Chapter Seven

The Environment and the Energy Sector

China’s significant environmental problems are due largely to the lack of modern technologies and remedial policies needed to update the infrastructure. Air quality is a major health concern. The cities of northeastern China especially suffer from polluted air, but the problem has accompanied industrial development throughout the country: 9 of the world’s 10 cities with the most polluted air are in China.¹⁶³
Beijing announced the latest State Industry Technology Policy in June 2002, which, in conjunction with the Tenth 5-Year Plan, establishes as “major targets” the use of “clean energy technologies, as well as oil substitution.”¹⁶⁴ Specific goals include reducing the power industry’s sulfur dioxide emissions by up to 20 percent from 2000 levels, probably an unrealistically ambitious goal.¹⁶⁵ The country’s environmental emission levels can be significantly lowered, however, simply by taking advantage of existing technology.
The question remains whether the national and provincial governments are able to find the resources to fund and to convince the power industry to make the changes necessary to meet this ambitious goal. The scope of the problem may be indicated by a report that “Beijing residents are expected to inhale 8,500 tons less of sulfur dioxide and 4,300 tons less of soot this [2002–2003] winter” due to such improvements as coal-burning boilers being “rebuilt.”¹⁶⁶
Existing environmental problems already pose very serious challenges. The ever-increasing energy demands generated by rising living standards and economic growth increase the urgency and scale of addressing the problem. The problem is being addressed, with the Special Olympics planned for Shanghai in 2007 and the Olympics scheduled for Beijing in 2008 serving as a spur.¹⁶⁷
The SETC has announced a Green Project in support of the Olympic Games, emphasizing increased use of solar energy, improved water conservation, and greater reclamation of recyclable materials.¹⁶⁸ The city is also planning to use geothermal energy in Olympic facilities.¹⁶⁹ The scope of the city’s concern is also indicated by efforts to invigorate the Green Light Program, begun in 1996 to attempt to reduce -mercury contamination.¹⁷⁰
The environmental consequences of continued heavy use of coal raise important issues not just for China but also for global efforts tackling the problem of climate change. Beijing has announced a goal of reducing its annual consumption of coal from 27 million tons in 2000 to less than 15 million tons in 2008. It has also set a goal of having “8,000 buses and 40,000 cabs...fueled by green energy” by 2007, which would account for 90 percent of the former and 70 percent of the latter. The primary means of accomplishing this ambitious standard will be through providing natural gas stations.
Other cities are following suit. A Shanghai official has claimed that the city “has made it a long-term target to build itself into an ecological metropolis.”¹⁷¹ If the massive West-East Pipeline is constructed, Shanghai’s sulfur dioxide pollution might be reduced by 90 percent and the current acid rain problem largely resolved.¹⁷² China is now the second largest emitter of greenhouse gases in the world (after the United States), while acid rain falls over 30 percent of China’s landmass. The World Bank estimates these conditions to cause 178,000 premature deaths a year in China and in 1995 to have been responsible for as much as $13.75 billion in economic losses.¹⁷³
As the world’s largest producer and consumer of coal, China should be able to focus on managing and balancing the environmental consequences of its dependence on coal as the major fuel of its economy. Beneficial results are possible from instituting new technology and processing policies. These range from improved mining methods, which would reduce methane emissions, to better management of water and land resources.
For the present, however, the overwhelming dependence on coal for fuel continues to affect the environment severely. Many of China’s environmental problems resulting from dependence on coal can be attacked by implementing existing technology in both mining and using coal. There is, however, strong competition in China for limited capital to fund the widespread modernization of the economy. Hence, Beijing faces difficult prioritization issues when allocating financial resources to the implementation of new technology for producing energy: does it devote available capital to spreading the application of current technology, or does it devote that capital to emerging technology, in an attempt to “leap ahead” of current shortfalls?
The linkage between non-hydrocarbon energy sources and the environment is illustrated in a report of “small, eco-friendly hydropower stations” being constructed. A tiny hydropower station built in Tibet reportedly allowed a farm family to substitute electric heat for the 20 kilograms of wood burned daily. This in turn should slow the deforestation process and thus preserve the habitat in which pandas flourish.¹⁷⁴
Much progress has been made in China during the past quarter-century to lessen the severe environmental degradation that has accompanied the nation’s dramatic economic development. During the past 5 years, moreover, the national and, to a lesser extent, provincial governments have begun instituting policies to counter environmental problems.
Government action has been particularly and increasingly pressing in the case of fresh water, with $3.6 billion earmarked for improving the water supply.¹⁷⁵ Especially in northern China, historic shortages have been exacerbated by drought, population increases, and economic development. The demand for water for personal and business uses has outstripped the supply. One analyst has claimed that China has just 8 percent of the world’s fresh water supply to support 22 percent of the world’s population.¹⁷⁶ Water also has very serious implications for Asia’s international relationships, as China’s efforts to assure its own future inevitably will clash with those of other regional nations.
Thirty million urban citizens were recently estimated to lack adequate fresh water, including those living in 400 of China’s 668 cities.¹⁷⁷ Beijing’s response to this increasingly critical shortfall has been multifaceted, urging conservation on the part of consumers, proposing a nuclear-powered desalination plan, and, more meaningfully, launching a massive project to divert water from southwestern China to the northern part of the country. This project will link the Yangtze and Huaihe Rivers and the Yellow River and Haihe valleys, forming a network of four horizontal and three vertical waterways that allows a more productive allocation of the country’s water resources nationwide.
This ambitious plan is designed to divert 3.8 trillion cubic meters of river water a year, which equals the annual flow of the Yellow River. This project was initiated in 2001, with worldwide public bidding invited for specific phases. While details are lacking—indeed, planning is still under way—the first and second of this plan’s three routes are scheduled to be under construction by 2010. Total cost will probably exceed $50 billion.¹⁷⁸
This water diversion scheme rivals the Three Gorges Dam project as an engineering feat and will probably surpass it in political importance. First, there are bound to be domestic implications, as water resources are taken from one province and given to another. Second, the nations of South and Southeast Asia have already begun registering their concern about Beijing following diversion of the Yangtze River with attempts further to “harness” the other three great rivers with headwaters in the same area.
The Mekong, Irrawady, and Indus Rivers are of the utmost importance to the economic and social existence of the nations lying downstream; some of these have begun complaining that China’s riverine efforts have already reduced the flow of water down river.¹⁷⁹ In the meantime, Beijing has promised to cooperate with the Mekong River Commission to ensure equitable distribution of water, environmental preservation, and electrical power sharing.¹⁸⁰ It is providing hydrological data on the river’s upper reaches and in June 2002 hosted the latest meeting of The Great Mekong Subregion Cooperation group, which was organized in 1992. In addition to China, Burma, Cambodia, Laos, Thailand, and Vietnam sent representatives, as did the Asian Development Bank.¹⁸¹
The quality and sufficiency of water for China’s continued economic growth is far more than an environmental question; it has a direct influence on continued social coherence among that nation’s vast population, whose growing sense of nationalism and loyalty to the Beijing regime depends in large part on continued economic growth at a personal as well as a societal level.
Implementation of new technology may be slowed by China’s desire to emphasize indigenous development. The continued rapid pace of economic development and its deleterious environmental effects mitigate against such an autarchic policy—the current state of air and water pollution and shortages means that Beijing must pursue solutions whatever their origin, domestic or foreign. Beijing recognizes the need for economic and technical cooperation between foreign and domestic organizations but insists on doing so according to its own terms and schedule. Nonetheless, it is doubtful that any significant energy infrastructure project has been launched during the past decade without very significant foreign involvement. One proposed project, the “main body of the Zhiganglaka -Hydropower Station on the upper Huang He,” will be “the first state-listed power project exclusively funded by overseas investment,” by the American AES Corporation and a Hong Kong company.¹⁸²
The growing degree of foreign involvement in China’s energy sector increases Beijing’s concern with the global energy situation, expressed at the November 2000 meeting of the Asia-Pacific Economic Cooperation (APEC) group by Foreign Minister Tang Jiaxuan. Alternate sources of energy are being investigated, both for generating electricity and powering vehicles; they include generating power from rubbish, straw, and marsh gas processing; wind power; hydropower; hydrogen; and solar energy.¹⁸³ A primary concern is the degree to which alternate sources are less injurious to the environment.
China seems determined to improve its record of conserving and improving the environment. It must do so not only for the near-term objective of the 2008 Olympic Games but also for long-term economic and social reasons. At a September 2000 APEC workshop on offshore energy facilities and the environment conducted in Beijing, the Chinese representatives emphasized the importance of environmental protection along the country’s very long (18,000 km) coastline and noted the revised body of law on protecting the marine environment China has instituted.¹⁸⁴ Beijing is advocating corrective policies and pushing the requisite programs, but the struggle to gain the effective support and cooperation of Chinese society, especially its industrial sector, is far from won.

Endnotes

¹⁶³World Health Organization (1999), accessed at <www.angelfire.com/mi2/pnginc/cctenworst.htm>. [BACK]

¹⁶⁴“China Issues Latest Technology Policy to Promote Clean Energy,” Interfax Information Services,in Alexander’s 7, no. 16 (August 23, 2002). [BACK]

¹⁶⁵“China Forecasts on Installed Power Capacity,” Interfax Information Services, May 27, 2002, in Alexander’s 7, no. 12 (June 13, 2002). [BACK]

¹⁶⁶“Beijing Paper Examines How New Coal-Burning Boilers to Create Cleaner Air,” Xinhua, October 29, 2002, in FBIS-CPP20021029000109. [BACK]

¹⁶⁷Tian Xiuzhen, “City Gets Tougher on Emissions,” China Daily, February 26, 2003, in FBIS-CPP20030226000087, also notes the World Expo planned for Shanghai in 2010. [BACK]

¹⁶⁸“China Implements ‘Green Project’ for Successful Olympics,” Xinhua, April 11, 2002, in FBIS-CPP20020411000144. [BACK]

¹⁶⁹“Beijing to Boost Geothermal Energy Resources,” Interfax Information Services, in Alexander’s7, no. 23 (November 27, 2002). [BACK]

¹⁷⁰See “Seminar Held on ‘Green Light Program’ to Protect Environment, Save Energy,” Xinhua, September 18, 2001, in FBIS-CPP20010919000001; “Beijing to Develop Pollution-Free Energy, Cut Coal Consumption,” Xinhua, February 24, 2002, in FBIS-CPP20020224000013. [BACK]

¹⁷¹Tian Xiuzhen, “Pollution, Energy Top Concerns for Shanghai,” China Daily, November 8, 2000, in FBIS-CPP20002208000032. [BACK]

¹⁷²“China Begins Construction on 4,200-Kilometer Long Gas Pipeline Project,” Xinhua, July 4, 2002, in FBIS-CPP20020704000141, is too optimistic, but shows that environmental improvement is becoming a more prominent concern in China’s energy infrastructure plans. [BACK]

¹⁷³Cited in Barbara A. Finamore, “Taming the Dragon Heads: Controlling Air Emissions from Power Plants in China” (Taipei: Natural Resources Defense Council, June 2000). [BACK]

¹⁷⁴“More Small, Eco-Friendly Hydropower Stations Built in Rural China,” Xinhua, February 1, 2002, in FBIS-CPP20020201000069. [BACK]

¹⁷⁵Liang Chao, “U.S. $3.6 Billion Pledged for Water Projects,” China Daily, February 26, 2003, in FBIS-CPP20030226000092. [BACK]

¹⁷⁶Luan Shengji and Hong Yang, “Water Security Problem in the 21st Century,” Keji Ribao [Science and Technology Daily], March 9, 1998, in FBIS-CHI-98-217. [BACK]

¹⁷⁷“Northern PRC Cities Facing ‘Serious’ Water Shortage,” Xinhua, April 2, 2002, in FBIS-CPP20020402000170; Zhu Ronghji, quoted in “Chinese Premier Unveils ‘Green Plan’,” March 5, 2001, accessed at <www.cnn.com/news>. [BACK]

¹⁷⁸Xie Ye, “Firms Thirst After Canal Project,” China Daily (Business Weekly Supplement), November 19, 2000, in FBIS-CPP20001119000015. The desalination scheme is discussed in “China Develops Nuclear Powered Heating and Desalination,” Xinhua, June 20, 2002. “West Route of Water Diversion Project to Start in 2010,” Xinhua, August 18, 2002, in FBIS-CPP20020818000047, provides some additional but still sketchy details, including an estimated cost of approximately $41 billion for two of the three routes; Miccarelli, “China’s ‘Three Canals’: The Impact of China’s Water Diversion Project,” VIC (May 9, 2001), gives $30 billion as the cost. Both of these figures are almost certain to be exceeded in such an unprecedented project. [BACK]

¹⁷⁹“Lancang-Mekong River Opens to Navigation in China, Laos, Burma, Thailand,” Xinhua, June 26, 2001, in CPP20010626000018; “China to Help Myanmar, Laos Dredge Mekong River,” Xinhua, June 28, 2001, in FBIS-CPP20010628000151; and “Project to Improve Navigation Route Through China, Burma, Laos, Thailand, Cambodia, Vietnam,” Xinhua, March 30, 2002, in FBIS-CPP20020330000095, all reflect both the sensitivity of plans to affect the course of these rivers, and Beijing’s plan to defuse opposition. [BACK]

¹⁸⁰“China to Provide Information on Mekong River to Downstream States,” Xinhua, April 1, 2002, in FBIS-CPP20020401000024; “Six Mekong Countries Sign Regional Power Trade Accord,” Xinhua, November 3, 2002, in FBIS-CPP20021103000055. [BACK]

¹⁸¹“China to Offer Hydrological Data to Mekong River Commission,” Xinhua, June 12, 2002, in FBIS-CPP20020612000068; “GMS Cooperation Meeting Opens in Kunming,” Xinhua, June 8, 2002, in FBIS-CPP20020608000071. [BACK]

¹⁸²“Work Begins on First Overseas-Funded Hydropower Station on Huang He,” Xinhua, September 25, 2002, in FBIS-CPP20020925000218. “CNPC and Power Technology Forge Ahead on Targets,” PWTC/APMT, June 6, 2002, in Alexander’s 7, no. 13 (June 27, 2002), reports China’s attempts to secure advanced welding technologies to improve pipeline safety and durability. [BACK]

¹⁸³Li Dadong, director of the China Petrochemical Industry Scientific Research Institute, quoted in “China to Vigorously Develop its Clean Fuel Technology,” AsiaPort, in Alexander’s 6, no. 24 (December 19, 2001), discusses alternate automotive fuels; “Many Chinese Cities Generate Power by Rubbish and Marsh Gas,” AsiaPort, in Alexander’s 6, no. 20 (October 24, 2001); “Western China Area May Also Use Renewable and Green Energy,” Asia Pulse, in Alexander’s 6, no. 18 (September 25, 2001); “Hebei Province Farmers Benefit From Straw Gasified Power,” Xinhua, March 12, 2001, in FBIS-CPP20010312000163; “China Develops Green Hydrogen Energy,” Xinhua, January 17, 2002, in FBIS-CPP20020117000164, discusses various projects—especially a joint venture with a Canadian company—to develop fuel cell technology, which “will not produce any pollutant.” Also see “Tibet Leading China in Solar Energy Use,” Xinhua, December 15, 2001, in FBIS-CPP20011215000038, which notes that this development “helps protect the fragile ecological system in the region.” [BACK]

¹⁸⁴"APEC Workshop in Beijing,” Xinhua, in Alexander’s 5, no. 20 (November 1, 2000). [BACK]