China's New National Plan: Green by Necessity

China's new national 2011-2015 economic plan--essentially also its green blueprint--is now starting to be unveiled, then will be finalized by the People's Congress in March. China is aiming at reforming the world's second largest economy by optimizing it for low-carbon, resource efficient and urban climate change-adapted performance, as it takes on 400 to 700 million more people in its teeming cities as part of the world's most ambitious socio-economic transformation.

"China is the earliest developing country in the world to map out its plan for ecological growth," said Wang Ronghua, President of the Shanghai Academy of Social Sciences, at the Fourth World Forum on China Studies, held earlier in November. "It will be a daunting task to restructure. There is a huge amount of funding available for this effort. This is being done because in the next three decades China will not be able to support 1.3 billion or more people." (China currently has more than 1.33 billion people.)

The new national "12^th Five-Year Plan" (twelfth, that is, since formation as the People's Republic in 1949), covers its industrial, economic and social development. The gist of the new plan:  a new focus on quality of development rather than on quantity only. China wants to strengthen the nation's low-carbon economy while trying to repair the extensive environmental and human health damage it has sustained during its 30-year race to lead global industrial production.

The 11^th Five-Year Plan (2006-2010) included goals of lowering energy consumption per unit of GDP. For China's provincial and city governments that means energy consumption per unit of GDP must decrease by 20 percent in 2010 compared to 2005. 

With its new national plan, China is now building on the goal of energy efficiency with a more full-scale sustainability agenda, featuring reduced carbon intensity (cutting carbon emissions per every unit of economic output, or GDP) combined with overall environmental restoration and management practices. This focus will increase investments in renewables, information and communications technologies, advanced transportation and materials, water supply and treatment technologies (including using plants for bioremediation), and air and water quality. In other words, China is trying to improve its quality of life, which would benefit investment, tourism, and ecosystem services, not to mention the health of humans, along with animal and marine species.

Part of this strategy rests upon moving the nation from being "factory to the world" to becoming a provider of services such as information and communications technologies, financial services, and other less-polluting business sectors, while also maintaining a global lead in manufacturing clean energy and other "value-added" technologies for export.

Draft language from the new Plan that was read to my Institute for Strategic Resilience (ISR) colleagues and me during my recent visit to China includes the directive for government officials to comprehensively, "Use technology and administration to transform mode of development to an eco-friendly and low-carbon lifestyle. Ensure that economic development confirms with environmental protection."

It was announced last week that the nation is also preparing to comprehensively monitor chemical and organic pollutants in both the air and water: currently only 200 pollutants are monitored versus 1,200 in the United States. Ambitious goals, yes, but China appears to be willing to attempt to back them on the ground.

The country began this summer a national low-carbon pilot program focused on five provinces and eight cities. Through the pilot programs, it is attempting to leverage best-of-breed strategies and tactics from localized sustainability plans, projects and methods. This simultaneous top-down (12^th Five Year Plan) and regional approach (pilots) will likely make China even more competitive in the development of new clean energy technologies and services.

China has already surpassed all other nations in the production of PV solar and wind technologies: one showcase city is the renewable production center of Baoding, a city of one million near Beijing with more than 20,000 new clean energy jobs in three years. Baoding is the smallest of China's eight pilot low carbon cities. The largest pilot is almost-megacity Shenzhen, with a population of nine million. In all, the pilot provinces and cities comprise 27 percent of the nation's population and 36 percent of China's national Gross Domestic Product. China is providing incentives for its cleantech companies through subsidies to manufacturers of solar film, wind turbines, and electric vehicles, and it is offering subsidies to consumers to purchase electric cars.

China announced December 4 that it is bolstering its renewables to get 500 Gigawatts (GW) of renewable power by 2020, which will be about one third of its total national power production by that year. This includes adding 125 GW (from 25 GW now) of wind power, and adding almost 20 GW of solar, from half a Gigawatt now. Other areas that will be boosted under the plan include ethanol, biodiesel, biomass and biogas production.

My observations and findings are fresh from a visit during October-November. I was a UN delegate to a one-day summit on "Urban Innovation and Sustainable Development," which was held as part of the closing ceremonies of the 2010 World Expo in Shanghai ("Better City, Better Life"), the largest world expo ever in terms of size, attendance, global participation and investment. The development of low carbon and green technologies, along with public education on moving toward more sustainable behaviors, was the key theme in the four pavilions sponsored by China and visited by tens of millions of Chinese citizens.

At the headquarters of its all-powerful State Council in Beijing, my ISR colleagues and I met with national government and academic sector experts about development of China's green economic research and planning. We were briefed at the State Council by economic, eco-city and low-carbon experts from the China Center for International Economic Exchanges, a top national think tank affiliated with the State Council. Our itinerary included a visit with government officials in a medium-sized city for a glimpse of how local governments in China are already attempting to balance sustainability management with economic development. More about the local angle in my next post.

During the excellent Fourth World Forum on China Studies in Shanghai, we were invited to present along with 20 academic, corporate and government experts on "Green Development." (More than 300 China experts participated in the overall forum, most of them from China.)

At the opening of the Green Development Sub Forum, Professor Wang Ronghua, former President of the Shanghai Academy of Social Sciences and a well-known editor on Deng Xiaoping's theories, ticked down a list of the nation's current state, making it obvious why China is moving toward comprehensive sustainability planning, measurement and management:

Water and Wastewater: "Fresh water supply is in danger because of rapid depletion--heavy industrial growth has caused the consumption of too much water." Wang Ronghua said. "China is one the most water scarce countries in the world. Lakes and rivers are viewed as sinks in which to discharge wastewater. Hebei province's lakes were once beautiful. Now they are highly lethal, the same with the Yellow and other rivers. Fresh water will become more scarce than oil in China, which is an inconceivable future."

Resource and Energy Use: "The consumption of mineral resources is occurring faster than production because of crude modes of production rather than making better uses of natural resources. China uses 17 percent of the world's total energy supply: it used 2.8 billion tons of coal in 2009, which will rise to 10 billion tons by 2030, which means China will rely on imported energy as it only produces four tons per year." (From 2007 to 2009, China's moved to being a net coal importer for the first time in its history. Oil imports also reached 52 percent in 2009, while its new car sales surpassed those of the US for the first time the same year. National car ownership will multiply by a factor of three or more between now and 2020.)

Land Use and Planning: "There are dilemmas about how to protect and make better use of land resources. Too much land is consigned for development and conceded, especially in coastal and eastern China. In Shanghai, five years' supply of land planned for new development has been used up in one year."

Waste: "Ninety percent of urban waste is landfilled. Garbage is increasing at 10 percent annually--out of six hundred big cities, one third are besieged by garbage and waste."

Air Pollution and Climate Change: "Acid rain and CO2 emissions will double by 2020.  High-polluting industries are also pillar industries," Wang Ronghua concluded. (Beijing's air pollution recently was said to be at a "crazy bad" level on Twitter by the US Embassy, which was later deleted and changed to "beyond index.") The Asian Development Bank estimated in 2008 that more than half of the world's increase in greenhouse gases through 2027 will come from Asian cities, a majority of that increase from the cities of China.

The most urgent challenge will be getting changes made at local levels. Ronghua said that the "costs of breaking the law are too low, there is not enough enforcement or enforcement is uneven with the same violation receiving different punishment."

Through its State Council and its operational arm, the National Development Reform Commission (NDRC), China is actively considering how it can develop models and indicators that will guide ecological restoration and green economic development in conjunction with traditional economic measures such as Gross Domestic Product (GDP). As part of its low carbon pilot province and city programs, regional and local governments are pledging to reduce carbon intensity, or carbon emissions per unit of GDP economic output, by up to 50 percent from 2005 levels by 2020. (See today's advertising supplement from China Daily, which also appeared on p. A12 of the New York Times).

There is a growing acknowledgment in China that economic growth cannot be an all-consuming goal. For 30 years, with an average annual national growth rate of 10 percent, China's GDP has for many years surpassed growth of other nations, but at what cost?

Zhou Fengqi, Director of the Center for Eco-Economy and Sustainable Development at the Shanghai Academy of Social Sciences, spoke of the need for systemic change in China: "China needs to change from the consumption of products to consumption of services."

Exactly how China will achieve its ambitious goals for a greener national economy will now emerge from numerous releases and announcements surrounding the new 12^th Five Year Plan. Key to its success will be how systemically national leadership can help develop objective measures for provincial and city leaders that provide clear and consistent goals for industries, business and citizens.

It's time for China to look at its cities, communities and centers of expertise for leadership and scalable solutions to help reverse the degradation of nature and quality of human life--along with the damage to its economy--that has occurred (or will occur) because of air, water and soil pollution, and global climate change. While many restorative activities will help bring new economic growth opportunities, they will also ensure that China has a base of natural resources for its cities that can sustain a viable quality of life.

The country must now decouple its economic growth from manufacturing while incorporating a more diversified (and less material intensive) base, in order to remain economically viable in the future. Said Wang Ronghua, "Instead of only focusing on GDP measurements, the government needs to provide more parameters on ecology and living standards, including improvement of culture."

Warren Karlenzig is president of Common Current. He is a fellow at the Post-Carbon Institute, strategic adviser to the Institute for Strategic Resilience and co-author of a forthcoming United Nations manual on global sustainable city planning and management.