Canada’s prime minister is on his way to Beijing to stoke interest in the country’s oil sands, but China would be wise to keep a safe distance, writes Angela Merriam.

Stephen Harper, Canada’s prime minister, arrives in Beijing tomorrow with a very specific goal: to secure a market for the further exploitation of Canada’s oil sands, a project that he once likened to the building of the Great Wall of China, “only bigger”.

Following widespread environmental protests, the US government two weeks ago denied a permit to the would-be builders of the US$7 billion (44 billion yuan) Keystone XL pipeline: a plan to pump crude oil from Canada’s oil sands, in the south-western province of Alberta, down the length of the United States to refineries in Texas. Now, with that plan scuppered by Canada’s southern neighbour, Harper has a renewed interest in selling oil to Beijing.

Anxieties about local ecological damage and concern about global climate change have driven opposition to the exploitation of Canada’s oil sands for years. The latest development, Canada’s proposed Northern Gateway pipeline, would increase exports of this “dirty” oil to China by over 50 times. But the strong environmental lobby in the United States may mean that Canada is now more willing to face considerable hurdles back home to export to what it hopes to be a more tractable Chinese market.

Canada holds the second-largest oil reserves in the world after Saudi Arabia. But because the oil is trapped in a highly viscous mixture of bitumen, sand and clay, it requires an extraction process much more water and energy-intensive and harmful to local ecology than conventional oil.

Shallower oil sands deposits are harvested by open-pit mining, first cutting down forest and removing an average of four tonnes of sand and soil per barrel of oil, which disturbs the ecology of surrounding areas including bogs, rivers and boreal forest. Deposits buried deep below the surface require an even more environmentally harmful in-situ practice: heating the mixture, usually through steam and oil, until it is fluid enough to be pumped out through a well.

After removal, each barrel of oil requires several barrels of water, which is heated to separate the bitumen from the sand. Contaminated water is discharged into tailings ponds, areas where waste-water is stored to allow solid particles to separate from the liquid. During this whole process, somewhere between 1.5 and four units of water are used for every unit of oil extracted, in addition to recycled water. 

All of this is done before the refining process that is also required for conventional oil. Together, it leaves an indelible blemish, on not only the local landscape, but also the air, water and possibly even local health.

Chinese companies have been investing in Canada’s oil sands since 2005 and, according to the Houston Chronicle, have injected around US$15 billion into Alberta alone over the past 18 months. Canada currently exports only 10,000 barrels of oil per day to China. The Northern Gateway pipeline would increase capacity 525,000 barrels of oil per day.

If approved, the proposed pipeline would take oil-sands crude west from Alberta and pass through mountainous British Columbia (BC), an area recognised for its majestic natural landscapes and home to 50 of Canada’s First Nations or Aboriginal groups. In the north-west coast of BC, the oil would be put on supertankers bound for Asia.

China is considered the biggest potential buyer of this oil as the country seeks to satiate its expanding appetite for energy. The International Energy Agency predicts that Chinese energy demand will soar 75% by 2035, accounting for more than a third of the growth in global consumption.

However, even if China is a willing client, domestic politics will likely mean a slow response from Canada. As in the United States with the Keystone XL pipeline, Canada will have to first assuage environmental opposition, and it will also have to determine how to respond to land claims from many native peoples.

Members of parliament, government bodies and environmental groups, while for the most part being in favour of “responsible oil sands development”, have all been outspoken about the need to implement effective environmental management systems, in particular for land, air and water resources around the oil sands. Many also argue that this is necessary for a predictable, stable investment climate.

The cumulative effects on the area’s watersheds are unknown, but several independent, government-recognised studies (compiled here) reference the need for better water monitoring systems at both the provincial and federal level. Environmentalists also argue that there is no regional plan that sets acceptable limits on oil sands’ ecological disturbance and protects threatened species in the oil sands area.

Opposition to the Gateway pipeline has been buttressed by a December 2011 report to parliament conducted by the Commissioner of the Environment and Sustainable Development (the Canadian government’s primary independent auditor) that prompted serious safety concerns  over the way the government’s energy regulator manages pipelines.

Further opposition to the Gateway is found in a report by the Pembina Institute, an environmental group that advocates responsible oil sands development, which includes a recommendation to reject the proposed pipeline and institute a ban on large oil tanker traffic off British Columbia’s coast. A tanker ban was put forward in a parliamentary bill just last year, and has been publicly supported by all federal parties in Canada with the exception of the Conservative government in power. If passed, such a bill would interfere with the 225 oil supertankers expected to connect Chinese markets to the Gateway pipeline.

Public hearings on the pipeline proposal began in early January and have already attracted over 4,000 people to participate in the consultation process, which will last for 1.5 years. The main issues raised will likely include the environmental impacts of oil sands production, the risk of a pipeline spill or tanker accident at sea and the accuracy of proposed economic benefits. Many participants are members of First Nations groups, there to protect their land claims, a barrier to the proposed pipeline that the Canadian government has already recognised.

Linda Duncan, head of environment policy for Canada’s second most powerful political party, the New Democrats (NDP), told chinadialogue that “our trading partners need to be aware that there will be clear opposition” when it comes to streamlining the Northern Gateway pipeline as Harper is now interested in doing.

Harper’s Conservative party Natural Resources Minister has argued that it is primarily “environmental and other radical groups” that will provide much of the opposition to the Northern Gateway, arguing that the process is being “hijacked” by foreign interests to “undermine Canada’s economy”.

This is not the first time such arguments have been raised against environmentalists, including in China. But Duncan insists the reality is that the Canadian government is “absolutely not responsive” to the democratic demands of Canadians for environmental protection. Environmentalists also argue that, as so many environmental problems transcend national boundaries, they will require an international response.

Indeed, many in the international community are very critical of the current Canadian government’s dismal environmental record. In 2011, a coalition of environmental groups awarded the Canadian government the fifth “fossil of the year” award for its poor record on climate-change action after pulling out of the Kyoto Protocol, the international climate treaty to tackle climate emissions adopted in 1997, and has been the target of repeated criticism by Canadian green groups for its poor environmental policy.

Canada is already one of the highest per-capita greenhouse-gas emitters in the world. The oil sands currently only represent 6.5% of the country’s total emissions, but the Pembina Institute estimates that future increases are expected to come “almost solely” from oil sands, and states that “efforts to constrain these emissions is out of step with Canada’s climate commitments.”

It is also clear that oil sands are more carbon intensive than conventional oil, although how much more depends on the measurement technique. Some calculate emissions disparities from extraction through to refining (“well to tank”), where oil sands oil is estimated to be three to five times more carbon intensive than conventional oil.But in a “well to wheels” calculation, which includes emissions all the way to the cars’ exhaust pipes, oil sands are only 5% to 15% dirtier, according to Cambridge Energy Research Associates,an environmental consultancy group. In other words, most of the carbon emissions still come from burning the oil, not extracting it.

But building infrastructure like oil pipelines creates a “lock-in” effect, which according to a study by the International Energy Agency, would set out a high-carbon energy growth path for decades to come. 

“Are we going to get serious about alternative energy, or are we going to go down the unconventional-oil track?” asked Simon Dyer of the Pembina Institute, cited in National Geographic. “The fact that we're willing to move four tonnes of earth for a single barrel really shows that the world is running out of easy oil.”

Environmentalists argue the Gateway pipeline is a path toward further global reliance on fossil fuels. Prioritising oil over renewable energy will ultimately carry a heavy environmental price, and it is future generations that will pay.

Canada will likely remain eager to diversify its trade basket through increasing cooperation with China. But if China is interested in importing more Canadian crude oil, it must be prepared to deal with the political and environmental realities of its partner. If there’s a message to be taken from Keystone XL, it’s that trading partners may underestimate environmental voices – and do so at their own peril. 

Angela Merriam is a Canadian environmentalist and educator based in Beijing. She currently works with the local NGO Green Earth Volunteers and teaches a class on social change in China through CET Academic Programs.   

 Homepage image by Greenpeace/ Jiri Rezac

Crisis on the financial markets has brought investors flocking to agricultural assets. But the risks may help drive a more sustainable approach, writes Alejandro Litovsky.

How agricultural land is owned, what is grown on it, and by whom, will probably determine much of the next century’s politics, profits and, possibly, revolutions.

Western investors tend to see land and commodity assets as a more secure alternative to the volatile stock and bond markets, and an opportunity to tap into lucrative biofuel and forestry markets. But for countries like Saudi Arabia, India and China, where water scarcity compromises food production, the acquisition of farmland to grow and import food has come to be seen as a matter of national security.

Both of these trends are resulting in large-scale acquisitions of land in regions where the soil is still fertile and water still available. In sub-Saharan Africa alone, in just 10 years, over 100 million hectares have been leased to investors for agricultural development by host governments often accused of ignoring the interests of communities living on the land. In places like Sudan, Mozambique, and Ethiopia, land deals are raising widespread concerns over forced evictions and social vulnerability.

Significantly, managing soil erosion, ensuring human security and keeping within ecological limits, especially regarding water, are risks to the long-term value of the land, the portfolios of investors and the economic competitiveness of host countries. As global agribusinesses face growing social and environmental pressures, investors seeking to manage the resulting risks will require an innovative approach to risk management: including ecological limits and human security in the agricultural equation.

Large-scale farming still operates in the bygone world of the Green Revolution, relying on the heavy use of chemicals and intensive, mono-crop cultivation as a means to boost agricultural output. Instead, what might a transition to a Green Economy model look like?

Just as large carmakers have turned to electric cars, large agribusiness firms may have to consider turning to organic farming to ensure the long-term value and resilience of the soil. Just as new business models benefit from thinking in terms of distributed networks, such as car-sharing schemes in large cities, so too agricultural models can better integrate networks of smallholder farmers into a radical rethink of their business models, to build the social resilience that is needed to cope with a growing population. Incentives for pursuing these innovations are more likely to arise from fully understanding the risk challenges involved in the current model than from appeals to global sustainability.

For example, investors are beginning to understand the extent to which soil erosion challenges the long-term productivity of agricultural investments. For investor Jeremy Grantham, the co-founder of GMO, an investment fund with US$93 billion in assets under management, soil erosion figures among the main concerns on commodities investments. “In Australia,” he writes in a quarterly analysis, “where records go back into the nineteenth century, it is also clear that more than 70% of arable land has been degraded to some considerable degree. For the planet as a whole, soil losses are certainly higher than replacement, and for some areas, notably in Africa, they are disastrously higher.”

In the United States, to cite another example, an exponential growth in pests that have effectively adapted to pesticides, including herbicides like glyphosate, is leaving US farmers either unable to shoulder the costs of additional chemicals or having to experiment with untested chemical cocktails that are likely to increase the toxicity of water supplies and the soil. Investment analysts have signalled that the growing resistance of pests to chemical pesticides is a cause for concern for investors in agrochemical companies.

Ecological limits are forcing farmers to acknowledge the importance that a healthy environment has on long-term agricultural productivity. After 30 years of scientific research – the longest-running scientific comparison between organic and conventional agriculture – the Rodale Institute, in the United States, found that organic farming, although providing lower yields in the first years, in the long term outperforms conventional chemical farming in terms of crop yields, sustainability and profit.

Part of this paradigm shift means viewing the fertility of the soil and the diversity of supporting ecosystems as “natural assets” that must be taken into account in the agricultural economic equation. In sub-Saharan Africa, where farmers are either too poor to afford chemical options or the distribution models are not sufficiently developed, natural ways of fixing nitrogen into the soil are driving agricultural innovation which can offer considerable insight to more developed nations.

One example is “fertiliser tree systems”: by planting certain types of nitrogen-fixing trees alongside crops, farmers have managed to boost crop fertility, while increasing the biological diversity needed to face climate changes, such as more frequent droughts. In making the transition from Green Revolution to Green Economy, investors in farmland and agribusiness must start to think seriously about investing in resilience.

Given the typically low levels of government accountability in sub-Saharan Africa, land investments, even if entered into by well-meaning investors, can have dire consequences for local communities. The unintended risks to human security may be significant, whether because these communities are forcibly evicted from the public lands they have cultivated, often without formal rights, for generations, or because new irrigation schemes jeopardise water availability for small-scale subsistence farming.

The growing social instability and vulnerability created by this booming industry is growing in visibility. Media spotlights on particular projects, for example a biofuel development in Tanzania, have raised alarm – and show just how material these reputational and political risks are for investors and companies.

Taking human security into account can be a good strategy for farmland investments, even if it means going beyond the investor’s legal responsibility, especially where governments cannot be relied upon to play their part. Ethiopia, for example, reportedly offered to lease three million hectares to foreign investors for agricultural production at a time when 2.8 million Ethiopians are suffering from hunger. While such investment deals may boost food or commodity exports, human security concerns – and the likely growth of land-related conflicts – should find their way to the top of the business and investment agenda.

A proactive approach is needed to ensure the transparency of investment deals and bridge the gap between formal and informal land rights held by communities. History shows that, as with other areas where governments have been slow or sloppy to respond – see, for example, Apple’s recent standoff over the environmental footprint of its supply chain in China – the private sector will be held to account. This approach should include ways of involving and benefiting local communities, not only through their informed and prior consent to these deals, but also with options that build their capacity and livelihood to participate in development.

The situation in Mali, in west Africa, illustrates the challenges that lie ahead. A recent study aggregated all the new land deals entered into by the government of Mali and found that, if they are all fully developed, it is likely that there won’t be enough water in the Niger River to irrigate them. The availability of water and water rights that come with land rights will be the main point of contention.

Two large investments there are said to require more than half of the critical reserve of water for the dry season, and have exclusivity of water service in emergency drought situations. Some of the new contracts take water rights for granted. A large irrigation canal is being built to cater for the needs of industrial-scale agriculture by Libyan investors; it is said to affect the water supply for more than 90,000 hectares of land used by small-holder farms for subsistence, as well as cutting routes of passage for livestock.

Climate change and recurrent droughts, which are difficult to predict, are likely to aggravate the situation. Land contracts that give preferential access to water resources, or fail to consider water rights, should be a point of concern for investors – as should the overall institutional capacity of government agencies to manage the water availability of a region.

Ecological limits also create unintended consequences. For example, since 2004, Saudi Arabia has leased more than 376,000 hectares from the Sudanese government to grow rice, a water-intensive crop. Weak water regulation has forced the Sudanese government to halt its wheat production because of water scarcity, which in turn has reduced grain supplies and increased its price on the local market.

Therefore, a fundamental shift must take place in how investors and governments consider the long-term value of the land. Everyone’s interests are undermined by surpassing ecological limits, allowing soil erosion and disregarding human rights when it comes to land issues.

Progress depends on host governments being more accountable and transparent in managing land issues. This is easier said than done, so it can’t just be left to governments to figure out. A forthcoming report by the Earth Security Initiative, The Land Security Agenda, identifies a series of proposals for investors, NGOs and other stakeholders to collaborate on bringing these issues into the day-to-day decision-making of governments and financial markets.

Pressure from civil society for greater transparency is increasing. A research partnership led by the International Land Coalition aims to create the world’s largest database on large-scale land investments. Initial steps are also being taken through the Principles for Responsible Investment’s (PRI) Farmland Working Group, where six pension funds are pooling their combined US$1.3 trillion (8.2 trillion yuan) in assets to explore how to drive more responsible investments. Considerable opportunities exist for cooperation among these stakeholders; precisely how investors implement transparency is still undecided.

Obtaining the “prior and informed consent” from local communities for large-scale investments is becoming a central demand from civil society. Framing this in terms of compliance is important, but more important from a business perspective will be to create more inclusive value chains that offer local communities participation in development. Cooperatives can help aggregate and coordinate supply. Where technical assistance is needed to help these communities up their game, development agencies are likely to step in to better direct the investments that agencies are already doing in this area.

With global financial markets in turmoil, investors regard land assets as a safe bet. This may not necessarily be the case. But incorporating soil resilience, human security and ecological limits into the equation is essential to fully understand what lies ahead, and managing these risks offers an extraordinary opportunity to move the sustainability agenda forward. Everyone has a stake in trying to make the land agenda work in the long-term.

Alejandro Litovsky is founder and director of the Earth Security Initiative. 

Homepage image by CGIAR Climate

Chinese investments must bring lasting benefit to Africa’s people in the form of development and better governance. Otherwise the relationship risks souring, warns René N’Guettia Kouassi.

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China has become an indispensable partner in Africa. The inroads it has made have reached every corner of the African economy and society. No African country falls outside the scope of Chinese cooperation that now forms part of everyday African life.

Beijing’s reach is characterised by the brand new headquarters of the African Union Commission in the Ethiopian capital, Addis Ababa. This huge multi-storey building with a 2,550-seat conference centre – a symbolic place where Africa’s major strategic decisions will be made, including those affecting sovereignty – is a gift from China. Who among Africa’s many global partners can compete with such largesse? Any opinion poll of young Africans would probably show that almost all would opt to strengthen cooperation with China, and that they would place their country’s partnerships with China above all others.

But will all this African goodwill towards China stand the test of time? It’s a question that leads to others: what should China do to maintain Africa’s confidence? What should Africa be doing to take full advantage of its cooperation with China? And also, what should be done to ensure this cooperation is not rejected by future generations of Africans?

We at the African Union Commission believe that China has every interest in hanging on to the admiration it has been gaining throughout Africa. To do this, China must make sure its cooperation with Africa is a win-win relationship. In foreign relations, philanthropy does not exist; what matters is national interests, and China’s ties with Africa follow this basic logic. By laying the foundations for win-win cooperation, China can contribute greatly to Africa’s development, and it is that which is most likely to attract the sympathy of Africans. 

China needs to innovate in its relations with Africa by helping the continent overcome poverty and misery; by teaching Africa to fish rather than by giving it fish, and by encouraging African countries’ integration into the global economy so that the continent can play its part in managing world affairs. Having itself now become a key global player, China must help its African friends enjoy the virtues of good governance. The principle of non-interference that guides China’s cooperation with Africa should not stop it from taking this historic step, because supporting moves toward a global role for Africa could help expand China’s credit among Africans. In other words, Chinese cooperation must help Africa to reduce substantially its dependence on the rest of the world.

China can help Africa to look after itself by becoming self-sufficient in food, by hastening its industrialisation and by coming up with ways of financing its own development. African countries need China’s assistance to put in place their own education and training agendas and eventually, to play their part in the management of world affairs. It’s a contribution from which China and Africa would both benefit, and would certainly give China and the Chinese people a lasting place in the hearts of Africans. 

Chinese aid to Africa is already immense, reaching into every sector. And it is highly appreciated by Africans because of its visibility and its impact on development. China’s contribution to redressing African countries’ lack of physical infrastructure has marked an important new stage in their economic growth.

But even so, a vital question needs to be answered: is Chinese aid being used efficiently? Put another way, is Africa making use of its strategic cooperation with China to once and for all escape the dead end of poverty and misery and achieve an economic breakthrough? Will future generations blame China for delaying their continent’s development, just as present generations blame Europe? 

If tomorrow’s Africans are not to reject Chinese cooperation, it is vital that today’s African leaders match Chinese aid with good political and economic governance. Heaven helps those who help themselves, they say, and China is certainly helping Africa. But it cannot take Africa’s place in allocating resources and adopting policies that accelerate its economic development.

For its part, Africa needs a common strategy to create a long-term win-win partnership with China, emphasising multilateral ties rather than the current bilateral approaches that are extremely burdensome for most African countries. In the absence of such a strategy, and without the efficient use of Chinese aid, the Africa of tomorrow is likely to witness the downside of the Chinese-African partnership. 

That said, China has accumulated an enormous capital of trust with Africa and its people. To preserve that capital, China needs to become more innovative in its cooperation, and must find ways of doing so that do not provoke social instability because of job losses, and that do not risk extinguishing African ingenuity. 

As for Africa, we Africans must take all necessary steps to make our cooperation with China a real opportunity for growth and development. It is also vital to understand that today’s Africans feel a huge need for democracy, human rights and freedom of expression. And tomorrow’s generations of Africans will be even more demanding because of accelerating globalisation.

René N'Guettia Kouassi is director of the economic affairs department at the African Union Commission.

This article was first published in the 2011 autumn issue of Europe’s World.  

Homepage image by  Kleinz1 

Chinese companies are facing problems on the ground in Africa as they ignore local politics and stir hostilities. Wang Xiaojuan opens a two-part article.

The importance of Africa to China is easily understood: it offers a huge market, rich supplies of natural resources and raw materials and cheap labour. Thirty percent of China’s oil imports come from Africa, and Chinese investment in the continent is growing at a rate of 40% a year.

Africa also offers China the chance to upgrade and relocate industry. The enormous demand for new infrastructure on the African continent is allowing transfer of significant over-capacity in China’s steel and concrete industries. At the same time, China is supplying capital for African development. And the arrival of Chinese firms presents an alternative to the old colonial nations – giving African nations more room to negotiate.

These mutual benefits have led to a blossoming relationship. Since 2000, Sino-African trade has grown by an average of 32% a year; in 2009, China replaced the United States as Africa’s largest trading partner; at Luanda, Angola’s capital and Africa’s busiest port, Chinese tankers load up to a million barrels of oil a day; in the Democratic Republic of the Congo, China has invested US$6 billion (38 billion yuan) in an “infrastructure for resources” deal; in Nigeria and five other nations, China is actively creating and promoting economic cooperation zones.

The entire continent can see what an army of Chinese engineers has built: from new bridges, roads, dams, railways and national stadiums, to ordinary projects such as residential buildings. China’s arrival is transforming African nations, and their relationships with each other.

But as China has accelerated its expansion into overseas markets, its every move in Africa has attracted global scrutiny and China’s significance for the continent is ever more widely discussed. As a newly rich, emerging nation, China is the leading partner in bilateral economic relations. And as China has always had friendly relations with African nations, it does not struggle as the west does under the burdens of colonial history. Thus, China believes it holds the moral high-ground in its participation in Africa’s development.

But that moral advantage does not automatically turn into favourable public opinion – China’s participation in Africa has come in for both praise and criticism.

On one hand, Chinese and African governments proclaim the innumerable achievements of their partnership and the south-south cooperation model. On the other, the international community, local media, academics and NGOs are wary of China’s influence. Some publicly accuse China of acting irresponsibly, pointing to its environmental performance, low labour standards and lack of transparency.

Working overseas has put Chinese companies to the test over compliance issues. And Chinese government policy on overseas investment has become a matter of global politics.

China’s domestic economy has seen 30 years of near double digit GDP growth. Africa has a huge market for cheap goods. In order to climb the value chain and outsource low value-added industries to poorer countries, like African nations, the Chinese government has encouraged suitable Chinese firms to expand overseas. The idea is for them to march into international markets using China’s huge foreign exchange reserves, in the hope that these reserves do not lose value and help Chinese firms to grow abroad.

Armed with plenty of cash and the experience gained through China’s rapid rise, these companies go in full of confidence, believing they can soon bring the warm winds of modernisation to the undeveloped and untamed land of Africa. China’s yesterday will become Africa’s tomorrow, they think, and Africa offers nothing but opportunity.

Chinese firms do have clear advantages – sufficient investment funds, policy support from their government, cheap Chinese labour and efficient working methods. But Chinese companies still have much to learn about soft power. Africa is not barbarian territory waiting to be developed: it has ancient cultures and traditions. It has won independence from colonial rule and claimed its place as its own, politically and economically distinct, continent. How many Chinese firms going into Africa have done their homework and really understand the countries they will work in?

Speaking at the 5th Chinese Cross-Border Investment Seminar Kong Linglong, head of the department of foreign capital and overseas investment at the National Reform and Development Commission, China’s top economic planner, explained that Chinese firms’ overseas investment is split equally between acquisitions and greenfield investment. Fifty percent of projects are classed as large, with investment of over 100 million yuan (US$15.8 million), and 80% are in the energy and resources sector.

There are different actors doing business in Africa, ranging from central state-owned enterprises, provincial state-owned enterprises and private companies to joint-venture companies, among which 80% of overseas investment comes from central state-owned enterprises. But only 50% of Chinese ventures overseas succeed. And figures from consultant McKinsey show that in the last 20 years, 67% of overseas acquisitions by Chinese companies failed, either going bankrupt or making no profit, far exceeding the average global rate of around 50%.

Since gaining independence, most African countries have built multi-party democratic regimes: ruling and opposition parties compete to govern; power is balanced between government, parliament and the judiciary; federal and state governments vie for decision-making powers. State constitutions endow citizens with the rights of association, publication and freedom of speech. In addition, there are other domestic laws or regulations to protect citizens' rights to establish labour unions and guarantee a minimum wage.

Chinese companies learn at home that you need to maintain good relations only with government, and rely on central and local governments to deal with the interest of different stakeholders and ensure everything goes smoothly. They naturally apply that lesson to their work in Africa: even when faced with criticism from other political parties, they still hide behind their good relations with the local government. They believe that the government will speak on their behalf and make sure everything is “fair”.

But not all silence is golden. Often, Chinese companies’ lack of transparency and open communication simply gives opposition parties campaigning space. Political groups in southern Africa often organise anti-China demonstrations, and there has been fierce political debate in southern Rwanda over whether or not China is exploiting the region. Even Tanzania, a nation friendly to China and with a similar political system, has seen anti-China sentiment ignited by Chinese companies undercutting prices and monopolising markets, bankrupting local merchants.

In Zambia’s elections in 2008, the main opposition party, the Patriotic Front, and its leader Michael Sata earned a significant amount of support with an anti-China stance, prompting the Chinese ambassador to say that, if Sata won the election, China may withdraw its investments, including China Nonferrous Metal Mining’s US$400 million (2.5 billion yuan) stake in the Luanshya copper mine. (Sata has since become Zambia’s president and has softened his voice towards China.)

Even the early stages of a resource development project can be very expensive. If China wants to ensure stable output and long-term profit, it needs to consider the political risks in host nations. War, political unrest, deterioration of bilateral relations – any one of these could result in failure and even threaten the safety of Chinese workers.

In February this year, the outbreak of civil war in Libya caught Chinese companies off guard. Although the safe transfer of 30,000 Chinese citizens proved the country’s ability to carry out a long-distance evacuation, a fortune in assets was lost. A spokesperson from China’s Ministry of Commerce said that Chinese companies were working on 50 construction projects in Libya, with contracts worth a total of US$18.8 billion (119 billion yuan). Four listed central state-owned enterprises – China Railway Construction Corp, China Gezhouba, the China Metallurgic Group and China State Construction – announced cessation of work on contracts worth 41.035 billion yuan (US$6.5 billion).

Libya teaches us that China’s economic interests in a nation are closely linked to that nation’s politics. Chinese firms eager to work overseas need to learn that lesson and work to minimise the risks. 

Wang Xiaojuan is a project manager at the Heinrich Böll Stiftung China office.

NEXT: a more sophisticated approach to development

Homepage image from whenchinametafrica.com

To meet its duties as a rising power, China must evolve a more nuanced approach to international development – just putting up the cash is not enough, concludes Wang Xiaojuan.

As Chinese companies have continued to expand overseas, their projects in Africa have come in for frequent criticism from international and local NGOs. Complaints include a lack of concern for the local environment, poor transparency in major projects and a failure to protect labour rights. 

Many Chinese firms do not take these criticisms seriously, even finding them ridiculous: what are countries with 80% poverty rates and average lifespan of less than 50 years doing talking about environmental protection and transparency? For these African countries, economic growth should be the most important consideration, they argue, and Chinese investments will help boost GDP.

China’s understanding of development comes from its own experiences, and is rooted in an outdated view of development economics. However, in international development practice, we find more and more that development is multi-dimensional, and involves changes in social structure, the accumulation of economic growth, the reduction of inequality and more.

There has been an on-going rethink of what true development is. Development of what? And development for whom? Traditional development theory overlooks society and people, particularly the wishes of the vulnerable, the marginalised and the poor. Now the majority of actors take a multi-dimensional view of development: simple economic growth does not necessarily translate into development. Quality development and rapid economic growth require resolution of issues around education, social justice, employment and systems of distribution.

Africa provides many examples of economic growth failing to benefit ordinary people – you only have to look to Africa's major oil-exporting nations. In these countries, oil exports increase GDP, but social development indicators do not rise correspondingly, and some even fall. For example, while the International Monetary Fund expects Angola to be one of the fastest-growing countries economically in 2012, 70% of Angola’s population live on less than US$2 per day, infant mortality rates stand at about 160 per 1,000 live births and more than 50% of the population lack access to improved water sources.

If China is to enjoy a positive investment environment in Africa over the long-term and earn sustainable returns, then the African people must benefit from Sino-African economic cooperation.

The reputation, image and profits of Chinese firms depend not just on their contribution to GDP but, more, on creating local employment, boosting social welfare and improving the overall business environment. And so Chinese firms need to manage the relationship between commercial and developmental interests. 

When it comes to certain, highly controversial, projects, Chinese firms must also fully respect and consider the rights of local people to life and development. In large dam construction, for example, they should take into account relocation needs, environmental management and cross-border river sharing and, in certain infrastructure schemes, consider land rights and labour issues.

China is already the world leader in dam construction, with one company alone – Sinohydro – owning 60% of the world’s dam-building business. The Merowe dam in Sudan, the Bui dam in Ghana, the Chafe Gorge Lower Dam in Zambia and the Gibe III dam in Ethiopia, which have been scrutinised by media and African and international NGOs in recent years, these are all Chinese-built and most are funded by loans from Chinese policy banks. Hence, banks should urge companies to carry out due diligence when making their loans. When firms are taking decisions that affect local interests, those interested parties need to be invited to participate to ensure decisions are transparent and fair.

Public participation in development projects is a new lesson for Chinese companies “going out”, because they do not gain relevant experience at home. Multi-stakeholder discussion requires communication skills, time and relevant professional knowledge. For example, resettlement work combines sociological, anthropological and economic knowledge, which is a systematic process. A multi-stakeholder approach to some extent may lower project speed and increase operation costs, but it can ensure to a large extent the comprehensive benefits of economic development projects.

Chinese companies need to abandon the perception that “growth is always at the cost of a small number of people” and realise their investment benefits cannot be guaranteed if they simply transplant China’s domestic-investment model into Africa.

It’s not just western and African media that complain that it’s hard to talk to Chinese companies – researchers have the same problem. Even Chinese academics and journalists struggle to make contact with the business world, often relying on personal connections to get interviews. When faced with questions, Chinese companies act defensively: “We bring development funds and the technology Africa needs,” goes a standard answer. “We provide all these jobs, we just work and don’t worry about politics – why do we get criticised rather than praised?”

These operators can’t imagine that local communities, the media and NGOs are concerned about anything other than job creation – that they also care about welfare issue, like worker safety, training, healthcare and minimum wage provision. Chinese firms either ignore questions around these topics, or provide irrelevant information.

In fact, it's unwise not to respond to doubts from outside. Closing doors won’t better protect Chinese companies. In fact, it costs them an opportunity to explain and even defend themselves, which ultimately deepens misunderstandings. Chinese companies have to learn how better to communicate and establish relevant mechanisms. This includes building independent compliance, CSR and public relations departments, publicising the contacts of these department and dealing with requests in a timely fashion.

Growth always comes at cost. If Chinese companies want to participate in the globalisation process with more confidence, there are lessons they need to learn and rules they need to follow. China says it wants to shift its economic growth model – but in fact what needs to change first is its crude and inflexible view of development.

There are numerous reasons for international objections to the actions of Chinese firms abroad. Clearly, problems exist, rooted not only in the lack of experience and non-compliance of Chinese enterprises, but also in failure of supervision and governance by host governments. However, we cannot ignore the misleading media coverage that contributes to the scepticism and criticism from the west.

Nonetheless, China must fulfil its responsibilities as an investor. Believing that you can simply put up the money and ignore the impacts your investments will have on communities is to shirk those responsibilities. It is an approach that will help neither the long-term prospects of the companies in question nor the development of Sino-African relations.  

Anything a Chinese firm does in Africa will be seen as representative of China as a whole. Anything a Chinese immigrant does in Africa will be seen as representative of all Chinese people. It is very much in the interests of the Chinese government to bolster supervision and management of Chinese firms working abroad.

Therefore, it should set standards for Chinese companies going overseas so that they fulfil their environmental and social responsibilities. It should develop mechanisms for compliance; urge companies to increase transparency in investment deals and other operational decisions; and help companies better communicate with local stakeholders.

China’s investments in Africa should create more space for Chinese diplomacy, rather than, as the international community would have it, Chinese overseas investment hijacking China's diplomacy.

Only when you play by the rules can you take the lead. Chinese firms need to play by local rules, respecting and considering other interested parties, better understanding and integrating into host societies – and making this part of their long-term growth strategy. Taking that path is a rational choice that will strengthen China’s soft power and embody its role as a responsible nation. Only then will China’s presence and participation in Africa be fitting of a major power.

Wang Xiaojuan is a project manager at the Heinrich BÖll Stiftung China office.

Part one: hostilities on the ground

Homepage image by Mike DuBose shows a child scavenging for food near Malanje, Angola.

State-owned companies are pushing for a “Great Leap Forward” in dam building. But Chinese NGOs can hold them to account, environmentalist Yu Xiaogang tells Isabel Hilton.

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Yu Xiaogang is director of the NGO Green Watershed, based in the city of Kunming, in south-west China. A veteran environmentalist and past winner of the Goldman Prize, an award for grassroots green campaigners, he has been at the forefront of China’s debate on dam building. At a recent meeting in Delhi, Yu Xiaogang sat down with Isabel Hilton to explain his concerns about powerful special interest groups in China who, he claims, exercise undue influence on government policy.

Isabel Hilton: Who are these special interest groups and why are you concerned?

Yu Xiaogang: One characteristic is their monopoly. The second is the combination of their power and capital. China is in a transition period: in the state-planned economy, every big company or industry was under government control. Then we changed to the market economy, but big state-owned enterprises (SOEs) still have power and they now get the advantages of the market economy. So they use their influence with the government to ensure they are allocated the assets; then they can get resources from the stock or the bond markets.

The state benefits from this in several ways: through taxation, or because such companies listen to the government most of the time. The government can dominate the market economy because its share in some industries is much bigger than in others. In energy for instance, it is as much as 70%. 

IH: What impact does this have on dam building in China?

YX: The government can dominate some very critical industries, like railways, air transport, power industries and telecommunications. They like to control them, but this also creates contradictions with their ideology or the targets that the Chinese government is pursuing – targets such as a just and harmonious society. These monopoly companies go in the opposite direction.

The Chinese government wants to improve policy and reach “political civilisation”, but we think that the SOE monopolies have a triple role: they are company owners; they are decision makers (or at least they can capture the decision makers); and they also manage the market.  So they control everything and that’s not good for the free market or “political civilisation”. Also it creates conflict with the people, because this combination of power and capital often works against the people’s interests, against democracy and against public participation.   

IH: Civil society managed to bring a halt to dam building under the 11th Five-Year Plan. In the 12th Five-Year Plan, there seems to be a “Great Leap Forward” in dam building in preparation. Will civil society be able to mobilise again?

YX:  We have realised that the 12th Five-Year Plan was influenced by these interest groups. Before this plan was finalised, we observed a lot of academics, official insiders, like the National Energy Administration, decision-makers and think-tanks combined saying that NGOs and civil society have misled the leaders under the 11th Five-Year Plan and that hydropower’s environmental and social impact was not negative. They portrayed it as a conspiracy between the international community and civil society to attack hydropower development. Also they said that because of the frozen period during the 11th Five-Year Plan, we now need a “Great Leap Forward” in dam building.

We can see very clearly that this advocacy influenced the decision-makers and we also think that NGOs can do something. I think it’s very important to deconstruct this discourse, because Chinese government decision-making is often influenced by this kind of discourse. NGOs should debate it. The special interest groups often operate behind the curtain – people don’t know about it. People think that SOEs are better than private companies because at least they operate in the interests of the taxpayer. People don’t know that they are destroying the economy and the political system and hurting the taxpayers’ interests. So we need to tell people about this. 

Why do these interest groups not pay attention to the environmental and social impacts? Because they want the maximum profit. They don’t care about the impacts. That’s why I think that civil society should look at what interests there are behind the curtain; so we can understand why they don’t listen to us and how they capture the government to make decisions that favour special interest groups. NGOs can investigate this and tell people the truth. Then people can perhaps find a solution individually, or campaign on projects.

IH: What would your solution be?

YX: There are many possible solutions. Some are more political. For example, some people say that these SOEs should make a profit. Many don’t. They may pay their taxes but they don’t share their profits. The taxpayer is the owner and should be recognised as such. The government should represent the people’s view.

[First], the SOEs should make their profits transparent and share them with social security funds or foundations for poverty alleviation or some other public purpose. Second, the government should not be too dependent on them. For example, in energy saving and emissions reductions, we have hundreds of solutions and methods. We need to pay attention and invest, to develop small and medium enterprises (SMEs) that can solve this. We have many demand-side management opportunities with small technologies. There are two general approaches: restraint and counterbalancing with an increase in SMEs. The third element is checking and monitoring. We should train the SOEs to follow market rules and reduce their monopoly.

IH: Would you like to see a halt to the kind of dam building that is proposed in the 12th Five Year Plan?

YX: Of course. We think that in the last 60 years, China has built so many dams already. Very big dams were constructed, especially in the last decade. Now the remaining rivers are in seismic-risk areas, so building in these areas will be very risky to people downstream and we must assess the environmental impact. We think we must assess the full cost first.

They may say that we need energy, but we should also rationalise energy consumption. This needs investment and education and the government to change its orientation. In this way, the people can save energy and reduce consumption. Only this way can we stop the dam construction. First, tell the people the risks and then have the government pay attention to the many small approaches that can solve the problem.

Isabel Hilton is editor of chinadialogue 

Photo courtesy of Tom Dusenbery

An incendiary Wall Street Journal article has accused Beijing of trying to dupe the world with a smokescreen carbon levy. The author is plain wrong, write Alvin Lin and Yang Fuqiang.

The news that China may very soon introduce a carbon tax has caused a stir. Of the many articles to address the topic, John Lee’s Wall Street Journal commentary “China’s Fake Carbon Tax”, published earlier this month, is particularly striking. In this confusing diatribe, Lee puts forward his personal theories about China’s motives. But these have no foundation in reality.

Why is China preparing to introduce a carbon tax? Taxing carbon is an effective market-based method for cutting carbon-dioxide emissions and tackling climate change. Many countries, both developed and developing, are considering a carbon tax, while some have already introduced one. The details of the tax differ from place to place, but the essential aim is the same: reducing carbon emissions; speeding up economic transition; promoting energy conservation and renewable-energy development; and mobilising industry enthusiasm for green measures.

At the same time as tackling climate change, carbon taxes can bring wider benefits to society. For example, measures to cut carbon emissions may also limit the release of other pollutants, while carbon funds can be used to help poor families buy energy-saving domestic appliances.

China’s approach to developing a carbon tax has been earnest and serious. We are honoured to have participated in the Chinese government’s research programme. In mid-2007, the Ministry of Finance formally listed a carbon tax in its revenue research plan. The government, bringing together top-level research units and the brightest minds, has since undertaken years of research on the topic. Key participating organisations have included the Institute of Fiscal Science, the Institute of Environmental Planning, the Energy Development and Reform Commission and Tsinghua University, among others.

Any carbon tax scheme introduced in China must properly account for the country’s phase of development, the impacts on different industries and consumers and the need to minimise negative impacts. The government must also choose the most favourable time for implementation. Certainly, China’s carbon tax will have its own characteristics and will not follow the same model used in developed countries.

However, Lee argues that the timing of recent announcements about the introduction of a carbon tax in China is suspicious. Since the economic crisis has meant a slowing in China’s economic growth, he concludes that the Chinese government must have hidden motives to introduce the tax. “Don’t be fooled by China’s actions,” he writes. “Beijing’s proposal is little more than clever political theatre, mixed with passing the economic buck.” From this starting point he launches an attack on China’s low-carbon plans. 

China and other developing countries have made suitable Nationally Appropriate Mitigation Actions (NAMA), setting out their commitments to reducing greenhouse-gas emissions. Where is the theatre in that? Compare this to the agreement reached at the 2009 summit in Copenhagen, when many western countries undertook to provide US$100 billion by 2020 to help developing countries deal with climate change. Normal 0 7.8 ? 0 2 false false false EN-US ZH-CN X-NONE /* Style Definitions */ table.MsoNormalTable { mso-style-parent:""; line-height:115%; font-size:10.5pt;"Calibri","sans-serif"; mso-bidi-"Times New Roman";} It is critical that developed countries step up to the plate in the post-2012 period and find ways to mobilise the money they have committed to provide to developing countries.

Compared to many developed countries, developing-world nations tend to be very bad at public relations. According to international climate-change agreements, every country must report its emission-reduction actions and achievements. Between 2005 and 2010, during the 11th Five-Year Plan period, China’s efforts led to a carbon-emissions saving of about 1.5 billion tonnes – the world’s single biggest national emissions reduction. But even then, China didn’t make a political song and dance about it. Perhaps that is why when China announces a new emissions-reduction measure, Lee labels it: “political theatre” and “a pre-emptive strike against international pressure, not a commitment against climate change”.

The Chinese government recently announced the launch of carbon-trading pilot projects in five cities in two provinces. Perhaps the government has done too little to publicise the scheme, or maybe Lee is simply ill-informed, but he arbitrarily claims that choosing to levy a carbon tax rather than adopting a cap-and-trade scheme “revealed the government’s true intent” – that there would be no “strict limit on the total amount of carbon emitted”. The truth is that China announced back in 2011 that it was gearing up to launch pilot carbon-trading platforms. In other words, China’s work on carbon trading pre-dates its action on carbon tax. 

Introducing a carbon tax can actually help to promote and improve a carbon-trading system. A carbon tax and a carbon market can co-exist. And, if the price of carbon in the carbon market turns out to be a better signal of market information, it’s possible that the carbon tax won’t be needed any more. How these sorts of calls are made will depend on how things play out on the ground, but Lee wants to drag the discussion into the realm of conspiracy theory.

Green, low-carbon development is the road the Chinese economy must follow. In meeting the challenge of climate change, developing economies can’t take the high-emissions route, but must instead work to reduce their carbon footprint. This is different from the “pollute first, clean up later” path taken by developed countries. 

When China, in advance of many developed countries, proposes a carbon tax and prepares to implement it during the 12th Five-Year Plan, it’s hardly surprising that some in the west, recognising that a carbon tax carries certain economic costs, wonder why. Lee, without doing any serious research, believes he has the answer: China wants to increase its “wiggle room” in international climate-change negotiations, “giving it the political cover to emit even more”. 

But a carbon tax would invigorate emissions reduction efforts and reduce the quantity of emissions. In the early stages, it would increase costs, but the long-term positive effects and economic gains would be greater. 

Clearly, China’s carbon tax plan should include a grace period for the businesses that will be most seriously affected to allow them to make the necessary changes and protect their competitiveness. During this grace period, a proportion of carbon tax revenue could be used to encourage such firms to complete the transition. But it is definitely not the case, as Lee writes, that “the government will ensure that these companies can easily bear the burden of reducing emissions.”

Lee’s crack at China’s energy-supply management is also off kilter. During the 11th Five-Year Plan, China closed down small thermal power plants with a total generating capacity of 20 million kilowatts, and new plants are all high-efficiency and large-scale. With one leap, China’s coal-fired power stations have made the transition to advanced international level, and their achievement in emissions reduction is outstanding. And yet Lee, citing data from an unknown source, says: “China’s coal consumption has been increasing by around 17% each year.” No matter how quickly coal-use is rising, an academic like Lee should not be trying to frighten people with figures plucked out of the air.

The key principles underpinning international climate-change negotiations must be adhered to. The Durban platform sets out a roadmap for reaching a new, legally binding convention on climate change action by 2015. Whether or not this agreement can maintain the principles of “common but differentiated responsibilities”, “respective capabilities”, “fairness” and “environmental integrity” is a critical issue for both developed and developing nations. 

Lee disregards these principles: let’s look at two examples he uses to justify his argument. First is the Chinese government’s opposition to European Union moves to bring aviation into its Emissions Trading Scheme (ETS). The EU-ETS is generally a good thing for emissions reduction, but there is a design flaw: the system doesn’t differentiate between the aviation industries of developed and developing countries and for this reason it has failed to win unanimous support. Implementing it will be difficult. The system will put more pressure on, and cause more losses to, the aviation industries of developing countries than developed countries. Hopefully, before April 30, when the collection of fees formally starts, this key problem can be resolved through negotiation.

Second, is the burden of a Chinese carbon tax on exported products. Carbon-dioxide emissions from exported products account for 30% to 35% of China’s total emissions. A carbon tax, naturally, would target the companies with the highest emissions. In China’s 11th Five-Year Plan list of 1,000 high energy-consuming companies and 12th Five-Year Plan list of 10,000 high energy-consuming companies, there are few foreign firms but, as Lee points out, “foreign investors dominate China’s export industry”. In other words, foreign companies account for a large part of China’s export profits and will shoulder a tax burden. This is only fair. If, in implementation, points of unfairness do emerge, then they can be addressed through other measures.

But not everything Lee says in his article is wrong. In fact, we like two of his sentences so much, we will use them to conclude this article. The first is this: “Environmentalists will argue that plans for a carbon tax by the largest emitter of greenhouse gases are a sign of Beijing's genuine commitment to do its part.” 

The second? “The carbon tax is of a piece with the fact that the current Five-Year Plan is the first to explicitly commit to market mechanisms to reduce the country’s carbon emissions as part of the plan's ‘green, low-carbon development concept’.”

Lee should stick to the facts. 

Alvin Lin is climate and energy policy director for China at the Natural Resources Defense Council (NRDC). Yang Fuqiang is NRDC’s senior advisor on energy, environment and climate change.  

This article is published as part of our Green Growth project, a collaboration between chinadialogue and the Energy Foundation.

Homepage image by Greenpeace / Zhiyong Fu

The state remains unprepared for the pollution and protests its ambitious garbage-incineration plans could generate, writes Yu Dawei.

Since early 2008, China has seen a frenzy of investment in controversial garbage-incineration plants. In the words of Zhang Yi, head of the Shanghai Environmental Sanitation Engineering Design Institute, the sector is experiencing an eight-year golden era, set to continue through the 12th Five-Year Plan period, which ends in 2015.

China creates more than 360 million tonnes of domestic waste each year, of which 150 to 160 million tonnes is generated in cities, and the quantity is growing at a rate of 8% each year. Dealing with these rapidly advancing heaps of rubbish is a challenge for all levels of government.

Most of China’s garbage meets with one of three fates: around half is placed in landfill, 12% is burned and a little under 10% used for fertiliser. The rest is mostly left untreated, much of it simply dumped. However, plants that burn waste – and in the process generate electricity –are on their way to playing a significant role in the disposal of Chinese refuse.

Zhang Yi, whose comments came at a Shanghai seminar on the future of the energy-from-waste industry, said that, although landfill is the most popular method of rubbish disposal in China, it is a relatively crude solution. It requires a lot of land, foul odours are hard to control, the waste takes a long time to stabilise and there is a risk of pollution.

In contrast, incineration plants take up little land, garbage is quickly stabilised and reduced in volume and its odours easily controlled. For densely populated cities, where land is at a premium, incineration is the ideal choice, said Zhang.

Shi Yang is chief engineer at the China Association of Urban Environmental Sanitation’s Consulting Centre. Shi told New Century Weekly that, when it comes to dealing with waste in China, the biggest problem is a lack of capacity for safe disposal. And so during the 12th Five-Year Plan, which covers the period from 2011 to 2015, building new processing facilities is the main priority.

China is set to increase its daily waste-processing capacity by 400,000 tonnes over that five-year period, said Shi. New investment of 140 billion yuan (US$22 billion) will be pumped into the sector, bringing total spending on waste-disposal to 260 billion yuan (US$41 billion).

Industry insiders say more than 100 billion yuan of that will be spent on waste-burning power plants. That rings true: incineration projects are quietly getting under way all over China. Shandong and Zhejiang provinces have plans for 20 new plants each, while Fujian has 17 in the pipeline, Jiangsu 14 and Guangdong 13. By the time the 12th Five-Year Plan comes to an end, the country will have a total of 300 incinerators, capable of handling 300,000 tonnes of garbage a day, or around 30% of all the waste China processes.

Evidently, China is gearing up for a Great Leap Forward in garbage incineration.

The path China has chosen will not be smooth. Local governments find themselves squeezed between mountains of rubbish piled around their cities on one side, and residents’ objections to incinerators on the other.

According to Zhang Yi’s calculations, there were 10 protests against incinerator projects between June 2007 – when locals objected to a facility at Liulitun in Beijing – and January of this year. Three of these were in Beijing, three each in Jiangsu and Guangdong and one in Shanghai. “These are the most economically developed areas of China, where residents have the most-developed environmental awareness and where property prices have risen the highest,” Zhang said.

He believes there are four key reasons for such protests. First, existing plants are of a low standard and poorly run, and as a result create fumes and foul odours. Second, land and property prices are steadily rising, leading residents to expect more of their local environment. Third, people are scared of dioxins, harmful chemical compounds that can be released during uncontrolled waste incineration (although he believes that this danger has been exaggerated). And fourth, in the past, local governments have failed in their duties during tendering processes, meaning badly managed companies have ended up operating plants.

Setting standards for waste-burning plants has also proved challenging. Incineration capacity is expanding rapidly, but from a very low starting point, said Wang Qi, head of the China Research Academy of Environmental Sciences’ Institute of Solid Garbage Pollution Control Technology. There is a wide variety in materials burned – the plants basically use whatever gets delivered, which presents serious challenges for pollution control, Wang said.

Despite the launch of so many incineration projects, there are still no clear regulations governing how the plants should be operated and pollution prevented. China’s Ministry of Environmental Protection is drafting new standards for pollution control, but has already missed a planned publication date of 2011.

“According to the original schedule, the standards should have been brought out in 2011, but there have been some changes,” said Wang, adding that the document – which has to take into account environmental impact, technical limitations, public reaction and social stability – is a challenge to draft. “You can imagine the pressure,” he said.

There is an existing set of standards, which was drawn up in the late 1990s, but it is considered out-of-date and vague. Wang said that some of its restrictions are no longer appropriate and it is not clear exactly to what the standards apply. Moreover, the rules focus on emissions control rather than the specifics of incineration technology and incineration-generated pollution.

Complaints have already been made about the new regulations. In a draft released for public comment, the rules on the selection of sites for incineration plants had not changed, something professor Zhao Youcai of the State Key Laboratory of Pollution Control and Resource Reuse at Tongji University told New Century Weekly is a mistake. The new standard, he said, retains a 300-metre buffer zone between incineration plants and local residents, just like the September 2008 notice on environmental impact assessments for biomass-fired power plants issued by the MEP and the National Energy Bureau.

But Zhao believes that the distance should be three kilometres: contrary to expectations, there is little pollution at a distance of 300 metres, he said. Pollution is highest at a distance of one kilometre, and then falls off quite quickly as you move further away.

Many academics also believe a major failing of the draft new standards is that construction is still not conditional on public consultation and approval, and that harmony between such projects and neighbouring communities remains impossible in China.

Despite early signs of pollution problems at existing plants and repeated public protests, a major push forward with incineration plants took place between 2008 and 2010, the last three years of the 11th Five-Year Plan.

There are financial motives for this Great Leap Forward in garbage incineration, closely bound up with the interests of the power-generation sector. The bulk of China’s garbage incinerators are electricity-generating waste-to-energy plants, characterised by high levels of initial investment followed by low operating costs and large and stable profit flows. Income comes from garbage-disposal fees and electricity sales, as well as tax breaks and the sale of by-products.

The industry estimates that it takes between eight and 12 years to earn back the cost of a waste-burning power plant. Currently such projects in China are mostly BOT (build-operate-transfer) or BOO (build-own-operate). Licenses are usually granted for 25 to 30 years, meaning a project investor could enjoy up to 22 years of profit.

Take the Gao’antun plant in Beijing as an example. It can handle 1,600 tonnes of garbage a day, or 530,000 tonnes a year. It generates 200 million kilowatt-hours of electricity a year, 160 million of which reach the grid – meaning it makes 104 million yuan (US$16 million) from electricity sales, or 195 yuan (US$0.31) per tonne of garbage. The profits are higher than for landfill or fertiliser, and the profit ratio is better than in many other industries.

The promise of cash may have unwanted side-effects: industry insiders report that, in the past, some incinerator-managers added coal to the garbage they were burning in order to boost the amount of electricity generated.

New Century Weekly learned that, to avoid stirring public sensitivities, many projects have been renamed “biomass electricity projects”. But this kind of fudging, say many experts, is hardly a sustainable path for garbage incineration. Rather, strict standards and transparent management are what’s needed, along with an appropriate system of compensation. Only then will local residents be able to get along with the neighbours.

Yu Dawei is a reporter at Caixin’s New Century Weekly, where this article was first published. 

Homepage image from @lemoned, via China Environmental Law, shows a 2009 protest against a planned incineration plant in Guangzhou

High commodity prices are complicating aquifer protection in the San Luis Valley, which – like northern China – faces a groundwater crisis. Brett Walton reports.

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This article was first published by Circle of Blue. It is used here with permission.

At an average altitude of 2,350 metres, Colorado’s San Luis Valley, in the western United States, is the nation’s highest agricultural region and one of its top potato producers. Almost by definition, water dictates the patterns of life and land.

With it, valley farmers have turned this sunny, high-desert rift into one of the most densely irrigated expanses of farmland on the planet. Soon, though, a confrontation between rising global commodity prices, which are pushing production to meet demand, and shrinking water supplies, largely linked to climate change, could cause a number of growers here to do without.

Like heavily irrigated areas in California’s Central Valley, in India’s northern regions and in the North China Plain, the San Luis Valley has a groundwater supply problem. Since government-subsidised electricity arrived in the 1950s, farmers here have readily pumped from the two aquifer systems that soak up snowmelt like a sponge. Now, those decades of withdrawals have combined with recently lower-than-average river flows to affect water-rights holders along the Rio Grande River, which cuts through the valley before eventually becoming the Texas-Mexico border.

Simply put, the San Luis Valley no longer has enough water to support the abundant farm production that is becoming increasingly supercharged by rising prices for the crops grown here.

There may be a way out. Water officials in the region’s six counties are working with the federal government on a voluntary plan that would pay farmers to take land out of production. If things turn out as planned, up to 16,000 hectares of the valley’s roughly 240,000 irrigated hectares will not be farmed.

Though it is still being negotiated, the plan has a significant obstacle: the explosive rise in food prices, which are making the sums offered by the water-conservation programme less enticing. Prices for the valley’s mainstay – potatoes – have increased 25% in the last five years. Wheat, alfalfa and barley prices have done even better, more or less doubling over the same period.

“The commodity markets are going to drive this,” said Steve Vandiver, general manager of the Rio Grande Water Conservation District, in an interview with Circle of Blue. “If prices stay high, it’s going to be harder to get farmers to sign up.”

If the voluntary programme does not work, Vandiver went on to say, the result would be worst for farmers. The state, he said, would then step in – like it did in not long ago in the nearby South Platte Basin – and force well owners to shut down, without compensation.

Living on a borrowed resource?

Viewed from above, the San Luis Valley is a punch card of tightly packed centre-pivot sprinklers that can pump four cubic metres of water per minute. Settlers started farming the valley in the 1850s and, by 1903, all of the available surface water had been claimed. Because the valley receives so little rain – just 75 millimetres more in a year than what the desert city of Las Vegas receives – everything is irrigated.

Years ago, farmers relied on groundwater, only to finish off the last weeks of the irrigation season, when surface flows were dwindling. But for the last two decades, surface flows in the Rio Grande have declined in comparison with the historical average, said Mike Gibson, manager of the San Luis Valley Water Conservancy District. To make up for the shortage, farmers have pumped groundwater to take up the slack.

Climate change plays a role in the new river patterns, Gibson told Circle of Blue. Wind-storms from the deserts in Arizona and New Mexico are more frequent, and they drop dust on the mountain snowpack, which is the primary water source for the valley’s rivers. The warming effect of the dust, combined with higher temperatures, means that the spring-melt has moved several weeks earlier in the year. With a longer dry period in the summer, more groundwater is required to balance the changes in the river.

New reservoirs to store the altered flows are prohibited under a compact between the states of Colorado, New Mexico and Texas, Gibson said, but existing reservoirs are being renovated to maximise their storage capacity.

Vandiver said that the valley is millions of cubic metres shy of sustainable water levels in the aquifer systems. Each year, roughly 615 million cubic metres are pumped to produce the bounty of alfalfa, barley, potatoes and leafy greens that contribute nearly 40% of the valley’s economy.

The water district banned new wells in the deep aquifer in 1972 and in the shallow aquifer in 1981 – but the over-pumping persists. The district is still developing groundwater models to determine how much of the annual deficit needs to be paid back.

“We have a huge economy here, based on a resource that doesn’t exist,” said George Whitten, president of the Rio Grande Water Conservation District. Whitten’s family has owned Blue Range Ranch since 1897, and he believes that, at the current rate, the agriculture-based economy and the water won’t last much longer.

Project fallow

The valley’s water agencies are working with the US Department of Agriculture’s Farm Services Agency to approve an incentive programme that would pay farmers to leave their land fallow. The incentive is authorised by the Conservation Reserve Enhancement Program (CREP), which was enacted by Congress in 1997 to improve water conservation, wildlife habitat and soils.

The Farm Services Agency runs water conservation CREPs in the states of Colorado, Idaho, Kansas, Nebraska and Oregon. The agency spent US$164 million (1 billion yuan) on CREP payments nationwide during the 2010 fiscal year.

The Republican River Basin is the only CREP programme currently in Colorado, and it began in 2006 with a goal of fallowing 14,000 hectares. But high crop prices have proven to be an impediment in Colorado and in other states – as of October, the programme had enrolled less than 60% of that target area.

Under the San Luis Valley plan, farmers would sign a 15-year contract to take land out of production. They would receive an annual payment per acre, based on local land rates. Valley water officials are asking the federal government for an annual average of US$370 (2,336 yuan) per hectare.

In addition, the local government must provide at least 20% of the programme cost. The Rio Grande Water Conservation District is meeting this requirement by levying a “pumping fee” of between US$35 (221 yuan) and US$60 (378 yuan) per 1,000 cubic metres on farmers who pump groundwater in excess of their surface water right. The fees are charged to irrigators in Subdistrict No. 1, a patch of land north of the Rio Grande, where the aquifer is most depleted and where the fallowing would occur. A smaller administrative fee is also charged to all irrigated land.

Valley officials hope the plan will be approved in time for this year’s irrigation season, but they cannot foresee how its effects will ripple through the community. “We don’t know what the economic and social impacts will be from taking tens of thousands of acres out of agricultural production,” Gibson said.

And if the goals of the management plan are not met, the state is waiting in the wings to enforce the limits with mandatory restrictions. The state engineer, who oversees water rights, will present draft rules to the state supreme court this year.

So, in essence, those farming in the depleted section of the aquifer have to ask themselves this question: if we pass up the land-fallowing deal and continue reaping jackpot harvests, can we find the surface water offsets that the state could require?

Karla Shriver, who for 26 years has grown potatoes on 400 hectares south of the Rio Grande, believes more people will take the payments rather than leave it to chance. She told Circle of Blue that, looking long term, the CREP money may be the best offer that farmers could get.

“We can’t maintain high prices forever,” Shriver said. “It’s all cyclical.”

The sun and the water?

Because the area gets an average of 340 days of sunshine per year, the San Luis Valley is at the center of solar-power development in the western United States. The Bureau of Land Management has put four parcels of land it manages on the “fast-track” for regulatory approval, and several investor-owned companies are already operating in the valley.

If hectares of silicon panels were to replace irrigated crops on worn-out land, this solar industrialisation could also help the water problem. But solar jobs are not farm jobs, and valley residents have pushed back against large solar projects. Besides, farming has been not just a way of life, but life itself here for the last 150 years.

“Agriculture is our economy in the valley,” said Vandiver. “If it goes away, we have nothing left.”

Brett Walton is a Seattle-based reporter for Circle of Blue. Part of the reporting for this story was done while he participated in a fellowship that was paid for by the Institutes for Journalism and Natural Resources.

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As the need to reduce the amount of energy and materials used in manufacturing processes becomes more urgent, architects and engineers should look for inspiration in nature, writes Michael Pawlyn.

At the start of the industrial revolution, people were scarce and resources were abundant. Today, the opposite is the case: we have a burgeoning population and dwindling resources. This shift, along with the growing challenge of climate change, suggests that we should develop design approaches that use fewer physical materials and more human resources.

Biomimicry achieves radical reductions in energy, uses physical resources sparingly and offers the potential for greater human input in terms of design and manufacturing ingenuity. It aims to draw the best out of biology, learning from products that have benefited from 3.8 billion years of research and development. Living organisms, because of the ruthless refinement process of evolution, are remarkable models of efficiency.

Some of the most inspiring examples in nature can be found where evolutionary pressures have selected particularly strongly for one factor. Birds, for example, have evolved in response to intense selective pressure on weight. The skulls of ordinary songbirds, such as crows and magpies, are little short of engineering miracles. A magnified cross-section shows that they comprise multiple bony shells that are connected by a matrix of ties and struts: an astounding combination of shell action with space-frame technology. Their thick skulls afford them maximum protection, while their weight remains as low as possible.

Spiders make their silk with spinnerets that produce a stream of perfectly aligned protein polymers. The strands are “spun” into a thread with the spider’s back legs and, when dry, the silk is stronger than Kevlar, the strongest synthetic fibre that we have been able to manufacture to date. The contrast in manufacturing methods is profound. Making Kevlar involves extremes of temperature and pressure, and produces large quantities of toxic waste, yet spiders achieve the same result at ambient temperature and pressure, using only dead flies and water.

This example is far from exceptional. Our manufacturing methods typically start with energy-intensive mining, crushing, smelting, refining and forming. The process frequently continues with other stages of treatments, protective coatings and adhesives. Natural sciences writer Janine Benyus refers to this as a “heat, beat and treat” mentality that compares unfavourably with the manufacturing that takes place in nature.

Until recently, it was difficult to mimic nature’s manufacturing processes because complexity of form nearly always resulted in higher cost. But we are now in the early stages of a digital manufacturing revolution. Rapid prototyping, which emerged in the 1980s, was a significant breakthrough for designers because it allowed them to turn a three-dimensional computer model into a physical one with a high degree of accuracy and minimal labour. The technology has developed consistently and has moved from a method for producing prototypes to one that may enable mass production.

While we have some way to go before achieving equivalent technology to biological growth processes, there is certainly the potential to use natural polymers such as cellulose to build complex, efficient structures at low temperature and ambient pressure. Imagine the implications of using materials made with 1% of the energy of conventional ones, in structures that are 10 times more efficient. Moreover, if we use them correctly, all of these materials can be recycled time and time again, in an endless process of transformation. The very notion of waste can be progressively designed out.

One of the best-known examples of biomimicry is the Eden Project [in the south-western English county of Cornwall], which took inspiration from pollen grains, radiolarian, carbon molecules and dragonfly wings to produce a radical reinterpretation of an established building type. The membrane covering was 1% of the weight and embodied energy of a glass solution. The end result was a superstructure lighter than the air contained within the building and the cost was a third of that of a conventional approach. With more advanced manufacturing technology, based on biology, the structure could be even more efficient in terms of resources.

The Sahara Forest Project is an initiative that aims to support agriculture in water-stressed parts of the world. It draws lessons from the fog-basking beetle, which has evolved to harvest fresh water in the desert. The project mimics ecosystems’ ability to create more value by designing out waste. In the near future, we may learn from jewel beetles, which make mirrored surfaces from proteins, from thorny devil lizards, which make water-harvesting surfaces, and from sand skinks, which swim through sand without suffering any abrasion.

While it could be argued that biomimicry has been used for centuries – the first dome structures were almost certainly inspired by shells – we now have an opportunity to revisit the idea of learning from biology with the massive advantages of scientific knowledge, better tools and aesthetic sensibilities unconstrained by historical dogma. It is rare for designers to be presented with such an opportunity.

So how can we accelerate these transformations? While there is a place for legal measures in some circumstances, fiscal measures that reward ingenuity are a surer way to stimulate innovation. Developments in computer-aided manufacturing to date have largely been driven by military research budgets. Addressing the paucity of research funding in the building industry would help to overcome a major barrier to innovation, enabling more companies to turn new ideas into commercial reality.

In evolution, some of the most remarkable adaptations have occurred in response to scarcity. We could stimulate innovation in an equivalent way by shifting taxation away from employment and towards the use of resources. On the Eden Project, for example, the cost of resources largely determined how efficiently they were used. If the price of steel had been higher, it would have made economic sense to use less of it. This would have saved resources and generated additional jobs through increased manufacturing complexity. Forms of environmental taxation, such as internalising climate-change costs in resource prices, would stimulate innovation and save resources.

Too often, governments try to bring about change through mandate rather than by creating the economic conditions out of which innovation can emerge. The latter approach would effectively be identical to the process of evolutionary refinement. In nature, materials have always been expensive and the result is a catalogue of solutions that achieve efficiencies several orders of magnitude higher than most human manufacturing.

Michael Pawlyn is the director of Exploration, a sustainable architecture practice based in London. His book, Biomimicry in Architecture, was published in 2011 by RIBA Publishing.

This article was first published in the winter 2011 issue of the RSA Journal, a publication of the London-based Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA), and is used here with permission. © The RSA.

Homepage image by Jürgen Matern of polymer domes emulating natural biomes at Britain's Eden Project.

Skyscrapers are costly to erect and permits are tough to get, so why do architects keep trying to go higher? Tall buildings have always been about ego, say Edwin Heathcote and Ed Hammond.

Cass Gilbert, architect of New York’s early 20th-century Woolworth Building, called skyscrapers “machines for making the land pay”. But skyscrapers were always more about ego than profit.

At the southern end of London Bridge, early 2012 will bring the topping out of the US$1.1 billion Shard, the tallest building in the European Union. Across the river Thames, The Pinnacle, the loftiest tower in the City of London – London’s main financial district – is being built. This year, the construction was announced in Jeddah of the world-record-breaking Kingdom Tower, which at over one kilometre high would top Dubai’s Burj Khalifa.

Costly to build, hard to negotiate: why do developers keep trying to go so high? “You have to pay a lot more up front but you want it to be an iconic design, one that people want to be involved in and one they want to keep,” says Khalid Affara, head of Arab Investments, the group behind the 288-metre Pinnacle. “It means you have guaranteed longevity.”

After aircraft smashed into New York’s Twin Towers a decade ago, there was a moment when it seemed the skyscraper would forever embody the fear of catastrophe. Yet the Freedom Tower being built beside the Ground Zero site displays the skyscraper’s surprising resilience. The risk for developers is more that, by having so much of their ego vested in the project, they forget to pay attention to economic realities.

In pure construction-cost terms, it is much more expensive to go up than to go low and wide. Cities are littered with examples of what happens when the dream of building the tallest, the pointiest or the most improbable tower has met with an unaccommodating economic reality. Even in dense metropolises such as London, where planning permission is difficult and expensive to secure, the streets are increasingly punctuated with ambitious schemes, many of which lurched from start to mothballing during the recent financial crisis.

Even the Shard – designed by Renzo Piano, co-architect of Paris’s Centre Pompidou – nearly came unstuck. Had it not been for a Qatari consortium enamoured of owning a share of the London skyline, the project would almost certainly have been abandoned.

“The single biggest risk of building a skyscraper is not money. It’s time,” says Affara. “You start building and can maybe see the market four or five years ahead, but there is not a chance in hell that you can figure out where it will be in seven or eight years. But if you get it done and can let it, you are sitting on a building with perhaps one million square feet [about 93,000 square metres] that … unlike lots of the smaller buildings, won’t be demolished in 20 years to make way for something else.”

The precarious state of financing these projects has led to one of the most radical transformations in skyscrapers in recent years – the arrival of residential space in the top floors. From the advent of the early towers such as Gilbert’s 1913 Woolworth Building – in its time the world’s tallest – the skyscraper has been an office block in a central business district where land was scarce and prices high. But developers have discovered a demand for rooms with a view, far above the city.

Most contemporary skyscrapers, from the Shard to the Burj Khalifa, now offer apartments. New York’s 8 Spruce Street, designed by Frank Gehry of Guggenheim Museum Bilbao fame, is almost entirely residential. This allows developers to pre-sell and thus part-fund the construction process.

One draw for prospective occupants is when a development is designed by a “starchitect”, or star architect, in the Gehry/Piano mould. These buildings are as much about hype as about height and the big names help not only with marketing but also with winning permissions; cities are flattered to boast an icon by a known figure.

The upside is that good architects attempt to bring real interest and quality; the downside is that each competes with the other for the most outlandish design. For a complex, layered city such as London, the result can be an incoherent mess of individual sculptural gestures.

German-born but Beijing-based Ole Scheeren is the architect behind the MahaNakhon tower in Bangkok, which appears to pixellate into the chaos characteristic of the street life below. “As dense cities in Asia prove themselves to be the most sustainable ways of living,” he says, “the skyscraper becomes an inevitability. The challenge is to ask how can we reconnect the skyscraper to the city, both where it encounters the ground and in its verticality … How can the tower project the life inside itself back out into the urban realm?”

The contemporary skyscraper scrapes a fine line between architectural ambition, superlative-laden marketing and metropolitan vanity. They are rarely hugely profitable, seldom truly innovative and do not often improve a city. Yet they represent a seemingly indestructible dream, a way of imprinting an idea not only on a site but also on an entire conurbation. All those spiky skylines have become a kind of electrocardiogram of dynamism. No city wants to flatline.

Copyright © The Financial Times Limited 2011

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Homepage image of the Shard in London by Lushan Huang

The air quality crisis confirms China’s once-bold environment ministry has become sluggish, weak and bureaucratic, writes Chu Long.

Since the autumn, a series of polluted “hazes” in cities across China – and discussion of that now ubiquitous term for fine particulate matter, PM2.5 – have attracted widespread public attention. So too has the official response: while urban air pollution fast became a focus of public anger, the Ministry of Environmental Protection (MEP), which is responsible for monitoring air quality, took the opportunity to show its sluggish and bureaucratic side.

In Beijing, the gulf between reported air quality and the reality experienced by city residents became a sharply divisive issue. At the same time, air quality data from unofficial sources spread rapidly via new modes of communication. That people now disregard government data points to the dissatisfaction they feel regarding the state’s environmental protection apparatus.

But a few recent events began to mollify people. First, premier Wen Jiabao stressed that environmental monitoring data must tie in more closely with people’s actual experience. Then, vice-premier Li Keqiang called for preparations to start for the monitoring of PM2.5, which specifically are particulates measuring 2.5 microns in diameter. Finally, the MEP joined the table: at the Seventh National Conference on Environmental Protection, minister for environmental protection Zhou Shengxian announced a detailed timetable for the monitoring of PM2.5 and ozone. 

In 2012, China will begin monitoring these two pollutants in Beijing, Tianjin, Hebei province, the Yangtze River Delta, the Pearl River Delta and other key regions, municipalities and provincial capitals. By 2016, the entire country will monitor PM2.5. Zhu Jianping, deputy director of the MEP’s environmental monitoring department, said that this plan presents no technical problems: in principle, monitoring PM2.5 is no different from monitoring the larger particulates known as PM10. The monitoring sites can be located alongside PM10 monitoring sites, meaning there is no need to establish a new network – PM2.5 measuring equipment can simply be added to existing stations.

So, why did it take so long? People find it difficult to comprehend how, if there’s no technical obstacle to measuring PM2.5, the ministry has only responded now. And why choose to proceed incrementally, dragging the process out to 2016? To date, the MEP has taken no effective measures to prevent a further deterioration in air quality. Air pollution is already being blamed, at least in part, for rising lung cancer rates in Beijing. How will there be time to tackle the problem if the country follows the ministry’s timetable?

As environment officials dithered over their response to the crisis, several Chinese NGOs, including Green Beagle, launched their own air-quality monitoring projects. The newspaper Southern Metropolis Daily took the opinion that while pollution monitoring by civil-society groups may not be as scientific as government monitoring – officials use machines that cost 700,000 yuan (US$110,000) a piece; the model used by the NGOs costs 25,000 yuan (US$4,000) – it would be a mistake to underestimate the power and momentum of civil society in this field.

If the government again neglects the issue of air-quality monitoring, it is bound to provoke an even greater public outcry and a more intense challenge. For this reason, the MEP must take off its mask of arrogance, listen to public opinion and strive to improve its service through a better relationship with the public.

Three years have passed since the sub-ministerial State Environment Protection Agency (SEPA) was promoted to ministry level and became the MEP. China’s environmental pollution has only worsened in that time. Currently, one-tenth of the country’s soil is affected by heavy metal pollution; 26% of its “key environmental protection cities” have air that does not meet standards; one-fifth of the country’s water is classed as worse than grade five, the lowest grade in quality; and many other key environmental indicators have deteriorated since 2008. As one MEP official said: “Although there has been some local improvement, there has been no halt in the general decline of the overall environment.”

The ministry’s impact is still weakening. In 2011, Luliang Chemical Industry illegally dumped 5,000 tonnes of chromium waste in Qujing, in the south-western province of Yunnan, causing severe pollution. The MEP forced the company to close, but soon the factory resumed production, in clear violation of the government order. The ministry’s punitive measures could not achieve their desired result and they had no way to effectively sanction this company.

It is a shame that it has come to this, because the main environmental arm of the state was once one of the most pioneering and innovative government bodies, which earned a lot of public trust. From its series of crackdowns, known as “environmental storms”, to the enforcement of regional planning restrictions – when it refused to approve projects for law-breaking local governments until changes were made – SEPA used to pursue its policies to the end, drawing the attention of the entire nation to the importance of China’s pollution problems.

There was significant momentum behind the “environmental storms”, but they never became a regular part of the system. At the time, observers and officials stressed that relying on occasional crackdowns to protect the environment wouldn’t work in the long term. China needed to strengthen its laws on environmental supervision and management, its standardisation and so on. Now China faces a situation where environmental measures are neither systematised nor implemented through crackdowns. The environment will continue to suffer the consequences.

Over the past few years, the pursuit of economic gain by special interest groups has grown more intense. These interest groups have all grabbed a firm hold of economic and political power, to the extent that they are now outside the scope of the MEP’s jurisdiction and supervision. Just look at the way the pollution incidents involving, for example, PetroChina, CNOOC and Zijin Mining Group, unfolded. Before the incident, the MEP could not take part in decision-making; during the course of the project in question, it could not carry out any meaningful supervision; and after the incident, it could not implement punitive measures. Yet MEP officials often end up resigning in the aftermath of these disasters.

Some say that since interest groups hold the reins of power and the MEP is weak, it is difficult to achieve anything. I disagree. Interest groups are a fact of life. Local governments will always be powerful. But isn’t it the responsibility of the central authorities to surmount these difficulties and implement policy according to China’s guiding principle of “scientific development”? Exactly as the central government has tried to regulate house prices, can’t they work to break the blockade formed by special interests and local government? Can’t practical difficulties be overcome by determination? In Wen Jiabao’s words, can’t one “offer up one’s life for one’s country, accept hardship and forgo personal gain”?

If a government body can only show initiative and responsibility when it is small, weak and non-bureaucratic, then perhaps the MEP should be dismantled and demoted back to agency status! Here I joke, of course, but the fact remains that interest groups have been allowed to grow powerful and the MEP seems powerless. There is a serious lack of momentum behind environmental protection in China's current political structure.

It recently emerged that the boundaries of the Yangtze River’s last remaining ecological conservation area have finally been “adjusted”. This seems to confirm that there is no way to stop those forces that put profit before nature. The ecological deterioration of the entire Yangtze River system looks inevitable. But reinvigorating China’s environmental movement could reverse the trend. Every nation experiences environmental pollution as part of its development path. Time and again, the solution is to take on those who profit from pollution. The victims of pollution, the Chinese public, already know this and have started to take action. They are fighting back against polluting interest groups, as we saw in protests against petrochemical plants in Xiamen and Dalian.

This is good news for the environment and for society. Only if the public becomes a stakeholder able to restrict the polluting actions of local government, big business and other interest groups, rather than just waiting passively for the MEP to take action, will environmental protection and social stability in China have a chance. And only then will “scientific development” policies be genuinely implemented.

Just waiting won’t bring China clear water and blue skies. Action is required. Whether the MEP dares to do something, or is capable of doing something, will finally show whether it’s at the vanguard of scientific development, or simply a redundant, bureaucratic organisation.

Chu Long (a pen name) is a university professor in Guangzhou.

Homepage image by dtraleigh

 

From Rio+20 to the birthday of Silent Spring, this year’s sustainability milestones mark decades of effort, writes John Elkington. Now the agenda is shifting its focus to the large-scale remodelling of capitalism.

Some people raised their eyebrows when, in a 2009 study called “The Phoenix Economy”, we concluded that the world was not in a simple recession, nor even in a double-dip variant, but instead that it had entered one of those periodic, fundamental restructurings of the global economy that take decades to work through. 

The drivers this time around, we argued, include the obsolescence of an increasingly global economic model that has served us fairly well since World War II, coupled with an accelerating shift of at least some parts of the global economy to Asia, and particularly to China. But we also spotlighted a growing interest in what some call “sustainable capitalism” – an appetite for change that is so far very poorly represented in the UN-led climate conferences in places like Copenhagen and Durban.

For an idea of what this might mean in practice, it will be well worth taking a look at the “Manifesto for Sustainable Capitalism”, due for launch shortly by Generation Investment Management—and which has already been spotlighted in The Wall Street Journal by Generation’s founders, former US vice-president Al Gore and former Goldman Sachs investment banker David Blood.

Unfortunately, as we noted in 2009, history suggests that a prolonged downturn is needed if we genuinely want to burn out the old economic mindsets, business models and technologies, and open up the space for new ones better adapted to the conditions of the twenty-first century. Now, as we enter 2012, it is worth taking stock and considering whether there is much evidence, either way, of progress towards the Phoenix Economy.

“We are once again facing one of those rare turning points in history when dangerous challenges and limitless opportunities cry out for clear, long-term thinking,” Blood and Gore argue in their Wall Street Journal article. “The disruptive threats now facing the planet are extraordinary: climate change, water scarcity, poverty, disease, growing income inequality, urbanisation, massive economic volatility and more. Businesses cannot be asked to do the job of governments, but companies and investors will ultimately mobilise most of the capital needed to overcome the unprecedented challenges we now face.”

But what do they suggest business leaders – what we might call the Global C-Suite – do next? They recommend “five key actions for immediate adoption by companies, investors and others to accelerate the current incremental pace of change to one that matches the urgency of the situation.”

First, they encourage CEOs and other senior business leaders to identify and account for the growing risk from “stranded assets”. These are risks “whose value would dramatically change, either positively or negatively, when large externalities are taken into account – for example, by attributing a reasonable price to carbon or water. So long as their true value is ignored, stranded assets have the potential to trigger significant reductions in the long-term value of not just particular companies but entire sectors.” We have been here before, they note. The true value of subprime mortgages was recognised very late in the day and mortgage-backed assets had to be repriced in short order. 

Second, they call for mandatory integrated reporting, something that is now being pushed by the International Integrated Reporting Committee. “Despite an increase in the volume and frequency of information made available by companies,” they say, “access to more data for public equity investors has not necessarily translated into more comprehensive insight into companies. Integrated reporting addresses this problem by encouraging companies to integrate both their financial and ESG [environmental, social and governance] performance into one report that includes only the most salient or material metrics.”

Third, they call for an end to the practice of issuing quarterly earnings guidance. “The quarterly calendar frequently incentivises executives to manage for the short-term,” they conclude. “It also encourages some investors to overemphasise the significance of these measures at the expense of longer-term, more meaningful measures of sustainable value creation. Ending this practice in favor of companies' issuing guidance only as they deem appropriate (if at all) would encourage a longer-term view of the business.”

Fourth, and a strongly linked point, they see a critical step to be the better alignment of senior executive compensation structures with long-term sustainable performance. “Most existing compensation schemes,” they warn, “emphasise short-term actions and fail to hold asset managers and corporate executives accountable for the ramifications of their decisions over the long-term. Instead, financial rewards should be paid out over the period during which these results are realised and compensation should be linked to fundamental drivers of long-term value, employing rolling, multiyear milestones for performance evaluation.”

And, fifth, there is a growing need to incentivise and reward long-term investing with “loyalty-driven securities”. The logic here is that “the dominance of short-termism in the market fosters general market instability and undermines the efforts of executives seeking long-term value creation. The common argument that more liquidity is always better for markets is based on long-discredited elements of the now-obsolete ‘standard model’ of economics, including the illusion of perfect information and the assumption that markets tend toward equilibrium.” To counter such short-termism “companies could issue securities that offer investors financial rewards for holding onto shares for a certain number of years.”

An immensely turbulent 2011 is being followed by a year marked by an extraordinary number of sustainability milestones. Most obviously, we have the UN’s Rio+20 Earth Summit. Then there will be the twenty-fifth anniversaries of the Brundtland Commission report, Our Common Future, and of SustainAbility, the company I co-founded in 1987. But there’s more. Many will celebrate the fortieth anniversary of 1972’s The Limits to Growth study which first laid out the “Peak Resources” agenda, and the fiftieth of 1962’s Silent Spring, Rachel Carson’s book that sparked the Environmental Revolution.

Some will find it strange that businesses like Generation Investment Management are now signalling the next round of the sustainability agenda, but as the focus shifts to the large-scale remodelling of capitalism for the new century, this feels like the logical trajectory for the next 20, 25, 40 or 50 years.

John Elkington is executive chairman at Volans and non-executive director at SustainAbility. He blogs at www.johnelkington.com and tweets at @volansjohn.

Homepage image by Ihuiz 

Debating the precise, quantifiable flows of the Brahmaputra will not foster regional cooperation. Water diplomats should discuss the river’s environmental value instead, argues Rohan D’Souza.

China has never been daunted by big engineering. The Great Wall, the Grand Canal and recently the Three Gorges Dam all testify to an almost habitual pursuit of projects involving enormous scale.

Small wonder that many people India see it is as inevitable that China will divert the Yarlung Zangbo for its thirst-ridden cities in the north. This idea is made even more spectacular, given that this siphoning will literally involve taking the waters in a hop-jump-skip equivalent over the upper reaches of three other mighty rivers: the Salween, the Mekong and the temperamental Yangtze.

And even when this unforgiving route is overcome, the flows of the Yarlung Zangbo that have not already evaporated will then still have to be pumped, dropped and shuffled across a whole set of connecting channels, tunnels and sprawling pipelines before finally gushing from turned taps in Beijing.

For many, understandably, this kind of engineering is between implausible and impossible. But can one confidently conclude that a desperately thirsty China is beyond such great, grand and gigantic imaginations about water?

Officially, the Chinese government intends to move 38 to 48 billion cubic metres of water annually from its southern rivers for populations in the north, through the unambiguously titled scheme, the South-North Water Transfer Project. But should these ambitious water diversions unequivocally hold for trans-boundary rivers as well?

One of China's major trans-boundary rivers is the Yarlung Zangbo, which after entering the Indian state of Arunachal Pradesh, opens up majestically within the Assam valley to become India's “moving ocean”, the masculine Brahmaputra. Later on, these flows briefly meander as the Jamuna in Bangladesh before entirely folding into the Ganges River, near Goalundo Ghat.

One river stringing three nations is inescapably a natural geo-political muddle. Anyone, for example, pinching flows can send political ripples and cross-border anxieties. Added to this, the hydrological processes of this complicated fluvial regime – comprising innumerable tributaries, bifurcations and branches – remain little understood.

As yet, the vast mosaic of ecological niches and fluvial habitats of the Yarlung-Brahmaputra-Jamuna system has not been credibly studied in terms of its environmental webs and linkages. Ironically, the lack of knowledge on the river's flora, fauna and intricate ecological relationships has failed to humble those shaping a vibrant discourse over water security for the region. If anything, ignorance seems bliss in this case; efforts have focused on ascertaining and intensely debating quantifiable flows.

In other words, the environmental qualities of the Yarlung-Brahmaputra-Jamuna have been conveniently ignored. Instead, it has become a river of volumes, compiled as numbers, as averages and as simple statistics.

And herein lies the Chinese water conundrum for Indian diplomacy and its non-traditional security strategists. If negotiations are reduced to ascertaining who is entitled to how much of the volume of water, the game might, in fact, be lost in a single move.

Thus far, the Indian side seems to be fashioning a two-point emphasis: constructing a dialogue for “sharing benefits” from probable hydro-electric projects on the Yarlung-Brahmaputra stretch; and developing a mutually agreeable format for exchanging hydraulic data.

The strategy, however, rests too much on hopes and expectations about reciprocal goodwill. Moreover, China’s imperatives or ability to realise kilowatts and cusecs (a measure of flow rate) do not, in any sense, provide compelling urgency for regional cooperation. Flow data, similarly, even when transparent and accessible, can only be read against the grain of several other imponderables.

And most critically, can such water arrangements, even if concluded as a treaty, be contained as a specific deal between India and China? That is, can India’s understandings with China be prevented from an interpretative spill over into existing water treaties, or significantly trouble other delicately poised discussions over trans-boundary rivers in the region? After all, India held the upper riparian position on previous major treaty negotiations: the Indus Water Treaty with Pakistan in the 1960s; and the Ganges Water Treaty with Bangladesh in the 1990s.

Upper riparians have an unstated advantage in the creation of hydraulic facts and can carry their topographical strength into concluding any arrangement. But clearly, in the case of the Yarlung Zangbo, India is in the weaker position, and bargains with China over a likely water treaty will put Indian negotiators in a technical context that for the latter, at least, entirely lacks historical precedence.

Put differently, the Indian side will need to develop a new language game which, above all else, provides a novel architecture for discussions that are based on an entirely different set of hydraulic concepts and categories.

Interestingly, cutting such a fresh path will be a lot easier than pursuing an intense, dogged and grinding exchange over contested river flow data. Since the 1990s, a dramatic scholarly turn has occurred in several social science disciplines with the theme of water as a central narrative. A range of publications in anthropology, sociology and history, have decisively altered our understanding of river management and hydraulic control.

An issue of the journal Nature in 2010 highlighted the urgency for an “integrative water approach” to strike a balance between human resource use and ecosystem protection. In effect, hydraulic and riverine habitat diversity have to be sustained if human consumption requirements are to be met in the long term.

It is imperative that Indian water negotiators harness this fresh research. Lazy arguments that continue to evoke nineteenth century quantitative hydrology and twentieth century large-dam monumentalism are most likely to fail.

Indian negotiators can make a more meaningful case by discussing the strong interconnections between hydraulic diversity on the one hand and livelihoods and intricate social dependencies on the other — rather than emphasising statistical simplifications about river flows.

Rohan D’Souza is assistant professor at the Centre for Studies in Science Policy, Jawaharlal Nehru University.

This article was first published on January 1, 2012, by Hindu Businessline. It is used here with permission. 

Homepage image by Rita Willaert

Planners and donors for a new wave of African dam projects should learn lessons from the past and not treat local people as mere obstacles, argues Jamie Skinner.

It’s been nearly 50 years since the Akossombo dam was built in Ghana in 1965, flooding the lands and homes of 80,000 people, creating the largest manmade lake in the world, and securing Ghana’s electricity supply.

Since then, west African countries have built more than 150 large dams. Like Akossombo, many have stimulated national development while also bringing considerable environmental and social challenges. Some local grievances have even passed down through the generations, clogging up government offices and courts with complaints over the way ageing dams were built. 

Large dam construction largely went out of fashion among major donors after 1990, as global concern grew over local impacts. But the past decade has seen the World Bank and other major multilateral banks renew their support for large dams in the face of increasing energy and food demand. Can these projects avoid repeating history? 

As part of the Global Water Initiative (GWI), the International Institute for Environment and Development (IIED) and the International Union for Conservation of Nature (IUCN) set out to help communities and governments learn from past experience to improve dam planning, benefit sharing and resettlement practices in west Africa. Their findings, published in a study at the end of last year, show that large dams could bring greater benefits to local populations. 

Currently, more than 60 large dams are being built, or are on the drawing board, across Africa, 39 in west Africa. The new dams face a very different economic and political climate from those built before 1990. The 1983 Sélingué dam in Mali was constructed under military dictatorship, for example, whereas region-wide decentralisation and democratisation surround the country’s latest dam project, at Taoussa. Donors’ policies have also evolved to give much more attention and funding to safeguard the environment and people.

Yet flawed planning can still cause tragedies, and donor-funded megaprojects like dams lack the financial flexibility to respond to unexpected social consequences. Lessons from past projects could radically improve the impacts of dams being planned now, which might start construction in five years and stand for another hundred. And while authorities sometimes resist addressing the legacies of dams built 20 years ago, many are more open to considering better ways forward. 

Between 2008 and 2011, GWI and local researchers reviewed documents from west African dams and talked with people who had to move out of the dams’ paths. Focusing on six large dams in Burkina Faso, Mali and Senegal, we asked about the effects of resettlement, the dams’ perceived benefits and who profited from them. Could these benefits be shared more fairly and effectively to allow development for all, and give affected people a stake in the project throughout its lifetime? 

National workshops, involving both government and local actors discussed the emerging stories and drew out lessons for national policy. One broad message was that governments and donors should put dams’ local development objectives on an equal footing with national objectives. Large dams are built for nationwide goals such as supplying electricity or irrigation, and people living near dam sites have often been seen as mere obstacles – needing to be moved and then compensated for their losses.

Disputes over compensation and resettlement lands dragged out and sometimes turned violent. Claims from Akossombo are still being submitted to land tribunals, for instance, while in Bagré, Burkina Faso, local chiefs are trying to protect what they regard as their customary land, ejecting immigrants attracted to new jobs and markets around the dam. 

Instead of bearing the costs of conflicts – in both money and lost development opportunities – governments could channel a portion of resources created by dams to displaced communities, ensuring local people gain directly from the projects.

For example, GWI is now helping authorities in Niger design a local development fund receiving 2% to 3% of hydropower revenues from a new dam. Over the dam’s 100-year life, this fund can meet the changing needs of local people – such as additional schooling, investments in agriculture or better water supplies – and provide flexible support that reduces dependence on the government to resolve resettlement conflicts. Besides hydropower revenues, shared benefits might include access to irrigated land, a share of electricity, or a structured fishery. 

The research shows another crucial step is to codify legal rights to the land, houses and other resources that dams redistribute. Local people affected by dams need their rights protected by written agreements to avoid accusations of broken promises, conflict within host, resettled and immigrant communities and litigation around compensation.

In many cases, such as at Sélingué, immigration has added pressure on resources, and the transition from customary resource tenure (rights to resources held through long local custom, rather than positive law) to modern legal rights has been complicated. Decades into a dam project, traditional chiefs who allocated land to immigrants or watched the government do so may come to believe their own groups were left behind in the resettlement process.

In oral cultures, colourful predictions by government speakers can also sow tensions. A resettled village head at Sélingué recalled, “We were told there would be so much rice that we’d be able to eat it and sell it to buy millet if we ever needed any.” In reality, irrigated rice plots proved harder and more expensive to cultivate than rain-fed millet. To ensure that plans for land rights, compensation and benefit sharing are clear and binding, governments must put them in writing. 

GWI’s research has shown that better sharing of the benefits from dams is in everyone’s interest – government, local communities, private sector and donors. Supporting local development alongside a dam’s national goals is not costly or complicated, and prevents protracted disputes that drain government resources over the long term.

The GWI initiative is working with dam development authorities, civil society and local communities to build these lessons into dam plans in Guinea, Mali, and Niger. It also contributes to thinking by international river basin agencies and the Economic Community Of West African States (ECOWAS), on good practice for large water infrastructure in West Africa. And with the new wave of African dam building still gathering momentum, there is more need than ever for projects to learn from the past.

Jamie Skinner is a principal researcher at the IIED and co-author of the report, "Sharing the benefits of large dams in West Africa".

Download the full report here. 

Homepage image by ZSM/ Wikipedia 

It’s been a disappointing decade for environmental litigation in China. Writing from the frontlines, Xia Jun analyses the problems.

As a lawyer with a decade-long involvement in environmental rights, I still remember the sighs of my colleagues when I set out on this path: litigation is hard in China; environmental litigation doubly so.

More than a decade ago, in May 2001, Beijing Youth Daily published an article called “Why are pollution cases so hard to bring?" The report quoted Wang Canfa, an environmental law scholar and expert in environmental litigation. “At the moment, it is hard to resolve environmental disputes,” said Wang. “First, polluting firms often pay a lot of money in taxes, and so are protected by local governments. Second, it is difficult for victims to provide evidence. And, third, it is hard to bring a case to court.

"Environmental lawsuits are usually brought by members of the public against a company, presenting a dilemma for the courts. There is a limit to how many cases a judge can handle, and a tricky case can drag on and on. Naturally, they are reluctant to take those cases on.”

Has anything changed in the last 10 years? Given my own experiences and the cases I am familiar with, I have to conclude that it is still a difficult time for environmental tort cases in China.

This is true for every stage of the process: lodging a complaint, registering a case, assessing damages, winning the case and executing judgements. Each step is a battle, and no real solution has emerged. Perhaps most depressing is the refusal of courts to hear environmental or administrative lawsuits that are legally entitled to a hearing, often on the basis of flimsy reasoning, where a reason is given at all.

The value of environmental litigation lies not only in its ability to make amends for the victims’ losses, but also in its service to society more widely. Pollution sanctions and administrative fines are too low to deter breaches of environmental law, but compensation in civil suits – awarded according to harm incurred – is potentially unlimited. High compensation payouts in a number of lawsuits would cause other polluters to pay attention.

“Relying solely on the power of the environmental authorities to deal with large and powerful companies is inadequate,” said Wang Canfa. “Victims seeking redress through the law courts will reduce pressure on the environmental authorities, and that’s a form of public participation.” In other words, pollution victims protecting their private interests will help to achieve public environmental goals. Environmental litigation not only offers a solution to environmental problems, but also benefits the nation and its citizens.

Enforcement of existing environmental laws is poor, and there is huge room for improvement in both judicial independence and public oversight of the justice system.

A major problem is that most courts are prone to interference from local government, and impartial judgements in environmental disputes are hard to come by. Often, cases are not heard – or not heard fairly – because local government funds the court, as well as hiring and firing its staff.

Local governments’ love-affair with GDP growth, focus on short-term benefits and narrow view of what it means to maintain stability mean that environmental legislation lacks authority and administrative powers are misused. Against this background, it is hardly surprising that many environmental disputes fail even to make it to court.

To offer a brief illustration of this problem, in 2005 the Chengde Intermediate People’s Court accepted a joint case brought by more than 1,500 villagers against a steel company that had polluted local groundwater. It was subsequently criticised for doing so by the local Communist Party committee and local government. Then, in July 2010, fishermen from Dalian in north-east China tried to bring a case at Dalian Maritime Court over an oil leak. The judge said helplessly: “If we heard the fishermen’s case, we would lose our jobs.”

Low awareness of environmental legislation and failings in judicial ethics also combine to thwart the efforts of defenders of environmental rights. Some judges are unaware of the special nature of environmental cases, have no experience in handling these cases and lack the ethical standards necessary to work for the people and uphold the rule of law. As a result, it is common for cases that should be heard to be refused.

In 2010, for example, Beijing resident Yang Zi took the Beijing Environmental Protection Bureau to court in an attempt to obtain monitoring data on a medical-waste incinerator near his home. Haidian People’s Court found that as the plaintiff’s home was outside the area classed as being affected by the facility, he had no right to request the information and rejected the case. 

Even more disappointing, environmental health cases – where compensation is sought for disease or deaths caused by pollution – are often refused, meaning grave damage goes ignored or is even covered up. In 2004, I represented the plaintiffs in a case against a mining company in Shaodong county, Hunan province. I tried for three years to get the case heard, ultimately in vain. The court was worried that the case would result in more claims being brought and so opted to ignore it.

Another reason for the refusal to hear certain environmental cases is the lack of adequate processes for assessing damages. China’s Tort Liability Law rules that the burden of proof in pollution cases lies with the polluter, who must prove that there is no causal relationship between the pollution and the harm suffered. But it is common practice for courts to rely on a report by a third-party specialist body to determine if there is a cause and effect relationship, and to set the value of the damage done. This means the judges themselves do not take the risk of making these decisions.

Tools are currently in place for evaluating pollution damage to fisheries, so when the fishing industry sues polluters it has access to credible technical back-up. But where other pollution cases are concerned, mechanisms for assessing harm are chaotic. It is often difficult to find an appropriate third-party assessor or assessment method and an authoritative assessment cannot be obtained. As a result, courts refuse to hear cases so as to avoid the risk of having to carry out that assessment themselves.

In certain respects, the judicial environment has been getting worse: some courts which previously welcomed environmental cases have started to refuse them. This prevents specialised courts from playing to their strengths, reduces the inclination of victims to try to bring cases, and undermines the proper handling of environmental disputes.

For example, maritime courts previously seemed happy to take on lawsuits where pollution at sea had been caused by land-based sources (even though the law is unclear as to which court has jurisdiction in such cases). Recently, however, some maritime courts have started to refuse these cases, instead referring plaintiffs to their local courts.

A range of worrying trends indicate China still has a long way to go to establish the rule of law in the environmental sector. Opening the road to judicial solutions to pollution is crucial for both environmental justice and the sustainable development of society. China must speed up judicial reform, strengthen the mechanisms that support green litigation and create an environment in which courts can issue fair verdicts in environmental disputes and the construction of an “ecological civilisation” can advance.

Xia Jun is a lawyer at Zhongzi Law Office. 

Homepage image by Qiubo / Greenpeace

As factories have moved out of Chinese cities, housing and public buildings have been built on contaminated sites. Bao Xiaodong and Zhang Xinyuan investigate.

Former industrial land is referred to in Europe and the United States as “brownfield”. It is a more refined term for this often polluted land than its routine designation in the Chinese media: “toxic land”. Either way, these sites can present a grave and lasting danger to human health. 

In the last few years, these areas have created a new nightmare for China’s cities. Southern Weekend found that many unremediated brownfield sites, left behind by relocated factories, have proved too tempting for local government and property developers, who have used the sites for affordable housing and other projects. But few people in China think about the history of the land their homes are built on.

As night falls in Wuhan, central China, more than half of the apartments in the Yangtze Pearl housing development remain unlit: this social housing community – 60% of the units are affordable homes – is far from being fully occupied. 

Han Han, 27, owns a 93 square-metre apartment here, bought in an unfinished condition with his parents’ life savings and a 100,000-yuan (US$15,800) loan. On November 30, just as Han’s family members, no longer forced to rent or live separately, were about to move in together, they saw on the news that the development was built on “toxic land”.

“We were devastated,” said Han. “We spent our life savings on a toxic home.”

The Yangtze Pearl site was polluted over a 60-year period, when it was home to Wuhan Jiu’an Pharmaceuticals and then Wuhan Yangtze Chemicals. After the chemical plant stopped production in 1997, another company used the site to manufacture additives for electroplating processes. In March 2009, an environmental report by the Institute of Environmental Evaluation at the China University of Geosciences in Wuhan found that many of the products manufactured at the site used toxic, even deadly, fluorides and electroplating additives.

This is a classic brownfield site: “toxic land” polluted by industry and in urgent need of remediation.

The four main types of brownfield site pollution are heavy metals, electronic waste, petrochemical pollutants and persistent organic pollutants. Once in the soil, petrochemical and organic pollutants, in particular, can enter the human body through flower beds, pipes and other routes, and land can remain toxic for up to a century. Some pollutants, such as poly-aromatic hydrocarbons, are carcinogens, which can also affect the wider population through the groundwater.

“Organic pollutants are slowly released from the soil. If you take your children out for a walk every day, the impact will increase,” said Gao Shengda, executive editor at HJXF.net, a website focused on environmental remediation in China.

The Yangtze Pearl development had been under construction for over a year and was almost complete when the Wuhan Environmental Protection Bureau found that it failed to meet environmental requirements. The developer levelled the soil, laid down an impermeable lining and covered it with clean soil before planting greenery. In September 2009, the site finally passed an environmental assessment by Wuhan Environmental Monitoring Centre. The apartment owners were not convinced: they blockaded the road and refused to move in, demanding alternative housing, but to no avail.

It is not uncommon for brownfield sites to be used for affordable housing. In Guangzhou, south China, the former sites of the Guangzhou Nitrous Fertilizer Factory and Southern Steel Factory were both used for this purpose, as were the sites of Third Chemical Plant and Red Lion Paint in Beijing. But it’s not just social housing. Gao Shengda said: “In many more cases, affordable housing has been repackaged as normal private housing, as this maximises profits.”

Gao gave the example of Wuhan Sanjiang Space Estate Development, which in March 2006 was awarded the tender to build private apartments on the Heshan 001 plot, a 280 mu site [one mu is about 667 square metres] 20 minutes’ drive from the city center. The following year, a construction worker fell ill on the site and a subsequent investigation determined that this was the former location of the Wuhan Fertiliser Factory.

The developer demanded its money back and Wuhan Land Centre paid 120 million yuan (US$19 million) in compensation for its failure to reveal the history of the site. Remediation, at a cost of 232 million yuan (US$37 million), only started in May 2011.

The histories of brownfield sites are often covered up and authoritative data on the extent of the problem do not exist. Southern Weekend asked a number of academic institutions and companies working on soil remediation for figures, but none were able to provide answers. In 2006, the State Environmental Protection Agency (now the Ministry of Environmental Protection) and the Ministry of Land and Resources launched a three-year survey of soil pollution nationwide. But there is still no sign of public data on brownfield sites.

Figures on factory relocations, however, can provide some clues. China’s more developed cities started large-scale relocations of factories out of urban areas as early as the 1990s.

Luo Yongming is deputy director of the Chinese Academy of Sciences’ Yantai Institute of Coastal Zone Research. His research suggests that large numbers of brownfield sites have been used for property development. Luo also points to incomplete statistics indicating thousands of polluting factories were moved out of places such as Beijing, Jiangsu, Liaoning, Guangdong, Chongqing and Zhejiang, leaving behind over 20,000 hectares of land – the equivalent of 28,000 standard football pitches.

A 2010 World Bank report on brownfield remediation and redevelopment in China said that surveys in Beijing, Shenzhen and Chongqing found pollution to be relatively serious in one fifth of sites left behind by relocated factories. Between 2005 and 2006, the Beijing Environmental Protection Bureau investigated 18 sites where chemical factories had ceased, or were soon to cease, production. Seven of them were deemed polluted, in some cases to a depth of 15 metres, and in need of essential remedial work before they could meet the environmental requirements for their planned use.

To date China has not seen any concrete cases of residents – as opposed to workers – being harmed by brownfield pollution. Gao Shengda said this is because China’s property development sector only took off in 2002 and it was 2005 before people started moving into their new homes. The damage done by pollution can take many years to become apparent, and then monitoring and elimination of other possible causes is necessary to confirm the link.

The first concerns about brownfield pollution were raised in 2004 after three workers were poisoned while digging on the site of a new subway line at Songjiazhuang, in Beijing. The site had originally housed a pharmaceutical factory, and was later taken over by a paint manufacturer. “There was no concept of soil remediation then,” said Gao. “The contaminated soil was just dug out and taken away. But that made everyone aware of the potential risks of industrial sites.”

In Europe and north America, soil remediation work started in the 1980s. But in China it has only started in a small minority of cities, and only over the last five years. Beijing, Shanghai and Chongqing have all published guiding documents on the practice, but even in places where it is happening, there are limitations, for example in the way that cities contract soil remediation work to local firms.

Many more cities, including Wuhan, still lack the appropriate mechanisms. Just like with the Yangtze Pearl development, attention is only paid to the issue when the media exposes a story or poisoning incidents occur.

Southern Weekend failed to find comprehensive figures on soil remediation nationwide, despite asking a number of research institutes and companies. “With some sites, even if remediation work is done, the developer keeps quiet about it for fear of damaging sales,” said one interviewee. But they all agreed that soil remediation work is “very limited”.

China still has no law on soil pollution that would make remediation compulsory. It does not even have standards for the surveying, risk assessment and remediation of polluted sites. Although China passed a law on environmental impact assessments in 2003, this does not capture existing brownfield sites. The law covers the environmental impact a new project will have, but not the history of the site.

To date, there have only been two national-level documents issued on the remediation of polluted sites, both of which put forward only guiding principles for regulation. There are no concrete rules for implementation and punishment, and so there is no real compulsion to follow those principles.

Bao Xiaodong and Zhang Xinyuan are reporters at Southern Weekend, where this article was originally published.

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Nature is under constant attack from corporate forces, but a British lawyer wants to find a capitalist to fight for the environment, writes Juliette Jowit.

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William Wilberforce is popularly credited with the abolition of slavery in most of the British Empire in the 1800s. But the anti-slavery campaigners – far ahead of their time in their methods – had recognised the need for a major business figure to stand beside them and declare his (it was two centuries ago) support. That man was Charles Grant, chairman of the East India Company, which then controlled over half of world trade.

The British lawyer Polly Higgins often draws parallels between the nineteenth-century campaign to outlaw slavery and her initiative – to abolish ecocide – the destruction of the natural world. Think poisoning a river, tropical deforestation or the havoc wreaked by climate change. The comparison is not original but it is valid, concerning the protection of powerful business interests, the damage that they cause but often do not see, and the prevailing ideology that some people can have dominion over others or their environment without consequences.

Higgins’s solution is also as simple as the outright outlawing of slavery: the campaign wants environmental destruction to be declared illegal by making it a fifth crime against peace in the International Criminal Court (ICC).

If this sounds implausible, it is arguably easier than the current approach to climate change: attempting to get 194 nations to agree targets to re-engineer their economies and cut consumption, and then keep their promises. Instead, Higgins is asking world leaders to open an amendment to the 1998 Rome Statute (the treaty that established the court, based in The Hague) until it has the required two-thirds of the statute’s signatories to become law. Curiously, to avoid mass chemical warfare, governments have in effect outlawed ecocide in war, but not in peacetime.

To reach her goal, Higgins needs to borrow one more detail from the slavery story: to find a modern Charles Grant willing to stand up among his or her business peers and urge them to support the abolition of ecocide. So who might that be?

It can be argued there are already promising candidates among the titans of our corporate world. The Microsoft founder, Bill Gates – the world’s second richest man, according to Forbes magazine – and his wife, Melinda, have become almost as well known for their philanthropy as his software. Since 1994 they have spent more than US$26 billion. Their Bill & Melinda Gates Foundation concentrates on development and health, but in so doing directly deals with environmental problems from poor soils to polluted water; its website states: “Climate change is a major issue facing all of us.”

Next on the Forbes list, the legendary investor Warren Buffett promised to give away 99% of his billions to good causes. Buffett has consistently pre-empted economic and social changes, responding to public pressure by rejecting new coal-fired power stations. But as important is his apparent appetite for clean solutions to politically awkward problems; Buffett recently told CNBC, the American business-news channel: “I could end the [budget] deficit in five minutes. You just pass a law that says anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.”

Perhaps more surprisingly, another contender could be Nestlé’s chairman, Peter Brabeck-Letmathe, who has been one of the most high-profile campaigners for introducing higher water charges. He has recognised that although this will add cost to his food and drink behemoth, for both moral and economic reasons the company will suffer far more if ordinary people are left in drought by its activities.

And a former Nestlé man, Paul Polman – now chief executive of its rival Unilever – famously stopped quarterly financial reporting in protest at the short-term investment culture. He recently told The Guardian that too many companies have prospered at the expense of society and nature, adding: “We do not have to win at the expense of others to be successful.”

Richard Branson, too, has a long history of supporting good causes, despite the sometimes startling gap between his business interests (Virgin Atlantic Airways) and professed interests (climate change). Whichever business figure steps into Charles Grant’s shoes and changes the course of capitalism, they will be guaranteed a place in history far greater than the annals of Forbes magazine.

http://www.guardian.co.uk/
Copyright © Guardian News and Media Limited 2012

Homepage image by Jörg Müller/ Greenpeace 

 

Many Chinese provinces now divert water across river basins to meet urban demand. But while cities enjoy the extra supplies, the environment has paid a heavy price. Gong Jing and Cui Zheng report.

Water diversion is back in the news in China thanks to the announcement of the 20-billion yuan (US$3.2 billion) Qiandao Lake project in Hangzhou, which has sparked controversy. Due to break ground during the next five years – the 12th Five Year Plan (FYP) period – the scheme aims to bring water from Qiandao Lake in Chun’an county to Xianlin, closer to downtown Hangzhou, the capital of eastern China’s Zhejiang province. Projects like this are not rare in China, but as Hangzhou is renowned for its rivers, lakes and beauty, this story has attracted particular attention.

Three decades of economic reform have set in motion in China an unprecedented urbanisation and industrialisation process, which has brought with it numerous large-scale water-transfer projects. Such schemes, which can easily cost 10 billion yuan (and often cost more), have helped create the conditions for rapid GDP growth. But the negative effects of these intensive and large-scale engineering projects have meanwhile been ignored. China still has a raging thirst for water-transfer, and even bigger plans are in the works.

There are good reasons for the Qiandao Lake project. Hangzhou relies on just one water source – the Qiantang River – for 80% of its drinking water. Industrial pollution along that river has worsened in recent years, and a serious incident could threaten the safety of drinking water for eight million Hangzhou residents. Both Zhejiang and neighbouring Jiangsu province have already built numerous large-scale water transfer projects, mostly designed to supply water to their large and medium-sized cities.

South China’s Pearl River Delta sees more rain than the rest of the country, but here too water diversion schemes are under way. Guangdong province is set to invest 23.6 billion yuan (US$3.7 billion) in a “West-to-East Water Transfer Project” during the 12th Five-Year Plan, benefitting 19 million residents in the cities of Guangzhou, Donghuang and Shenzhen.

The city of Kunming, on the shores of Dianchi Lake, in the south-western province of Yunnan, is also joining in. Here, a “Central Yunnan Water Transfer Project” – which aims to move 3.4 billion cubic metres of water a year along a 900-kilometre canal, at a total cost of 62.9 billion yuan (US$10 billion) – has been in planning for almost a decade. While Yunnan has plenty of water overall, supplies are not evenly distributed and planners say the centre of the province needs more.

In the north of the country, there have been several rounds of water-transfer construction over the decades. Rough calculations by New Century Weekly found that several dozen more at least are currently either under construction or in preparatory stages.

What has turned China into the world’s chief diverter of water in just a few decades? Cheng Xiaotao is deputy chief engineer at the China Institute of Water Resources and Hydropower Research. He believes that rapid urbanisation and industrialisation are the cause: “China’s population has increased by 700 or 800 million in the past few decades, and people have also been flowing into the cities with unprecedented speed. Urban industry is also rapidly expanding. This is something no other country has experienced. The water those people need just isn’t available locally.”

Under these conditions, some of China’s cities – particularly in the arid north – find themselves short of water, and a process begins: first, they appropriate water from agriculture; then they extract excessive quantities of groundwater; and, finally, water-transfer projects start.

Beijing was the first city to come up against water scarcity after the founding of the People’s Republic of China in 1949. To allow expansion of population and industry, in 1951 Beijing constructed the Guanting Reservoir on the Yongding River and, seven years later, it built the Miyun Reservoir on the Chaobai River. Nonetheless, a water shortage quickly became apparent. To meet the shortfall, the city started to pump groundwater. But, today, groundwater levels are several dozen metres lower than they used to be, and so the city is planning to bring water in from the Yellow River.

Tianjin, another enormous city in the north, has had similar experiences. In 1983, a landmark project was built to bring water to the city from the Luan River. This was followed by a scheme to divert water from the Yellow River in nearby Shandong.

And, as Beijng and Tianjin in the Hai River basin have reached out to the Yellow River, areas along the Yellow River itself have followed suit. In Qinghai, at the river’s source, a project to transfer water between two Yellow River tributaries, the Da and the Huang, is under way. Projects, both large and small, designed to extract water from the Yellow River are in motion in Inner Mongolia and the provinces of Shanxi, Shaanxi, Henan, Hebei and Shandong.

This has all placed an unbearable burden on the Yellow River. Recognising this, the Chinese government is turning to the Yangtze. One academic, who preferred not to be named, said that over the last decade, the idea of using water from the Yangtze to assist the Yellow River has become an accepted strategy among hydrologists.

These projects tend to cost somewhere between a billion yuan and tens of billions of yuan. Sometimes the price-tag is even higher: the mega South-North Water Transfer Project, which aims to divert water to the country’s parched north, is expected ultimately to cost hundreds of billions of yuan. One hydrologist said: “Many of China’s water transfer projects are carried out without regard to the costs.”

This makes sense: as the costs of a project are borne by central or provincial government, if a city can get a project approved, it has no immediate incentive not to push ahead. Clearly, this is one of the reasons behind the rising number of projects. But “free” water, with no water resource fee or environmental compensation costs built in, often becomes too expensive for cities and residents on the receiving end of the diversion canals.

In October 2003, the floodgates opened on a 10.3 billion yuan (US$1.6 billion), 10-year project, the first phase of a water-transfer channel from the Yellow River to the Jin River at Wanjiazhai in Shanxi, a province in north China. At the time, the city of Taiyuan planned to transfer 320 million cubic metres of water a year, while the Huyan Water Treatment Plant was built with a designed capacity of 800,000 cubic metres per day. Today the plant provides just 240,000 cubic metres a day.

Municipal water officials told Xinhua reporters that water has to be pumped uphill a number of times to reach Taiyuan – at a cost of five yuan per cubic metre. By the time the water has been treated and delivered to residents’ taps, the cost has climbed to eight yuan per cubic metre, far in excess of the price paid by those residents of less than three yuan per cubic metre. Water from the Yellow River has become too expensive, and the companies running the project in Taiyuan are selling it at a loss.

By the end of 2008, the Yellow River Water Supply Company had accumulated losses of 127 million yuan (US$20 million). Further losses of 90 million yuan (US$14 million) were seen in 2009. Large quantities of water pumped in from the Yellow River are simply dumped into Taiyuan’s waterways – treating it would only increase losses.

These problems are not confined to Taiyuan. With the completion of the second phase of that same project, identical issues are emerging in Shuozhou and Datong in the north of Shanxi. The same is true in Inner Mongolia and Shandong province, where water from the Yellow River is being moved to Hohhot and Qingdao respectively.

Decades of intensive water transfer have imposed a heavy price on the environment. Environmentalists commonly say that severe damage will be done to a river if 30% of its natural flow is syphoned off for other uses. By this standard, the Yongding, Chaobai and Luan rivers in the Hai River basin have already been used up – the waterways beyond the reservoirs are either dry or polluted, and there is no ecosystem to speak of.

The removal of water from the Yellow River for irrigation or to supply cities has meant that, in the last 10 years, only 20 billion cubic metres of water has actually reached the sea, down from 50 billion cubic meters in the 1950s. This sustained fall has left the nitrogen-phosphorus ratio in the Bohai Sea far out of balance. The Bohai used to be a rich fishery, but now there are hardly any catches and large numbers of marine organisms have disappeared.

Many academics also point out that the South-North Water Transfer Project may result in more salt-tides at the mouth of the Yangtze River, creating a crisis for Shanghai’s water supply. Shanghai obviously agrees – it is building a new reservoir at Qingcaosha to prevent saltwater intrusion.

Zhu Chun, freshwater projects officer at WWF China, believes that a genuine solution to water supply and demand problem must include better protection of local water sources. Long-distance water diversion schemes change the flow of rivers, affecting biodiversity, links between river basins and the hydrological cycle.

But many local governments regard water transfer as a cure-all, one hydrologist told us: if there’s a water shortage, they don’t try saving water, they just bring more in. If water is polluted, they don’t deal with the pollution, they just bring in new water. “It becomes the cure to all ills, and once you have the extra water you can continue with extensive economic expansion.”

Gong Jing and Cui Zheng are reporters at Caixin’s New Century Weekly, where this article was first published.

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City children in China have become cave-dwellers in an urban jungle, with many unable to connect with the natural world, writes Liu Xinyan. Educators are working to rebuild the links to plants and animals.

We all met by the roadside before setting off for the nature camp. It was a clear, early-spring morning and several of the children played on a dusty patch of ground next to a run-down factory. We grabbed one of the girls as she ran past. “Do you like it here?” we asked.

“Yes,” she shot back.

“Really?”

“Yes!”

And off she ran. We watched curiously as the girls piled earth, stones, sticks and leaves together.

“What are you doing?”

“Making a cake!”

The child who answered didn’t even look up, being too busy adding leaves to the “cake”. We laughed, but also felt a little sad. It was good to see the children at ease and happy and feeling close to nature. But it was also obvious that it had been a long time since they’d seen any real nature and that they rarely got to play outside; otherwise, they wouldn’t have been so excited about this scrap of land.

And – sure enough – when we got to our destination and saw the orchards, grass, ponds and hills, they whizzed off like escaped rabbits.

I still feel the same mix of happiness and sadness every time children get out of the car and run off shouting, ignoring any calls to return.

China’s rapid economic development has changed much of the country’s appearance. Childhoods of climbing trees, picking dates and grapes, catching fish, shrimp and tadpoles (or cicadas and crickets), making whistles from willow twigs, and spending all day outside until you were deeply tanned are gone. What have today’s children, growing up with TVs and computers, lost?

City kids in China became cave-dwellers in an urban jungle long ago. Children lose the ability to experience nature. They can talk at length about whales or cheetahs, but not describe a flower at their feet. Parents know that if their youngsters eat too much processed food, they will not have a balanced diet; yet they are less likely to know that too much processed information will also hamper children’s development.

In Richard Louv’s Last Child in the Woods, the phrase “nature deficit disorder” is used to describe the broken connection between children and nature. And in a rapidly modernising and urbanising China, this phenomenon is spreading quickly.

Friends of Nature, formed in 1993, is one of China’s oldest NGOs and has provided links between the urban public and nature through bird-watching and gardening groups. Nature education aimed at children started in 2000, with Green Hope Action and the Antelope Bus.

Green Hope Action sees volunteers from the city visit poor villages to provide environmental education. The Antelope Bus is a mobile nature-education project that Friends of Nature adopted from Germany; in its early years, it also visited rural schools. Similar projects include the Beijing Brooks Education Centre’s programme to educate children who live near nature reserves about wetlands. These projects all started in cities and are aimed at rural areas. China’s early NGOs aimed to help vulnerable groups, rather than urban populations that tended to have access to more resources.

Over time, however, some of those involved started to question this long-distance approach and to look towards city residents. They found that children in cities had fewer chances to get close to nature than did their rural counterparts – that urban children suffered more of a nature deficit – and so they began to experiment with environmental education in cities. City children (and even some parents), it emerged, didn’t need more knowledge – they just needed to rebuild their links with the natural world.

Even an ant can cause both children and adults to panic, says Wu Yue, children’s nature tutor at the Lovingnature Education and Consulting Centre. The ants, worms and lizards we often caught and played with as kids have become terrifying beasts. Similarly, an experiment once found that Japanese university students preferred to play in a concrete gully, believing that two tree-lined mountain rivers nearby were dangerous. Long-term separation from the natural environment causes estrangement, fear and the loss of the ability to appreciate nature’s beauty.

As the NGOs worked, they came to understand that while it’s good for a child to be able to name a plant, more is gained if he or she can appreciate its beauty; understand its structure and evolution, its links with other animals and plants; and experience the connection between people and nature.

Within two or three years, these ideas gave birth to a range of educational activities based around the observation and experience of nature. These activities include Friends of Nature’s Nature Camps, run by members and volunteers; Beijing Brooks’s nature and art experiences at Waterdrops Camp at its Nature Study Centre in the hills outside of Beijing; Hanhaisha’s community gardens project; and Nature Heart’s classes combining observation, explanation and photography of nature.

And we were delighted to see how the children behaved during the activities, breaking down the barriers between themselves and nature; it was like a miraculous journey.

Song Xi works on Friends of Nature’s nature experience project. She asked a group of lively children to close their eyes and lie beneath the branches of a large tree. When they opened their eyes and saw the sun shining through the green canopy, they fell silent –as if the whole world had stopped.

At first, city kids are unruly and uninterested, but they become curious, excited and focused over time. Initially they don’t want to get dirty and they scream at the sight of a bug – but soon they get closer to nature than their parents do. If they have the opportunity to observe and experience nature, they discover new things, things we may never have noticed, and they become imaginative about things that look ordinary.

Nature is ever-changing and full of beauty, and everyone is drawn to appreciate and understand it. It sharpens our senses, stimulates the spirit and cleanses the soul. No matter what their background, all children can find restoration in nature. As Hu Huizhe of Friends of Nature says, even “adults caught up in themselves can feel the power of nature when they notice a dramatic mountain scene or the colours of a wild flower”.

Playing outside makes children more fit and coordinated, and helps them to build friendships. The “secret gardens” of our childhood can absorb our sadness, soothe our soul and nurture our lives – and build our future personalities. Activities in the natural environment are not optional; they are an essential ingredient of a healthy childhood, just like sunshine and air are essential for trees and plants.

Nature is a treasure-house of knowledge, a palace of art, a spring of imagination and creativity. Children who know how to appreciate beauty will be happier, and creative children will be more successful. In his “Song of the Open Road”, the 19th-century American poet Walt Whitman said: “Now I see the secret of making the best persons; it is to grow in the open air and to eat and sleep with the earth.” Letting children build an emotional connection to nature, to ignite their curiosity and passion – that is the root of all learning.

As Li Weiwen, chair of Taiwan’s Society of Wilderness wrote in his book Education Can Be Romantic: “Take your child for a walk, and if you have a calm and unflustered heart, nature will lead you to appreciate it and learn everything that we should know.”

Liu Xinyan is deputy director of the Beijing Brooks Institute.

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