiLge cani go below 50 pcrccnt because of high natural-borne dust Irvels. 18. Levels of natural airborne dust arc often high in north and northwest cities, which explains many of the ditferenices in TSP levels betveenl the north (with the exception of the northeast) and the south. Road transportation may bc an impurtant buit unconfirmed contributing factor to ambient TSI' levels, bccause it re-suispcnds grotnd dLst. 19. Since monitoring of fine particulate matter (PN1i1)) only startcd rccently and is still sporadic, the assessment mradc in this report is based on monitorinig data for TSP 20. The latest example is Beijing's effort to convert all small and nmcdium coal-fired hcating boilers (I to 10 ton-stream/ hour) within the fourth ring roatd to natural gas-burning Lunits. 21. The latest such program is the Clean Development Mechanism (CDAI) unider the K yoto Protocol, which is intendcd t) provide a mechanism to facilitate international carboni trading. 4 Air Pollution Control 97 S M !tAs;+~~~~~~~~~~~~~~~~~~~~~ lR~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5: This chapter outlines the main institutional and regulatory developments during the 1990s, identifies continuing problems and issues, and provides suggestions on addition- al reforms that need to be considered. Developments in Environmental The economic and social changes that char- Administration aateri-ze the 1990s in China were also a-terized the 1990s in China were also The 1990s saw both advances and setbacks rflecieI in the environmental agenda. The sreflcturedo industhe environmntral agena. T in environmental administration. On balance, structure of industry and industrial pollution thadncsowegdtestbks(e changed significantly; urban and rural envi- The a s iee ronmental issues became much more visible Table 5.1). and important; and the growing middle class Recent notable developments include: became more aware and concerned about the dteriratin stae of he evironent. SEPA's elevation to the status of a ministry, Political . awrne .alsoi the clarifying its position as the agency with Political awareness also increased. At the oealrsnblit o niomna Fourth National Environmental Protection overall responsibility for environmental Conference in 1996, both the President and management and protection in China. Premier stated that protecting the environ- Further efforts were made to address the ment was essential for maintaining produc- so-called "horizontal-vertical" issue, in tivity. The subsequent Ninth Five-Year-Plan which lower-level EPBs report to higher- (1996-2000) was the first to include explicit level EPBs and ultimately SEPA, but and monitorable environmental perform- receive their budgetary resources from the ance objectives and a targeted pollution con- local government.' Appointments to head trol investment program. Finally, as part of local EPBs must now be endorsed by a the 1998 central government reforms, the higher-ranked environmental agency. For National Environmental Protection Agency example, a municipal government's selec- (NEPA) was upgraded to the level of a min- tion to fill the position of EPB director istry and re-named the State Environmental will have to be endorsed by the relevant Protection Administration (SEPA). provincial EPB. This is the second attempt to address this difficult issue.2 5 Environmental Management 99 Lower-level EPBs were strengthened, The 1990s saw a significant worsening either by lifting their bureaucratic status or of the gap between SEPA's declining by giving them independent bureaucratic staff resources and the widening mandate status. Both changes are important steps in assigned to it. This gap extends to EPBs increasing administrative leverage. As of at the provincial level; it will probably 2000, all 31 provincial EPBs were inde- worsen as provincial reform continues. pendent agencies and 30 of them were If the government is not prepared to pro- first-tier institutions;' all city-level EPBs vide the staff and financial resources to were independent agencies, and most were match the current environmental man- first-tier; about 70 percent of county EPBs date, it will have to narrow the agenda. were independent; and about 1,422 envi- ronmental protection units were estab- Nn fterfrso h 90 lishedtat prothectiow unshiptlevel, wereaddressed the critical issue of budgets and financing to underwrite the operations of Notwithstanding these developments, there SEPA and the EPBs. The funding of remain a number of outstanding institution- supervision and monitoring activities is al issues that will have to be overcome if the inadequate, and control of point-source challenges of the 21st Century are to be pollution is far less efficient and effective successfully confronted: than it needs to be. Many lower-level EPBs are heavily dependent on retained The cross-secroral dimensions of environ- pollution levies to cover their operating mental management are becoming mental managemen are becosts,5 which creates numerous perverse increasingly important. The dissolution of incentives. For example, it is in the inter- the SEPC (see Table 5.1) removed a est of EPBs for enterprises to keep pollut- potentially important forum for encourag- igclaoaiv wor oncos-utn ing and pay their pollution levy, rather ing collaborative work on cross-cutting than to comply with discharge standards environmental issues and for resolving jurisdictional disputes. The SEPC's coor- dination role was transferred to SEPA, but The organizational structure of environ- experience in other countries suggests that mental administration is very susceptible SEPA, as a second rank (non-cabinet) to interference by local leaders. As men- ministry, will not be able to effectively tioned, various measures have been carry out this role.4 applied to reduce the sometimes conflict- ing demands of horizontal and vertical influences, but the problem has not yet been solved. 100 China: Air, Land, and Water Table 5.1 Developments in Environmental Administration, 1974 to 1998 Advances Setbacks 1974 * Environmental Protection Office (EPO) estab- lished under State Council. Staff allocation: 20. 1979 * Promulgation of the first Environmental Protection Law. Several provincial and city gov- ernments took the initiative to increase rank of EPOs to that of a bureau (first-tier organizations). 1982 * Staff allocation of the State EPO increased 1982 * EPO transferred from State Council to to 60. the (newly created) Ministry of Urban and Rural Construction and Environmental Protection (MURCEP). 1984 - State Environmental Protection Commission (SEPC) created under the State Council to aid in cross-sectoral coordination. EPO upgraded to a Bureau (National Environmental Protection Bureau-NEPB). Staff allowance doubled to 120. 1988 - NEPB separated from MURCEP and reclas- sified as an Agency (NEPA) with a bureaucratic rank slightly below a ministry It resumed direct reporting to the State Council. Staff allowance increased from 120 to 321. 1993/94 - Creation of the Committee for Natural 1993/94 -Widespread downgrading of many Resources and Environmental Protection of the county EPBs to second-tier status following a National People's Congress to take responsibility new round of administrative reforms. for revising and drafting new environmental laws and assuring their rapid promulgation. 1998 - NEPA upgraded to ministerial status 1998 - SEPA's staff numbers reduced from 321 to and renamed as State Environmental Protection 200. SEPC of the State Council was disbanded. Administration (SEPA). More lower-level EPBs raised to first-tier status, offsetting the setback of 1994. Source: Adapteu from Iahie (1998', 5 Environmental Management 101 Approaches to enforced; and (b) they are concentrated primarily on stationarv point-source pollu- Environmental tion control. Management During the 1990s, regulators attempted to The environmental agenda has three major encourage three shifts in industrial pollution themes; industrial pli urban environ- . .....control strategy. First, at the enterprise level, themes; industrial pollution, urban environ-* mental management, and what SEPA refers pollution control shifted toward whole- to as "ecological environmental protection," process control, rather than just end-of-pipe which might alternativelv be described as waste treatment. Second, the regulatory , ' I.6 .. focus shifted awav from y ollutant concen- natural rcsources management.h Te existing r . 1 1 1 1 ~~~~tration tozazard total load control b-v enforc- repertoire of environmental laws and regula- ll n .. . ........... ing a combination of concentration and tions addresses all of these issues to varying g degrees. The greatest progress has been mass-based discharge criteria. Third, to made in the field of industrial pollution con- improve cost-effectiveness, the focus shifted mad in th fildofinusralpoluiocn from dispersed-source control, Nvhere each trol, which is most amenable to a regulatory f d . ~~~~~~~~~enterprise had to individuallv resolve its approach. Progress on the second two has been more limited, and these will continue emission problems, to a more integrated to be the main problem areas over the next 5 approach that considered the possibilities for to 10 years. centralized control, by for example encour- aging the discharge of semi-treated liquid INDUSTRIAI. POLLUTION CONTROL wastes to municipal sewers. The regulatory and administrative frame- The shift to total process control is being work for industrial pollution control is quite cncouraged by promotion of the "cleaner comprehensive. It has been continuously production" concept and adoption of ISO 14000 certification procedures.7 The updated and expanded to improve effective- Cleaner Production (CP) program, which ness and cover emerging issues. The current started in 1993, encourages enterprises to framework of command-and-control sys- i w a t temS spplmened y eonoic,volntav, adopt in-plant waste minimization tech- tems, supplemented by economic, voluntary, nobogies as supplements to traditional "end- and public disclosure instruments (see Table ologie" plemen-contraditoachesd- 5.2), provides a good basis for effect of-pipe" pollution-control approaches.C pollution control. The system suffers from There is considerable potential in the CP two major shortcomings: (a) the laws and program, smice many of the older and more regulations lack teeth and are inadequately pollutng enterprses are very inefficient and use outdated production technology, but take-up has mainly been focused in areas 102 China: Air, Land, and water Table 5.2 Current Framework for Industrial Pollution Management and Control Command-and-Control Economic Voluntary Public Disclosure Instruments Incentives Instruments Instruments Concentration-based Pollution levy fee Environmental Cleanup campaigns pollution discharge Non-compliance fines labeling system Environmental limits Discharge permit Promotion of ISO awareness campaigns Mass-based controls system (experimental) 14000 system on total provincial Sulfur emission fee Cleaner Production discharge (pilot only) (experimental) program Environmental Impact Emission trading Assessment Eiso rdn (experimental) Three synchronous Subsidies for energy- polimit time saving products treatment2 Regulation on refuse credit to high-polluted Centralized pollution firms control Two compliance policy3 Environmental compensation fee Notes: TheThree Synchronous Po cy is intenoed to ensure thatthe p 3nning de- gnoand con,trLnrcio of poI ut on control facililies occurs 3t the t me that rew enterprises are established and that producton does not commence until EPE cert f cat on is rece ned. Imposit on of mandatory timern limts for ono-comp ant enterpr ses to come nto compliance orface shut-down The Two Comp ance Po cy-compliance with d scharge standards and amb ent standards coon s mnsing from coocentiation cased to mass-based or tota cad cntro Source: World Bar k Staff with strong incentives, such as the belief that it will increase the compliance water-scarce areas of northern China. rate without increasing regulatory effort. Nevertheless, the technical capacity to The work was initiated by SEPAs Office of undertake clean production audits and feasi- Environmental Management Systems. bility studies has been established, creating Subsequently, a Steering Committee for the capacity to respond as the demand for Environmental Management System these services develops. Certification was established within SEPA to provide accreditation services for certifi- ISO 14000 certification procedures were . . c. cation bodies and auditors. Several environ- irntrodued in 1997.tion The attraiOn f0 gv t mental management and consulting centers have been established to conduct ISO 14000 5 Environmental Management 103 certification. The adoption rate, as in other implementation of a discharge permit sys- countries, has been slow-27 enterprises tem (DPS) based on the total-load-control received ISO 14001 certification during the concept. The program expanded to over 200 first year. The majority of participants are cities and 12,000 enterprises by 1994. either foreign firms or domestic firms Howcver, studies of the pilot program engaged in production of export-oriented showed only modest gains in environmcntal products, neither of which are the sort of quality in participating cities (World Bank industries responsible for the nation's main 2000), mainly because the program did not pollution problems. address the underlying problem of lax regu- latorv enforcement. Mass-based control is a Both of these programs are worth contnu- ing, although it would he a mistake to man- necessity if real progress is to be made in ingdatethougawh itwouldbcamistaker tomnsir- improving ambient environmental quality, date them in law, which is under considera- but it will probably be too complex and tion in the case of Cleaner Production.9 expensive to apply on a nationwide basi Enterprises will adopt these strategies when The approach should he adopted i pollu they have good incentives. Resource short- Ton htpoand hato be acopanied by ages and increasing prices are effective incen- increased regulatory effectiveness and the tives; so too is increased regulatory pressure. increased manpower and operational budg- The CP and ISO 14000 programs can make ets needed to achieve it. a contribution to solving China's industrial The third shift, from dispersed-source con- pollution control problems. But they are not trol to the combination of centralized con- a substitute for the budgets and manpower trol and source control," was primarily an needed to effectively enforce pollution laws acknowledgment of practical realitv The and regulations. previous emphasis on controlling wastes The shift from concentration-based control from individual sources was not achieving to mass-based control recognized that the the desired effects. It placed too many key to improvemcnt in ambient environ- demands on EPB staff for supervision, and mental conditions was to restrict the total in the less-developed areas there was insuffi- load of pollutants emitted, not just their cient technical expertise to actually imple- concentration."! In 1987, SEPA (then ment the policy. Encouraging discharge of NEPA) began to experiment with mass- pre-treated wastes to municipal sewers does based control to cap or reduce the total level not climinate the need for supervision of of pollutants released to the environment in enterprises. But it reduces the monitoring certain areas. Seventeen cities and one river workload and wvill improve the economics of basin were selected to participate in trial the centralized sewerage system, so long as 104 China: Air, Land, and Water discharge fees are set at levels that cover the Figure 5.1 Industrial WasteTreatment Rates,1990-98 costs of receiving and treating the wastes and the fees are collected. 80- In summary, the shifts made in industrial C60- pollution control during the 1990s went in t 40 - the right direction. The level of success var- 20 - ied, but the combined effect was beneficial. The gross value of industrial output more °l N0,' le N0' than doubled between 1991 and 1998, while the total discharge of major pollutants barely --Wastewater -- Waste Air - SolidWaste increased.2 Waste treatment rates also Note: Data for CAOEs only TVIEs hae substantfally oswer increased (see Figure 5.1). Due to the inad- treatment rates a though they too have been mproving equate deterrent effect of the levies, the same Source: Cuo 1999). cannot be said of treatment efficiencies. More progress needs to be made. Table 5.3 highlights areas where improvement is by the lack of a tradition of drafting laws needed, using as models current conditions so as to limit ambiguity and provide clear in the U.S., Japan, and representative guidance about the rights and responsibil- European countries such as Denmark ities of different parties. In total, there and Germanv. are major challenges to be overcome. As regulatorv effectiveness increases, the Key issues to be dealt with include: demands for legal recourse and an effective Strengthening the rule of law and the legal system will rise accordingly. Due to involvement of courts. The environmental the complexity of the problem, action on legal system is at an early stage of devel- this matter has to be expedited. opment, and its effectiveness is hampered The discharge permit system (DPS) needs by a wide variety of factors.'3 There is to move beyond the demonstration phase also a deeply ingrained problem-solving and be progressively extended to make it culture on the part of all parties-EPBs, mandatory for all large point sources of other government agencies, and industrial pollution, including municipal wastewater enterprises themselves-that is based on treatment plants. negotiation and bargaining outside of the court system. This militates against An effective strategy has to be developed recourse to the courts and will have to be for dealing with small stationary pollution overcome.'4 These factors are compounded sources." These sources will always be a 5 Environmental Management 105 Table 5.3 Elements of Regulatory Development Required in China Key Features in the US, Japan, and Germany Current Situation in China Legal and Administrative Framework Strong legal foundations with independent There is a legal foundation, but it is not strong judiciary and/or administrative appeals system in a legal sense. The courts are not yet playing an active role in adjudicating environmental disputes. Strong command-and-control system, The basic command-and-control framework exists usually incorporating a permitting system. but enforcement is uneven and generally weak. Will have to move to a permit system in the short- to-medium term. Financial incentives (levies, fines) are very The pollution levy fee is an incentive mechanism, but effectively applied it is not set high enough to be effective. It also pro- vides perverse incentives. Fees need to be increased and perverse incentives need to be removed. Incentives Market instruments (offsets, tradable Market instruments only applied at limited pilot permits) effectively applied scale and effectiveness is not very high. Strong public demand for cleaner environment Moderate public demand, mainly confined provides positive reinforcement for to wealthier urban areas. Continuing public environmental agencies education is needed. Public participation in legislative and Minimal public participation (but slowly increasing). administrative processes Voluntary programs only introduced at Early introduction of voluntary programs but late stage without strong incentives, participation is limited. Results Continuous real growth in GDP and Environmental protection budgets are not keeping environmental protection budgets up with GDP growth or the rate of growth of the environmental management and protection challenge. Massive cleanup over 25-year period, including rapid EPBs are holding the ground against industrial reduction in short periods; for example, a 5o percent pollution (maintaining emission constant while reduction in toxic discharge from 1987-90 in the U.S. industrial GDP is increasing) but they are not getting ahead of it. New techniques introduced to continue improve- ments in environmental quality; for example, a recent Japanese law promotes ioo percent recycling and reuse of municipal solid waste. Source Adapted from Ecology and EnOvroement, Inc (1999) 1o6 China: Air, Land, and Water regulatory headache, since both regulatory specific urban environmental protection and abatement costs tend to be higher objectives; (c) a comprehensive approach than average. There are numerous models should be taken to control urban wastewater, from other countries that could be adapted air pollution, solid waste, and noise pollu- to the Chinese situation. tion; and (d) classified guidance should be provided in demonstration cities. URBAN~~~~~~~~~~~rv ENV ROMET 1. URBAN ENV'IRONMIENTAL, A number of instruments were developed to MANAGEMENT deal with the adverse environmental effects China's urban environment is under tremen- of urban growth and development (see Table dous stress, with high levels of ambient 5.4). However, in comparison to the instru- particulate pollution, rising automobile ments developed for industrial pollution emissions, large amounts of untreated control, they are fewer in number, less municipal wastewater, and increasing solid sophisticated, and more weakly applied. As a waste management problems. The challenge result, they have been less successful.' is difficult because of the complexity of the The main constraints to more effective issues, the large number of institutions influ- urban pollution control include: encing the pace and nature of development, and the rapid rate of urban growth. The Urban environmental pollution is dealt problems are not going unnoticed, however. with as problems emerge and along sector The government has been assigning increas- lines or media divisions. Most cities do ingly large amounts of development spend- not have environmental master plans and ing to manage some of these problems.lb are not taking an integrated approach to the problem, although there are some The government'asapproach to urban envi- notable exceptions such as Beijing and ronmenral issues has been based on five Shanghai. Cities that do not enjoy the integrated principles, which are described as financial and technical advantages of "unified planning, opimum structure, Beijing and Shanghai need assistance in rational distribution, appropriate construc- urban environmental planning through tion, and comprehensive renovation" (SEPA training, handbooks and procedures, and 2000). Key operational policies during the technical cooperation arrangements. 9th FYP including the following: (a) all Chinese cities should draft and implement Urban environmental services-water urban environmental protection plans; (b) supply, wastewater collection and treatment, the responsibility system should be extended solid waste management-are generally to cover municipal governments based upon underpriced. They do not provide a basis 5 Environmental Management 107 for sustainable continuation of the services, that time, SEPA was assigned direct respon- nor do they provide sufficient basis for a sibility for several dimensions of the prob- price response in demand. lem, including nonpoint pollution control and control of animal xvastes. Neverrhcless, Inadequate attention is given to the envi- as control onimal wastes. thessr ronmntalconsquenes o spaial lan- as a pollution control organization, there are ronmenral consequences of spatial plan- limits to the impact SEPA can have in this ning. Transport planning, maintenance of limisk to depen hain thio field. Progress is likely to depend mainly on ambient water quality, and provision of the on-going work of the Ministry of public open space are particularly notable Agriculture and other ministries whose deficiencies. wxork impinges dircctly on the state of the Environmental control of urban construc- rural environment, structural reform of the tion sites is generally very poor; again, rural economy, and further progress in rural Shanghai and Beijing are notable excep- poverty alleviation. Beyond that, priority tions. There is an urgent need for develop- issues that need to be addressed include: mcnt and promulgation of national stan- Most natural resources management prob- dards for environmental management of lems in China can be traced back to poorly urban construction, with particular conceived and/or implemented rural and emphasis on dust and noise control, runoff .natra rce s a develoment pol (s maaeet maaeeto.cntuto narural resources development policies (see management, management of construction Chapters 2 and 3). The best hope for the traffic, storage of construction materials, future lies in a significant correction of the current imbalance between development The growing environmental problems and environmental protection. Without of small cities and administrative towns such a correction, almost all other stratcgies are not adequately being addressed. will be undermined. Environmental master planning for Further reform of pesticide management these areas is being postponed until their and control procedures is required to clarifv basic infrastructure has been improved...' regulatory and monitoring responsibilities. Enforcement of existing laws and regula- tions has to be strengthened considerably. PROTFCTION The approach to control of fertilizer Unlike the efforts to control industrial pol- runoff has been based on a command- lution and manage urban environment, rural and-control philosophy that is unrealistic environmcntal protection wasn't a major and inappropriate. The solution lies in government priority until the late 1990s. At reform of the domestic fertilizer market 108 China: Air, Land, and Water continued structural reform in the agricul- Two control zones. There has been good ture production sector, farmer education, progress on planning-175 cities in and more effective soil conservation work. 27 provinces have formulated pollution It is notable that China has no soil conser- control plans-but less progress on imple- vation servicc, even though it has some of mentation; by the end of 1998, only the worst erosion problems in the world. 65 plans had been approved by the rele- vant local governments. There are some National Priority fundamental issues wvith the program that need to be addressed (see Chapter 4). Programs One seai. There has been no detectable A final arm of the environment strategy dur- impact. ing the 1990s comprised a program of invesrmenrs to address prioriry environmen- One city. There have been significant tal issues. The program was devised in 1996 improvements. and incorporated into the 9th Five-Year- Notwithstanding the mixed succcss, the pro- Plan for Environmental Protection as the gram has to continue because the objectives "33211" programn. The overall concept of have not yet been achieved, but there are a the priority program is basically sound; number of problems that need to be addressed: given the scale of environmental problems in China, a mechanism is needed to focus Certain elements were far too ambitious ,21 expenditures on priority issues. The effects andein Indmight be better to narrow of various components of the program are ile It ighe better discussed in earlier chapters; overall, the results have been mixed."' The current score- Some programs, such as Three Lakes, card in terms of improvements in ambient were inadequately researched, and invest- environmental quality is: ments did not necessarily address all rele- Three lakes progranm. This program has had vant factors. limited if any effect (see Chapter 3 and There were coordination problems, which Box 3.1). were exacerbated by the haste to imple- Thr-ee riers progran. This program may ment the programs. A leading group have had some beneficial effect in the Huai mechanism for particular sub-programs River2' but less so in the Liang and Hai. might provide a means for overcoming R'er . . ... this problem. Conditions remain serious in all three rivers, and could well deteriorate further. 5 Environmental Management log Table 5.4 Urban Environmental Management Initiatives Instrument Content Results/issues Goal-responsibility Compels provincial governors, city mayors, Contract terms are not pub- system of and county magistrates to sign contracts lished, so their value depends environmental that specify environmental goals to be on the weight higher-level protection (1994) attained within their jurisdictions during political leaders give them. The the contract period.They are designed to State Council goal of holding ensure that political leaders weigh envi- provincial-level pollutant totals ronmental concerns equally with economic to 1995 levels by the year 2000 development plans. will be open to independent analysis, and this may improve the incentive to comply. Air pollution index Large cities are obliged to publish regular A radical change. Makes data (1997) air quality information. Currently, 46 cities manipulation more difficult publish a weekly air quality index, of which and allows independent analysis 7 publish daily data (Beijing provides daily of air quality trends and, by monitoring results from eight sites). Since extension, of the municipal June 2000, the national television network government's effectiveness in has been reporting daily air quality indices pollution control. May have been for 42 cities in its evening news bulletins. one of the most effective public education exercises yet under- taken in the environmental field. Annual urban SEPA conducts an annual, quantitative Limited effect. environmental quality assessment of environmental quality in 46 assessments (1989) key cities and 524 ordinary cities. Twenty weighted indices covering the areas of air, water, solid waste, noise, and tree coverage are used to assign an overall score for each city. Results of the assessments are released to the media. The policy also requires mayors to incorporate objective environmental quality objectives into their development plans, and serves as a platform for local leaders to assign pollution control responsibilities among concerned sectors, as well as a channel for public participation. 110 China: Air, Land, and Water Table 5.4 Urban Environmental Management Initiatives (Continued) Instrument Content Results/issues Environmental model Cities can volunteer to have environmental Cities participate in the belief cities program (1997) sustainability of their development pro- that receiving the title of grams evaluated by panels of experts environmental model city will organized by SEPA.The evaluation criteria create a favorable investment include a range of indices of environmen- environment, increase tourism, tal quality, investment, and management and otherwise benefit the local as well as other indicators relating to social economy.Take-up has not been and economic conditions and public envi- very high. A contributing factor ronmental awareness. As of the end of may be that the risks of getting 1998,11 cities had been nominated as a bad rating outweigh the environmental model cities. benefits of getting a good one. Environmental review SEPA is required to carry out environmental SEPA lacks both the staff and of regional plans (1998) reviews of regional plans and sectoral expertise to effectively carry economic policies. out this function. Urban environmental The "Notice on Increasing Wastewater An essential policy. It has been tariffs (1999) Treatment Fees and Establishment of implemented in a wide range Centralized Urban WastewaterTreatment of leading cities, including Systems" (SDPC, MOC, SEPA) requires that most notably, Beijing, which centralized civil wastewater treatment fees now charges households RMB 3 be collected nation-wide. Wastewater treat- (US $0.36) per month as a ment plants are required to be run as enter- waste disposal fee. This is prises, to keep separate accounts, take full probably not covering O&M responsibility for profits and losses, and to costs, but it is a step in the pay taxes. Municipal water companies will right direction. incorporate wastewater-treatment fees into the water tariffs and remit these to waste- water-treatment companies monthly. In cities without centralized wastewater treat- ment plants, the wastewater-treatment fee may be used, subject to local government approval, to accumulate investment funds for new treatment plant construction, although they must be completed and operational within three years from the date the local government starts fee collection. Note:, If It is assumed that an average fam, y of three generates i2o I/c/d of wastewater. the fee works at about RMB 0 3/m. wh ch would be considerably ess tharn the nomirial 0-and M cost (rMB o 5 -i 5/ ns depend ng on the circumstances. Source: World Bank Staff 5 Environmental Management iii The focus was almost entirely on capital political leaders are not raised too high; (b) a investment, which was not always the sole step-by-step approach is followed, starting source of the problem. Other factors gen- with small-scale pilots and gradually build- erally not covered included lack of opera- ing up; (c) resources are directed at manage- tional funds, lack of technical capacity, and able problems; (d) the programs should not lack of public awareness. These issues only support capital investments, but also need to be addressed in the future. provide support for institutional develop- To increase politica attentionament, capacity building, and other "soft" To 'mcrease political attention and invest-' .. . . ~~~~~~problem areas; and (e) the new three-areas ments, a similar approach is being developed problem s;ould not nerthree-ares to address "ecological conservation" issues. program should not divert resources and During the 10th Five-Year-Plan, SEPA attention from the ongoing 33211 program. intends to implement a "three areas strategy" with the follow7ving components: New C ha I I en ge s The Special Eco-finctional Protection Area Two new challenges are of particular con- is a program of investments focused on cern to SEPA and were reviewed as part of the headwvaters of the Yangtze and Yellow the background research underlying this Rivers that is intended to address the report: (1) China's accession to the WVorld underlying causes of recurrent flooding, Trade Organization (WTO); and (2) the water shortages, waterlogging in the government's proposed "Great Western lowver reaches, and sandstorms. Development Plan." These issues, which are briefly summarized here, are reviewed in The Keyv Resouxrces Exploztaitzon Area The Key Resources Exploitation Area detail in a chapter in the statistical annex is intended to rationalize natural rcsources (see attached CD-ROM). management in the Tarim River Basin (Xinjiang Province) and the catchment of the Three Gorges Dam. TRADE ORGANIZATION The Rich Biodiversity Area and Ecological The main effect of MVTO accession will Sound Area would establish 20 nature reserves of natoa be to reinforce and probably accelerate rcscrves of national significance in .. . . ~~~~~manv changes in the patterns and forms Hainan, Jilin, and Jiangsu provinces. Of production that are already taking place. This program needs to be approached cau- tiously Superficially, it may develop problems I similar to the 33211 program. Great care is will probably speed existing production needed to ensure that (a) expectations of shifts toward China's areas of comparative 112 China: Air, Land, and Water advantage, including labor-intensive activi- cannot successfully adapt to change, they ties such as livestock, fruit and vegetables, may increase their usage of the only factors aquaculture, non-timber forest products, and of production readily available to them- highly transformed timber products such as their own labor and surrounding unutilized furniture. It will tend to shift production land. This could increase land degradation away from areas of comparative disadvan- and exacerbate associated envirolnmenltal tage, including water-intensive agricultural impacts such as erosion, sedimentation, and sectors such as grain production, and land- loss of biodiversity. intensive forms of forestry production such The degree to which such risks actually as woodchips and low-grade pulp. On materialize will depend on the level and balance, the direct environmental effects are ' o . ~~~~~~~~effectiveness of support provided bv the gov- expected to be beneficial, although the incremental impact may be little different ernment to help these communities adapt to changing circumstances. The types of sup- from effects alreadv being experienced due c p tc rport most likely to be of assistance include increased (a) labor-intensive public works The indirect effects arise primarily as a result programs to help maintain income levels of the social implications of change. From a during transition periods; (b) access to new macroeconomic perspective, it is likely that production technologics through support for the aggregate effect of the changes in agri- applied research, enhanced agricultural cultural and forestry production attributable extension services, and production and/or to VVTO entry will be economically and development credit; (c) vocational training, socially beneficial. However, it is equally particularly for younger farmers; and (d) likely that these benefits will not be spread access to childhood education and improved evenly across the rural community. There health services to improve the capacity of will be winners and losers; on balance, some the next generation to transcend local of the most significant adverse indirect envi- constraints to development. ronmental effects could be associated with the~~~~~ loes Comnte.otlkl ob A similar story holds for industrial pollution. t.e lose. Ce mt lThe main effect of WTO accession will be to losers are inland rural communities, partmcu- increase competition for local industries, larly those located in the poorer counties which will require them to strengthen their where susceptibility to land degradation is technology, knowledge base, and quality of highest, and who have the least physical, m intellectual, and/'or financial capacity to mngmn CS 00.Tems intellectual, and/or financial capacity to adversely affected industries will be the d' ers'fy, product'on mn the face of changed 1 diversif production inthefaceofchange "smokestack" industries, which are signifi- market conditions. If these communities 5 Environmental Management 113 cant pollution sources and arc frequently WTO accession (Wheeler et al. 1999). The characterized by their low state of technolog- main need is to remain vigilant against poten- ical development, low product quality, and tial migration of polluting activities or import high consumption of raw materials, particu- of hazardous materials in response to weak larly energy and/or water.22 These industries domestic enforcement of relevant laws and are already disadvantaged by the new indus- regulations. The challenge to environmental trial development environment in China, so management is not a flood of dirty industries, it is difficult to see that WTO accession will but about how to help raise the environmental add anything new to existing trends. performance of domestic industries and other trading sectors so they can face increased The winners are likely to include the apparel, ineatolevrnmtlscuny international environmental scrutiny. electronics, textile, leather, food processing, and other light manufacturing sectors. Some of these-particularly textiles, leather, and food processing-can be significant pollution OF THE GREAT WESTERN sources, and it will be important to bring DEVELOPMENT PLAN them into the regulatory net from the outset. The "Great Western Development Plan" In general, it is far easier to apply (more literally, "Great Opening of the pollution control systems to new enterprises West"; xibu dakaifa) is intended to re-direct than retrofit them to old enterprises, so the state-sponsored development expenditures environmental risk associated with this new away from the wealthier coastal provinces industrial development will be somewhat toward inland provinces and autonomous less than with the old industries. regions, which have been relatively less A potentiallv beneficial indirect effect of favored by such expenditures over the last 20 years. The details of the plans are still being WTO acccssion could arise in termns of the variety and qualty of environmental protec- wvorked out, but the main focus is expected varlety~ ~ ~ ~ ~ ~ ~t and onat (a) infrastructure develpmc- tion technology that becomes available on the to be on (a) infrastructure development; local market. Increased foreign competition (b) ecological construction; (c) industrial could prompt consolidation of local firms restructuring; (d) strengthening science, and increase investments in new, technology, technology, and education; (e) strengthening an inraeivsmnsi.c ehooy local administrative capacity; and (f) which could reduce pollution control costs. promoting foreign direct investment. Overall, the experience to date suggests that international trade has not adversely affected China has a history of ambitious govern- China's environment, and the prospects are ment-sponsored development initiatives. that this experience will continue following These initiatives have generally been well- 114 China: Air, Land, and Water intentioned, but have had limited develop- impacts that can be effectively evaluated ment impact and adverse environmental through conventional environmental impact consequences. This experience is not unique assessment procedures; and (c) "Wait," to China; the track record of large-scale which includes developments that could regional development programs in many have adverse impacts at a regional scale and other countries has also been mixed, with need to be careftilly studied and evaluated development impacts frequently not meeting before proceeding. expectations, while adverse environmental consequences were worse than originally Future Management expected. There is a risk that the Great Western Development Plan could result in a Needs and Priorities repetition of these mistakes, particularlv if it China has reason to be pleased with its plcannin and eluthastian. 'thi rishasbeqten progress in developing the laws, regulations, planning and evaluation . This risk has been and institutions necessary to underwrite w'dely recognmzed among env'ronmental wi iz environmentally sustainable development. It experts in China." is amongst the leaders in the developing The key to minimizing the adverse environ- world. But given the scale of problems con- mental consequences of the plan will be to fronting it, best in class is not good enough. "make haste slowly," particularly with regard China has to match the environmental man- to investments that have uncertain environ- agement performance of the leading OECD mental impact potentials, including large- countries; by that measure, it has a long way scale infrastructure developments, agricul- to go. The long list of priority actions on tural production initiatives, and other environmental institutions and legal/regula- investments with the potential to register tory instruments is as follows: direct and/or indirect environmental impacts at scales larger than the project INSTITUT]ONS itself. In the Bank's analysis, Great Western Development projects have been placed in Cross-sectoral coordination on environ- . . . , ,, ~~~mental issues needs to be strengthened. one of three priority categories: (a) "Go, " which includes developments that have little The best option is to reconstitute an "SEPC-like" institution under the State or no adverse environmental impact poten- tial and/or are precursors necessary to reduce Council to provide a venue for negotiating the adverse environmental impact potential and agreeing on collaborative approaches of later investments; (b) "Go Slowly," which to cross-cutting environmental issues, includes developments with only localized particularly development policies.24 It would ensure that environmental effects 5 Environmental Management 115 arc taken into account in setting sectoral etarv channels, but this will require reform development policies; reduce overlaps of the entire fiscal system. An intcrim and contradictions; maximize synergies solution would be to continue with the between the work of different agencies; current system, but to modify it to remove and adjudicatc disputes. For this institution the perverse incentives. An example to be effective, it needs a pro-active secre- would be moving away from levies, which tariat and the financial resources necessary are applied only when concentration to commission studies and spin off techni- standards are exceeded, to pollution taxes, cal groups to address particular issues. An which apply to all discharged pollutant alternative would be to raise SEPA's status loads, whether or not they exceed pre- to the level of a front-rank cabinet ministry, scribed standards. This is technically feasi- but this would be less effective. ble, although not simple (World Bank 2000), since it will require major improve- Tighten the connection between resources..- . ments in the environmental monitoring and responsibilities in environmental pro- sstmInhelgtr,alsuhax - and ~~~~~~~~~~system. In the long term, all such taxes- tection agencies. As a matter of priority, .. reto gnis samte fpirt and, for that matter, all other administra- the government should carry out a major nd, fees-hol be assedmonitoah ' . -. ~~~~~~tive fees-should be passed on to the mlanagement and staffing review of envi- relevant taxation agencies. In the short-to- ronmental institutions at all levels to g assess the significance of the gap and medium term,hwver, their seems develop strategies to deal with it." Evcn retention by the concerned EPB. without the benefit of such a study, it is already obvious that environmental pro- Resolve horizontal/vertical contradictions. tection agencies nced to (a) narrow their Options for proceeding further on this focus; (b) concentrate the bulk of their matter include (a) increasing the direct efforts on that small number of issues regulatory function of SEPA itself, perhaps where they have comparative advantages, through adoption of a regional structure both technically and administratively; and along the lines of the US EPA and the (c) give priority to technical problems that People's Bank of China; and/or (b) dcle- are potentially solvable. gating regulatory power over all but the smallest industrial enterprises to munici- palities and provinces and away from the mental institutions througb the govern- . i mental institutionsthroughthe g county level; and/or (c) increasing super- ment s regular budget. The ultimate objective should be to fully finance the vision and audits of the performance of operations of EPBs through normal budg- ii6 China: Air, Land, and Water lower-level EPBs by higher levels to contains a variety of standard terms and expose instances of continued failure to conditions (that is, they do not have to enforce relevant laws and regulations. be developed for each new enterprise) and other undertakings relating to the REGULATIONS AND INSTRUMENTS Improve the rule of law and increasc the role of courts. The agenda is huge. Key Box 5.1 Environmental Permits in OECD Countries steps include (a) increasing public aware- ness of the possibility that the courts could Permitting schemes are established by general be an ally in pursuing pollution complaints; environmental protection laws, but most of the (b) developing more transparent legisla- details are contained in regulations (which are tive and rule-making processes to build easier to change). The regulations specify the consensus between the regulating agen- industries, processes, installations, and chemical substances or types of nuisances to which per- cdes, the regulated parties, and the public mitting applies. They also define the criteria on the value of a stronger legal base; (c) for industrial facilities subject to permitting allowing more active public participation and further break down the target industries in the regulatory process at all stages, according to size, type of activities, and from drafting of cnvironmental legislation toxicity of releases. Usually, thresholds are to enforcement activities; (d) further set below which enterprises are exempted from modif.lng existi.ig environmental laws the permitting process. Depending on the modi*Ving existing environmental laws country's environmental framework, the type to include provisions for common-law of facilities concerned, and the environmental presumptive judgments that make a circumstances under consideration, permit violation of a standard by itself a crime; (e) administration may be delegated to regional and involving the court system in reviewing local authorities. In many, if not all countries, the constitutionality of legislation, inter- permit requirement conditions can be appealed. preting its ambiguities, and reviewing the Almost always, there are provisions for non- clarity and propriety of the delegation of compliant enterprises to come into compliance administrative authority; and (f) increas- over a defined period of time. ing the role of the court svstem in trying In summary, the permitting system is a proce- and punishing violators. dure by which an authorization is granted to a facility or individual to perform an activity under Introduce a permit system for large point specific legal conditions deemed necessary to sources of pollution. A permit is essentially ensure the protection of environmental quality a contract between the pollution control and public health. agency and an industrial enterprise that Source: OECD (1999) 5 Environmental Management 117 legal and regulatory obligations of the control; that is, environmental assessments enterprise (see Box 5.1). The permit can for industrial enterprises need to assess include an acknowledgement that a breach incremental pollution loads attributable to of the permit conditions constitutes a vio- proposed developments, and these should lation of the law. An essential adjunct to be used to determine how developments the permit system would be elimination of can proceed without increasing total the concept of a pollution levy and its loads. In addition, partnerships between replacement by a schedule of administra- EPBs in eastern and western areas should tive fees to issue permits and punitive fines be encouraged as a basic part of the cur- for any breach of conditions. rent western development strategy- Develop flexible and mixed instruments Review and update discharge and emis- for small stationary sources. Different sion standards. The existing industrial countries have developed different emissions standards need to be reassessed approaches, but the method used in the according to mass-loading control objec- Netherlands would be worthy of close tives as well as ambient quality goals. study. To reduce the need for discharge Meanwhile, requirements for flow meter- monitoring, small and intermediate firms ing and alternative methods for calculat- are assigned a number of pollution units ing total load should be added to the dis- based on the general pollution characteris- charge standard. Fine particulate control tics of their sub-sector, and their pollution emissions standards for industrial boilers charges/permit fees are based on those will need to be tightened. general criteria. If a firm feels that it can better the general sector performance, it promote ura environmental mas planning. The effectiveness of SEPA's rctains the option of direct measurement mandate to review urban master plans is to establish that fact. limited due to staff shortages and the Increase training and human resource technical difficulties of actually doing the development at the lower levels, particu- work. Most cities do not have environ- larly in the western region. SEPA should mental master plans, and their planners assist lower-level EPBs to make better use have limited knowledge of the environ- of the environmental impact assessment mental consequences of different planning system as a tool in mass-based pollution strategies. SEPA, in collaboration with the Ministry of Construction and State ii8 China: Air, Land, and Water Development Planning Commission, needs to develop and disseminate some basic urban environmental planning guidelines and manuals, including a com- prehensive checklist for environmental considerations in urban development. SEPA also should advocate increased public participation in urban planning and collaborate with MOC on piloting public participation procedures in selected cities. The sequenced policy for dealing with urban environmental issues should be reconsidered. The current plan is for urban environmental protection plans to be developed progressively for large cities (9th FYP), medium and small cities (10th FYP), and small towns (lth FYP). It would be better to prioritize according to the seriousness of environmental problems rather than the size of the urban area. 5 Environmental Management iig Notes 7. The ISO 14000 series is a collection of voluntary consensus standards intended to assist organizations to achieve envi- ronmental and economic gains through the implementation 1. This refers to the conflict between an EPB's vertical of effective environmental management systems. The series responsibility to higher-level EPBs and SEPA, and its hori- includes a wide variety of subsidiary standards covering zontal allegiances to its own level of government, which matters such as formulating an environmental policv provides its budget. Local governments often have a different developing and implementing environmental management view from SEPA on the balance between the environment devli andi environmental management and development, particularly in cases where the local govemment may be the whole- or part-owner of a polluting 8. The program was developed with the assistance of enterpdse. This represents one of the most serious constraints UNEP and UNIDO. The World Bank provided material on the effectiveness of pollution management in China. support through the Environmental Technical Assistance Project, which established a US$6 million line of credit 2. The first was the environmental responsibility system to underwrite installation of demonstration cleaner produc- of 1989 (still in force), under which local government lead- tion systems in five representative industrial enterprises, ers sign annual contracts with higher-level EPBs agreeing plus technical assistance funds to underwrite various to help EPBs reach certain environmental targets and technical studies, training, and preparation of basic specifying specific investment projects to meet these procedures manuals. goals. According to environmental administrators, this system has improved environmental management in the 9. A Cleaner Production Act was drafted by the State jurisdictions concerned. Economic and Trade Commission and submitted for review to the National People's Congress in February 2001. 3. In this capacity, they can report directly to the provincial governments rather than through an intermediary. 10. The national pollution control objective for the year 2000 vwas to maintain emissions of 14 major water, air, 4. For example, the US Environmental Protection Agency and solid waste pollutants at their 1995 levels. By the end is an independent agency reporting directly to the president, of 1999, average emissions of five major pollutants (COD, giving it many of the characteristics of a cabinet-level m- SO2, soot, fugitive dust, and industrial solid waste) were istry. In Germany and France, the environmental agencies about 30 percent lower than the targets, significantly are cabinet ministries. In the UK and Netherlands, the envi- exceeding expected performance. ronmental agencies are part of much larger and powverful cabinet-level line ministries working in related fields such 11. Principally, this is achieved by promoting discharge of as housing and physical planning. (Lovei and Weiss 1997) semi-treated wastes to municipal sewers or, in areas without sewverage systems, development of centralized wastewater 5. Some city EPBs are reported (World Bank 2000) to rely treatment systems in industrial estates. on pollution levies for as much as 90 percent of their funding. 12. As discussed in Chapter 1, there were other contributing 6. These terms are not entirely synonymous. SEPA's term factors, including the industrial slowdo-wn during the second did not originally encompass every dimension of what west- half of the decadewhich played a minor role, and industrial ern environmentalists would knowv as sustainable natural restructuring, which has favored development of industries resources management. It started out focusing on nature producing less pollution per unit of output. The rest of the conservation (in its own nature reserves) and issues such as observed result can be attributed to the effects of increased nonpoint pollution (particularly due to runoff of fertilizers administrative and regulatory pressure through the three and pesticides), promotion of ecological agriculture, man- shifts plus the application of short-term and ad hoc agement of livestock wastes, and control of "white pollution' interventions such as the program to shut down 15 kinds (litter due to discarded plastic film). More recently, it has of small enterprises. expanded to encompass concepts such as regional land use management-the "Three Areas Strategy" is an example. 13. Most forms of non-compliance with pollution control In making such distinctions, SEPA is attempting to avoid laws are not actionable offenses. EPBs have limited access overlap with the on-going work of other agencies such as to legal expertise, there is no tradition of settling regulatory the Ministry of Water Resources, Ministry of Agriculture, and State Forestry Administration. 120 China: Air, Land, and Water issues through the courts, and most industrial firms do) 22. The most significant of these from an environmental not acknowrledge that violating environmental laws and point of view are non-metal mineral production; chemical standards is a legal offense. production; pulp and paper production; textiles; ferrous 14. Negotiation and arbitration are useful methods of smelting and processing; and mining and electricity resolving disputes, but they will not be sufficient to deal production (World Bank 2000). with serious and economically significant disputes that will 23. The chairman of the environment and natural resources inevitably arise when EPBs start rigorously enforcing the lawvs. committee of the National People's Congress, Professor 15. Two key issues are air emissions from smnall industrial Qu Geping, has warned that without proper controls the boilers and .anaccs in urban areas, and water emissionsnew program could lead to severe environmental degrada- boilers and furnaces in urban areas, and v-atcr emissionstin(haYohDil,Mrh420)Heoedht from small-scale industrial enterprises, tion (China Youth Daily, March 4, 20001. He noted that historically in China, sevcre pollution and environmental 16. For example, the majority of the US$19.3 billlon in degradation accompanied rapid development. An editorial national infrastructure bonds floated in 1998 and 1999 was in the China Environment News (March 7, 2000) also used to underwrite municipal water-supply and wastewvater advocated that readers should take a more sober view toward treatment systems. The funds were partly used to finance what it called the "Western development craze." It pointed 253 municipal wvastewater treatment plants with a total out that the WVest suffers from widespread soil erosion, low treatment capacity' of 23 million m7day. agricultural productivity, water shortages, and water quality 17. Compliance with urban pollution targets during the 9th problems. Irrational development could cause significant FYP was much less than compliance with industrial pollu- ecological damage. The top priority for WVestern develop- tion targets. Some urban pollution targets were not met (for ment should be environmental sustainabilty example, S02 emissions were more than 50 percent above 24. An option suggested by some Chinese commentators target) and others were met less convincingly than in the is to use the existing coordination arrangements (between industrial sector (for example, urban COD loads Avere only SDPC, SETC, and SEPA) that were used for revieAv of 13 percent better than target, whereas industrial COD the 9th and 10th Five-Year Environmental Plans and for discharges were 57 percent better than target). setting the national environmental targets for 2010. This mechanism has worked reasonably well for industrial i8. Three Rivers (Huai, Hai and Liang), three lakes (Chao, pollution issues, hue may be less effective when it comes Dianchi and Tai), two control regions (SO2 and acid rain), ton ironmentay issues. one sea (Bohai), and one city (Beijing). 19. Some of these programs have long-term time horizons 25. The issues to be addressed in such a study, perhaps and arme mean toebe approgracshved iongstep-bstmep fhizon. T through a series of case studies of EPBs from different levels fact tat improvementsahaveanordben register insthe. The in thc hierarchy, would include: (a) current budgets and fact tht imprvementshave nt beenregisteed in he ini resotirces -and recent trends; (b) the scope of wvork of EPBs, tial stage of a program does not necessarily mean it is failing. r a as defined by relevant laws and regulations, what they are 20. The conclusion depends on which environmental data- actually doing, and the extent (and reasons) to which thcy base is consulted. SEPA has conclbided, based on analysis are not carrying out all assigned responsibilities; (c) howv of its owvn data, that conditions in the Huai Rivcr improved. the current skills mix of the EPBs fits with the range of However, analysis of multiple databases (World Bank et al. activities they are trying to carry out; (d) how effectively 2001) suggests that wvater quality, as retlected by COD, con- and efficiently they are using current budgets, and what tinued to deteriorate. The fact that it is so difficult to deter- opportunities are available to extract more value from their mine what actually happened illustrates the need to signifi- current budgets; and (e) the degree to which the duties of cantly improve environmental monitoring and data manage- EPBs are likely to change in the near future due to changes ment systems. in economic structure and/or the roles and duties assigned 21. A good example is the "one sea" component. The sources to them, and the budgetary and manpower implications of of pollution of Bohai are so diverse that it is difficult to these changes. The findings would provide a basis for SEPA imagine any program of remediation that could have any and the lower-level EPBs to develop strategic plans, staf impact in less than a decade, even if then. ' development plans, training plans, and so on. 5 Environmental Management 121 S S g g g g b g | mS 0 a :0: ES S - :D: : a\ g - - - - - | - |---| !;: The review revealed opportunities to strengthen environmental support, even though China is no longer eligible for con- cessionary International Development Association (IDA) assistance. To realize this potential, action will be required both by the Bank and the Government of China. The Portfolio This: environmental sector update started L .;/? % R ; > ~~~~~~There were 140 completed and active proj- wf h v:g revie* of the World Bank's 1990- 2000- A;vronmental portfolio in China. The ects in the 1990-2000 portfolio, representing Xuuu nvlrnmenal portfolio in China. Thie cumulative lending of about US $23.5 bil- review was intended to assess the relation- lativ lendin of about Us $2.vil- ship between the Banks assistance program Of this al, 8 percent wa prvie and priority environmental issues in China identified in relevant Five-Year-Plans and The dominant sectors in the portfolio in the Bank's own 1992 environmental sector terms of the number of investment projects study (World Bank 1992). The results pro- were rural development (29 percent of the vide a basis for identifying ways to strengthen total number of projects); transportation (17 environmental support during the 10th FYP. percent); urban development and urban Orltrisw tahBk environmental improvement (17 percent); Overall, the review showed that the Banles adteeeg etr 6pret. environmental investment program was and the en setre(16 pcent). * . 1 , . , ~~~~~Geo ra hically the eastemn re ion accounted quite strong. There was a good geographical fit with priority environmental issues. In for the greatest proportion of lending volume terms of sectoral distribution, the rural (44 percent), followed by the central (29 development and urban/environmental percent) and western (27 percent) regions. sectors dominated the portfolio in terms of As would be expected given the poverty both number of projects and lending distribution in China, IDA commitments volume, substantially reflecting the priorities were highest in the central region, followed identified in the 1992 environmental sector by the western and the eastern regions. strategy. There was a less complete fit between the portfolio and the environmen- tal priorities in the 9th FYP. 6 The World Bank's Environmental Portfolio 123 Environmental sector. The two Category A rural develop- ment projects (Loess Plateau I and Red Dim ens io f s of Soils II) provided a rare combination of the Portfolio investments that were both profitablc and environmentally bencficial as a whole. In INVESTMENT PROJECTS other rural development projects, it has becn much more difficult to identify such "win- Forty-one investment projects (30 percent of win" investments. The only alternative has the portfolio) are defined as environmental been to address environmental issues as side- projects. These fall into two categories: (1) lines to other investments intended to 15 investments that were primarily focused produce short-term financial benefits." on environmental issues (referred to below as Category A projects); and (2) 26 investments An the principal environmental themes that were not primarily environmental, but included one or more components intended control was undoubtedly the strongest at to deal with environmental issues (referred $1.2 billion. Lending for air pollution con- trol and solid wastc management was much toblowasCtegry projectslower, totaling about $130 million, primarily As shown in Table 6.1, the Category A proj- due to the greater complexity of design ects accounted for about 40 percent of envi- issues, cost recovery problems, and the lower ronmental lending volume. The overwhelm- priority of these issues in the government's ing majority of these-13 projects- urban development agenda. addressed the "brown" environmental agen- 3 wo addressed the "bw evo nagreen- There was a good fit between the regional da, while onlv tv drse h re da) while only two addressed the "green distribution of investments and the pattern agenda."4 On the other hand, a significantly of environmental issues on the ground. larger number of rural development proj- s i There were more brown projects in the cast- ects-14 in all-mnclucded components that *vere itnetoadef emrn region, where problems of industrializa- *vere intended to address some element of the environmental agenda. tion and urbanization are the most acute. The bulk of lending for the green agenda These patterns largely reflect the realities of was focused in the central and westcrn project lending in China. In the urban regions, which have more fragile ecological sector, it is relatively easy to identify invest- conditions. ments that provide environmental benefits plus the short-term economic returns neces- C u sarv to repay the loan.3 It is much more most important in the rural development I ~~~~~~~~~sector, water supply and sanitation, and difficult to do this in the rural development s w s a 124 China: Air, Land, and Water Table 6.1 The 1990-2000 Environmental Portfolio by Sector Investment Category A Projectsa Category Ba Total Sectors No. Amount No. Amount No. (Us$ million) (US$ Million) "Brown" Agenda Urban 12 $1,944 5 $ 637 17 Energy Nil Nil 3 $ 965 3 Health Nil Nil 1 $ 110 1 Water Supply & Sanitation 1 $ 250 1 $ 92 2 Total Brown Agenda 13 $ 2,194 10 $1,805 23 "Green" Agenda Rural Development 2 $ 446 14 $1,862 16 Water Supply & Sanitation Nil Nil 2 $ 117 2 Total Green Agenda 2 $ 446 16 $1,979 18 Total 15 $2,640 26 $3,784 41 Note: a Se- text Source: VWorls BaK staff urban. IDA was particularly important in lion), xvhich supported improvements in supporting the environmental dimensions of environmental monitoring and data man- rural sector lending. Projects involving water agement, promotion of cleaner production, and soil conservation had the highest IDA strengthening of environmental assessment share, followed bv "eco-agriculture," rural procedures, improvements to ecological water supply, desertification, afforestation, research, and basic environmental research. and agricultural nonpoint pollution. The loss The project was successful. In the absence of of IDA will further complicate the provision IDA, there is virtually no opportunity for of assistance in these areas in the future.7 a Bank-financed follow-on, unless the gov- ernment changes repayment arrangements. TECHJNICAL ASSISTANCE AND The Multilateral Fund for the Montreal GLOBAI. ENVIRONMENTAI PROJECTS Protocol (MFMlP) and, to a somewhat less- The only environmental technical assistance er extent, the Global Environment Facility project was the IDA-financed Environmental (GEF) have made significant contributions Technical Assistance Project (US$50 mil- to addressing global environmental issues in 6 The World Bank's Environmental Portfolio 125 Table 6.2 Portfolio Linkages to the 1992 Environmental Strategy Paper Priority Sectors and Themes Patterns of Support in the 1990-2000 Identified in the 1992 Strategy Report Environmental Portfolio Strengths Weaknesses Priority Energy, Industry, Urban, Rural Urban Environment Industry Sectors Rural Development Energy Water Resources Urban wastewater Integrated river Urban/rural water basin management supply Air Quality District heating Mobile sources Solid and liquid wastes Solid waste Hazardous/toxic management waste management Energy conservation, industrial Energy conservation Industrial efficiency and pollution control (GEF) pollution control Strategic Themes Natural resource management Reforestation Biodiversity and conservation Water conservation conservation Soil conservation Sustainable agricultural Pest Management Integrated agriculture/ practices on marginal lands natural resources management Environmental institutions Institutional Capacity building strengthening for natural resource Policy and regulatory management development Co-financing from CEF Co-financing from Aid coordination on energy conservation GEF on biodiversity conservation Source World Bank staff China. The MFMP program (S323 million) program, which far exceeds the combined is the biggest in the world. About 67,000 performance of all other signatories to the tons of ozone-depleting substances Montreal Protocol. (ODS) have been phased our under the Most investment-$128 million-under the GEF has been for greenhouse gas (GHG) reduction projects. There has been much less 126 China: Air, Land, and Water GEF assistance for biodiversity conservation to integrated river basin management and to ($13.7 million, only 3 percent of total global modify rigid loan repayment conditions, portfolio volume), although the number of which limit the Bank's ability to provide projects in the pipeline has recently started support for investments with substantial to increase. externalities. Clearly, there are major opportunities to CONSISTENCY WITH THE increase access to global programs, particu- 9TH FIVE-YEAR PLAN larly biodiversity protection programs through the GEF, and also through possible The 9th Five-Year-Plan (FYP) included new initiatives such as a convention to sup- for the first time quantitative targets and port the phaseout of certain persistent indicators for industrial pollution, urban organic pollutants (POPs).8 environmental improvement, ecological environmental protection, and agricultural Strategic Directions in and rural environmental protection. A key element of the investment plan was the the Ass ista n ce Prog ra m "33211" program, a series of priority pollution control projects in five geographical areas."0 CONSISTENCY WITHi THE 1992 The major gaps were similar to those sum- ENVIRONMENTAL, STRATEGY marized in Table 6.2, and the underlying The 1992 Environmental Strategy Paper causes were also similar. was the first of its kind for China,' and appears to have had significant influence on Op port u n iti e s fo r the government's thinking about environ- mental issues. It also influenced the pattern the Bank Under of World Bank lending although, as shown t h e 1 0th FY P in Table 6.2, there were a number of gaps between priorities identified in the strategy There have been clear strengths and weak- paper and the contents of the assistance pro- nesses in the Bank's portfolio as it relates to gram. Removal of these will require action both its own environmental sector strategy by both the Bank and the government (see and the environmental planning priorities Table 6.3). On the Bank's side, better use set out by the government in the 9th Five- can be made of the GEF biodiversity win- Year-Plan. dow. On the government side, action is required to remove institutional constraints 6 The World Bank's Environmental Portfolio 127 Table 6.3 Factors Preventing Action on Certain Dimensions of the Bank's Environmental Strategy for China Main Factors Preventing Action O Industrial Pre-condition for Bank participation would he reform of SOEs plus 0 adjustment of pollution levies to provide proper incentives for improvement of industrial sector pollution control performance. integrated river Government has not succeeded in getting all relevant ministries and inter- basin management ests thinking in the same way on this subject. Bank has been attempting to participate through Huai He Pollution Control Projects, but the integrat- ed approach has not yet been fully accepted. If progress is to be made, there needs to be a major breakthrough on the government side. Non-point pollution Government needs to develop a technical approach that is likely to be effective. Unfortunately, most of the solutions are non-structural, and hence not amenable to an investment solution. Hazardous and toxic Some technical assistance provided through Southern Jiangsu waste management Environmental Protection Project, but this is not presently a priority issue for municipal governments, the Bank's main counterparts. Payback mechanism could be a problem. E Industrial pollution The same problem restricting overall Bank participation in the industrial I control sector. Unlikely to be any avenue for increased involvement in this field. u r Biodiversity Insufficient use made of GEF. Partly historical due to Bank agreement that u conservation UNDP should cover this field in China. That situation has now changed and a much improved GEF biodiversity pipeline is being built up. Integrated Research has just been commissioned to assist the government to identify agriculture/ proposals for assistance. New Operational Program 12 under GEF might Natural resources provide an opportunity management Capacity building Main assistance has been through IDA-funded Environmental TA Project on natural resources and GEF-funded Nature Reserves Management Project. Future support management will only be possible through GEF projects or collaboration with donors providing grant assistance. Aid coordination Has not been a strength in the past. Recent collaboration with ADB on GEF may provide a way forward. Source Wor d Bank staff 128 China: Air, Land, and Water The gaps between the strategies and the items 2, 3, 7, 8, 9, and 10 in Table 6.4. portfolio are largely explained by a variety of Of these, items 7 and 8 require action by the practical considerations. Three general con- Bank to facilitate greater engagement, and ditions are evident: (1) areas where there is the remaining four items (2,3,9, and 10) potential for further engagement, provided require action by the government. there is action by the Bank; (2) areas where there is potential, provided there is action by Th govern entihsnben prepa ing the government; and (3) areas where there 10th FYP for environmental protection, l do is which is regarded as a key driver of state limited potential for the Bank to contribute, spndn on eniomnatcnlge These are summarized in Table 6.4. sedn nevrnetltcnlgc and services, and also indicates how foreign Looking at the fit between the Bank's finance will be allocated. The current draft portfolio and the government's cnviron- of this plan highlights the following princi- mental strategy under the 9th FY, the main pals and priorities: weaknesses were in the fields of ecological The main principal is to attach equal environmental protection, rural environ- mental protection, biodiversity conservation, imporac tonbtr otion c and marine environmental protection- Table 6.4 Preconditions for Wider Bank Participation in the Environmental Agenda Theme Precondition for Increased Bank Participation Action by Action by Limited the Bank Government Potential 1 Industrial pollution 0 2 Integrated River Basin Management 3 Nonpoint pollution 4 Mobile source pollution 5 Hazardous/toxic waste 6 Industrial efficiency 7 Biodiversity 8 Wetlands/grasslands 9 Eco-agriculture 10 Capacity building on NRM 11 Aid coordination Source: W-rld Bank zr&ff 6 The World Bank's Environmental Portfolio 129 Table 6.5 Actions Required to Strengthen the World Bank's Environmental Program Priority Sector/Area Action Required by Bank and/or Government Industrial pollution Will probably remain a continuing weakness in the program, although the potential for participation would be improved if pollution levies were increased to provide the necessary impetus to operate clean production/ pollution control facilities once installed. Urban environmental The program is already strong, although mechanisms need to be found management to broaden the range of issues addressed, particularly solid waste management and mobile source controls. Ecological conservation More work required by both the government and the Bank to devise more integrated rural development projects, which provide an improved balance between increased production and improved natural resources manage- ment.There are certain models (Loess Plateau I and 11 and Red Soils I and 11) that provide a guide.There are opportunities to improve collaboration with other donors, particularly those who have grant-based resources. Rural environmental There has already been some contribution to management of livestock protection wastes (Smaliholder Cattle Project), which might provide a model for promoting "clean production" technologies for smaliholder livestock producers. This could be extended to SPH production units, perhaps in combination with a program of increased enforcement. Bank participation on improvement of pesticide management would need to be based on a comprehensive review of pesticide management and reg- ulatory issues to provide an agreed position on problems and issues in the sector on which investment programs could be based.There is probably good potential for some kind of investment program based on promotion of Integrated Pest Management, although repayment arrangements would continue to be a constraint. There could be opportunities in development of pilot-scale rural industrial estates for TVIEs and centralized wastewater treatment, although finding the right funding mechanism will be difficult. Priority Areas The Bank and government need to work together to identify rural devel- opment options in the priority areas that provide an adequate balance between production increases and natural resources management, and which also solve the funding/repayment problem. Source 'World Bank saff 130 China: Air, Land, and Water Priority sectors include (a) industrial An essential part of the assistance strategy pollution prevention, focusing on indus- will be improved coordination between trial structural adjustment and promotion donors to maximize the differing advantages of cleaner production; (b) urban environ- inherent in their programs (interest rates, mental management, emphasizing repayment conditions, procurement con- centralized treatment of wastewater and straints, political risks, etc.). This is particu- solid wastes and control of TSP and S02 larly important in view of the restrictions emissions; (c) ecological conservation, arising from China's graduation from focusing on the "three areas strategy"11 IDA eligibility. and ecological surveys and monitoring of Co-financing accounted for only about the Great Western Development plan; ofnn'gacutdfrol bu thed ureat WesteronDevelomental platon; 9 percent of total project costs in the 1990s, and (d) rural environmental protection, so there is clearly a lot of room for develop- promoting development of rural industrial metlotc-iacn a o omr ment. Most co-financing was for commer- development zones as a way of handling c cially oriented projects. No attempts were pollution from small-scale rural enter- l t made to use concessionary co-financing to prises and addressing nonpoint pollution ptises ad adilute the terms of Bank funds for purposes sources, including livestock, fertilizers, such as pure environmental projects. This is and pesticides. an area that could be developed over the next Priority areas include continuation of few years. It would meet the Bank's objective the "33211 program," while expanding of maintaining its engagement in the envi- it to cover the "two resource areas" (see ronmental area, and also meet the needs of Chapter 5). many bilateral financial sources with strong Some of these areas are in sectors that have social and/or environmental objectives. traditionally been a strong point in the Partnerships like this were difficult in the Bank's program, such as urban environmen- past, since each donor dealt with a different tal management, while others are in areas government ministry. This situation was that have been weaknesses, such as rural partly remedied as a result of the govern- environmental protection. Actions required ment reorganization of 1998,12 and the fea- to improve the Bank's contribution to the sibility of a more integrated and cooperative environmental strategy are summarized in approach by foreign donors has been Table 6.5. improved to some degree. Nevertheless, some work will still be required to promote cooperation between MOF and MOFTEC. 6 The World Bank's Environmental Portfolio 131 Notes 9. In addition to the strategy paper of 1992, there were three other sector studies produced during the decade that had a bearing on environmental strategy: (1) A7ational 1. The IBRD provides long-term loans to middle-income EnvirsnmentalAction P/an; (2) Urban En'ironmnental countries at semi-commercial interest rates-current tcrms Services; and, (3) China 2020: Clear Water, Blue Skies. are about 5 percent repayable over about 20 years with a grace period of 5 years. IDA provides credits to very poor 1O. The "33211" program is described in Chapter 5. countries on concessionarv terms-cero interest, a lowv 11. The "three areas strategy" is described in Chapter 5. annual administrative charge (0.75 percent), and a repay- ment period of 35 or 40 years with a 10-year grace period. 12. Responsibility for major lenders (World Bank, Asian Countries with per capita incomes of less than $925 Development Bank, Japanese Bank for International (in 1996 dollars) are eligible for IDA credits. Cooperation) was consolidated in the Ministry of Finance (MOF). The Ministrv of Foreign Trade and Economic 2. The order was only slightly different in terms of lending Cooperation (IOFTEC) is responsible for bilateral volume; rural sector (32 percent); transportation (21 per- grant cooperation. cent); energy (21 percent), and urban development and urban environmental improvement (15 percent). 3. Urban and industrial environmental management. 4. Natural resources management, biodiversity conservation, etc. 5* WVater supply, sewage collection and treatment, and urban road improvements/traffic management are the main forms of investment. 6. This is a situation unique to China due to the government's policy of delegating loan repayment responsibility to all project beneficiaries. The policy is considered to be largely responsible for the high rate of project success experienced in China, but there is equally little doubt that it makes it much more difficult to make a real contribution to environ mental issues, particularly those in the green agenda. 7. China "graduated" from IDA in 1998. 8. POPs are organic chemicals that persist in the cnviron ment and can adversely affect human health and the envi- ronment through bioaccumulation. Due to their persistence and transportability, they pose risks beyond the immediate time and place of their production and use. The United Nations Environment Program is coordinating efforts to agree on an international treaty to phase out production and use of certain specified POPs. China and other countries are already taking steps to develop capacity to carry out baseline surveys to undenvrite development of national POPs imple- mentation programs in anticipation of an international treaty being developed and agreed to in the near future. 132 China: Air, Land, and Water SS SX - - - '-S: S:l t fi2--- _ 1w§''' ''' 0 ' ; 0 s :: :0:aD::090;:V:X: Cl | E 0 0 2 Z S 1s_ s tt i 10_ '1S_ S S i .tXi- A A continuation of strong economic nt 2 - "'"$- . growth, with average annual increases in ' x GDP projected in the 6-7 percent range Higher growth-about 8-10 percent annually-in industrial output A resumption of strong growth in energy consumption, on the order of 3-4 percent annually The w5,:Challenge Continued growth in urban population, projected to increase at about 3.4 percent Puhrig the 1990s, the government devoted annually substantial financial resources to environ- mental improvements and made major Increased agricultural intensification. efforts to strengthen the regulatory environ- In this context, the government's environ- ment. The tide of industrial air and water mental objectives for the 10th FYP pollution was stemmed, due substantially to are ambitious. the government's efforts. To a large extent, however, these efforts were overwhelmed by A Strategy for the the government's strikingly successful growth and development program. The New Mill e n n i u m environmental agenda increased both in scope and complexity. There were growing The central lessons to be learned from problems with other sources of pollution, China's environmental experience over the such as municipal wastewater, fugitive dust, last 10 years are that (a) environmental insti- and emissions from mobile sources of air tutions cannot possibly manage everything pollution. And the state of the natural envi- by themselves in an economy as large and ronment continued to deteriorate. diverse as China's; and (b) to make real progress on environmental quality, the whole The environmental challenge will become mode of development in China has to be even more complex in the foreseeable future, changed. To meet future challenges, the gov- particularly during the period covered by the ernment needs to re-order its priorities and 10th Five-Year-Plan (FYP). The govern- revise its overall development policy, so as to ment is projecting: sign ficantly improve the fit between develop- ment and environmental sustainability. 7 An Environmental Strategy 135 It made several moves in this dircction dur- their policies and objectives to (a) fully ing the 1990s, but they were not sufficient. incorporate the concept of cnvironmentally The current track is not environmentally sustainable development into their devel- sustainable, particularly in the context of opment objectivcs; (b) emphasize their what SEPA refers to as "ecological environ- primary roles as "stewards" of the national mental protection."2 estate; (c) divest themsclves, to the extent possible, of resource exploitation responsi- To implement an environmentally sustainable b.ii I I bilities; (d) reviewv their policies and opcr- developmcnt strategy; the government has to ' ~~~~~~ational programs to rcm-ove develop)- take concrete actions in threc main areas: ment/environment contradictions; and (e) The institutional arrangements for dcaling increase the support they proVide for with environmental issues research, design, and implemcntation of environmentally sustainable dcvelopment The instruments applied to achieve . i straegle. Tis wrk'ill take timc, but cnvironmental objectives srtge.Ti okw environmental objectives needs to start immediately. The investments made to achieve environ- Cross-sectoral coordination. Most sustain- mental objectives, able natural resources managcmcnt issues cut across normal lines of administrative INSTI'UT IONS 'tresponsibli A means has to be estab- The new and developing environmental lished to coordinate the work of challenge, as already recognizcd by both different agencies, reduce overlaps and the government at large and SEPA in contradictions, maximize synergies, and particular, is to promote environmentally adjudicate disputes. A coordinating body sustainable development of China's natural is needed to replace and improve resources. Making progress will require the on the State Environmental Protection full attention of government and coordinat- Commission (SEPC), which was dis- ed efforts by all relevant agencies, which in solved during the 1998 reorganization. turn will require changes in the way that This coordinating function could be all relevant government institutions established by re-constituting the SEPC; approach their work. Priority tasks include: establishing an alternative "SEPC-likc" institution under the State Council; Mainstreaming. Government agencies, or creating an alternative venue outside particularly those concerned with eco- the State Council, such as a ministerial nomic and/or spatial planning and natural (a) committee. What matters iS that(a resources management, need to adjust a coordinating function should be 136 China: Air, Land, and Water established at a sufficiently high level to be corrected. The major barriers are ensure effectiveness; (b) it should be given essentially administrative and political. the necessary secretarial support to permit The government should create new it to pursue an active agenda; and (c) and separate river basin management a means should be provided to resolve institutions whose governance structure inter-ministerial deadlocks. makes adequate provision for effective participation of key stakeholders- Reforiii the tipproctch to biodzversi^sty conseis R rthe. aproc to .iortinerst Conase principally provincial governments-in vation. Given the importance of China's their decisionmaking processes. blodiversity resources and the level of threat they are facing, priority has to be In contrast to the situation with given to significantly strengthening the natural resources management, institutional approach to biodiversity protection and arrangements for carrying out the basic tasks management. A central element should of pollution management and control are be establishment of an independent, essentially in place in China. Several things state-level "Nature Reserves Service" to need to be done to strengthen the effective- (a) manage nature reserves of national and ness of these institutions, including: global significance; (b) devclop into a . center of excellence for nature reserve IcpastaEPBacpacmtis a! . with particullar emplhasis at the local level. management; (c) represent the country in TehnIC c paci an resoucs mev ' ~~~~~~~Technical capacity and resources made international conservation forums; and (d) provide the ledaavailable to EPBs, particularly at the lower 'rvde the lead and set standards 'cor countv and township level need to be counterpart institutions at provincial and d t lower levels. There are many other things increased through training, partnership that need to be done on biodiversity programs, increased budgetarv allocations, conservation, but this is the key. and the provlslon of assistance from higher levcls in setting strategies and priorities. Ptzsh forward with integrated river basin At the same time, oversight by higher management in water-scarce regionis. There levels has to be increased to counteract the is wide agreement among technical strong and growing localism in economic experts that a more integrated, river-basin development, and to ensure that enterprise approach is required to sustainably man- inspections are carried out more compre- age water resources in the most heavily hensively and rigorously; regulations are conflicted catchments, which are mostly objectively enforced, and the quality of in north China. But no significant environmental monitoring is improved. progress is being made toward achieving An essential element of this work will that objective. This situation needs to be to resolve contradictions between 7 An Environmental Strategy 137 horizontal and vertical responsibilities at beyond wealthier urban areas in the east. all levels. Options available include (a) Environmental messages and modes of delegating more regulatory authority to delivery need to be varied to take account provinces and municipalities and away of local conditions, particularly in the from counties; and/or (b) increasing central and xvestern parts of the country, supervision of lowcr levels by higher levels which are less urbanized and where through performance audits and public education levels tend to be lower. reporting; and/or (c) developing a regional structure for SEPA, along the lines of the INSTRUMENTS People's Bank of China, to strengthen China alreadv has manv of the basic policies supervision by the state. This work needs to be resolutely attacked at the earliest and instruments necessarv to achieve a high possible time. level of effectiveness in the management and control of point-source pollution. Main Strengthening the legal system. An essential priorities for the future should be: pillar of the approach should be develop- mentp ofi a strong body of environmental A new approach for point-source pollution ment of a strong bodv of environmental ' . . ....... control. The effectiveness of current regu- law backed bv an impartial judiciarv to I . . ' latory procedures for industrial pollution interpret the laws and adjudicate legal and regulatory disputes. This will be long- c c term work, and cannot proceed in isola- without making any conceptual changes ' . ~~~~~~~~to the svstem. A first priority is to make tion from general strengthening of the . A , , - , , ,, . ~~~~the existing system v.ork to its maximum legal system as a whole. Nevertheless, it ... . ~~~~~advantage bv pursuing the institutional needs to be initiated as soon as possible. Given the numerous conceptual, social, strengthening measures outlined previ- 'ously. Nevertheless, new approaches have and technical dimensions, the task will not be simple, but it should be a priority. to be developed to deal with the growing number and diversity of point sources and Continuing to promote public participation to eliminate some contradictions in the in environmental decisionmaking. One of existing system, particularly in relation to the strongest elements of SEPA's environ- the pollution levy fee system. This report mental strategy has been its work on advocates adoption of a permitting sys- public participation, public dissemination rem, under which all significant point of environmental information, and envi- sources of pollution (industrial, municipal, ronmental education at all levels. This even large intensive animal production work has to continue, with an emphasis on units), regardless of ownership, must extending the emnironmental constituency 138 China: Air, Land, and Water secure a permit or license to operate and underlying causes of problems, and the must pay an administrative fee to cover creation of incentive frameworks to encour- the costs of issuing the permit. A schedule age sustainable development of natural of graduated and increasingly punitive resources. Priorities include: fines for breach-of-permit conditions Continued price reform for environmental would also be required. The permitting z R o system could be incorporated into or com- p rove enerm of rerc priing pletely separated from the environmental assessment (EA) system,4 and it works be continued, broadened to include equallywell with concentration-based or resources such as groundwater, and accel- equal lyad-based regulatory approache erated so as to allow prices to reflect total load-based regulatory approaches. criyadevrnmna xenlte scarcity and environmental externalities Keep working on supplementary control and to increase the price-responsiveness of strategies. Command-and-control instru- demand. This is particularly important in ments played a key role in determining areas already suffering from major industrial pollution trends during the resource conflicts.' Continued reform of 1990s. On their own, they may not be prices for basic raw materials can also have sufficient to meet future challenges, partic- beneficial effects in terms of industrial ularly those arising from changing indus- pollution control, insofar as it will increase trial ownership patterns, the declining role incentives for development and adoption of the state, and the increasing role of the of cleaner production technologies and private sector. Work has to continue on utilization of alternative energy sources. development of the three other pillars of the onrrl stateg: eonomc, vluntry; Strengthen focus on the poverty/land degra- the control strategy: economic, voluntary, and p cdation connection. Chinese researchers and publich dislosurehinstrument. Nhew have established a clear geographical link and much more comprehensive approaches btenrrlpvryadrrlln need to be developed to deal with prob- deratin, and iis al lkl lems associated with agricultural nonpoint tht thdegradation, and it is also likely polluton. Tese ma inclde a cmbina that there are causal links. China has an extremely effective poverty alleviation tion of economic measures, education, and selected administrativ meaprogram implemented through the Leading Group on Poverty Reduction Command-and-control strategies will not (LGPR), and many of the program com- provide an answer to natural resources man- ponents target underlying causes of rural agement problems; a much more compre- land degradation. Institutions concerned hensive approach will be required. It needs with "ecological environmental protec- to be based on a clear understanding of the tion" issues need to get more engaged in 7 An Environmental Strategy 139 the LGPR program and identifv ways of to maintain, their focus on pollution man- working collaboratively to increase the agement and control, which is their area of environmental benefits of the program. strong comparative advantage and greatest effectiveness. They have to be careful and Re-orient natural resources deve lopment seetv in idnifn thi rol xve policies. The degraded state of natural selexaing in dthengreen ro expanding into the '`green ' or eco-cnviron- resources in China is a result of develop- mental agenda. Prioritv should be given to ment policies that focused on maximizing m t a output at the least cost to the rest of the on the state of the natural environment, and assessing and reporting on the impli- ing production levels consistent xvith the c o p g long-term maintenance of the resources in on the state of the environment through question. Policy needs to be based on rele- - . . l~~~~~nstruments such as Strategic Environ- vant research, which needs to be increased mental Impact Assessments (SEIA). and made more cross-disciplinary to SEPA and the EPBs could also play a ensure that adequate account is taken of u i useful subsidiarv role in promotng£ and both the social and ecological dimensions f i of natural resources management. opmentaids i already bei devin > opment l~~~~deas (as IS a1rcady bc'ng done in collaboration with the Ministrv of INVESTMF.NTS Agriculture and others in certain priority The work on institutional and policy devel- agro-ecological areas); helping the opment provides the framework for environ- government define environmental invest- mental improvement, but investment is the ment priorities through programs such driving force needed to achieve results on as 33211 (see Chapter 5); and related the ground. Certain steps are needed to strategic activities. increase the impact of environmental invest- Increase envzronnzental expendiltures z'n real ments, including: terms. Total environmental investment Keept/cused on priority issues. The range of for the 9th FYP was less than 1 percent environmental responsibilities assigned to of GDP, while the projected figure for SEPA and the EPBs is expanding at a far the 10th FYP is about 1.3 percent. The greater rate than their staff and financial actual amount will increase by about resources, running the risk of dissipating 55 percent in nominal terms, from about their energies over too broad a range of RlIB 450 billion during the 9th FYP to issues and reducing their effectiveness. RINIB 700 billion during the 10th FYP. EPBs need to maintain, and be permitted Judging by the magnitude of environ- 140 China: Air, Land, and Water mental problems facing China and its bonds, or increasing private sector partici- growing wealth, spending as a proportion pation.' But investment also has of GDP needs to increase,7 and much to get "smarter." For example, municipal greater allocations need to be made for sewage treatment standards need to be basic capacity building.' To put these adapted to local circumstances.l' There expenditures into pcrspective, the most also may be opportunities to develop conservative estimates for China are that industrial estates with centralized waste- environmental costs are equivalent to wvater collection and treatment, which 3.5 percent of GDP per annum. could provide cost-efficient solutions to the growving problem of small- and Improve temedium-sized enterprises with high water ecolog-ical construction and conservation. The 6 pollution emissions. government is allocating substantial t resources to "ecological construction" Less haste anld nmore thouight on environmnen- work, but the effectiveness of these invest- tal imiprovement programs. Some targeted ments could be substantially improved by environmental improvement programs placing more emphasis on addressing the have been lcss successful than intenided. underlying social and economic causes of Effectiveness will be improved by: (a) land degradation and less on treating the spending more time and resources on fea- symptoms. Investments in ecological con- sibiliry studies; (b) paying more attention servation are only expected to account for to the cost-effectiveness of investments; about 7 percent (RlIB 50 billion) of envi- (c) reducing emphasis on investments in ronmental protection investments during physical capital, and increasing invest- the 10th FYP period, which is low com- ments in human capital development; and pared to overall investments in traditional (d) avoiding the temptation to broaden "brown" areas of water and air pollution the agenda before priority problems control, as well as solid waste protection. arc solved. Itivest mnore anld "tnore smartly" in iurban enzrvironmental infrastructure. Financial The Role of Daonors commitments for construction of basic The environmental challenge under the sewerage and solid waste managrement seweragtructurehd soli w e magnafimantlv 10th FYP will be substantial, as will the gov- i r hf ernment's need for technical and financial increased to meet the challeii,e of increased tobameeatithe Chnger .o assistance. The World Bank and other incrasedurbaizaion.Consderaion foreign donors could significantly enhance should be given to tapping new sources of oteir envro co ntributionhby .. their environmental contribution by public capital, such as floating municipal 7 An Environmental Strategy 141 focusing assistance on the three strategic domestic priorities over the planning pern- priorities discussed above within the od. All donors need to take much more following framework: explicit account of these plans in setting their priorities and identifying assistance Enhancement of donor contributions. The . government and donors need to increase work to eliminate redundancies, reduce Increased use of collaborative approaches. overlaps, and better match donor participa- An integrated approach to environmental tion to their respective strengths in terms of problems often requires a variety of factors such as available instruments (loans, assistance needs that extend beyond the grants, technical partnerships, and collabo- vehicles available to any particular donor. rative arrangements), technical strengths In such circumstances, collaborative and experience, program size, and adminis- approaches between different donors may trative procedures. The government needs provide a way forward, provided that to take the lead on this and to maintain the the potentially formidable administrative critical mass of staff within key agencies, difficulties can be overcome. such as the Ministrv of Finance necessary I Increased role and use of technicalpartnerships. to lead the coordination role. In particular, it should ()dvSEPA has already signed cooperative it should (a develop acommunicatagreements with Ministries of Environment strategy to facilitate information flows in 26 countries, which have led to between relevant arms of government and substantial developments in terms of donors; (b) compile a roster of potential research on environmentallinstruments donor partners to include their areas and technology transfer. Other relevant of expertise, strengths and weaknesses, and individual program priorities; and ministries have made similar arrangements. .c estab'sh anNevertheless, the possibilities remain sub- stantial, and this could be an area in which periodic exchanges of views and informa- b tinbtentegvenetaddnr bilateral donors would have a distinct ton betweenvirnenl ises and prors comparative advantage. Areas for beneficial ovith a view to tackling this vast and com- partnerships include (a) further develop- plex agenda aseficietlyndment of environmental instruments such plex agenda as efficiently and effectvely as EIA and Strategic EIA; (b) integrated as possible. river basin management; (c) nature reserve Donors should take more account of the gov- management and protection; (d) sustain- ernmentsfive-year environmentalplanning able agricultural land management; and priorities. The government's five-year (e) general technical training. plans provide very clear guidance on 142 China: Air, Land, and Water Private sector participation. Private sector environmental value include (a) rural devel- participation in environmental manage- opment projects that combine poverty alle- ment and control, which is a new and viation with environmental protection developing area in China, may be of par- and/or sustainable natural resources man- ticular interest to bilateral agencies. In agement, with particular emphasis on grass- addition to development of environmental land areas, hilly and mountainous areas, and infrastructure, the private sector could priority areas under the "Three Regions" make a contribution in education and policy; (b) urban pollution control and envi- training, technology transfer, policy ronmental management, including support formulation, and public awareness. for sustainable development of urban envi- ronmental infrastructure as well as increased Role of NGOs. EnZvir onimenztal NGOs are jlist startng to develop n China. As public private investments in specific investment JZIs o dvelp zn Chzna. Asprojects; (c) biodiversity conservation and interest in environmental issues grows, development of new approaches that inte- their role should increase substantially in the future. This is another area in which foreign donors could play a role through conservation; and (d) development of new foregn onos culdpla a olethrugh approaches to management of wastes from training and technical assistance, broker- aprchstmngentowsesfm training partndtershnical with sxternac, b - small-scale rural enterprises by, for example, ing partnerships with external NGOs, and esalhmnofidtrldvlpet provision of material support. zones with centralized waste collection It goes without saying that all foreign insti- and treatment. tutions interested in the environment and development agenda in China have a role to play in helping to underwrite the huge investments that will be necessary to meet the environmental challenge in China. In reality, their aggregate contribution will always be small in relation to the need. The best use of foreign investment support will be in leveraging benefits beyond the bound- aries of particular projects by supporting innovative ideas and new development con- cepts. Based on the review underlying this report, and taking account of the govern- ment's environmental strategy for the 10th FYP", investments likely to be of particular 7 An Environmental Strategy 143 N ote s 8. Only about 1.5 percent of projected environmental expenditures will be for capacity building, which is far too low given the major training and technical assistance needs, i. It intends to ". . .(achieve) improved environmental particularlv among the lower-level EPBs. performance in pollution control wvhile the deteriorating trend in the ecological environment will be halted." 9. It should be noted, however, that neither option elimi- nates the difficult task of increasing service cost recoveries 2. The concept of sustainable development was mentioned to sustainable levels. There are additional risk premiums in the 9th FYP and is elaborated upon further in the 10th associated with both options, which mav outveigh the FYP, wvhich refers to the need to achieve more harmonious efficiency gains that could theoretically'be achieved. development of population, natural resources, and the environment, although the details of how such an objective 10. For example, in the short term, and given financial will be achieved are unclear. constraints, secondary treatment may be appTopriate in water-shortage areas, but it may not be the optimum 3. For example, by encouraging them to focus thetr solution in some water-rich areas (such as along the regulatory efforts on priority geographical areas and/or Yangtze River and along the coast) that have the capacity industrial sub-sectors, which contribute disproportionately to assimilate screened or only primary treated waste. to local pollution problems. 11. The four main environmental priorities under the 10th 4. The EA system already covers developments that do FYP are (1) improving water pollution control in large river not fall within the ambit of point-source pollution control basins through the promotion of integrated river basin man (such as dams and other large scale construction projects), agement; (2) urban air qualitv management; (3) combating and it wvill probably extend to cover an even wvider range land degradation; and (4) increasing the effectiveness of of devclopments in the future, including land use change, rural environmental protection, with particular emphasis on significant building developments, and certain types of large the management and control of nonpoint pollution sources. scale rural development. There is no necessary reason why EA and pollution permitting have to be tied together. In some jurisdictions, the two processes are administered by completely different agencies-a planning agency and a pollution control agency, for example-often at completely different stages in the development approval process. In others, they are handled together S. The regulatory approach-concentration-based or mass- based-is only one small part of the permitting process. 6. 'WVorld Bank ct al. (2001) provides a comprehensive discussion of the effects of water pricing in the Huai, Hai, and Huang River Basins of Northern China, and illustrates the significant dampening effects that increased water prices can have on effective demand. 7. The World Batlk estienated (World Bank 1997) that investments of around 2 percent of GDP on air and water pollution control through the year 2020 would produce an environmental standard of living (in terms of air and water quality) comparable to that in the United States today. Additional expenditures would be required to address other elements of the environmental agenda. 144 China: Air, Land, and Water Cor mmissioned Studies Yu, X., and W. Li. 2000. "Grassland Degradation." Institste of Geographic Science and Resources, included on the CD-ROM Chinese Academy of Sciences. Grassland Management Division, Livestock and Husbandry Crooks, R.D., and J. Nygard. 2000. "Future Bureau Ministry of Agriculture. Beijing. Environmental Challenges: WTO and Liang, H., M. Zhang, and X. Yu. 2000. "Wetlands Great Western Development." Washington. Degradation." WVorld Wide Fund for Nature China ECON (Center for Economic Analvsis). 2000. Program Office, WVetlands Resources Monitoring "An Enxironme Cost Model" ECON (Center forCenter, State Forestry Administration, Institute "An Enrvironmnental Cost Model" ECON Report eanRsoreItiu, No.16/2000 (Unpublished). Project No.32850. Oslo. of Geographic Science and Resource Institute, Chinese Academy of Sciences. Beijing. Huang, J. 2000. "Erosion and Salinization." Huan, J.2000 "Eoso an Sinzto. Wu, B. 2000. "Land De,radation: Desertification." Chinese Center for Agricultural Policy, Chinese W B Academy of Science. Beijing. 'Chinese Research and Development Center for Academv of Science. Bellmg. Combating Desertification, C'hinese Academy of Nygard, J., and X. Guo. 2001. "Environmental Forestry. Beijing. Management of China's Township and Village Industrial Enterprises." Washington. Other References Pei, X., and D. Li. 2000. "Ecological Protection in China." Policy Research Center for Environment Cited in the Text and Economy of SEPA, Institute of Forest Ecology Environment and Protection, Chinese Agritean. 1998. "China Pork Industry Summary Academv of Forestry. Bclling. ,, Academy of Pores try. Beijing. Report." Paper prepared as part of the China- PRCEE (Policv Research Center for Environment Canada Lean Sxvinc Project. Agriteam Canada and Economy), China National Environmental Consulting Inc., Calgary, Canada. Monitoring Center (CNFMC ), and CRAES Banks, T. 1997. "Land Tenure and Sustainable (Chinese Research Academv of Environmental Agriculture in MIarginal Environments: The Case Sciences). 2001a. "New Countermeasures for t . Pe Air Pllutin Conrol i Chma" Beiing.of Western China." Paper presented at the 41st Air Pollution Control in China." Beijing. . Annual Conference of the Australian Agricultural PRCEE (Policy Research Center for Environment and Resource Economics Society, January 20-25, and Economy), China Nationial Environmental Gold Coast, Australia. MAlonitoring Center (CNEMIC), and CRAES Chen, J. 2000. 'Assessment of Water Pollution (Chinese Research Academy of Environmental Control Strategies: A Case Study For Dianchi Sciences). 2001b. "New Countermeasures for ." Vte Poluio Coto in Chn." Beijing. Lake." Unpublished back-ground paper prepared Water PltoCnoigfor the China Emironmental Sector Update. Shi, P, and J. Xu. 2000. "Deforestation in China." Department of Environmental Science and Chinese Academv of Sciences and Chinese Engineering, Qnghua University. Academy of Agricultural Sciences. Beijing. Bibliography 145 CASS (Chinese Academy of Social Sciences). Huang, J, J. Lin, and S. Rozelle. 1999. "What Will 2000. Chinaˇ Industrial Development Report. Make Chinese Agriculture More Productive?' Beijing: Institute of Industrial Economics, Paper presented to a Conference on Policy Reform Economic Management Publishing House. in China, Stanford University, November 18-20. CID (Center for Internation Development Huang J., F. Ojao, L. Zhang, and S. Rozelle. at Harvard University) 1997. "Improvement 2000. Farm Pesticides, Rice Production, and the of Northern China Grasslands Ecosystems." Environment: A Final Project Report. Center for Unpublished report of Asian Development Chinese Agricultural Policy, Chinese Academy Bank Technical Assistance No. 2156-PRC. of Agricultural Sciences, Beijing, China. Report Asian Development Bank, Manila. prepared for Economy and Environment Program for Southeast Asia (EEPSEA) Ecology and Environment Inc. 1999. "An Integratcd Environmental Management Plan for Hughes, G., and M. Dunleavy 2000. "Why Do the Chao Lake Basin." Unpublished final report Babies and Young Children Die in India? The Role of Asian Development Bank Technical Assistance of the Household Environment" Draft Discussion Project No.2693-PRC. Asian Development Paper. Washington: World Bank. Bank, Manila. Hvdrosult and China Institute of Water Resources Gloyna, E. 1971. Waste Stabilization Ponds. Geneva: and Hydropower Research. 1999. "Strategic Options World Health Organization. for the Water Sector" Draft paper prepared for the Government of the People's Republic of China Guo X. 1999. 'Analysis of Industrial Pollution and the Asian Development Bank under Technical Prevention and Control Strategy of China." Assistance No. 2817-PRC. Paper presented at the Workshop on Creating Incentives for Industrial Firms to Control Jahiel, A.R. 1999. "The Organization of Pollution in China. Mav. Beijing. China. Environmental Protection in China." In R.L. Edmonds, ed., MlanaginSg the Chinese Environment. Hardin, G. 1968. "The Tragedy of the Commons." U.K: Oxford Universitv Press. Science 162:1243-1248. tLi,J. 1998. "China's Agricultural Resource and its Harkness, J. 1999. "Recent Trends in Forestry and Sustainable Development." In Jian Liu and Ol Lu, Conservation of Biodiversitv in China." In R. L. ecds., Grassland Mlanagement and Livestock Production Edmonds, ed., Managing the Chinese Environment. in China. Reports of the Sustainable Agriculture U.K.: Oxford University Press. Working Group, China Council for International He, X., and R. Yang. 1994. Lung Cancer andIndoor Cooperation on Environment and Development. Air Pollution froni CoalBurning. Kunming, China: Beijing: China Environment Science Press. Yunnan Science and Technolog-y Press. .i, B. 1998. "The Grassland Resources of China Heilig, G.K. 1999. Can China Feed Itse pA System and Its Management Strategy." In Challenges and for Evaluation of Policy Options. (CD-ROM Version Opportunitiesfir SustainableAgriculture in China. 1.1) Laxenburg, Austria: International Institute for Reports of the Sustainable Agriculture Working Applied Systems Analysis. An ahhreviated version Group, China Council for International is on the internet at: http://wwv.iiasa.ac.at/ Cooperatnon on Environment and Development. Research/LUC/ChinaFood/index m.htm Beijing: China Environment Science Press. 146 China: Air, Land, and Water Li, G. 1999. "Land Rights, Tenure, and Leaders in Sinton, J.E. and D.G. Friedly. 2000. "What China." Unpublished Ph.D. diss. Food Research goes up: Recent Trends in China's Energy Institute, Stanford Universitv Consumption." LaNvrence Berkeley National Li, K. 1991. "Evaluation of Pesticide Pollution in Laboratory Report No. LBL-44283, Berkeley CA. Henan Province." Henan: Journal of Agricultural Smith, K. R. 1993. "Fuel Combustion, Air University. Vol 25: 4. Pollution Exposure, and Health: The Situation in Developing Countries." Annual Review oJf Lvnden, G., and L.R Oldeman. 1997 "The nrvadEni-otef18526. Assessment of the Status of Human-induced Energy and Invronment 18: 529-66. Soil Degradation in South and Southeast Asia." Stapleton, J., H. Ludwig, and J. Forster. 1999. The Netherlands: United Nations Environment "W"Tater Pollution Management." Unpublished Program (UNEP), Food and Agricultural report prepared for the Ministry of WATater Organization of the United Nations (FAQ), Resources and World Bank. International Soil Reference and Information Centre (ISRIC), Wageningen. SEPA (State Enviroismental Protection Administration). 1998a. China Ecological and! Mlangan, J., and MI. Mangan. 1998. 'A Comparison Env'ironsncntal Situation Report 1989-1 998. of Twvo 1PM Training Strategies in China: The Beijing: China Environmental Science Press. Importance of Concepts of the Rice Ecosvstem for Sustainable Insect Pest Management." Agr7iculture SAEPA (State Environmental Protection andHuman vincs 15:209-221. Administration). 1998h. TheNasm'Listof Natuire Reserves in China. Nature Conservation Morton, N. 1999. "Agrochemical Usage in the Department. Beijing: China Enironmental Asia Region: Second Edition." Unpublished Science Press. report prepared for the Environment and Social Develoment nit, \torldBank,June.SEPA (State Environmental Protection Admini- Development Unit, World Bank, June. stration) 2000. China Environmental Status Murray, Christopher J., and A.D. Lopez. 1996. Report. Beijing: China Environmental Science The Global Buoden of Disease. Cambridge, MIA: Press. Also available at http:/Awwwzhb.gov.cn/ Harvard University' Press. bulletin/99gb.phb3 Nvberg A., and S. Rozelle. 1999. Accelerating Thiers, P. 2000. "China's "Green Food" Label and Chinai Rurnl Tranjbrm7natiol. WVorld Bank, the International Certification Regime for Organic XVashington, D.C. Food: Harmonized Standards and Persistent Structural Contradictions." Sinosphere 3 (3): 8-18. Rozelle, S., J. Huang, S. Husein, and A. Zazucta. 1999. "From Afforestation to Povertyv Alleviation Walsh, Michael P. 2000. "Transportation and the and Natural Forest Mlanagement: An Evaluation Environment in China." C'hina En-viro7nment Serieis, of China's Forest Development and WAforld Bank Issue 3, The Woodrow Wilson Center, Assistance." Unpublished report prepared for the Washington, D.C. Operations Evaluation Department of the World Bank, WAashingtoni, D.C. World Bank. 1992. China: E'ironnc'ta/ Strategy Paper: Vols 1-2. Report No.9669-CHA. Washington, D.C. Bibliography 147 World Bank. 1997. "China's Environment in the Zhou I., R. Sun, L. Gao, Y. Zhang, and G. Vleeck. New Century: Clear XVater, Bluc Skies." In China 1997. Studies on the Relationship between Developnzent 2020: Development Challenges in the iaew Century. Patterns and Ecological Changes in Imnpoverished Washington, D.C. Mountain Areas of China. Taiyuan, Shanxi: Shanxi Econom-ic Press. \'Vorld Bank. 2000. "China: Mass Load Control and Tradable Permits: Efficient Regulation for Industrial Pollution Control in the 21st Century." Report prepared by the Urban Development Other Sources Sector Unit, East Asia and Pacific Region,June. Not Cited in the Text World Bank, UNDP, Leading Group for Poverty Reduction. 2000. "China: Overcoming Rural Ash, R., and R.L. Edmonds. 1998. "China's Povertyv" Rural Development and Natural Land Resources, Environment, and Agricultural Resources Unit, East Asia and Pacific Region, Production." In R. L. Edmonds, ed., Managing Report No. 21105-CHA. Washington, D.C. the Chinese Environment. U.K.: Oxford Universitv Press. World Bank, Sinclair Knight Merz and Egis Consulting, General Institute of WVater Resources CCICED. (China Council for International and lHIydropower Planning and Design, Institute Cooperation on Environment and Development) of Water and Hydropower Research, Institute 1996. "China Country Paper to Combat of Hydrology and Water Resources and Chinese Desertification." China National Committee Research Academy for Environmental Sciences. for the Implementation of the UN Convention 2001. "China: Agenda for Water Sector Strategy to Combat Desertification. China Forestry for North China." Report No. 22040-CHA Publishing House, Bcijing, China. (Draft). Washington, D.C. Choi, S. 2000. "Agenda for China's Urbanization Zhongguo Chengshi Jianshe Tongji Nianbao Policy: Economic Mobility and Integration." (ZCJTN) (China Urban Statistical Yearbook Presentation at China Urban Policy NVorkshop for Urban Construction). 1992-1999. Bcijing: 2000, Washington DC, May 8. Ministry of Construction Publishing H louse. F'erris, R.J, C. \Wu, and J.B. Weincr. 2000. Zhongguo Hluanjing Nianjian (ZHN) (China "Environmental Implications of China's Accession Environmental Yearbook). 1992-99. China to the WTO: Policv and Law considerations." Jnvironosental Yearbook. Beijing: China Sinosphere 3 (3): 5-8. Environmnental Science Press. Ge, F., D. Chao, and D. Li.1997, "Risks and Zhongguo Tongji Nianjian (ZTN) (China Suggestions: The Use of Chemical Pesticides in Statistical Yearbook). 1990-1999. China Statistical China." Plant 7Tchnology and Popularization 1997 (2): Yearbook. Beijing: China Statistics Press. He, K., and C. Cheng. 2000. "Present and Future Zhou, L. 1990. "Economic Development in Pollution from Urban Transport in China." China China's Pastoral Regions: Problemns and Solutions." Environmnent Series Issue 3. The XWoodrow WVilson In John Longporth, ed., The Wool Industry in C(hina. Center, Washington, D.C. Victoria, Australia: Inkata. 148 China: Air, Land, and Water He, X-W. 1997. Resolrce Dynamicls andi1 Exploitation WVang, I., and D. Wheeler. 1996. "Pricing Strategies in China. Beijing: China Science and Industrial Pollution Control in China: An Technology Press. Econometric Analysis of the Levy System." World Bank Policv Research Department Humphrey, C., and D. Sneath. 1999. The End of WAAorking Paper, No. 1644. A'olnzadcnf Societly, State, ainl the Enviroinenet inl Inner Asia. Durham: Dukc University Press. Wheeler, David, S. Dasgupta, and H. Wang. 1999. "Can China Grow and Safeguard its Environment? Li, C., and G. Wienen 1995. The Yak. Bangkok: The Case of Industrial Pollution." California: FAG Rgion-al Office for Asia and Pacific. Stanford Institute for Economic Pollcy Research National Environmental Protection Agency 1996. Working Paper. October. A Report on Environmentaal Qoiality in Chinia 1991-95. WNorld Bank. 1997. "At China's Table: Food Beijing: China Environmental Science Press. Security Options." In k/ina 2020: Development OECD (Organisation for Economic Co-operation Challenges in the Nest C.'enturv. Washington, D.C. and Development) 1999. Environtmcntal Regnire- World Bank. 1997. ('iaa Engaed eitegration lnenthjor Indmztrial Pernzittiog. Vols. 1-3. Paris. with the Glohal Economy. Washington. D.C. SEPA~ (Stare Environmental Protection Wu G., C. Ren, and L. Zhou. 1997. "Study on Administration) 1999. Yearly Rcpor-t oin Poverty Alleviation Since Post-Reform Rural Environmental Statistics. Beijng: China China." Beijing: Rural Development Institute, Environmental Science Press. Chinese Academy of Social Sciences, December. Stern D. I. 1998. "Progress on the Environmental Zhang, Z., K. Deng, and R. Overend, cds. 1999. Kuznets Curve?" Environment anlfd Development Design for Marker-Oriented Development Ecoio7nics3: 175-198. p "Dsg fo-lre-rene ceomn Strategy of Bio-encrgy Technologies in China. Sun, C. 2000. "WTO and Chinesc Forestrv: In Eva/nation ol1Commercialization oJ,Biomass An Outline of Knowledge and Knowledge Gaps." Energy Conversion Tech nologies and their Market- Paper delivered at PACE 2000: Policy Reform Oriented Developsiiient StVategy, report prepared and Environment in China, organized by the jointly by the MIinistry of Agriculture and U.S. Professional Association of China's Environment Department of Energy Bcijing: China (PACE) and sponsored by the World Bank Environmental Science Press. Development Research Group, August 31- September 2, Washington D.C. USEPA (United States Environmental Protection Agency). 2000. EPA Strate,ttgic Plan. USEPA, Report No. 190-R-00-002, September, Washington D.C. WVang, J., D. Cao, C. Ge, and J. Yang. 1998 'A M'vacro-economic Analysis of Industrial Pollution in China." Background paper for a Seminar on Industrial Pollution Control in China, World Bank and State Environmental Protection Agency of China, Washington D.C., September 8. Bibliography 149 CHINA: Air, Land, and Water China: Air, Land, and Water presents the results of a two-year effort to reassess the environmental situation in China. The research was a collaborative effort involving the World Bank, the China State Environmental Protection Administration, and a wide range of other technical and research institutions within China. Based on this research and extensive consultations, the World Bank proposes a wide range of programs and policies that will help improve environmental quality despite new and emerging sources of pollution and challenges to natural resource management. In the past 20 years, China's economic output has consistently grown faster than the rate of degradation. In order to continue this successful trend, China needs to balance environmental protection with continued industrialization, urbanization, and improved agricultural productivity. Written for a broad audience, this book will be of interest to all those con- cerned about environmental quality in Asia. A CD-ROM, which is included, provides background research and additional technical detail. "During the 1990s, China achieved great progress in the fields of envi- ronment protection and economic and social development; how e, X face *ineg complex challenges in the newc . ( Wa~~~~~Ln~adWtr rvde i' nihfladcmrki* Telophoneedamn orbohth Cie: 2tP~ "Fac 262-4comunit 9to8suppo3t937 lnterr*~By