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Expert view: What to look out for in 2018

What are the key challenges for environmental governance in the year ahead and what actions should China take?

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Greater responsibility, accountability and transparency on the implementation of environmental law will be focal points for China in 2018 (Image: ADB)

Few expected that in 2017 China would become the new leadership hope for climate change action and defender of globalisation. So what might 2018 bring? To get an idea, we’ve asked nine experts to share what they think are the key priorities and challenges for China this year.

Prioritise environmental justice

Li Jing, freelance reporter and formerly senior environment and climate reporter for the China Daily and South China Morning Post

The buzzword for environmental protection in 2017 was “oversight”. The Central Environmental Inspection Group struck hard against the complex of interests behind local protectionism; and the inclusion of staff from the Party disciplinary and human resources authorities sent a clear message to officials – performance on environmental protection is now an important part of your record and your chances of promotion.

But the unexpected “collateral damage” of these crackdowns cannot be ignored: some local governments have forced businesses to shut down, with private SMEs bearing the brunt and some workers left temporarily jobless; the shutdowns and reductions in output have pushed raw material prices upwards; and a rushed coal-to-gas transition has caused problems for both residents and industry over the winter.

The key task for environmental protection in China for 2018 will be to sustain the improvements. New policies such as the national carbon trading market in late 2017, the collection of an environmental tax in early 2018 show that China is seeking to internalise once overlooked resource and environmental costs.

Fortunately, the data currently available for 2017 shows that the year’s crackdowns had only a moderate impact on the economy as a whole. A new issue for policy-makers will be how to spot and reduce localised impacts of environmental management measures on the economy and vulnerable groups and pay due attention to environmental justice.

 

Improve local government

Dr Tan Hao, associate professor on China's energy transition at the University of Newcastle

Establishing a more systematic appraisal system for the performance of local governments and government officials will be a major challenge in 2018.

Local governments and their officials in China often struggle with different priorities that are sometimes subject to ad hoc directives from higher levels in the political system and changes in public opinion that can cause confusion. Recent events, such as the mishandled ban on coal heating in Hebei, have shown that an ad hoc approach to environmental protection may jeopardise China’s effort to improve its environment in the long run.

Of course, the tensions between social, economic and environmental objectives are not unique to China. But the introduction, interpretation and implantation of certain policies in China could become less arbitrary.

 

Get business on board

Peter Corne, co-head, Dorsey & Whitney Cleantech Business Group, and managing partner, Shanghai Office
Johnny Browaeys, director of international operations at GREENMENT Environment


Environment enforcement campaigns are time consuming and require a lot of resources to execute. Punishment is not enough. Blunt enforcement does not always “land” well; nor does it “stick” well. Alone, it is not the most efficient tool for the purposes of compliance: environmental officials cannot be everywhere all of the time. 

Instead, there needs to be a mechanism that inspires voluntary compliance, a supporting business culture that will naturally lead to self-governance. This is the challenge that stands between the government and a true “ecological civilisation”. And it is the only way that a lot of the flaws in the current system can be realistically addressed. 

Those that are regulated must become environmentally self-aware, thus more education is needed at all levels; the regulated must become capable of improvement; given the resources to do so, engaged in the process of building a better environment, and motivated to achieve the goals that the government has set.

 

Improve the rule of law

Zhang Boju, executive director of Friends of Nature

The outlook for soil pollution in China is not good, and this impacts directly on food safety and human health, yet despite its importance there is no legislation. In 2017 the legislative process for the Soil Pollution Prevention Law was started, and the resulting consultation draft sparked widespread discussion in professional circles.

The main tasks of this law are to prevent pollution occurring, to clean up existing pollution, and to compensate for losses. A clear definition of who is responsible whilst fully implementing the principle that the polluter pays is the only way to ensure those responsible take the necessary measures rather than the current situation of “businesses pollute, the government pays, the people suffer.”

[We] need to see improvements to the design of the mechanisms for judicial redress, information transparency and public participation and green financing mechanisms.

 

Curb coal

Ranping Song, senior associate at World Resources Institute

China is on track to beat major climate targets two to three years ahead of schedule. Despite the progress, carbon emissions and coal consumption are projected to rise again, reversing a three-year trend. This is largely due to resumed growth in energy intensive industries, such as steel, chemical and electricity production.

Is this just a blip or a trend? For the vision of Ecological Progress to take hold, more robust measures are needed, many of which make financial sense even for coal power plant owners. For example, new research finds China’s existing coal power plants would lose a whopping US$14.2 billion under the current policy trajectory. However, if China banned new coal power after 2017, adopted a 30-year retirement schedule for coal plant, and accelerated the deployment of low-carbon electricity in line with the two-degree Celsius goal, losses could be capped at US$2.3 billion.

 

Accelerate green investment

Rachel Kyte, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All (SEforALL)

China has the opportunity to stake out its leadership role more determinedly in 2018. How it behaves overseas as well as domestically will be key.

Domestic demand for clean energy has created dominance in wind and solar energy. It is ironic therefore that Chinese entities still have so much at stake in proposed coal power generation around the world. China’s expansive vision in its One Belt, One Road initiative could demonstrate that its investments can spur inclusive and clean growth for all.

From energy access projects in Pakistan to energy storage in Africa, funding and support from One Belt, One Road could be the difference in meeting the sustainable development goals on time. 

Finally, it seems that not a day goes by without breaking news on electric vehicles – an area where China is becoming a leader. 2018 could be the year when China supports cities and countries around the world to adopt such vehicles as a standard for school buses, municipal vehicles, as well as public fleets.

 

Regulate international project financing

Wawa Wang, public finance policy officer, Bankwatch

In response to international criticism, Chinese governmental agencies have devised symbolic guidelines throughout the years to govern the environmental and social performance of projects enabled by Chinese financing and company investments. 

These non-legislative guidelines have almost zero effect because most project financing agreements with Chinese banks take place before issues of non-compliance with recipient country laws and international best practices are dealt with. Urgent regulatory oversight – no less than legal requirements – is called for to raise the quality of environmental, social and legal due diligence before project financing is agreed.

In acting as a climate leader, China should approach its international coal projects with the same resolve as it is starting to demonstrate by halting coal-fired power plants at home. Bankwatch’s research shows that China remains the world’s largest financier and exporter for coal technologies internationally. To improve its global environmental governance, China needs to stop financing coal projects as a false “eco-friendly” solution, when in fact the financing enables an overall capacity increase in the global coal fleet, therefore, an overall increase of greenhouse gas emissions.

 

Engage in global governance

Paulo Esteves, director at BRICS Policy Center

Instead of focusing on internationally agreed standards, multilateral development banks (MDBs) are adopting policies that push country systems to the centre of the environmental governance landscape. This is a threat to socio-environmental governance because it relies on national systems to cope with undesired impacts.

Combined, these two sets of policies are stressing already fragile country systems. Moreover, they are part of a broader Western response to China’s rise as a key source of investments in infrastructure. In this context, it is critical to monitor how country systems are reacting to this growing pressure, and to have China actively engaged, along with Western powers, in a broader debate on socio-environmental governance.

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