MEP Recalibrates for 2009
Last month, Caijing ran a story on the difficulty of the government in achieving various environmental targets (h/t Cleaner Greener China), specifically with regards to the reduction of energy intensity and increasing forest coverage. Indeed, China Environmental Law blog (CELB) has highlighted the unease that the Ministry of Environmental Protection (MEP) feels with respect to economic policies promoted by other branches of government that work at cross-purposes with the nation’s environmental goals.
Ren Yong, deputy director of MEP’s policy research center for environment and economy, was quoted as saying in China Daily:
The globalization has left China in an awkward situation, which enjoys a trade surplus, but meanwhile an ecological deficit.
In light of the “slippage,” the MEP has adopted eight New Year’s resolutions Read the full story
JUCCCE Clean Energy Forum--Closing Summary
The following is the complete transcript, modified and supplemented for completeness and readability, of 
the closing speech that the author of this blog (pictured below) delivered on November 11 at the JUCCCE Clean Energy Forum in Beijing.
We are at war. A world war. But unlike World War I or II, this is not a war about military tanks, but it’s a war about gas tanks. This is not a war about military strength, it’s a war about political strength, and innovation. This is not a war about conquering territories, its about conquering our addiction to fossil fuels. And unlike the first two wars, we are all fighting from the same side. We are engaged in a global energy and climate war. We have essentially, through our reckless consumption of the earth’s natural resources, provoked an unanticipated response in the world’s climatic system. We have essentially pitted Mother Nature against Mother Nature, and we are all caught in the middle.
So what now?
We need a serious restructuring of the way we organize our energy system, implement new rules and policies, and adopt new ways of using energy. We need to, as Rob Watson says, change transform “ego-nomics” into “eco-nomics,” and we do this by appropriate adapting human laws to the immutable laws of nature.
So how do we get there? How do we achieve the innovation to meet the energy-climate challenge? We need an smart and well informed mix of regulatory and market mechanisms. There is no single silver bullet, but I believe that over the past two days of discourse, we have collectively started forming a framework for the array of solutions, a full complement of many green bullets to get the green revolution under way. I see three themes emerging from our discussions: Read the full story
David Tyfield [Part 2 of 2]: Middle-Class Aspirations and IP Protection in China
This is the second post of two covering an interview with Dr. David Tyfield (pictured) on the topic of international collaboration in low carbon innovation. The Green Leap Forward had the opportunity to interview Dr. Tyfield before a live audience of about forty attendees at an event hosted by the Beijing Energy Network on October 29 in Beijing. The first post focused on questions posed by The Green Leap Forward, and this second post summarized Dr. Tyfield’s responses to questions posted by the viewing audience.
GLF would like to especially highlight his response below on intellectual property protection in China.
Q: Have you done any thinking on the relationship between low carbon innovation and the aspirations of the middle class, because what I see and a lot of us see is that the middle class in the West aspires to cars and we’re seeing the same thing happen in China.
DT: We haven’t done any size of work or research on it. My thoughts in particular would be on the issue of mobility rather than energy as far as the most obvious example of aspiration and the aspiration to cars and holidays. What I would say is that this goes back to what i was saying about the biggest obstacle being, in a sense, political will. Political will doesn’t just come from government; its a much more dispersed phenomenon. I don’t think I’m a pessimist, perhaps I call myself a realist. The people don’t look for alternatives until they are forces to. Arguably, another positive to come out from the recession is that people from the West start to actually question the standard of living, the extremely indulgent, the highly carbon consumptive standard of living they have enjoyed for twenty, thirty years, in particular. And therefore they will start to look for alternative. Of course that is going to take a long time and the first inclination when someone loses something is to try to get it back. So that the initial political pressure will be to do everything they can to preserve their high carbon standard of living. But if that proves impossible, and I think it will prove economically impossible, then they will start to look for alternatives, and that is when aspirations will start to change.
In terms of the middle class situation in the west, they are in many ways the greatest culprits for high carbon standards of living. But its when an electric car actually comes on to the market and becomes someting that peopel rush out to buy, just like when the new Apple iPhone came out. When that kind of thing happens, this will be the forerunners for developing these markets more widely in the West. I dont; think we will see struggling single mothers on housing estates leading the way on green consumption. Read the full story
1.7 Trillion Reasons to Clean Coal Up
External costs (i.e. cost not accounted for in the price tag, such as environmental, public health and other social costs) of coal in China totaled RMB 1.7 trillion (about US$250 billion) in 2007, equivalent to 7.1% of China’s 2007 GDP, according to a landmark report commissioned by Greenpeace, Energy Foundation and World Wildlife Fund released yesterday. “The True Cost of Coal” (Chinese version; English version) is the second high profile report on the Chinese coal industry to be released this month, following one by a group of MIT researchers which we previously discussed here.
Pictured (L-R): Ms. Yang Ailun of Greenpeace, Professor Mao Yushu of the Unirule Institute of Economics, and Dr. Yang Fuqiang of the Energy Foundation at the press conference announcing the release of “The True Cost of Coal” on October 27 at the Swissotel, Beijing.
Professor Mao Yushi of the Unirule Institute of Economics and chief author of the report summarized the rationale of the study:
Environmental and social damages are underestimated while using coal in China, as a result of market failures and weaknesses in government regulations. In order to address these problems, China needs to count these external costs and make the coal price reflect its true costs.
So what makes up this RMB 1.7 trillion bill of external costs? Read the full story
Paradoxical China--Interview with Social Bridges
I was recently interviewed by Social Bridges, a relatively new but excellent blog on sustainability and corporate social responsibility. The interview touched on various topics, including the following question on China (followed by my response):
Q: As your main focus is on China, what’s your take on the sustainability/greener efforts in your country and are you satisfied? International media keeps on criticizing the Chinese efforts such as the Olympics – how do you view all this?A: China’s green push is a paradox. On the one hand, it has awakened to the imperative for sustainability and has announced all sorts of progressive environmental and energy reforms. On the other hand, its legacy of a highly polluting industrializing economy is of massive scale, and the socio-political pressures to maintain economic growth so as to provide jobs for its vast populous shows no sign of ebbing. It is clear that the Chinese government is well aware of the need to protect its environment, but as various China commentators have observed, there is a significant disconnect between the top-level central government green policy intentions, and the capacity of its various institutions to effectively manage its energy, environmental and water sector. This means that environmental and energy reform must be undertaken simultaneously with administrative and structural reform of its political institutions–no easy task by any measure. I guess I would consider myself an optimist, but a cautious one at that.
Yes, it is true that the international media has not always been kind to China on various cross-cutting issues. But that comes with the territory of being the world’s emerging superpower. China has to take the good with the bad. Hopefully, rather than simply stirring up local indignance, the international criticism can be turned into an opportunity for China to respond positively–with actions, rather than merely defensive rhetoric. China has demonstrated the ability to listen to its international partners–its current policy over the revaluation of its currency is a case in point.
For the rest of the interview, click here.
Green Hops: Supercities; Rule of Law; Auto Parts Recycling
Newsy tidbits on green developments in China, sans analysis.
Super eco-cities? The unstoppable drive in China towards increased urbanization in the midst of the massive scale of
rural-to-urban migration is well known. A report by McKinsey, the prestigious global consulting firm, advocates that China undertakes a more concentrated form of urbanization by building 15 “supercities” each with populations of 25 million each, in order to facilitate the massive scale of rural-urban migration. This is in contrast to the more dispersed approach of developing dozens of smaller cities, and the development of the rural western inland regions of the country.
As stated in the press release announcing the report:
MGI [McKinsey Global Institute] finds that concentrated urban growth scenarios could produce 20 percent higher per capita GDP than that yielded by China’s current urbanization path, would have higher energy consumption but also higher energy efficiency, and would contain the loss of arable land. Concentrated urbanization would also have the advantage of clustering the most skilled workers in urban centers that would be engines of economic growth, enabling China to move more rapidly to higher-value-added activities.
Rule of Law. Earlier, I lamented about the need to improve environmental governance at the provincial and local levels. The head of the newly-named Ministry of Environmental Protection is vowing to tighten up enforcement of environmental laws.
Increased Government Investment. The government plans to pump in 41.8 billion yuan (about US$5.9 billion) this year to help meet its 2010 environmental targets, which include reducing energy intensity by 20% compared to 2005 levels. According to Xinhua News, 7.5 billion yuan would be invested in ten energy-saving programs, 4 billion yuan in closing inefficient coal-fired power units and outmoded steel plants, and 5 billion yuan to tackle water pollution.
Government White Papers. Charlie McElwee of China Environmental Law blog breaks down the National 11th Five-Year Environmental Protection Plan (2006-2011), the English version of which has only be been released earlier this month. While I’m at, I should mention the official white paper on China’s energy policy, available in English here.
Recyling Auto Parts. As part of China’s Circular Economy initiative, the National Development and Reform Commission has signed and agreement with three auto makers and 11 parts manufacturers letters of commitment to set up a pilot auto parts recovery program. As the New York Times reports, China is becoming a big player in the auto parts industry.
Bureaucratic Streamlining and Rule of Law
Yesterday, the National People’s Congress announced moves to reorganize the central government by creating five so-called superministries, including one responsible for environmental protection via the upgrading of the State Environmental Protection Administration (SEPA) to ministry status. But the NPC stopped short of creating a unified organ to oversee the contentious issue of energy policy.
The government streamlining, the sixth in three decades, is aimed at increasing bureaucratic efficiency and reducing the overlap of responsibilities among various agencies (i.e. reducing the turf wars). The elevation of SEPA to ministry status, in particular, is viewed as the increased importance that the central government places on environmental protection in the face of China’s growing economic strength.
While optimists are hopeful that the new Ministry of the Environment will be the beneficiary of an increased budget or staff capacity, others, like Charlie McElwee at China Environmental Law are more skeptical about the immediate impacts:
SEPA will not be wresting any environmental powers away from other ministries such as the National Development and Reform Commission or Ministry of Construction, but the existing patchwork of agencies with environmental portfolios does not differ significantly from many other countries. This move will have little immediate effect on the environmental enforcement ground game; SEPA is not slated to receive any greater control over local Environmental Protection Bureaus (EPBs).
Until a greater alignment of governance among the new SEPA and the local EPBs is realized, I agree that we will see few positive effects. The problem with environmental governance in China is not the lack of laws and regulations, for indeed there are dozens of comprehensive pieces of environmental legislation, but their lack of enforcement and administration.
In that regard, the recent white paper on Rule of Law offers promise that the central government is serious about building the necessary institutional capacity across its judicial and administrative ranks. Only with the necessary Rule of Law can the local officials be held accountable to the central government for local environmental performance, or harmed citizens seek recourse against polluting enterprises, or foreign companies fully protect the intellectual property of the green technologies that they bring into China.
Though it is difficult to eliminate any overlap of environmental governance amongst the various agencies, I am hopeful that clout of the new SEPA will grow and Rule of Law will take hold in meaningful and positive ways. However, any such gains would be undermined without cooperation with a more cohesive energy policy regulator.
Will Two Become One?
Contrary to earlier speculation, no new single energy ministry was formed. As I’ve made reference in an earlier blog posting, there have been indications from the government that such a move would not be imminent. Instead, the plan is to divide authority on energy matters amongst a new “high level” energy commission would develop national energy strategies, on the one hand, and an energy bureau under the central planning agency would control administration and oversight of the energy sector, on the other hand.
Such a division of authority is viewed simply as a political compromise, rather than any deliberate strategy, remarked Yang Fuqiang, director of the China Sustainable Energy Program, a Beijing-based think tank, to the New York Times. Indeed, I have read reports in the print edition of today’s Straits Times (ST 3/12/08 “China holds back on bureaucracy reforms“) that pressure by two major oil and gas state owned enterprises–Sinopec and PetroChina–has something to do with it. This piece by Forbes also paints the cast of disparate political actors in the China energy landscape. According to the New York Times, Yang predicts that the two energy agencies will eventually be merged into a full ministry in a few more years.
There are few industries as complex as the energy industry. Because the public goods nature of energy in the role of society is unquestioned, it is imperative that a competent, transparent and clear-visioned administrator is able to shepard the industry along and address any market failures and inefficiencies. However, as long as energy regulators continue to be beholden by the interests of the likes of fossil-fuel giants like Sinopec and PetroChina, I am concerned about the ability for clean and renewable energy in making the necessary inroads to propel China on its Green Leap Forward. All the (think) tanks and (green) technologies alone cannot put a green grid together.
Thoughts?
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