19.02.2014 Author: Alexander Salitsky

China: “Green Prospects”. Part 1

65In November 2013, the Central Committee of the Communist Party of China adopted a resolution containing an official statement on the adoption of a plan for comprehensive deepening of reforms. According to Chinese media, the document sets out a “road map” of social and economic transformations that determine the development of the PRC for the next 10 years. In particular, the Resolution considers the issues of environmental protection in China.

As it is well known, modern oriental society has two types of environmental problems. The first type is due to the agrarian overpopulation, widespread poverty and often-unconscious environmental damage. The most common and dangerous example of this kind is deforestation. Similar problems include swamp drainage and lake shrinkage, mountain slopes plowing, overgrazing in the steppes, etc.

The second type of environmental problems is closely associated with the industrialization and increasing use of fossil fuels. These problems have a long history of research in developed countries, and they have become an important part of the international agenda since the 1970s – it will suffice to mention the UN Stockholm Conference on the Environment in 1972 and the report to the Club of Rome on “Limits to Growth”, published in the same year.

At that time, many developing countries (including China) suspected an attempt to slow down their economic development with the idea of the “zero growth”, suggested by the authors of the report. Over time, the debate on this issue has been formed into a thesis about different historical responsibility for global environmental problems of developed and developing countries.

Meanwhile, the contradiction between industrialization and environmental protection, as it has been shown by the post-reform China, can be mitigated even in the East with its huge agrarian overpopulation and a burning need to employ it. One of the ways to improve the situation is the development of new energy.

Industrialization, environmental problems and new energy

Study of the course and stages of Chinese industrialization disposes one to a cautious optimism, in respect of understanding the severity of environmental problems of this giant country. First, China has largely solved environmental problems of the first type – i.e., problems related to the widespread poverty of the rural population. Among the specific ways, found by Chinese reformers, we should note the restriction on births and migration to cities, the introduction of the manufacturing system in the villages, public environmental work (especially massive afforestation), public education, etc.

The successful solution of environmental problems of the first type in the energy sector can be associated with a significant reduction in the use of traditional fuels (and hence the increase in the welfare of the village). The share of traditional fuels in the total primary energy consumption in China decreased from 18% in 2000 to 2% in 2010. Such dynamics cannot be called other than a “breakthrough” (This figure has decreased in the PRC only 2% over the previous decade.).

Second, we can observe a generally positive relationship between the dynamic economic development (including industrialization) and the ability to diagnose, prevent and correctly treat environmental illnesses (although the latter is somewhat delayed in time).

Certainly, in the early stages of market reforms, the PRC had to follow the vicious algorithm “you have to get messy at first, and then you can think about the environment”, but the pace of economic change in China was so rapid that the mass understanding of the dead end of this path was quite timely. Already in the mid-1980s – early 1990s were a time when the state and society decisively faced environmental issues.

In addition, the relative scarcity of fuel and energy, as well as acute transport problems forced Chinese reformers to release energy prices onto the market sector quite early (1992-1993). As a result, there was a fundamental shift in energy efficiency in the country in the second half of the 1990s. However, this was somewhat exaggerated by the official statistics of the time (Chinese statistics were showing approximate equality in coal production in 1990 and 2000 for some period of time, although this defect was corrected in the future: about 1 billion tons, which, of course, meant a huge fuel economy. In fact, the figure of 2000 “did not take into account” about 300 million tons. However, savings were achieved, but these were simply not so impressive).

On the other hand, market reforms can cause significant environmental damage – as long as society does not learn to regulate this area. The fact is that in China, where coal deposits are widely distributed throughout the country and its production in small mines and pits was encouraged by the state for a long time, the availability of this type of fuel led everywhere to its involvement (including illegal) in the market turnover, and gave rise to various ways of using it that were far from ideal.

The problems stemming from the excessive burning of coal, as well as environmental (and human) side effect of its production in various ways are well known. In China, this is aggravated by the fact that many cities are located in kettle depressions, and by the problem of solid waste management in megacities, etc. However, there was no other available resource for continuing industrialization in a country that was relatively poor at the time. During the first decade of this century, China had tripled the use of this type of mineral fuels – with all the negative consequences.

Nevertheless, there also was an evolutionary significance in this industrial breakthrough. A massive accumulation and modernization of basic assets in the major coal production and energy sector was accompanied by a “continuous modernization” of heavy industry. At the same time, a modern transport infrastructure was created in the country with a scale unprecedented even in East Asia. The decade of the industrial breakthrough also prepared a rapid consumer revolution, being observed today. Moreover, the ecological revolution is its integral part, as it was in developed countries at the time.

In view of all this, we can see that there is no basic contradiction between industrialization and environmental protection. It is also clear why the understanding of sustainable development has its special features in China, which partly contradict conventional ideas. We can distinguish at least three of them. First, Chinese interpretation of sustainable development does not involve any significant anti-industrial elements, on the contrary, the continued industrialization is also considered as a way to solve environmental problems. Second, the motif of nature transformation is quite strong: the state makes significant efforts to develop the continental areas of the country, implements a number of infrastructure mega-projects, including water transfer from the south to the north of the country, etc. Third, sustainable development has a pronounced social aspect in China (poverty alleviation), and implies a certain isolation of national states and the specialness of their environmental policy, as well as the protection from adverse external influences, such as prohibiting the import of “dirty” industries into the country.

It is no mere chance that Chinese understanding of sustainable development has led to the transformation of the country into one of the leaders in the field of renewable energy resources (RES) – at least among the developing countries. Another fact is also clear: without gaining a certain level of production and consumption of fossil fuels, the transition to new energy (its formation) is hardly possible on a mass scale.

On the other hand, the rapid development of the RES-generation industry in China leads to a significant reduction in the price of equipment for industry, and a quite intense competition has developed in this sector. Therefore, the countries lagging behind in industrial (energy) and environmental revolution can have some additional opportunities to improve things, thanks to cooperation with China.

This was evidenced, for example, by the results of the “Global Fair 2013” in Nairobi in autumn 2013. At this event, the contracts concluded with China in the “South-South” line in the field of “green economy” amounted to over $400 million.

In a sense, China defies the forecasts of the Club of Rome. In this regard, we should mention that the forecasts of the early 1970s also reflected the obvious concerns of the West, which was much more industrial at that time then it is now, about further growth of prices for resources during the industrialization of the East. However, restraining development from the outside (including under the environmental banner) was not successful in the case with China.

All this does not mean a problem-free situation. In 2012, the press reported China’s intention of to build another 360 coal-fired power plants with a total capacity of over 500 GW. Many of them will be placed in areas with already significant water deficiencies. These plans have been criticized, including by Chinese environmentalists and economists, some observers believe that they may be significantly adjusted in the future.

Partially, the point is that it seems that the rapid development of heavy industry in the PRC is being completed.

(To be continued…)

Alexander Salitsky, PhD in Economics, chief research fellow at IMEMO, professor at the Institute of Oriental Countries; 

Svetlana Chesnokova, Researcher in the Center for Energy and Transport Research of the Institute of Oriental Studies, 

exclusively for the online magazine “New Eastern Outlook”.

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