In order to confront the current economic crisis, China passed one of the largest stimulus bills in the world. Considering the size of the stimulus relative to the nation's GDP, it is the largest stimulus package issued since the fall of the world economy.

     

China has parceled the money out to a variety of projects, including housing projects, medical care and education, and research and development  innovation projects. The bulk of the money, however, will go to improve infrastructure. Fifty percent of the 4-trillion yuan plan will go towards the improvement of highways, railroads, and power grids, with another 25 percent going to  infrastrucutre projects in rural and earthquake-stricken areas.

 

The chief concern from environmentalists' perspectives, both domestic and international, regarding the Chinese package is that there are not adequate safeguards to prevent further environmental degradation. Their concerns are not unfounded-- China recently passed the United States as the world's leading emitter of greenhouse gases.

     

"It is a disgraceful lifestyle to drive a BMW but have only dirty water to drink," said Zhou Shengxian, China's minister of environmental protection, in an interview with China Daily.

     

In order to combat the environmental issues that officials say will result as part of the infrastructure projects, Zhou said that he and his department will exercise the right to reject projects they deem are too harmful to the environment. His Vice minister, Zhang Lijun agrees.

     

"I don't see environmental problems in the stimulus plan because we have set a 'firewall' to block projects that could cause serious pollution or consume too much energy and natural resources."

     

So far the Environmental Protection Ministry (EPM) has approved 365 infrastructure projects for environmental impact, and rejected 29, among them chemical, petrochemical and coal-burning projects.

     

Additionally, the EPM has reported reductions in two key measures of pollution in China, citing a 4.9 and 2.9 percent reduction in acid-rain causing sulphur dioxide and chemical oxygen demand, respectively.

     

This measure seems to be at best, a stopgap measure. Many infrastructure projects are fast-tracked towards approval, and politics plays a definitive factor in the process.

     

Zhang himself admits many businesses will altogether ignore the regulation and build their construction projects without an environmental impact evaluation.

     

And while the two measures of pollution reduction outlined above are important, they alone are not enough to stop or even significantly slow down China's environmental degradation.  Zhang continues to explain that surface water and air pollution remain some of the most serious problems in China. Prominent examples include the quality of water, averaging a level VI on a I-VI scale (VI being too polluted for irrigation purposes) and air quality, which is heavily polluted in seven major Chinese cities.

     

Still, the EPM insists that stimulus-generated economic growth will not come at the expense of the environment. Seven percent of the Chinese stimulus package has been allocated to deal with ecological and environmental impacts.

     

The main goal of the environmental projects is to  increase the percentage of renewable energy resources to about 20 percent of total energy sources, a goal the Chinese government hopes to achieve by 2020. This means more wind and solar power, and  China has already invested heavily in these technologies with about $15.6 billion in 2008, an 18 percent increase over 2007. The onset of the economic crisis has only further underscored the need for China to act as a leader in renewable energy technologies.

     

This confirms a renewed commitment of the Chinese government to addressing domestic environmental problems. Whereas previously environmental concerns were brushed aside in favor of rapid economic growth, the economic crisis has actually proven to be a boon for environmental advocates, since slowdown has allowed China to take a step back and re-orient itself towards environmental safeguards.  Zhang notes: "the economic slowdown has given the country an opportunity to adjust its economic mode, and green businesses will help increase domestic consumption in the economy and change our pattern of growth."

     

Both are key points for which the international community, and particularly the United States, has been pushing. China has long argued that it cannot be held to the same standards as the Western world, saying that there were no such impositions on the United States or Europe when they were going through similar phases of development.

     

The economic crisis has changed the playing field though. The reality is that there are fewer natural resources in the world than when the so-called "first world" was still developing. Consequently, China has no other choice than to consider how to develop sustainably and preserve the environment.

     

In September 2006, China took an initial step by releasing the Green GDP Accounting Study, a report which represented environmental degradation and consumption of natural resources as a percentage of the GDP. The State Environmental Protection Administration (SEPA) and the National Bureau of Statistics (NBS) headed up the pilot study and found that environmental pollution cost about three percent of national GDP.

     

While a significant figure, leading Chinese scientists and international observers expected a figure between 8-12 percent. Chinese officials with the NBS and SEPA tried to maintain the integrity and usefulness of the report by noting underestimations and missing items for review, which led many to wonder what sort of net effect the report would have on Chinese economic growth and environmental protection.

     

Internal politicking was one of the greatest detractors of the green GDP, since Beijing had considered the idea of linking promotion for officials with the degree to which they had engaged in environmental protection. Now again with the stimulus package, internal politics may once again prove to be a potent deterrent for any true change to be accomplished. The local officials felt threatened by the final Green GDP report and blocked it from the public. Similarly, it is entirely conceivable that local officials will seek to bypass the EPM's approval process and use the stimulus money to immediately begin construction, under the pretext of improving the standard of living in their respective areas.

     

It is undeniable, however, that China is making a definitive and concerted effort to improve environmental conditions domestically and to become a global environmental leader. Perhaps most noteworthy about the stimulus package is that unlike the United States, the Chinese package is not a re-orientation of the nation's economy to try and produce green jobs, but rather to bolster and accelerate what was already an impressive and growing part of the Chinese economy.  Indeed, many observers are worried that entrepreneurial ventures in the United States will not be able to compete with China's existing market.

     

Observers of that viewpoint have reason for concern. Take for example the Climate Group's report titled "China's Clean Revolution" released in 2008, which details both the trials and tribulations that China has experienced in recent times regarding the environment. Currently, China is heavily dependent on coal, using it for approximately 77 percent of its energy needs. However, as previously mentioned, China had planned on increasing its overall percentage use of renewable energy to 15 percent by 2020, but recently increased that estimate to near 20 percent.

     

The stimulus package also goes a long way to accomplishing that goal. Estimates on the amount of money going to the explicitly stated "ecological and environmental projects" range anywhere from five to fifteen percent[i], but some reports include various infrastructure projects under the umbrella of environmental affairs, boosting the figure to 38 percent of the total package[ii]. The Financial times and the HSBC have also estimated the figure to be 38 percent of the total package.

     

As Christopher Flavin, president of the Worldwatch Institute, an environmental institution out of Washington D.C. says, "China's leaders see it as a necessity, not an achievement. Renewable energy sources…are seen by many Chinese leaders as the key to the country's economic future and national security."

     

China is a prime example of how environmental protection and economic growth are not mutually exclusive. In order to sustain growth, renewable energy technologies and usage must become a capstone for virtually every economy on Earth. However, with pollution at its current measures, it remains to be seen if China's green development can contain, or perhaps even reverse, the immense damage that industrialization has wrought upon the country.

     

    

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