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Officials should have more power over Chinese companies abroad

Denise Leung — Fri, 24 May 2013 09:30:00 +0000

Domestic environmental laws should be extended to overseas operations, says former government environment economist Hu Tao

Chinese overseas investments are rapidly increasing. As of 2011, China’s outward foreign direct investments (OFDI) spread across 132 countries and regions and topped US$60 billion annually, ranking ninth globally according to UN Conference on Trade and Development statistics. A significant amount of this increasing OFDI goes to the energy and resources sectors – much of it in Asia, Africa and Latin America.

But there are two sides to China’s OFDI coin. On the one side, these investments can benefit China and recipient countries, generating revenue and improving quality of life. However, like any country’s overseas investments, without the right policies and safeguards in place, these investments can fund projects that harm the environment and local communities.

WRI‘s new issue brief surveys the progress and challenges China faces in regulating the environmental and social impacts of its overseas investments. I sat down with WRI senior associate and China expert Hu Tao to talk about China’s overseas investment landscape. Before joining WRI, Tao worked as a senior environmental economist with China’s Ministry of Environmental Protection (MEP). Here’s what he had to say:

Denise Leung: How have China’s overseas investments grown in recent years? What are some trends you’re seeing?

Hu Tao: Although China’s outward foreign direct investments (OFDI) reached US$60 billion and only ranked ninth in the world in 2011, its growth rate has been much higher than other countries. As China’s GDP and foreign trade volume grow very quickly – jumping over the past decade from number six to number two and from number seven to number one, respectively – I am sure that China’s OFDI will catch up soon.

DL: What opportunities does this growing investment bring to China and to the countries in which it invests?

HT: These investments distribute economic resources worldwide and increase the efficiency of the global economy. They create profits for China’s investors and benefit host countries in ways such as job creation, infrastructure improvement and economic development. For example, Ethiopia, as one of the fastest-growing economies in Africa, benefits in many ways, including economically and socially, by hosting China’s investments.

DL: But there are also social/environmental risks associated with these investments. Can you elaborate on how China’s OFDI creates these risks?

HT: Every investment project has its social and environmental externalities. Like other countries’ OFDI, China’s OFDI definitely has significant social and environmental impacts, especially in countries with poor social and environmental governance systems. As an investing country, China faces investment risks. For example, China has invested in several Nile River dam projects. These projects inevitably have implications – and potential risks – for the river ecosystem and the communities that rely on and live near the Nile.

Ideally, these risks should be fully evaluated and considered before an investment is made, and should be taken into account for the duration of the project. WRI is currently examining case studies that will illustrate the environmental and social risks posed and faced by Chinese companies.

DL: What are the biggest challenges that China faces in addressing the environmental and social effects of its overseas investments?

HT: In my view, there are three major challenges:

1) Poor governance systems in host countries, for example in some Least Developed Countries in Africa. Weak governance systems fail to protect communities and the environment from potential harm;

2) Some Chinese companies, especially some small- and medium-sized companies, who do not heed social and environmental responsibility within China, are now taking those negative practices abroad.

3) Lack of coherence between international investment/trade treaties and environmental agreements. From an international legal perspective, this is a grey area.

DL: China’s Ministry of Commerce (MOFCOM) and Ministry of Environmental Protection (MEP) recently issued Guidelines on Environmental Protection and Cooperation, which apply to China’s overseas investments. What are the biggest opportunities and limitations of the guidelines?

HT: The current guidelines are voluntary. There are no mandatory guidelines. These are guidelines that companies may feel a moral obligation to follow, but do not face any repercussions for failing to do so.

When my former MEP colleagues and I were working on the guidelines – before I joined WRI – we tried very hard to make them mandatory. We wanted MEP to have the authority to manage the Environmental Impact Assessments (EIA) and environmental standards of companies doing business overseas. After negotiating with MOFCOM, we had to make some compromises, so we started with voluntary guidelines first. In the future, we may have mandatory guidelines.

Even though the current guidelines are voluntary, they will have positive impacts on the large companies that pay attention to their public image, such as state-owned enterprises. Implementing the guidelines will be important for the corporate social responsibility of these companies.

In China, the current EIA Act only covers companies within the Chinese border. One possibility is to extend the EIA Act beyond the border to include companies doing business overseas. During the last National People’s Congress in March, we provided technical support for a bill submitted by one of the delegates of the Chinese People’s Political Consultative Conference (CPPCC) that would authorise the National People’s Congress (NPC) to extend MEP’s oversight to Chinese companies overseas. The draft bill is still being considered, and relevant ministries from MEP and MOFCOM are being asked for feedback.

While we want mandatory guidelines in the future, we currently don’t have a legal basis to do this. We are now hoping NPC can authorise ministries to do more regarding the environmental management of Chinese companies overseas.

This post was first published by WRI Insights.

Locust plagues point to grim future of climate change

Ido Liven — Thu, 23 May 2013 09:19:00 +0000

Climatic changes in China, the Middle East and Africa could see more severe outbreaks of locusts devastating food crops

The desert locust, the most notorious of about a dozen locust species for its ability to rapidly multiply and travel long distances, threatens an area of 32 million square kilometres, stretching across 50 countries from west Africa to India.

The fearsome insect has been farmers' foe since the earliest days of agriculture.

When solitary, locusts are harmless. But when they congregate into groups they transform – in behaviour and even appearance – into killer vegetarians. In turn, swarms can be as large as several hundred square kilometres, of which a single square kilometre can comprise at least 40 million bugs, at times even double that.

In the immature adult phase, a locust can consume its own weight – about two grams – in vegetation per day, according to the UN's Food and Agriculture Organization (FAO). One tonne of desert locusts ("a very small part of an average swarm", according to FAO's website) could guzzle in a single day an amount of food equivalent to that consumed by 2,500 people. Locust plagues could therefore seriously imperil crop production, and in turn food security.

An ongoing desert locust upsurge, primarily along the Red Sea periphery, possibly acts as a reminder to a natural threat that is often overlooked, or even deemed a thing of the past.

Swarms of locusts spread from North Africa

Countries today are considerably better equipped to deal with the threat than they used to be. The second half of the twentieth century has seen a dramatic decline in frequency, duration and intensity of desert locust plagues, largely thanks to improved control and monitoring capacities in the affected countries.

"What we have done as a big improvement is to be able to monitor where the locust are and try to control them," says Pietro Ceccato, an environmental remote sensing expert with the International Research Institute for Climate and Society (IRI) at Columbia University. "Now we have that information – both from the control teams and from the satellite. We know where to target the control."

And yet, in anticipating future locust invasions, climate change appears to be one key unknown.

"This year is a bit unusual," says Keith Cressman, senior locust forecasting officer at FAO. Normally, he explains, after a good breeding season like this year's, the locusts would move from Sudan to the interior of the Arabian Peninsula, across the Red Sea. This autumn, however, while some did reach Saudi Arabia, groups started migrating northwards to the interior of Sudan and further to Egypt, not before Sudanese authorities treated close to 270 square kilometres.

By late February, an outbreak looked imminent, as groups and swarms of a new locust generation started moving north. In early March, Egyptian news outlets and social media were teeming with reports and photos of the clouds of locust that had descended on Cairo.

"It is relatively rare that Desert Locust swarms reach Cairo," the website of FAO's locust unit later reported. "This last occurred in November 2004, almost 50 years to the day after the previous occasion."

Within days, the swarms flying further east crossed the border into Israel, reaching the north west of the Negev desert. Three weeks later Jewish Israelis were celebrating Passover, commemorating the exodus of the Israelites from ancient Egypt, preceded by the Ten Plagues, the eight of which was the Plague of Locust.

According to FAO's Locust Watch, April has seen a total of 220 square kilometres treated across five countries, down from 790 square kilometres in March.

In Israel, the ministry of agriculture reported in mid-May that damages to crops were "minimal," but concerns are of the next waves of locust coming in from Egypt's Sinai peninsula as well as a new generation of the pest after extensive hatching has been detected.

"[Israeli] researchers had said that [the locusts] would not even be able to breed here due to weather conditions. And not only did they manage to breed, they have bred excellently and even settled. So, all projections were disproved," Dafna Yurista, the ministry's spokesperson told chinadialogue. According to FAO, the last time Israel saw locust breeding and formation of hopper bands was in April 1961.

Nevertheless, and despite the ongoing outbreak, control operations across the region appear to have been effective. "So far, there hasn't been any significant damage to crops," says FAO's Cressman.

In Locust Watch’s latest update, from May 15, three countries were put on the second highest level of alert – Saudi Arabia, Israel and Sudan – and control teams have been operating to curb the infestations before the young hoppers become voracious adults by the end of the month.

Adult locust groups forming in these countries are expected to move back to the summer breeding areas in central Sudan. In addition, some locusts now in Saudi Arabia, the Locust Watch update stated, "could reach southwest Iran and continue moving eastwards."

"So far," Cressman says, "Sudan, Egypt, Saudi Arabia have been lucky. What we're concerned about now is this coming month in Sudan, where we have a new generation of locust, and those immature adults more likely to stay in those cropping areas and eat whatever is green – basically, the seasonal crops."

The last time the region had faced a large-scale locust upsurge was in 2003-2005. Back then, swarms took off from Niger and moved up to north Africa, before heading east along the Mediterranean coast. Overall, 26 countries were affected, and nearly 130,000 square kilometres were treated.

Back then, Morocco alone treated 40,000 square kilometres over a two-year period, escaping the plague without any substantial damage, says FAO's locust expert in the country Said Ghaout. This time, Morocco has seen a considerably smaller extent of infestation.

The impact of climate change

Yet both outbreaks have shown anomalous patterns, mostly owing to unusually favorable weather conditions at the locusts' breeding areas. Ghaout does not rule out the possibility that climate change played a role, or that these outbreaks might be a sign of things to come. "This is a question everybody is asking," he says.

"It's a real difficult topic," says Cressman about the possible effect of climate change on the desert locust. Generally, global meteorological models aren't sufficiently reliable to make concrete predictions for the desert locust habitat range, and regional models for the relevant desert areas are not developed enough, he says.

Overall, forecasts for desert locust activity rely on four main factors: temperature, rainfall, vegetation and wind. "I took a look at all the data that we have so far, and looked at temperature – because that's what everyone kind of agrees on, and we have the most data on – and it seems like if there's an increase of temperature under climate change scenarios, the effect on desert locust is very minimal," says Cressman. In this case, "they might be able to get an extra generation of breeding in before the habitat becomes unfavorable."

It's not all about temperature, however. To breed, desert locusts require moist soil and vegetation, so precipitation is key. But climate change models for the region contradict one another when it comes to rainfall, says Cressman.

For instance, in late April and early May, Saudi Arabia saw more rainfall than usual, which could in turn contribute to locusts moving further into the interior of the Arabian peninsula. "It happens that sometimes you have more rain, sometimes you have less rain," says IRI's Ceccato, who monitors climatic and ecological conditions that affect desert locust activity. "But that happens. It's variability. To relate that to climate change, it's difficult."

China’s locust plagues

Several studies have tried to explore the possible impact of climate change on the abundance of another species, the Oriental migratory locust, in China. In 2011, researchers examined locust outbreaks recorded over a period of 1,910 years and meteorological data over the same time-span and concluded, that "there were more locusts under dry and cold conditions and when abundance was high in the preceding year or decade." Therefore, an increase in temperature or rainfall would actually mean fewer locust outbreaks.

A paper published four years earlier, based on a thousand years of records, has also suggested that warming could mean fewer locust plagues in China, since locust numbers were historically "highest during cold and wet periods".

Yet, a 2009 study using the same data came to different conclusions. Climate change, these authors said, could worsen locust outbreaks in China. Taking a more geographically nuanced approach, the researchers showed that, in north China, the most severe locust upsurges happened in warm and dry years. In south China, however, it was during warm and wet years.

Despite their contradictions, taken together these studies and others do offer some valuable insights, and not only for China. First, scientists seem to agree that rainfall could be affecting locust dynamics more than temperature. There also appears to be a consensus that climate change predictions for rainfall patterns are so far unsatisfactory.

And this is not the only missing variable. "The other aspect that nobody is really looking at yet is what's going to happen to the wind under climate change," Cressman says, "because of course locusts migrate with the wind."

Even if projections are still inconclusive, history tells us that locusts have braved previous climatic changes, and humans need to prepare.

"Probably all countries need to review their preparedness in terms of some of these climate change scenarios, and maybe look at the worst case scenario," says FAO's Cressman. In particular, that means preparing for longer locust seasons, he explains. "They're going to have to make those plans a little more flexible."

Why the world struggles to prevent climate chaos

Martin Wolf — Tue, 21 May 2013 09:48:00 +0000

Fear of the distant horrors of climate change isn't enough to drive anything more than just political talk and hand-wringing

Earlier this month, the concentration of carbon dioxide in the atmosphere was reported to have passed 400 parts per million for the first time in 4.5 million years. It is also continuing to rise at a rate of about 2 parts per million every year. On the present course, it could be 800 parts per million by the end of the century. Thus, all the discussions of mitigating the risks of catastrophic climate change have turned out to be empty words.

Collectively, humanity has yawned and decided to let the dangers mount. Professor Sir Brian Hoskins, director of the Grantham Institute for Climate Change at Imperial College in London, notes that when the concentrations were last this high, “the world was warmer on average by three or four degrees Celsius than it is today. There was no permanent ice sheet on Greenland, sea levels were much higher, and the world was a very different place, although not all of these differences may be directly related to CO2 levels.”

Read also: The psychology of climate change: why we do nothing

His caveat is proper. Nonetheless, the greenhouse effect is basic science: it is why the earth has a more pleasant climate than the moon. CO2 is a known greenhouse gas. There are positive feedback effects from rising temperatures, via, for example, the quantity of water vapour in the atmosphere. In brief, humanity is conducting a huge, uncontrolled and almost certainly irreversible climate experiment with the only home it is likely to have. Moreover, if one judges by the basic science and the opinions of the vast majority of qualified scientists, risk of calamitous change is large.

What makes the inaction more remarkable is that we have been hearing so much hysteria about the dire consequences of piling up a big burden of public debt on our children and grandchildren. But all that is being bequeathed is financial claims of some people on other people. If the worst comes to the worst, a default will occur. Some people will be unhappy. But life will go on. Bequeathing a planet in climatic chaos is a rather bigger concern. There is nowhere else for people to go and no way to reset the planet’s climate system. If we are to take a prudential view of public finances, we should surely take a prudential view of something irreversible and much costlier.

So why are we behaving like this?

The first and deepest reason is that, as the civilisation of ancient Rome was built on slaves, ours is built on fossil fuels. What happened in the beginning of the 19th century was not an “industrial revolution” but an “energy revolution”. Putting carbon into the atmosphere is what we do.

As I have argued in Climate Policy, what used to be the energy-intensive lifestyle of today’s high-income countries has gone global. Economic convergence between emerging and high-income countries is increasing demand for energy faster than improved energy efficiency is reducing it. Not only aggregate CO2 emissions but even emissions per head are rising. The latter is partly driven by China’s reliance on coal-powered electricity generation.

A second reason is opposition to any interventions in the free market. Some of this, no doubt, is driven by narrowly economic interests. But do not underestimate the power of ideas. To admit that a free economy generates a vast global external cost is to admit that the large-scale government regulation so often proposed by hated environmentalists is justified. For many libertarians or classical liberals, the very idea is unsupportable. It is far easier to deny the relevance of the science.

A symptom of this is clutching at straws. It is noted, for example, that average global temperatures have not risen recently, though they are far higher than a century ago. Yet periods of falling temperature within a rising trend have occurred before.

A third reason may be the pressure of responding to immediate crises that has consumed almost all the attention of policymakers in the high-income countries since 2007.

A fourth is a touching confidence that, should the worst come to the worst, human ingenuity will find some clever ways of managing the worst results of climate change.

A fifth is the complexity of reaching effective and enforceable global agreements on the control of emissions among so many countries. Not surprisingly, the actual agreements reached give more an appearance of action than a reality.

A sixth is indifference to the interests of people to be born in a relatively distant future. As the old line goes: “Why should I care about future generations? What have they ever done for me?”

A final (and related) reason is the need to strike a just balance between poor countries and rich ones and between those who emitted most of the greenhouse gases in the past and those who will emit in the future.

The more one thinks about the challenge, the more impossible it is to envisage effective action. We will, instead, watch the rise in global concentrations of greenhouse gases. If it turns out to lead to a disaster, it will by then be far too late to do anything much about it.

So what might shift such a course? My view is, increasingly, that there is no point in making moral demands. People will not do something on this scale because they care about others, even including their own more remote descendants. They mostly care rather too much about themselves for that.

Most people believe today that a low-carbon economy would be one of universal privation. They will never accept such a situation. This is true both of the people of high-income countries, who want to retain what they have, and the people of the rest of the world, who want to enjoy what the people of high-income countries now have.

A necessary, albeit not sufficient condition, then, is a politically sellable vision of a prosperous low-carbon economy. That is not what people now see. Substantial resources must be invested in the technologies that would credibly deliver such a future.

Yet that is not all. If such an opportunity does appear more credible, institutions must also be developed that can deliver it.

Neither the technological nor the institutional conditions exist at present. In their absence, there is no political will to do anything real about the process driving our experiment with the climate. Yes, there is talk and wringing of hands. But there is, predictably, no effective action. If that is to change, we must start by offering humanity a far better future. Fear of distant horror is not enough.

Water-trading could exacerbate water shortages in China

Debika Ray — Mon, 20 May 2013 09:38:00 +0000

China approaches water trading with the twin problems of ensuring equity of supply and avoiding ecological damage

Large-scale engineering projects and rigorous state control are hallmarks of the Chinese developmental model, and both have been apparent in the country’s approach to water management.

A US$62 billion project to divert water from the south to the parched north is under way, while the government is investing US$3.35 billion in desalination plants, aiming to produce 2.2 million cubic metres of desalted water a day by 2015. In 2002, it attempted to implement a permit system for water access to curb over-abstraction.

But such measures are proving insufficient to keep up with the country’s increasing demand for water. Rapid industrialisation and urbanisation are bleeding China dry and pumping pollutants into its rivers. The 2030 Water Resources Group predicts there will be a water shortfall of 199 billion cubic metres by 2030. The government is therefore turning to a new solution: the market and allocating water through a system of tradable water rights.

“It’s an attempt to move from a centralised, top-down system, to one with more horizontal arrangements between users,” says Dajun Shen, who led the Chinese side of the Water Entitlements and Trading (Wet) Project, an attempt by the Ministry of Water Resources and the Australian government to examine the feasibility of nationwide water-trading in China.

Australia is one of a handful of countries that have implemented trading schemes to tackle water scarcity; Chile and the US are others. Under such systems water use is capped at a sustainable level, then users are allocated entitlements they can exchange like any property.

Supporters of these schemes say applying market mechanisms to water ensures its price reflects its scarcity, that it encourages conservation and that it allows water to be exchanged more easily between areas of abundance and shortage. But sceptics warn that such a system is impractical and could have devastating effects on those most at risk of water shortage.

Nonetheless, China is embracing the concept. The Wet project, which ran from 2006 to 2008, was encouraged by the success of a few trial projects – in Inner Mongolia, Ningxia and Zhejiang province, among others. The resulting proposal was a multi-faceted trading system with regional, individual and sectoral elements. In 2008, the government outlined new principles for water allocation – the first, essential, step towards water rights trading. However, progress since has been slow, mainly because of the logistical problems of defining rights for a free-flowing resource in a large country.

Even after rights are assigned, there are difficulties. “Entitlements are not enough – they have to be enforceable,” says James Nickum, vice-president of the International Water Resources Association. “If someone takes more than their share or holds on to a right without using it, there has to be a way to sanction them. China, in part because of its size, has long had problems enforcing rules at the local level.”

In other words, a water market cannot compensate for poor governance. Past form, however, suggests that the Chinese government is capable of administering such schemes. “The water ministry is powerful,” says Jennifer Turner, director of the China Environment Forum at Washington’s Wilson Center think-tank, pointing to its strict management of the Yellow River Basin, where water rights allocation has progressed fastest.

Indeed, the interventionist attitude of the Chinese state is, perhaps, what makes it uniquely placed to implement such a complex system. Water trading in other parts of the world has generally been based on a free market model. China’s interest in trading reflects its increasing faith in individual property rights and laissez-faire economics, but the communist state is, as ever, forging its own path.

“The nature of the Chinese government meant a water trading system was never going to be a fully free market,” says Robert Speed, the Wet project Australian leader. “The goal was simply to give China’s water system greater flexibility.”

While adopting the principals of exchange, the government plans to maintain strict control over transactions. In Wet pilot projects, for instance, prices were based on the amount of water saved in a given area and the costs of achieving this, rather than simply what buyers were willing to pay. Moreover, the ministry arranged the trades, investing the money in infrastructure rather than handing it over to the sellers.

Who will be the losers?

Such strict supervision could ensure water is allocated to its most beneficial uses and allow China’s system to avoid pitfalls such as the potential for speculation on water and price manipulation.

On the other hand, what the government sees as efficient or urgent may not always be socially beneficial – water may be diverted from, say, subsistence living or ecological conservation to higher value uses such as cash crops, industry or tourism. “If a farmer and a power plant need water, we know who gets it,” says Turner. “The energy sector reigns supreme in every country.”

Shiney Varghese, senior policy analyst at the Institute for Agriculture and Trade Policy agrees: "As long as water trading benefits only those who can pay, is government control any better than private sector?” She points out that the definition of success varies. “If you evaluate success as environmental conservation that doesn’t compromise growth, China may be more successful than, say, India, where the state has to compromise. However, if it is defined in terms of environmental and social justice, then it’ll be far from successful.”

The social effects of privatising a common resource have been witnessed before – land reforms of the 1970s increased agricultural productivity, but were also associated with violence and antagonism. “Land grabs remain the biggest source of conflict in China today,” says Turner. Speed emphasises that, like in other countries, the right to water for basic needs would remain. But it is possible that industries’ needs would trump those of others in the long run.

“A strong sector like industry may damage weaker sectors like agriculture or ecological systems, and affect social stability,” says Shaofeng Jia, chair of the department of water and land resources at Beijing's Institute of Geographic Sciences and Natural Resources Research. Ecological water requirements must be secured before rights are allocated for economic activities, he says.

As the Chinese government’s efforts to formalise water rights progress, Turner anticipates it will encounter another problem – a basic lack of excess useable water. “Can China seriously embark on water trading when so much of its water is dirty?” she asks. “And after you account for infrastructure, dams, the demand from cities and agriculture, is there even any water left to trade?”

Singapore’s growth story holds lessons for water-scarce China

Cecilia Tortajada, Asit K Biswas — Thu, 16 May 2013 09:43:00 +0000

Singapore’s leaders realised 40 years ago that it is much more expensive for a society to live in a polluted environment than a clean one

When the tiny city-state of Singapore gained independence in 1965, its social, economic, political and environmental constraints appeared so formidable that many of those looking in from outside predicted a future of dismal dimensions.

Forty years on, the reality looks very different. Within a few decades, the state – just 714 square kilometres and with very limited natural resources – has turned itself into a role model: a country with increasing per capita GDP, a clean environment and vibrant innovation. From China to Myanmar, “learn from Singapore” has become a common refrain.

Today’s emerging economies are right to single out Singapore for study, and they should pay particular attention to its history of water management. In the face of multiple challenges – surging water demands due to rapid economic development; a 30-fold rise in GDP; a 23%-plus increase in land area through reclamation; a tripling of population; thriving industry – water security has actually improved. Though Singapore is still dependent on imported water, it aims to become self-sufficient within 50 years.

Boom in water consumption

Between 1965 and 2011, total water consumption in Singapore increased from 70 to 310 million gallons per day.

To meet the challenge of this increase, the state has expanded its water catchment – the area from which rainwater is collected through a network of drains, canals, rivers and stormwater collection ponds – to 67% of the area of the island, compared to only 11% when it became independent.

Singapore still buys a lot of its water from Johor in neighbouring Malaysia, but at the same time as water demands have grown, the city-state has worked to reduced its heavy reliance on imports. One of two key water agreements with Malaysia expired in 2011. Under the second, a maximum of 250 million gallons per day can still flow to Singapore. The state aims to cut this figure to zero within 50 years.

The latest available technology has been used to expand Singapore’s water supply base, manage water quality and reduce the energy consumption of its water activities. Examples include the development of non-conventional water sources, such as very high-quality treated wastewater known as NEWater and desalinated water.

NEWater already meets 30% of the national water demand, a figure expected to rise to 50% by 2060. It has become a chief alternative for the growing industrial sector and reduced pressure on potable water. Desalinated water meanwhile satisfies 10% of total water demand and is expected to cover 30% by the year 2060.

Participation of the private sector in infrastructural development has also been encouraged: water pricing has been set at a marginal cost since 2000, while the public has been involved through decades-long communication and information efforts.

Technological advances have been integrated into water policies as one of the many elements necessary both to increase available supply and maintain high water quality, while different ministries proved able to coordinate their water strategies. Notably for China, laws and regulations have been stringently enforced: there were more than 29,000 prosecutions relating to environmental offences in Singapore in the 32 months between 1968 and 1971 alone, marking a move by the state to enforce environmental law decades ahead of its Asian peers.

These are lessons that could be considered by emerging economic powers like China, where fast growth and its associated pollution have triggered serious economic, social and environmental concerns.

Cleaning up the Singapore River

The 10-year clean-up of the Singapore River is one example of coordinated planning, though it took time to come to fruition. Success was made possible by the large-scale re-development of central Singapore and the elimination and control of the sources of pollution entering the river so that water could be used safely and cost-effectively for potable use.

It was not a quick process, and Singapore learned lessons along the way, including the need for support at the highest political levels to permanently solve pollution problems.

Since the river was the main trade artery of the island and growing economic activity along its banks attracted increasing numbers of people – squatter colonies, hawkers, backyard industries – the problem was repeatedly sidestepped. The net result was that increasing quantities of domestic and industrial wastewater and solid waste was discharged into the river, seriously affecting its quality.

It wasn’t until former prime minister Lee Kuan Yew gave an ultimatum to ministries and agencies in 1977 that things started to change. They were instructed to work together to improve the water quality of the river, identify the domestic, commercial and industrial pollution sources blighting the waterway, create relevant legislation and, ultimately, redevelop Singapore’s entire central area.

More than 26,000 families were resettled into public housing, significantly improving their living conditions. Almost 5,000 street hawkers, more than 46,000 squatters and some 800 lighters – barges used to transport goods along the river – were relocated. Around 2,800 industrial cases of backyard trades and cottage industries were also moved, most of them into newly developed industrial estates. Finally, some 610 pig farms and 500 duck farms, which used to discharge untreated wastes into the river, were phased out.

At US$240 million, the clean-up of the Singapore River wasn’t cheap. But a tally of the benefits – both direct and indirect – makes clear it was a sound investment. The programme transformed the face of Singapore. Land values along the river banks soared, as did tourism and business.

Lee Kuan Yew noted during a personal discussion with us that the main driver for long-term strategic planning was the search for water security. During his premiership, water was prioritised to the extent that economic development was subordinate to the impacts it could have on water resources. This strong political support from the highest levels of government has been instrumental to the state’s development.

It is said that Singapore has been able to thrive because of its small size and that its experiences are therefore not relevant to other countries. On the contrary, without a hinterland and almost no natural resources, the tiny island has had to formulate long-term, creative solutions to ensure economic growth and a liveable environment.

Lee Kuan Yew realised as early as the late 1960s that, in the long-term, it is much more expensive for a society to live in a polluted environment than a clean one. Almost half a century later, most of the world’s leaders are still to grasp this fact.

Cecilia Tortajada and Asit K Biswas are authors of The Singapore Water Story: Sustainable Development in an Urban City State (Routledge, 2013).

How the Major Economies Forum could break the climate impasse

Timmons Roberts — Wed, 15 May 2013 08:21:00 +0000

Counting emissions where they’re consumed rather than produced would be fairer on China – and a key pillar of an effective climate change deal

During George W Bush’s administration, the US government was under pressure to act on climate change, but saw the UN as a dead end for negotiations. Instead of the cumbersome talks with almost 200 countries at the table, the Bush administration favored “minilateral” or “plurilateral” solutions with small groups of countries.

Now in 2013, with a new president in the White House who was feted by the Nobel committee for renewing multilateralism, the idea of smaller plurilateral solutions seems to have kept its currency. After two arduous decades of negotiations since the 1992 Rio de Janeiro Earth Summit, when the first climate framework treaty was penned, it’s time to reconsider whether these smaller groups can break the endless stalemate.

Although the negotiations have grown tremendously complex, the core difficulty is who has to act to reduce their emissions, how much and when. An “apple pie” phrase in the 1992 treaty is that countries should act according to their “common but differentiated responsibilities and respective capabilities”. It’s a pretty agreeable statement: everyone’s responsible for this global crisis, but some countries created much more of the problem so they should act, and especially those countries with the most funds.

Developing countries see this as obligating the wealthy nations who have dumped the most carbon pollution into the atmosphere to act first and most aggressively to cut their emissions. Some key wealthy countries have resisted acknowledging “historical responsibility”, since doing so might mean damage to their economic competitiveness, or maybe even imply legal liability.

But the clock has been ticking these 20 years, and time is running out. We need a viable coalition for efficiently and adequately addressing emissions reductions, consisting of a group small enough to avoid the unworkability of full universal multilateralism and, at the same time, large enough to significantly address the issue. In April, the Obama administration hosted representatives from a group of countries assembled precisely for breaking this impasse.

George W Bush began a group called the “Major Economies Meeting on Energy Security and Climate Change” back in 2007, and upon arriving in the White House, president Obama renamed the group the “Major Economies Forum on Energy and Climate”. The new “MEF” was officially launched in March 2009 “to facilitate a candid dialogue among major developed and developing economies [and] help generate the political leadership necessary to achieve a successful outcome at the annual UN climate negotiations.”

The group has met 15 times since then, including a meeting from April 11 to 12 this year in Washington. Its members include Australia, Brazil, Canada, China, the EU-27, India, Indonesia, Japan, Korea, Mexico, Russia, South Africa and the US. If you add them all up, over four-fifths of all contributions to fossil fuel greenhouse gas emissions in the world are represented. A reasonable deal within this group would be nearly five times more effective than the current commitment period of the Kyoto Protocol, which only covers 15% of global emissions.

In a recently published Brookings’ paper, Marco Grasso of the University of Milan-Bicocca and I propose a compromise by which the MEF could break the climate negotiations impasse. Markedly, our approach requires all key players to compromise on some demands in order for their own to be met. The goals are fairness and feasibility.

Counting emissions where they’re consumed

First, we suggest the use of “consumption-based accounting”, which counts emissions where products are consumed, not produced. This would be fairer and beneficial for China, the leading current emitter and third highest emitter historically. China is the “workshop of the world” and essentially the place to which other countries have outsourced their highly polluting stages of manufacturing. Because of its diverse economy, which includes significant resource extraction and primary processing of those resources, this kind of accounting also doesn’t hurt the US significantly.

Second, we create a “carbon budget”, based on the total amount of emissions that can still be released while keeping us below a 25% chance of the world warming above 2 degrees C on average. That’s the level at which the climate change is expected to worsen to the point of unpredictable and unacceptable impacts.

Also central to the compromise, to apportion the carbon budget we propose a “short horizon polluter pays principle”, which calculates responsibility for climate change from past fossil fuel emissions, but only from 1990 to 2010.

India, China and other developing nations have demanded that the wealthy countries be obligated to act based on their long histories of emitting and their capability to pay, and our short horizon polluter pays principle and use of national income as an indictor of capability address their concern.

However, limiting the responsibility for past fossil fuel emissions to a 20 year horizon is a compromise for the US, EU and other wealthy countries with far longer emissions histories. While developed nations must acknowledge some responsibility, this proposed compromise only requires that they do so from the point that climate change emerged as a concern and global negotiations on the issue were under way.

This minilateral compromise within the Major Economies Forum may be the only way to avoid the disasters that lie ahead. In this deal, all actors must bend to some demands of the other key players in order for their own to be met, as with any true compromise. The MEF can lead us down a new road by exploring this approach.

Timmons Roberts is non-resident senior fellow in the Global Economy and Development programme at the Brookings Institution

Mafia “deeply involved” in renewable sector, say Chinese companies

Xie Dan, Wang Yue — Tue, 14 May 2013 09:39:00 +0000

Chinese companies working overseas say the renewable energy sector is attracting organised crime in Italy, Greece and Japan

On April 4, the Italian police confiscated €1.5 billion in assets from business tycoon Vito Nicastri – including 43 wind and solar power companies.

According to the police, Nicastri was laundering Mafia money through investments in new energy.

Although the major investors in new energy worldwide are governments and the private sector, “alternative investors” are appearing on the scene – including criminal gangs.

Chinese companies investing in Italy’s wind and solar power sectors were already aware they were in “heavyweight” company.

“The Mafia are deeply involved in the new energy sector,” said Jiang Zhe, CEO of solar power manufacturer and operator Up Solar. “And they are present in many sectors of the Italian economy.”

Although Up Solar built a 1MW solar power plant on the island of Sicily, most of the companies' projects are in the north of the country. Jiang admits this is partially due to higher Mafia activity in the south. “As a foreign company all we can do is to do our best to avoid that, such as doing due diligence investigations as early as possible to find any hidden problems.”

Organised crime in Greece and Japan

And it’s not just an Italian problem. Evidence is mounting that organised crime is at work in the new energy sectors in numerous countries, including Japan and Greece.

Zhao Ran, vice-president of a Chinese new energy company, went to Japan three months ago in search of projects to invest in. But he had not anticipated the kind of “partners” he might meet.

“We were carrying out preliminary investigations of one project and an agent told us it was backed by a violent criminal gang, which scared us off.” Zhao explained that the Fukushima disaster spurred new energy development in Japan and organised crime joined in – although not as often or as deeply as in Italy.

ISA Intel, based in Sarajevo, carries out due diligence investigations in Europe, the Middle East and Africa. According to a report from the company, there is evidence that organised crime is also involved in the new energy sector in Greece.

Criminal gangs such as the Mafia like new energy, and even see it as a symbol of their “modernisation”, because of lucrative government subsidies and lax regulation.

Despite being one of the few European nations to lack a long-term energy strategy, Italy’s new energy subsidies are very generous. According to the president of GSE, the body responsible for new energy planning in Italy, initial calculations put new energy subsidies in 2011 at €8 billion. Quite a bit of that ended up in Mafia pockets.

Former Mafia boss Antonio Birrittella once told the UK media that the Mafia viewed government subsidies as a gift.

Chinese reaction to mafia influence

According to a report from Bloomberg New Energy Finance on overseas investments in new energy by Chinese firms, as of April 2012 centrally-owned state firms including Huaneng, Guodian, Guangdong Nuclear Power and the Three Gorges Corporation had made new energy investments of over $1.2 billion across Europe and North and South America.

Cao Yin, head of energy and power at consultancy Martec, said that while Chinese companies making actual investments in Italy were aware of the Mafia’s presence, their reactions would differ according to the nature of their investment. Some Chinese investors are almost used to dealing with organised crime.

“This kind of thing is actually a double-edged sword – sometimes it actually brings advantages, such as quicker government approvals. But unknown factors can create huge problems,” said one investor, adding that it also depended on the needs of those investing.

If they are simply buying a wind farm to sell on for a profit, investors may not be too concerned about who they are buying it from. But investors will steer a wide berth if they want to make a profit by actually operating the plant. “You can’t just reject a project because of criminal involvement,” said the same investor. “Business is business, after all. You just need to be more careful.”

Zhao Ran said that Chinese companies are most worried about their “special” partners coming up with unreasonable demands.

Salvatore Moncada, CEO of Italian energy firm Moncada, is a good example. He has suffered from Mafia intimidation on two occasions, and once spent 18 months under 24-hour police protection. His refusals to cooperate resulted in wind turbines being torched.

But of the Chinese companies spoken to, none reported this kind of intimidation.

(Zhao Ran’s name has been changed)

This article was originally published in the Southern Weekend

Special report: China’s image crisis in Ghana

Cui Shoujun — Mon, 13 May 2013 10:08:00 +0000

As Chinese investment in mineral-rich Ghana soars, negative attitudes towards Chinese workers are also common. Cui Shoujun spent three months in the African state investigating

Shouts of “Hello, Chinaman” sound friendly, but language barriers mean most Chinese workers reply only with silence or a smile. In fact the greeting might not be all that cordial – it is often a label, rather than a welcome.

Long-term Chinese residents of Ghana fall into four categories: traders and businesspeople, who tend to be well-off; professionals such as technicians, engineers, aid workers, teachers and healthcare workers, who tend to be well educated; workers contracted to private or state-owned Chinese firms, the largest group; and those who have settled in Ghana – the true Chinese “immigrants”.

In a speech given in 2009, the Chinese ambassador to Ghana estimated there were about 10,000 Chinese nationals in the country. The figure is likely to have grown rapidly since then.

China started to build links with West Africa in the 1950s, both for ideological reasons and to work with the Third World against the Soviet Union. Situated on the north coast of the Gulf of Guinea, Ghana has rich mineral resources – as a British colony it was called the Gold Coast, due to its deposits of the precious metal.

In 1957 it became the first sub-Saharan colony to win independence, and the country now enjoys stable economic growth, a two-party political system, and an independent media.

China and Ghana established diplomatic relations in 1960, and China is now Ghana’s biggest trading partner: in 2011 bilateral trade was worth US$3.5 billion, and Chinese investment continues to grow fast. But there is a trade imbalance: Ghana’s exports to China were worth only US$400 million the same year.

Negative images of China

Chinese people in Ghana are largely unaware or uninterested that the locals have a negative image of them. The Ghanaians are a gentle people and rarely express unfriendly views, while the Chinese are unable to read the local newspapers, leaving them uninformed. The Chinese often stick to their own areas and do not genuinely integrate into local culture.

So there is a gap – one that’s hard to bridge – between the Chinese “self-image” and the “other-image” of the Chinese in Ghanaian society and media. Those negative images held by society and the media can be categorised as follows:

First are negative attitudes towards Chinese investment. In fact, views here are sharply divided. Ghanaian academics and government mostly welcome Chinese investment, believing it drives economic growth on the continent. Officials quote Sierra Leone’s ambassador to China, who once said “If a G8 nation had wanted to rebuild our stadium, we’d still be holding meetings. The Chinese simply come and build it for us.” A survey of Ghanaian students also found that a large majority approve of the role of Chinese investment.

But opponents point to negative factors such as political motivations, poor working conditions and a lack of respect for human rights, and this view is often expressed in the media. China is represented as not playing by the rules of the game and damaging Ghana’s economic interests.

Some Ghanaian officials have also expressed scepticism about the motives. The former Minister of Parliamentary Affairs, for example, once said that “Chinese capital is as ruthless as Wall Street’s – it’s here to make money.”

Second are views on the status of Chinese workers. To my surprise, many of my friends in Ghanaian government have asked me if the workers China sends to Ghana are convicts. In surveys of randomly selected locals, I found that many believe that China brings in convict labour to work on infrastructure projects, as the workers wear dirty clothes and work hard for long hours.

Chinese workers were shocked and angry when I asked them about this. One construction worker from Anhui told me he had come to Ghana because he wanted to save some money for tuition fees for a child soon to attend university. The Ghanaian Minister of Education has denied that China uses convict labour in Ghana on television, but the idea is still widespread.

Another issue is the view that Chinese workers are lecherous. Ghana’s newspapers and websites often report rumours of male Chinese workers fathering children with African women, or of cases of sexual harassment by Chinese workers. This is a very sensitive issue. Local media once ran a story about a Ghanaian women becoming pregnant after allegedly being raped by a Chinese colleague. The Chinese firm’s management team was furious, and the woman visited the site with her parents to identify the culprit, but was unable to do so. The government later said that, as there had been no public accusation, there was no case of harassment to answer.

Although there may be extreme cases, I found that the majority of Chinese workers remained celibate in Ghana, both out of a sense of responsibility, and because they say they are not attracted to African women. This actually led to another rumour, that Chinese workers had “sex inoculations” before travelling to Africa, to stop any sexual desires.

Product quality and rising crime

Fourth are concerns about Chinese product quality. Chinese-made goods are common in Ghana, from toothbrushes and shoes to motorbikes and Chinese medicine (such as sweet wormwood, used to treat malaria). Chinese shops are springing up everywhere, mostly owned or run by the Chinese themselves. But some complain that Chinese goods are of poor quality. The media claims that China sends the best quality goods to the EU and US, while sub-standard or even fake goods are exported to Africa.

Actually, China sends both high and low quality goods to the continent: the better goods are found in large supermarkets and department stores, the poorer quality products in outlying regions or villages.

The media once reported that over 400 Chinese-made buses, given to local urban transportation firms as part of an aid project, could not be used due to quality problems. But a Dutch engineer investigated and found that the buses met quality standards. The problem was the consumable parts had not been replaced, due to inexperienced mechanics and the lack of an English manual, as well as the weather in Ghana being hotter than the buses were designed for.

The Ghana News Agency later confirmed that the use of water in coolant tanks, rather than actual coolant, had caused rusting, overheating and blockages. Chinese products are cheap and provide more options for African consumers, and this helps improve their quality of life.

There are also increasing numbers of reports of Chinese people committing crimes in Africa, including in human trafficking, the sex industry and illegal mining and fishing. But as Africans often do not distinguish between Chinese, Koreans, Vietnamese and Japanese, crimes by any of these nationalities can get blamed on the Chinese.

Ghanaian gossip makes it clear that the Chinese have an image crisis.

How Europe and the US can compete with China on renewables

John Mathews — Fri, 10 May 2013 12:20:00 +0000

The push for privatisation and deregulation by Europe and the US is preventing them from competing with China on renewables

Washington think tanks are busily arguing that no one can stand up to Chinese mercantilist policies which promote standardised products at the expense of innovative new ventures competing in market niches.

But is China really the ogre that is destroying "the global energy innovation ecosystem"?

There would appear to be some prima facie support for such an argument when we look at US and European companies that have been developing innovative new solar PV cells.

They have had to succumb to Chinese competitive pressures in the past year.

Solyndra in the US had to declare bankruptcy. German Q-Cells had to sell off its CIGS subsidiary, Solibro (CIGS stands for Copper, Indium, Gallium, Selenide -- alternative materials to silicon). Chinese power producer Hanergy snapped up the firm.

These are two cases where the firms were developing new CIGS "thin film" solar cells that would operate at slightly lower efficiencies, but much lower material costs, thereby promising decisive cost advantages.

There is no denying that the business promise of these kinds of solar cells was undermined by Chinese mass production of first-generation crystalline-silicon solar cells.

The Chinese indeed have driven the costs of the standardised products down so fast that the newer, lower-cost CIGS cells never had a chance to establish themselves in the marketplace.

Chinese support for renewable energy is determined, serious and relentless.

It is being pursued not primarily for reasons to do with climate change, but as a national energy security policy, to allow China to build its energy system without impinging on other countries' fossil fuel entitlements and thereby threatening war.

It is a smart strategy that suits China. So how then should other countries respond?

The failure of tariffs and trade bans

The US government provides one way forward, by seeking to curb Chinese activities overseas and imposing trade sanctions (penalty tariffs) on Chinese-made imports of solar cells into the United States.

The EU, for its part, is threatening even broader sanctions, not just on PV cells but on modules and whole systems as well. Such tariffs are designed to curb sales of Chinese-made products abroad.

Both instruments are rather blunt, and already being circumvented by smart Chinese companies. They are building their manufacturing base in the US and are globalising their production activities and importing solar cells into the United States from non-mainland Chinese sources (e.g. Taiwan).

Moreover, the Chinese are perfectly able to impose the counter-tariffs on US exports of high-value PV components and materials, including pure-grade silicon (where the US currently runs a trade surplus with China).

These unanticipated consequences are likely to make the US trade sanctions relatively ineffective, while incurring severe displeasure from China, for which there will be a political price to pay.

The EU has also opted for a different competitive strategy.

The European market for solar PV systems was expanded through consumer subsidies, notably feed-in tariffs -- in the expectation that German manufacturing industries would expand to supply the market.

As a market expansion strategy, this worked extremely well, allowing firms to benefit from cost reductions via the learning curve.

But, of course, it turned out that Chinese firms were the main beneficiaries in the absence of specific German industrial policies designed to grow a domestic market for German-owned and designed PV technologies.

Since Germany's swing against nuclear power in 2011/12, there has been a revival of German industrial policies designed to boost what is left of the solar PV cell manufacturing sector, with (so far) positive results.

Ultimately, there is only one effective response to the serious competitive threat posed by China's strong support for renewables and that is equally strong support for innovation and market expansion by Western countries.

Where is the West's support for its own renewable industry?

China targets well-established and standardised technologies for rapid scaling-up and diffusion (such as first generation crystalline solar PV cells), and does so very effectively.

Other countries can place reasonable curbs on China's imports (regulating that they remain below a certain threshold, in line with WTO stipulations), while actively supporting and building innovative alternatives to China's standardised products.

It was open (and still is open) to the US, EU and Japanese governments to opt for policies to rapidly build the market for new, thin-film CIGS solar cells (through producer subsidies and government procurement, both allowable under WTO rules).

That would ensure that they achieve cost reductions that would keep them ahead of their first-generation crystalline silicon alternatives.

If the market for CIGS cells is grown fast enough, then CIGS technology will become the new dominant technology, with German, US and Japanese firms already occupying a strong position, and able to tweak the technology to drive further improvements.

Of course, Chinese firms would then switch to this new, dominant CIGS technology, driving costs and prices down as they do so -- and so weaker German, US and Japanese firms would be driven from the market.

But stronger ones would maintain their position, particularly in supplying their domestic market, while they ramp up further innovative variations. And so the process will continue, from one technology generation to another.

Why don't the US, German (EU) or Japanese governments pursue such an obvious counter to the Chinese competitive onslaught? In a word, because they are afraid of anything smacking of an "industry policy."

So powerful has the neoclassical objection to anything to do with promotion of some specific technology become (called "picking winners") and promotion of market expansion through government procurement (called "market interference") that policymakers are now afraid to propose anything along these lines.

The net effect of these ideological blinders is that they leave the field wide open to the Chinese.

This is the great-unanticipated consequence of the Western world's turn to neoclassical ideologies -- pushing privatisation and deregulation, and outlawing anything to do with industry policy. Why this was allowed to happen is another (and very interesting) story.

Think tanks like the Information Technology and Innovation Foundation valiantly struggle to portray "innovation" as the only way forward, and provide support for trade sanctions, under the guise that Chinese policies are "mercantilist" (and yet are no more so than those pursued by individual US states like California).

What they should really be supporting is a full-blooded counter to Chinese targeted industry promotion, through counter-targeting of new, innovative technologies and deliberate and determined market expansion, via instruments such as public procurement.

Then we would really see a flourishing of US renewable energy industries.

This article was first published by The Globalist

The biohazard epidemic poisoning America

David Rosner, Gerald Markowitz — Wed, 08 May 2013 17:07:00 +0000

While China battles widespread lead pollution, the US is dealing with its own legacy of lead poisoning – and facing a new set of biohazards

A hidden epidemic is poisoning America. The toxins are in the air we breathe and the water we drink, in the walls of our homes and the furniture within them. We can’t escape it in our cars. It’s in cities and suburbs. It afflicts rich and poor, young and old. And there’s a reason why you’ve never read about it in the newspaper or seen a report on the nightly news: it has no name – and no antidote.

The culprit behind this silent killer is lead. And vinyl. And formaldehyde. And asbestos. And Bisphenol A. And polychlorinated biphenyls (PCBs). And thousands more innovations brought to us by the industries that once promised “better living through chemistry”, but instead produced a toxic stew that has made every American a guinea pig and has turned the United States into one grand unnatural experiment.

Today, we are all unwitting subjects in the largest set of drug trials ever. Without our knowledge or consent, we are testing thousands of suspected toxic chemicals and compounds, as well as new substances whose safety is largely unproven and whose effects on human beings are all but unknown. The Centers for Disease Control (CDC) itself has begun monitoring our bodies for 151 potentially dangerous chemicals, detailing the variety of pollutants we store in our bones, muscle, blood and fat.

None of the companies introducing these new chemicals has even bothered to tell us we’re part of their experiment. None of them has asked us to sign consent forms or explained that they have little idea what the long-term side effects of the chemicals they’ve put in our environment – and so our bodies – could be. Nor do they have any clue as to what the synergistic effects of combining so many novel chemicals inside a human body in unknown quantities might produce.

How industrial toxins entered our homes

The story of how Americans became unwitting test subjects began more than a century ago. The key figure was Alice Hamilton, the “mother” of American occupational medicine, who began documenting the way workers in lead paint pigment factories, battery plants and lead mines were suffering terrible palsies, tremors, convulsions and deaths after being exposed to lead dust that floated in the air, coating their workbenches and clothes.

Soon thereafter, children exposed to lead paint and lead dust in their homes were also identified as victims of this deadly neurotoxin. Many went into convulsions and comas after crawling on floors where lead dust from paint had settled, or from touching lead-painted toys, or teething on lead-painted cribs, windowsills, furniture and woodwork.

Instead of levelling with the public, the lead industry, through its trade group the Lead Industries Association, began a six-decade campaign to cover-up its product’s dire effects. It challenged doctors who reported lead-poisoned children to health departments, distracted the public through advertisements that claimed lead was “safe” to use, and fought regulation of the industry by local government, all in the service of profiting from putting a poison in paint, gasoline, plumbing fixtures, and even toys, baseballs and fishing gear.

Only after thousands of children were poisoned and, in the 1960s, activist groups like the Young Lords and the Black Panthers began to use lead poisoning as a symbol of racial and class oppression did public health professionals and the federal government begin to rein in companies like the Sherwin-Williams paint company and the Ethyl Corporation, which produced tetraethyl lead, the lead-additive in gasoline.

In 1971, Congress passed the Lead Paint Poisoning Prevention Act that limited lead in paint used for public housing. In 1978, the Consumer Products Safety Commission finally banned lead in all paints sold for consumer use. During the 1980s, the Environmental Protection Agency issued rules that led to the elimination of leaded gasoline by 1995 (though it still remains in aviation fuel).

The CDC estimates that in at least 4 million households in the US today, children are still exposed to dangerous amounts of lead from old paint that produces dust every time a nail is driven into a wall to hang a picture, a new electric socket is installed or a family renovates its kitchen. It estimates that more than 500,000 children ages one to five have “elevated” levels of lead in their blood. (No level is considered safe for children). Studies have linked lost IQ points, attention deficit disorders, behavioural problems, dyslexia, and even possibly high incarceration rates to tiny amounts of lead in children’s bodies.

Unfortunately, when it came to the creation of America’s chemical soup, the lead industry was hardly alone. Asbestos is another classic example of an industrial toxin that found its way into people’s homes and bodies. For decades, insulation workers, brake mechanics, construction workers and a host of others in hundreds of trades fell victim to the disabling and deadly lung diseases of asbestosis or to lung cancer and the fatal cancer called mesothelioma when they breathed in dust produced during the installation of boilers, the insulation of pipes, the fixing of cars that used asbestos brake linings, or the spraying of asbestos on girders. Once again, the industry knew its product’s dangers early and worked assiduously to cover them up.

Today, however, these devastating industrial-turned-domestic toxins, which destroyed the health and sometimes took the lives of hundreds of thousands, seem almost quaint when compared to the brew of potential or actual toxins we’re regularly ingesting in the air we breathe, the water we drink and the food we eat.

Of special concern are a variety of chlorinated hydrocarbons, including DDT and other pesticides that were once spread freely nationwide, and despite being banned decades ago, have accumulated in the bones, brains and fatty tissue of virtually all of us. Their close chemical carcinogenic cousins, polychlorinated biphenyls (PCBs), were found in innumerable household and consumer products – like carbonless copy paper, adhesives, paints, and electrical equipment – from the 1950s through to the 1970s. We’re still paying the price for that industrial binge today, as these odourless, tasteless compounds have become permanent pollutants in the natural environment and, as a result, in all of us.

The largest uncontrolled experiment in history

While old houses with lead paint and asbestos shingles pose risks, potentially more frightening chemicals are lurking in new construction. Our homes are now increasingly made out of lightweight fibres and reinforced synthetic materials whose effects on human health have never been adequately studied individually, let alone in the combinations we’re all subjected to today.

Formaldehyde, a colourless chemical used in mortuaries as a preservative, can also be found as a fungicide, germicide and disinfectant in, for example, plywood, particle board, hardwood panelling, and the “medium density fiberboard” commonly used for the fronts of drawers and cabinets or the tops of furniture. As the material ages, it evaporates into the home as a known cancer-producing vapour, which slowly accumulates in our bodies.

While the flame retardants commonly used in sofas, chairs, carpets, love seats, curtains, baby products, and even TVs, sounded like a good idea when widely introduced in the 1970s, they turn out to pose hidden dangers that we’re only now beginning to grasp. Researchers have, for instance, linked one of the most common flame retardants, polybrominated diphenyl ethers, to a wide variety of potentially undesirable health effects including thyroid disruption, memory and learning problems, delayed mental and physical development, lower IQ and the early onset of puberty.

Other flame retardants like Tris (1,3-dichloro-2-propyl) phosphate have been linked to cancer. As the CDC has documented in an ongoing study of the accumulation of hazardous materials in our bodies, flame retardants can now be found in the blood of “nearly all” of us.

These synthetic materials are just a few of the thousands now firmly embedded in our lives and our bodies. Most have been deployed in our world and put in our air, water, homes and fields without being studied at all for potential health risks, nor has much attention been given to how they interact in the environments in which we live, let alone our bodies.

The groups that produce these miracle substances – like the petrochemical, plastics, and rubber industries, including major companies like Exxon, Dow and Monsanto – argue that, until we can definitively prove the chemical products slowly leaching into our bodies are dangerous, we have no “right” and they have no obligation, to remove them from our homes and workplaces. The idea that they should prove their products safe before exposing the entire population to them seems to be a foreign concept.

In the 1920s, the oil industry made the same argument about lead as an additive in gasoline, even though it was already known that it was a dangerous toxin for workers. Spokesman for companies like General Motors insisted that it was a “gift of God”, irreplaceable and essential for industrial progress and modern living.

Like the oil, lead, and tobacco industries of the twentieth century, the chemical industry, through the American Chemistry Council and public relations firms like Hill & Knowlton, is fighting tooth and nail to stop regulation and inhibit legislation that would force it to test chemicals before putting them in the environment.

There can be no doubt that this is the largest uncontrolled experiment in history. To begin to bring it under control would undoubtedly involve major grassroots efforts to push back against the offending corporations, courageous politicians, billions of dollars and top-flight researchers. But before any serious steps are likely to be taken, before we even name this epidemic, we need to wake up to its existence.

David Rosner and Gerald Markowitz are the authors of Lead Wars: The Politics of Science and the Fate of America's Children.

This article was first published by TomDispatch.com

Copyright 2013 David Rosner and Gerald Markowitz