Monday, November 7, 2011

From the archives: The China Syndrome

(Originally published in Kyoto Planet, January 2008, and still quite topical.)

The China Syndrome:
Can the World Be Saved if China Doesn't Go Green?

By John R. Platt

There's a lot of talk these days about China's impact on the environment -- and with good reason. China is now the world's top producer of greenhouse gases, it's the home of 16 of the world's 20 most polluted cities, and some of its factories have infamously shipped tainted goods to clients around the globe.

China produces 70-80% of its electricity in coal-burning plants, and its energy needs have more than doubled since the beginning of the decade, according to the Worldwatch Institute. Meanwhile, its population is moving from rural areas to cities, where they use more power and buy cars, which adds to the country's demand for fossil fuels.

China's growth has been fueled by an export-driving economy that finds it supplying goods and services to companies and countries around the globe. According to the World Trade Organization, China became the world's second-largest exporter in 2006, and the WTO predicts it will become the world's biggest exporter in 2008.

Amidst all of this, the Beijing government has started taking steps to improve China's environmental impact. Massive clean-up efforts are underway in preparation for this year's Olympic games. Meanwhile, China was expected to invest over $10 billion in new renewable energy capacity in 2007, including wind turbines and production of solar photovoltaic cells.

But even with these and other steps in the right direction, China can't do it alone. "It has to be a collaborative effort," says Elizabeth C. Economy, the C.V. Starr Senior Fellow and Director for Asia Studies at the Council for Foreign Relations. "What we have to focus on is how we all can work together to solve this problem."

Part of the difficulty, says Economy, is that local officials tend to ignore the central government's environmental mandates, which lack enforcement on the local level, in favor of profits and economic growth.

"Chinese factories, institutions, the government...everyone needs to be on board," says Economy. "There has to be a local commitment. You can have a great effort from Beijing, but if you don't have the follow-through to the local level, it's essentially meaningless."

So, if a business wants to make sure that the Chinese goods it orders are being produced in an environmentally responsible way, what can it do? The first step, says Economy, is that "any company needs to know the factories from which it is sourcing. Some multinationals might not even know. It's difficult to know. Many Chinese manufacturers source their production to 10 different places."

After that, says Economy, businesses need to find out if the factories are, at the very least, adhering to Chinese environmental standards, and find ways to reward the factories that are doing a better job.

"Businesses can say, 'you're doing the right thing, Factory X, so you'll give us a greater portion of what you're selling, to the detriment of Factory Y, which isn't doing a good job.' You can reward factories which are going green, and punish those which aren't."

Some NGOs are involved in efforts to help businesses gather information on factories' environmental impact. The Natural Resources Defense Council, for example, has lent its support to the Greenwatch environmental ranking system in Jiangsu Province. The NRDC plans to work with multinational retailers and manufacturers to develop what they call "preferred supplier systems" for factories with strong environmental records.

"The solution isn't going to come from multinationals or foreign governments pouring money into China or placing new technology, which has happened over the last few decades," says Economy. "If you don't have a willing and capable Chinese partner, you're not going to get very far. China needs to develop the infrastructure to support a better path."

As part of this, Economy says that China needs to examine the way it prices its utilities. "China froze the prices of its natural resources. Water is priced well below market rate in China, and energy is too. Concerns for social unrest keep the price of water and energy low. But if you want to create an incentive to conserve, you have to be willing to pay a price."

Forcing Chinese factories to go green may have another price, forcing the cost of goods and services up, but it might be a price we need to pay. "Can China go green? Yes," says Economy. "Can the world be saved if China doesn't go green? No."

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