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How participation can help China's ailing environment

China’s past 15 years of reform have brought many successes, but the market cannot resolve the country’s ecological crisis – or the social inequalities it exposes. Ma Jun sets out the solution.

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During Deng Xiaoping’s famous tour of southern China in 1992, the former leader declared that “development is of overriding importance”, and so revitalised China's reform process. He set China on a path to further development, and helped the country avoid a retreat into rigid ideology. But this same statement has been misinterpreted to mean economic growth should always be China’s highest priority. And as a result, economic growth has been used as a sole indicator of government officials’ performance. Local governments have been encouraged to pursue economic expansion without concern for the consequences.   

China has thus been trapped by a resource-hungry, inefficient model of growth – a trap we must now escape. As we enter a new century, the country has shifted ever more towards heavy industry; and while energy and resource consumption has risen sharply, power consumption per unit GDP has fallen as efficiency plummets. Local governments ignore environmental issues and look only to the heavy industry and energy projects that will boost their economies. For example, north China’s cities of Dalian, Tianjin and Qingdao, as well as Hebei and Xinjiang provinces, all of which suffer from water scarcity, have built large petrochemical facilities as new centres of economic growth. South China’s Shanghai, Jiangsu, Zhejiang, Guangxi, Sichuan and Yunnan are doing the same. This type of growth flies in the face of China’s poverty of resources and environmental precariousness.

In order to attract investment, many local governments have adopted a policy of “pollute now, clean up later.” Development zones and industrial parks are created, where environmental standards can be lowered, and some major polluters have even been classed as “eco-friendly” to prevent the environmental authorities making spot checks. Deng's statement on development has become an excuse for local policy-makers to ignore environmental management. At the start of 2007, China’s State Environmental Protection Agency (SEPA) announced a further 82 projects, with a total investment value of over 112 billion yuan, had been found in serious breach of the environmental impact assessment law and regulations on the integration of health and safety measures into project design. Many of these projects were located in environments that are already at full capacity, yet the headlong expansion of energy-hungry and polluting industries continues – and causes serious air and water pollution.

Some advocate putting growth first, claiming China’s environmental problems are a normal part of economic development and will be solved in time. But the damage to public health is already grave enough that we may not be able to wait. After a decade and a half of industrialisation and urbanisation, pollution emissions continue to rise. Statistics show that two-thirds of China's urban residents are breathing seriously polluted air, 300 million rural residents are drinking unsafe water, and one in five sources of drinking water for major cities is below standard. Harm on this large a scale cannot continue for long without serious consequences.

Environmental problems also expose great social inequality. A minority of people and places have enjoyed huge benefits from development, while others pay the environmental cost. Social groups that are already vulnerable face the worst pollution and have their resources depleted. They are sometimes even left with a completely uninhabitable environment. This robs them of opportunities for their own development and results in social conflict. Since 2002, the number of complaints to the environmental authorities has increased by 30% every year, reaching 600,000 in 2004; while the number of mass protests caused by environmental issues has grown by 29% every year. These vulnerable groups must achieve equitable treatment – both for the sake of social justice, and because China’s future growth is dependent on its social stability.

In light of this inequity, central government has proposed the “scientific concept of development,” which is designed to change the current GDP-centred model of growth and realise balanced, sustainable development. In 2006, premier Wen Jiabao listed three changes that China needs: to move from a GDP-centered model of growth to one that balances economy and environment and seeks the development of environmental protection; to change from a view of environmental protection as an obstacle to economic growth to the development of economy and environment in tandem; and to institute a range of methods to help resolve environmental problems. Putting these changes into effect will help correct the misinterpretation of Deng's 1992 statement on development.

The “invisible hand” of the market

The “invisible hand” of the market can promote the efficient use of resources if the ownership of resources is clear. But many environmental resources are public property, and it is hard to say who actually owns them. And when they can be used at will, their overexploitation is inevitable.
In 1992, Deng Xiaoping said that economic liberalisation should replace the ideological struggle between socialism and capitalism. A period of market reform followed, with many becoming devotees of liberal economics. But today these market reforms have become the subject of debate. Problems arising from the reform of state assets, healthcare and education have left many with doubts about the process.

Fifteen years of market economics have brought some, limited improvements to China’s environment. But overall, the story has been one of continual harm. In fact, economists have long acknowledged that markets are not enough to protect our shared environment. Economists use publicly-owned pasture as an example. If a farmer buys an extra sheep, the farmer earns an extra sheep’s worth of income. But the additional damage that this sheep causes to the shared pastureland will be borne by all who use it. And competition over who will benefit from the land will result in its over-use; this is known as the “tragedy of the commons.”

This tragedy was played out during China’s market reforms in the 1990s. A 2001 report showed that during that decade, the country’s northern grasslands were 30% to 50% less productive than in the previous decade, marking a sharp fall in the grasslands’ livestock-bearing capacity. The same principle applies to marine over-fishing and the misuse of water resources and forests. When industry emits fumes, effluent and solid waste into public spaces they are, in fact, consuming a shared resource: the environment. Air and water pollution harms public health, but society pays the price – not the polluter. In economic terms, this is called a negative externality.

Some mainstream economists believe that market failures can only be corrected through the further use of markets. They believe that only when the ownership of pastures (or water, or forests) is well-defined, will the costs of their use rise to reflect their scarcity, thus preventing their misuse and promoting environmental improvements. This theory enjoyed a period of popularity, but it is business, not the environment, that has profited from this idea. For example, the price of water rose in many cities, but there has been no visible improvement in the quality of China’s urban water environment. And on top of this, salaries at the water companies continue to rise. These kinds of changes are not easy to find support for.

The failures of the market have led some to suggest a return to the planned economy, where a powerful government would implement environmental protection regulations. In the example of the shared pasture, they believe that rational decisions by each individual farmer would lead to overall inefficiency. But if the government decreed – on threat of punishment – who could use the land, when they could use it and to what extent, the land would be used rationally and tragedy avoided. However, a planned economy is less efficient at allocating resources than a market economy. Even with limited economic development and a low material standard of living, a planned economy is capable of causing serious environmental damage. This was proven by the experiences of the Soviet Union, eastern Europe and China before 1978.

Public participation

The public are the key obstacle to the profit-seeking of the powerful. China must open up public policy-making and give everyone the opportunity for informed participation, allowing the public to find the delicate balance between economic growth and environmental protection in the course of protecting their own rights.

Society already recognises the gravity of the environmental crisis. We now need to decide what is to be done.

Is the theory of scientific development enough to help local governments find a balance? A survey by environmental authorities in Shanxi indicates it is not. Asked if a mayor who achieves economic success at the cost of severe pollution should keep his job, 71% of public respondents answered “no”, but 90% of local government officials said “yes.” These officials have their own interests at heart when making environmental decisions, and we cannot rely on them for balanced policy.

Expert opinions on policy have been sought, in the hope that they will provide disinterested, scientific judgment. But experts too have their own interests, and face pressure from businesses and even government, which threatens their impartiality. Policy-making guided by expert opinions is not the answer.

The turning point we are seeking today came to the west in the late 1960s. Public opposition to environmental degradation spurred western countries to reform environmental management. The public can spur environmental protection, since they are the ones who suffer when it is not in place. They will not choose to endanger their own health and safety, or squander the resources their children will need.

The efficient allocation of resources that a market economy does allow is crucial for a populous but resource-poor country like China. But market reforms will only receive public support when they are combined with principles of good governance. Rises in water prices will only be popular if the public can examine company accounts and see what benefits they will enjoy from the extra cost – and public supervision will ensure the benefits are actually achieved. Public participation also brings the social and environmental outcome of projects to the fore, internalising negative externalities and transforming the cost-benefit analysis of an undertaking to the advantage of projects that save energy and resources rather than those that promote their expansion. This will boost the service industry and ultimately help change the country’s mode of economic growth.

China’s greatest failing in its environmental and resources management is its lack of public involvement. But thankfully, things are changing. In 2003, the environmental impact assessment law was the first Chinese law to demand public participation. In 2004, China’s State Council called for greater transparency of information. In 2006, the central government said that, “Social equality and justice are basic requirements for a harmonious society, and the system must ensure them,” and went on to call for “expansion at all levels of citizens’ orderly participation in politics, ensuring the people’s legal management of national affairs, the economy, culture and social affairs.”

China stands today at a crossroads. Going backwards is no solution, and there is no future in debates about “left” and “right.” Chinese society is experiencing a proliferation of many different interests; the real question is how to prevent any one interest group monopolising the policy-making process for its own gain. In order to achieve this, public decision making must be open, with informed participation by all interest groups. This will allow the public to exercise their environmental rights, and in doing so find the delicate point of balance between growth and the environment. Orderly participation is the meeting of the public interest, governmental and business interests. Respect for the public’s right to participate in environmental decision-making can provide a limited legal and democratic channel that will help reach agreements on difficult issues, allow the market economy to efficiently allocate resources, assist in the achievement of social justice and create harmony between man and nature.

Ma Jun is director of the Institute of Public and Environment Affairs

This is an edited extract of an article first published in Southern Daily

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匿名 | Anonymous


这是一篇很好的文章。要生产就必须有消耗。这是不可避免的。 原料来自生态系统本身,而其耗损也与整个生态体系有关。当森林被大面积砍伐以提供原木来源之后,它就不再是休闲场所和蜜蜂栖息地了,其保持水土和净化空气的能力也会大大降低。废弃物回到生态体系中(例如大气和水土循环中),更加剧了生态系统的恶化。相应地,公共利益也会因此受到损害。公共利益不只关乎个人,从这个意义上来说,它是非竞争性的,也就是说,如果森林为我提供休息场所,对其他人亦然。因此,在为了私人目的进行的生产活动中,涉及公共利益的生态系统不可避免地沦为牺牲品经济对环境的负面影响已开始可能以隐而不现,比如,它会催生一些有一定潜伏期的慢性疾病,并造成不可预料的非连续性病变(传统的马克思主义术语把它称作“从量变到质变”)。现在的问题是,出于私人目的而进行的生产活动在与政治联手后有上升的趋势,所造成的对公共利益的侵害已为许多人所察觉(例如,他们不再享有清洁的空气和干净的饮用水)马军很正确——大众的知情和参与很重要,这有助于应对日益严重的威胁和已经存在的负面影响。在为追求最大利益的市场设置种种规定和限制时,这些负面影响必须被考虑到。因为这关乎社会公平。尽管如此,仍有一些经济学家声称,出于发展经济的考虑,中国可以先污染后治理,正如一些发达国家过去过去经历的那样。然而,这种模式似乎并不适宜于中国,其付出的代价也会太高。在经济发展到理想水平以前,中国人很可能早就被肮脏的空气呛死了。另外,许多运用“污染——治理”模式的国家都把危害环境的废弃物倾倒到欠发达国家(也包括中国)。 因此,这一模式也许更适合于发达国家。

A Great Article!

This is a great article. It is impossible to make something from nothing - the production of market goods requires raw materials and generates wastes, inevitably. Raw materials are taken from the ecological system structure but that depletes connected ecological-system services. When a forest is fenced off to be used as a raw material source (by being logged) then its ability to act as a watershed, as a way of cleaning the air, as a place of leisure and habitat for pollinating bees is degraded. Waste returned to eco-systems (the air, water systems, the soil) further degrades ecological -system services. These are public goods that are degraded - they are not owned by anyone in particular and, when they are used as public goods, they are non-rival. ("non rival" means that if I use an open access forest as a place of leisure it is still available as a place of leisure to others).

So eco-systems which are creating life sustaining services that are public goods are being degraded in the production of private goods. Negative economic impacts feed into a complex ecological system creating degrading effects some of which may be hidden at first, e.g. chronic illnesses appearing with a time lag, and creating unexpected non linear transformations.(In old fashioned Marxist jargon, quantitative changes suddenly become qualitative changes -or in ordinary talk, "nasty surprises").

The problem is that private benefits accrue to market actors with political connections in some places and the burdens and losses from degraded public goods are felt by other citizens in other places (e.g. they can no longer breath clean air or drink clean water). Ma Jun is quite right - this requires well informed mass participation by citizens to better generate the information needed to account for threatened possible or already existing negative impacts (ecological and collective costs). Those negatively effected must have access to information, research and support to feed their concerns into a process of negotiated collective restraints set on the markets driven by the profit seeking few. These are social justice issues.

Despite this some economists say China should pollute to get rich first and clean up later. They say this is what happened in other rich countries. However, the turning points, the levels of income at which the worsening is supposed to halt and reverse, are too high for China to ever reasonably expect that it will get there. Its population will have choked on filthy air and water first. Moreover, much of the apparent improvement in wealthy countries comes from these nations offshoring the most environmentally damaging production stages of the goods that they consume to the poorer countries like China. Pollute first and clean up later is a theory that suits the big foreign interests and the wealthy shopper of my country.

Brian Davey

Default avatar
匿名 | Anonymous



An issue that was overlooked by Deng Xiaoping

Development is a firm principle; and it really has led to a dramatic improvement in China! During his time, Deng overlooked China's environmental issues; but now he probably would say development which takes environment into consideration is the only the firm principle that can guide real development.

Default avatar
匿名 | Anonymous



pinpoint analysis!

The style of Ma Jun's article seems to be as mild and placid as his characteristics. However, you could feel the article's powerful, sharp and pointed strengthes.

The relation between development and protection protection has been an over-talked topic, but this article displays a distinctive and pinpoint analysis.

Default avatar
匿名 | Anonymous



Rent-seeking of the powerful!

It has been the same for centuries for the powerful to seek rent. And this does not happen only to environment protection area.

China still has a long way to go to advance its democracy progress. Hopefully, the country could make a breakthrough in the environment protection area.

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匿名 | Anonymous



Balance of interests

All issues in the end are about the balance of interests. Pan Yue's opinion in the article is great: the rich are consuming and damaging the environment, however, the poor are suffering from the pollution.

Default avatar
匿名 | Anonymous



Against pollution, against polluting factories and individual pollutors

People is entitled, but without actual power. Government officials facing the tradeoff between fiscal income and environmental protection (corporation taxation vs. serious pollution mitigation) lost their strategic long-term thinking, that is, they choose the former! The public can only tolerate in silence. Publicity of antipollution should be encouraged. And a more active involvement of the media is also needed...

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匿名 | Anonymous

发展经济 切记引狼入室



The downsides of development

Since grand scale encouragements for foreign investment for economic development, ‘foreign investment’ has been introduced, however, it exploited our resources, factories and cheap labour, while they own the majority of the capital; by the time they leave, there will just left behind bare rock and grey sky…… Miaohe

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匿名 | Anonymous

Handling problems

Some people think that the problem has caused widespread negative influences,and need to be resolved urgently. Some other people think it is not so serious, and just the necessary process of human beings' improvement under the social development. Whatever,the problem has became very prominent, and it is the time that we should handle it right now.