You are on page 1of 180







Jennifer L. Turner

FRONT COVER DESIGN: This new cover design was created by Luan Dong and Kathy Butterfield to capture the special water-energy theme of this issue of the China Environment Series. PHOTO BELOW: Some members of the China Water-Energy Team (China WET) stand at the banks of the Yellow River in Wuhai City coal base in Inner Mongolia. The Woodrow Wilson Centers China Environment Forum and the Chinese NGO Greenovation Hub created this team of five U.S. and four Chinese water and energy experts to participate in an exchange in China to discuss challenges and possible solutions for addressing Chinas waterenergy confrontations. In Beijing the China WET members gave two public presentations at Peking University and Beijing Energy and Environment Roundtable, and seven closed presentations at the Development Research Center of the State Council, Institute of Public and Environmental Affairs, Natural Resources and Defense Council, Syntao Co., Ltd, Institute for Geographic Sciences and Natural Resources Research of Chinese Academy of Sciences, Energy Research Institute of the National Development and Reform Commission, and the Chinese Academy of Environmental Planning. After meeting with policymakers, business leaders, NGO professionals, and students in Beijing, the team traveled to Wuhai City, Inner Mongolia and Yinchuan City, Ningxia Province to see two coal base complexes in action. In recent years, many small- and medium-sized coal power plants have been subsumed by large state-owned enterprises such as the Shenhua Group. Mining, processing, and industry all happen within close proximity on a grand scale. Condensed within the cities are open pit mines, coal-fired power plants, and coal-to-chemical plants. See more photos documenting China WET exchange on page five. The China Water-Energy Team exchange was part of the Choke Point: China initiative created by the Wilson Center and Circle of Blue. The exchange was supported by the China Sustainable Energy Program, Skoll Global Threats Fund, USAID, and Vermont Law School.

Robert Batten Luan Dong


Susan Chan Shifflett David Tyler Gibson Ella Genasci Smith


Kathy Butterfield Luan Dong


Abi Barnes, Catherine Beck, Katie Lebling, Jake Reznick, Tara Sun Vanacore, Joyce Wenfang Wang, Yuanchen Yang, Likangjin Zheng






The views of the authors expressed in this publication do not necessarily reflect the views of the funders.



or seventeen years, the Woodrow Wilson Centers China Environment Forum (CEF) has created projects, workshops, and exchanges that bring together U.S., Chinese, and other Asian environmental policy experts to explore the most imperative environmental and sustainable development issues in China and to examine opportunities for business, governmental, and nongovernmental communities to collaboratively address these issues. The networks built and knowledge gathered through meetings, publications, and research activities have established CEF as one of the most reliable sources for China-environment information and given CEF the capacity to undertake long-term and specialized projects on topics such as energy development in China, environmental justice, Japan-China-US clean water network, municipal financing for environmental infrastructure, river basin governance, environmental health, water conflict resolution mechanisms, food safety, and environmental activism and green journalism. Our current initiatives are: Choke Point: Chinaa multimedia and convening initiative uncovering how energy is impacting water in China. Cooperative Competitorsresearch and exchanges on U.S.-China clean energy cooperation and, Complex Connectionsmeetings and research examining environmental impact of Chinese investment overseas.


The China Environment Forum meetings, publications, and research exchanges over the past two years have been supported by generous grants from the Skoll Global Threats Fund, Hewlett Foundation, Rockefeller Brothers Fund, blue moon fund, U.S. Agency for International Development, Vermont Law School, the Walt Disney Company, and ClimateWorks Foundation. Jennifer L. Turner has directed the China Environment Forum since 1999 and Susan Chan Shifflett began as the projects associate in December 2012. The China Environment Forum is a project under the Wilson Centers Global Sustainability and Resilience Program.

ForeWorD 1 | Jennifer Turner SPeciaL RevieW of Water-EnerGY NeXus ChaLLenGes in China 8 | Untapped Potential: Energy Savings and Climate Benefits from Strengthening Water Use Efficiency in Chinas Building and Industrial Sector Michael Davidson, Gretchen Greene & Mingming Liu 32 | A Pinch of Salt: Why Chinas Brute Force Push Toward Desalination May Leave the World Better Off David Cohen-Tanugi 35 | A Revolution on the Horizon: The Potential of Shale Gas Development in China and its Impact on Water Resources Peter V. Marsters 48 | Choke Point: On the Global Frontlines of the Water-Food-Energy Crisis Jennifer Turner, Andrew Maddocks, Luan Dong, Susan Chan Shifflett, David Tyler Gibson & Katie Lebling 52 | Sustainable Coffee Growing in Yunnan David Tyler Gibson 63 | Quenching Chinas Thirst for Renewable Power: Water Footprint of Solar, Wind, and Hydro Development Nina Zheng & David Fridley 71 | Lowering the Water Footprint of Solar PV Production in China Jodie Roussell 74 | Inner Mongolia: Coal Heaven, Water Hell Troy Sternberg, Caitlin Werrell & Francesco Femia

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Commentaries 77 | Chinas Hydropower Sector Meets the Limits of Growth Peter Bosshard & Katy Yan 85 | Science, Controversy and Climate Change Journalism in China Sam Geall 94 | Exploring Solutions for Sustainable Development and Water Conservation in Sichuan Province Li Zhang & Yayue Peng 102 | Market Transformation for Urban Energy Efficiency in China Sha Yu, Meredydd Evans, Benchi Guo & Jianmin Zhang 112 | Clear Benefits: Quantifying Non-Energy Benefits of a Carbon Reduction Initiative for a Glassware Company Sheri Willoughby, Stephan Guo, Maja Dahlgren, Thomas Schaefer & Hongming Jia 121 | Making the Grade: Performance Targets and Industrial Energy Policy Tucker Van Aken 129 | How Chinas Cities Can Chart the Course for the Planets Low Carbon Future Warren Karlenzig & Daniel Zhu 137 | In the Public Interest: New Litigation Tool for Cleaning Up Chinas Polluted Waterways Jingjing Liu SPeciaL Focus on Chinas TrouBLeD LaKes 151 | Compensation in the Shadow of the Law at Yangzonghai: Legal Reform, Interested Actors, and Pollution in Yunnans Lake Leah Larson-Rabin

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


160 | Guizhous First Public Interest Environmental Litigation: Guiyang Lake and Dam Administrative Bureau vs. Guizhou Tianfeng Chemical Co., Ltd. Cai Ming Feature BoXes 82 | Risks of Intensified Development of Hydropower in Southwestern China Su Liu 99 | Nuclear Power Prospects in a Post-Tsunami East Asia Tom Drennen & Darrin Magee 110 | Sacrificing the Planets Arteries to Save Her Lungs? Peter Bosshard 118 | The New Potential for Reigning in Chinas Corporate Environmental Polluters Adina Matisoff 127 | Chinas Trials in its Overseas Oil Investments Susana Moreira 134 | The Environmental Cost of Clean Energy: Chinas Renewable Energy Goals Contribute to Lead Pollution Perry Gottesfeld 144 | Training the Next Generation of Environmental Advocates in China: The U.S.China Partnership for Environmental Law Jingjing Liu SPotLiGht on NGO Activism in China 90 | The Stewards of the Most Heavy-Metal Polluted River in China: Green Hunan Luan Dong


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

148 | Burning With Anger: A Chinese NGO and Citizen Opposition to Incinerators in Beijing Chang Cheng 157 | Permanent River Protection: An Option for China? Kristen McDonald 166 | Life Above 4,000 Meters: Sowing Green Seeds of Mount Everest Liu Rongkun


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

by Jennifer L. Turner ( ), Editor

ver the past year Chinas dismal air quality has garnered considerable attention particularly in January 2013, when pollution levels in Beijing and many other northern cities crashed beyond the air quality indexes. The grey smog that enveloped Beijing for weeks was caused predominantly by small particulate matter (PM2.5) from coal and cars. This Airpocalypse sparked sharp criticism from the Chinese news media and netizens and even Chinese environmental health researchers chimed in with sobering statistics on the growing number of people who die prematurely each year in China due to poor air quality. The governments policy responses have been rapid and numerous. In December 2012, the National Peoples Congress issued a law to require regional multi-pollutant air quality plans and new emission targets in 113 cities. To give the new law more muscle and clarity, in September 2013 the State Council issued a Pollution Action Plan. It is very unusual for the government to announce a plan that does not coincide with normal fiveyear planning cycle, but the extreme pollution clearly demanded decisive new steps. This plan requires Beijing, Shanghai and Guangdong to reduce fine particle density by 25, 20 and 15 percent, in the respective cities by 2017. Moreover, a list of good and poor performing cities will be published monthly. These steps to more aggressively address coal emissions open up more opportunities for U.S.-China clean energy cooperationnot just formal bilateral collaboration under the Clean Energy Research Centers, but also for top-notch U.S. environmental NGO efforts, such as Natural Resources Defense Councils coal campaign and the Energy Foundations Sustainable Cities initiative. In our Cooperative Competitors work at the China Environment Foruman initiative supported by the blue moon fund and Rockefeller Brothers Fundwe are advancing U.S.-China

dialogues focused on clean energy cooperation. Our Choke Point: China work has continued its deep dive into coal-energy nexus issues in China through our partnership with Circle of Blue. Since 2010 we have jointly produced 21 feature stories and dozens of infographics, photos, and blog posts that have for the first time explored how energy development is impacting vulnerable water resources in China. As part of our initiative, we created a China Water-Energy Team with 9 U.S. and Chinese water and energy experts, who participated in dialogues in Beijing in August 2013 to discuss priorities for China to address its growing water-energy confrontations. Local Chinese NGO Greenovation Hub was our partner in this exchange, which was generously supported by the Skoll Global Threats Fund, the China Sustainable Energy Program, USAID, and Vermont Law School. We will publish a China Water-Energy Roadmap in the fall of 2013. A PEEK INSIDE THIS ISSUE To highlight our growing engagement in Choke Point issues, this years China Environment Series opens with a Special Review of Water-Energy Nexus Challenges in China. Michael Davidson, Gretchen Green and Meng Jingjing kick off this review with an encyclopedic (in a good way!) survey of the untapped potential of saving energy through improving water use efficiency. Peter Marsters, one of my former assistants, draws on his year as a Fulbright Fellow in Sichuan Province to reflect on the water challenges in Chinas shale gas revolution. David Tyler Gibson explores the water-energy-food tangle surrounding coffee production and hydropower in Yunnan, while two stellar energy researchers from Lawrence Berkeley National Laboratory Nina Zheng and David Fridleyponder the oft overlooked water footprint of wind, solar, and hydropower in China. The boxes in this review section cover desalination (David
W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


Cohen-Tanugi); solar PV production (Jodie Roussel); and coal gasification in Inner Mongolia (Troy Sternberg, Caitlin Werrell and Francesco Femia). To highlight the major role cities play in driving water-energy confrontations, my team at CEF (Luan Dong, Susan Chan Shifflett, David Tyler Gibson, and Katie Lebling) and Andrew Maddocks created a neat infographic on the urban Choke Point challenges. This years commentaries covered a broad range of issues with some sprinkling of Choke Point issues as well, such as Peter Bosshard and Katy Yans piece on Chinas hydropower sector hitting limits. A commentary authored by staff from the World Wildlife Fund (Sheri Willoughby), IKEA (Stephen Guo, Maja Dahlgren & Thomas Schaefer), and a Chinese glass manufacturer (Hongming Jia) presents a promising case of the non-energy benefits of a carbon reduction initiative at a glassware company in Shanxi Province. Cities were a popular topic with Sha Yu, Meredydd Evans, Benchi Guo and Jianmin Zhang examining market transformation for urban energy efficiency in China and Warren Karlenzig and Daniel Zhu discussing how Chinese cities could become low-carbon leaders in the world. Shifting out of the cities, Li Zhang and Yayue Peng highlight the value of Conservation Internationals ecosystem service and freshwater initiative for biodiversity in Sichuan Province. Three commentaries hone in on different aspects of good governance Tucker Van Aken looks at promising changes in industrial energy performance targets for local cadres and Jingjing Liu reflects on recent developments in water pollution public interest litigation. Finally, Sam Geall explores whether Chinese media reports tend to confuse or enlighten the public regarding climate change. Two commentaries were placed in their own Focus on Chinas Troubled Lakes section of the publication. First, Leah LarsonRabin relates a story on the struggles in

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

developing legal reforms to control pollution in Yunnans lakes. Next, Cai Ming, head judge at the Environmental Law Court in Qingzhen Guizhou, documents the first environmental public interest case that was successfully adjudicated in his court. Scattered throughout the issue are short, but rich Feature Boxes, so please dont ignore them! Energy was a popular topic with two feature boxes examining Chinas hydropower development overseas (Peter Bosshard) and within China (Su Liu); Shannon Selerowski highlights the growing problems of lead pollution from batteries for wind power and electric bicycles while Darrin Magee and Tom Drennen reflect on the challenges facing nuclear power in China. Susana Moreira looks at Chinas overseas oil investments and Adina Matisoff examines the impact of environmental disclosures in the Hong Kong Stock Exchange on Chinese overseas investment. Jingjing Liu crafted a lengthy box on all the great environmental governance training and capacity building work that Vermont Law School has been carrying out in China. Our Spotlights on NGO Activism in China introduce the relatively new, but dynamic grassroots group Green Hunan (Luan Dong); the advocacy work on incinerators by Friends of Nature (Chang Cheng); and environmental protection efforts by the Pendeba Society of Qomolangma National Nature Preserve (Liu Rongkun). Long-time contributor Kristen McDonald from Pacific Environment writes compellingly about the need for permanent river protection strategies for China. MY TEAM CES is a labor of love and over the past year we at CEF have not always had as much time for love and editing as we would have liked. Our office is always happily busy with

projects, meetings and fielding information requests, but I did sometimes find quiet moments to read and edit this publication during the many delays on the DC Metro Red line. While commuting it is always good to make lemonade out of transportation lemons. So while belated, we did get this issue out and I am eternally grateful to my authors for their patience and to the research interns and assistants who helped pull this issue together. Robert Battens organizing ability helped me in the final sweep to clean up the texts and purge papers of any hint of passive voice. Luan Dong did the triple duty of assisting in editing, design and layout of this publication. Kathy Butterfield, our intrepid designer at the Wilson Center has a fabulous eye for design and sense of humor. The other heavy lifters in editing and writing deserve more songs of praise than I have space for here, but a big shout out to Abi Barnes, Katie Beck, Katie Lebling, Susan Chan Shifflett, Ella Genasci Smith, Tara Sun Vanacore, Yuanchen Yang, and Likangjin Zheng.

I wish to thank Rockefeller Brothers Fund, Vermont Law School, and USAID for supporting this and related publications over the past two years. Besides the China Environment Series, these funders have supported our work in producing online research briefs and infographics that we know many of you in our network have been clicking on and reading. Speaking of people who click and readI would be remiss if I forgot the most crucial members of the CEF teamlook in the mirror. You are likely one of the 5,000+ people in the CEF mafia, a growing network of environmental and energy professionals who are working on policies, projects, research, and campaigns in China or you aspire to work on these issues. The network is the lifeblood of this program and I am very grateful as I move into my 15th year as director of the China Environment Forum that many of you are active participants in our work as speakers, authors, audience members, bloggers, reviewers, and re-tweeters. !

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

5 6

4 1

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

1 | CEF Program Associate Susan Chan Shifflett (far left) poses with the Greenovation Hub Beijing team in their office. 2 | In a talk to a packed hall at Beijing University, Yang Fuqiang of the Natural Resources and Defense Council shows a map of Chinas most water-stressed regions. 3 | Keith Schneider (Senior Editor, Circle of Blue) discusses the waterenergy choke points at the Chinese Academy of Sciences. 4 | Jia Shaofeng of the Chinese Academy of Sciences and Pam Bush of the Delaware River Commission exchange perspectives on water-shale gas issues. 5 | Jia Yangwen (Department of Water Resources, China Institute of Water Resources and Hydropower) speaks to business leaders on the risk of water-energy confrontations. 6 | Jennifer Turner and Lo Sze Ping (CEO, Greenovation Hub) flank prominent Chinese environmental activist Ma Jun after visiting the Institute of Public and Environmental Affairs. Photo credit: Susan Chan Shifflett.



UntaPPeD PotentiaL
Energy Savings and Climate Benefits from Strengthening Water Use Efficiency in Chinas Building and Industrial Sector
by Michael Davidson, Gretchen Greene & Mingming Liu

ver the past four decades China has undergone a seemingly unstoppable economic boom. The countrys need for energy to fuel this growth has increasingly come at a high cost to Chinas water resources. With soaring pollution levels and water resources equivalent to a quarter of the worlds average, ensuring a stable freshwater supply presents a significant challenge to Chinas rapid urbanization and industrial development. At the same time, curbing rising energy consumption and greenhouse gas emissions has become a national priority. For the last twenty years, Chinas policies have recognized the need to use existing water resources more efficiently, but bureaucratic turf struggles, low water prices, and unclear water rights have often limited effective implementation of water conservation and pollution control regulations and laws. Indeed, water conservation offices have been established in almost every sector and every city to promote efficient water use. Water resource management is highlighted numerous times in the 12th Five-Year Plan, which emphasizes price reform and water-

saving technologies. To be most successful, however, Chinas energy and water policies must not operate in isolation, but must instead recognize that for a water-scarce country like China, water and energy resources are inextricably linked. Improving water use efficiency in China could not only extend the use of this scarce and critical resource, but also save energy and reduce greenhouse gas emissions. Lessons in water efficiency can come from many sources. In this paper, we first analyze the water-energy nexus in China, highlighting the similar challenges faced by southern California and northern China. After outlining the dual benefits of water efficiency solutions in Chinas building sector and textile industry, we conclude with recommendations for successfully integrating water and energy strategies into national policy priorities. CHINAS WAtER AND ENERGY HUNGER Water use and energy use are inextricably linked. Energy is embedded in each stage of the water-use cycle extraction, purification, distribution, treatment and disposal or re-use.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Conversely, energy production often requires tremendous amounts of water. For example, the coal lifecycle is very water intense from mining and washing coal to cooling power plants. These stages of coal extraction and production also cause considerable pollution that reduces the availability of usable water. Few, if any, countries have prioritized data collection and policies to deal with the growing confrontations between water and energy. This watergy gap needs to be filled, particularly in China where the water footprint of energy development and the energy footprint of water are large and growing. Chinas water-energy choke points are particularly acute in the arid north where lack of water hinders coal mining. The need for water is also great in north Chinas grain belt, where at least 40 percent of the water needed for crops must be pumped from diminishing ground water resources, a process that uses considerable amounts of energy. For decades Beijing has benefited from numerous emergency water transfers to quench its thirst. Now to help secure a more permanent source of water, the Chinese government commissioned the construction of the South-North Water Transfer Project (SNWTP), a massive energyintensive water diversion project to move

water from the Yangtze River to cities and coal fields in the dry north. Water treatment plants to handle wastewater disposal, purification and re-use are also energy-intensiveand the costs for non-treatment are even greater. Lack of water conservation can ultimately create significant energy burdens. Water and energy are both in short supply in China and separate ministries and different laws regulate each of these vital resource sectors. Few Chinese researchers have focused on the interplay of water and coal or the growing energy footprint of moving and cleaning water. A greater awareness of the water-energy nexus could help catalyze stronger water conservation and water pollution control policies, as well as lessen the water footprint of energy development. NO BRAKES ON CHINAS RISING ENERGY DEMAND Since China adopted its reform and opening policy in 1978, its economy has grown around 10 percent annually, becoming the second largest in the world in 2010. During the same period, primary energy consumption increased sixfold, reaching 3,250 million tons of coal-equivalent (tce) in 2010, as shown

FiGure 1. Economic anD EnerGY GroWth TrenDs in China (1978-2010)

45 40 35 30 25 20 15 10 5 0
1978 1980 1985 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

35% 30% 25% 20% 15% 10% 5% 0%

Energy Consumption (100million TCE)

GDP (Tillion RMB)

GDP Growth Rate

Energy Consumption Growth Rate

Source: National Bureau of Statistics (1979-2011).

in Figure 1. China currently relies on coal to meet over 70 percent of its primary energy consumption needs, which according to one estimate causes environmental and human health damages equivalent to 7 percent of annual GDP (Greenpeace, 2008). Roots of the Energy Boom Influenced by the worldwide energy crisis in the 1970s, and facing high energy demand domestically, China began to focus on energy conservation in the early 1980s. Central authorities prioritized energy conservation was in the national development plan, and central and local g ov e r n m e nt s issued policies and established enforcement organizations. Although total energy use continued to rise, the programs were successful at lowering Chinas energy intensity (energy consumed per unit GDP) throughout the 1980s and 1990s. Following a leveling off of Chinas total energy use in the 1990s, expansion of energyintensive industries and growing household consumption led to a sharp increase in energy consumption beginning around 2002. During the 10th Five-Year Plan period (2001-2005), Chinas energy consumption grew faster than its GDP for the first time in over a decade. In 2006, China issued its 11th Five-Year Plan (2006-2010) that called for reducing nationwide energy intensity by 20 percent by 2010 from a base year of 2005, for a projected reduction of 600 million tce (State Council, 2006). China identified energy efficiency as the most costeffective way to meet the 20 percent target, and initiated a suite of programs supporting mandatory reduction targets in provinces and in the top 1,000 energy-consuming enterprises. These programs included comprehensive

efficiency standards by sector, energy efficiency investment targets for utilities, more stringent efficiency standards and labeling for buildings, and other investments in low-carbon efforts. By the end of 2010, energy intensity had fallen 19.1 percent. The average 11.2 percent annual GDP growth rate during this period was accompanied by an average annual energy consumption growth of only 6.6 percent (NDRC, 2011). Over the same time period, energy intensity in the United States and the European Union fell by 7.75 percent and 7.81 percent, respectively. Compared to industrialized countries, Chinas 2010 energy

intensity (0.900 tce per $1,000, 2005 constant dollars) was almost four times the United States (0.243) and five times the EU rate (0.170) (IEA, 2012). In March 2011, China laid out targets for the current 12th Five-Year Plan (2011-2015), including an average annual GDP growth target of 7 percent per year, a half percent below the 11th Five-Year Plans annual growth target, and 4 percent below the 11.2 percent annual growth rate that was actually realized during the previous five years (State Council, 2011). Premier Wen Jiabao highlighted the importance of improving environmental protection and pursuing sustainable development when explaining the governments decision to reduce its economic growth target. While Premier Wen did not talk in terms of the water-energy nexus, controlling economic growth will entail reducing the use of coal, which would lower the energy sectors water footprint. By 2015, the Chinese government aims to reduce energy intensity from the 2005 levels
W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S



by another 16 percent and carbon intensity (carbon dioxide emissions per unit GDP) by 17 percent. Officials have coupled these efforts with a goal to increase the proportion of non-fossil fuel energy to 11.4 percent of total energy consumption by 2015 and 15 percent by 2020. These targets are consistent with Chinas international commitments made during the Copenhagen climate conference, but there is still room for more ambitious goals and deeper cuts (Cohen-Tanugi, 2010). If China continues to consume energy at the same rate as it has over the last five years, by 2050 its primary energy consumption will reach an astronomical 27 billion tce, almost double the total global energy consumption in 2008 (ERI, 2009). Taking into account the expected gradual decline in the growth rate as per capita consumption levels off and the continuation of current energy policies, the China Energy Group at Lawrence Berkeley National Laboratory projects 5.48 billion tce of consumption in 2050 (LBNL, 2011). A Thirsty Nation Facing Water Scarcity Challenges Like energy, water is critical to economic development. Chinas total annual water use
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

increased 9 percent from 2000 to 2010 (549.76 to 599 billion m3), owing largely to increases in industrial and domestic water applications (NBS, 2011a). (See Figure 2). The total amount of water resources in China has remained roughly constant over the last decade, around 2,700 billion m3. Agricultural water use, which currently accounts for more than 60 percent of the total, remained relatively constant over this period. However, water used by industry and households has been steadily increasing. According to the 2011 No.1 Central Document, which reflects government priorities for the year, China aims at capping its annual water use at 670 billion m3 in 2020, about an 11 percent increase from the 2010 level (State Council, 2010). Central to the water challenge is the uneven distribution of water resources, as many developed regions in China are in water-scarce areas. In northern China, for example, water availability is only 700 m3/person. Moreover, in the Huabei Basin, which includes Beijing, water availability was only 308 m3/person in 2009well below the international standards for water scarcity1 of 1,000 m3/person (NBS, 2010). Chinas rapid economic growth is

FiGure 2. TotaL Water Use anD BreaKDoWn in China (2000-2010)

700 600 500 581.87











Unit: billion m3

400 300 200 100 0



































Ecological Protection

Source: NBS (2001-2011).


FiGure 3. TotaL Amount of Water Resource, Water Use anD GDP of Different ReGions in China, 2009

Source: NBS (2010).


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

hampered by a critical shortage of water. The government estimates that 400 of Chinas 668 cities with populations over 100,000 suffer from water shortages. Of the total water supply, only 812 billion m3 (29 percent) is usable, while per capita renewable water resources stood at 2,112 m3 in 2009, a third of the world average (NDRC, 2007a; World Bank, 2012). Climate change also threatens to disrupt Chinas precipitation patterns, exacerbate water scarcity in northern China, and lower water flows in the south (NDRC, 2007b). Besides climate change, inefficient water use in all sectors of the economy and increasing water pollution are compounding water scarcity in China. Industry in China uses 5 to 10 times more water per unit output (depending on the product) than in developed nations (NDRC, 2005). The 12th Five-Year Plan begins to address this wastage by setting a 30 percent water recycling goal for industries. Water loss in agriculture, which uses 60-65 percent of all water in China, is also significant: irrigation of crops in China can lose up to 45 percent of the water (Xinhua, 2006). Moreover, runoff from overuse of fertilizers and pesticides has pushed agriculture to the top water polluting sector in China. In 2007, 43 percent of chemical oxygen

demand (COD), a major water pollution indicator, was from agricultural sources (MEP et al., 2010). Municipal waste and untreated industrial waste combined with agricultural runoff have left the country with nearly 30 percent of its waterways undrinkable. Figure 3 compares total water resources, water use, and GDP of individual provinces and municipalities in China. A number of cities are consuming water well beyond the local supplies. For example, Beijing provides 3.3 percent of Chinas GDP, but has only 0.09 percent of Chinas water reserves, a disparity of almost a factor of 40. In contrast, Shandongs ratio of GDP to available water reserves is about 8. While cities in Chinas arid north are facing severe water shortages, cities in the more water-rich south lack access to sufficient clean watera trend not reflected in this figure. Massive, energy-intensive water transfer projects, such as the South-North Water Transfer Project, are underway to alleviate this imbalance between water demand and supply. The projects first two pipelines will transport 28 billion m3 annually, ten times the volume of the next largest transfer project in the world, the California state water project. Costing $62 billion USD, the central and eastern canals


FiGure 4. CaLifornias State Water ProJect anD Chinas Southto-North Water Diversion ProJect SiDe-BY-SiDe

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Chinas $62 billion USD water diversion project from the Yangtze River to the north will be ten times as large as the worlds current largest transfer project, the California state water project.


Photo 1. Shuozhou Coal Fired Power Plant in Shanxi Province, China. One coal plant uses over a billion liters of water a day. Photo creidt: Wikipedia Commons.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

will each snake over 1,200 km of countryside from the southern Yangtze River to population centers in the north like Beijing and Tianjin. (See Figure 4). The 11th Five-Year Plan set a 30 percent reduction target for water use per unit of industrial value-added output (a measure of the water intensity of Chinas economic activity) from a base year of 2005. Chinese government figures indicate that the achieved reduction was 37.8 percent, lowering industrial water use from 169 m3/10,000 RMB in 2005 to 105 m3/10,000 RMB in 2010 (NBS, 2011a). Over the same period, total emissions of COD, fell by 12.5 percent, surpassing the 10 percent COD reduction target under the 11th Five-Year Plan. The 12th Five-Year Plan sets an additional 30 percent reduction target for industrial water use efficiency compared to 2010 levels, an additional 8 percent reduction in COD, and a new 10 percent reduction in the water pollutant ammonia nitrogen. Such targets are vital as industrial water use and wastewater emissions continue to increase.

THE OVERLOOKED WAtER-ENERGY NEXUS REALItY IN CHINA Accessing energy resources requires substantial amounts of water. No energy technology has a net-zero water foot print, although there is significant variance in the quantity of water consumed for electricity generation depending on the primary energy source. On the flip side of the water-energy nexus, energy is required for the extraction, purification, transportation, distribution and heating of water and for the treatment and disposal or reuse of wastewater. Without significant expenditures of energy, much of the worlds population would not have access to potable water. Shining a light on all facets of the water-energy nexus will be crucial in catalyzing research and policies to promote sufficiently aggressive energy and water conservation. How Thirsty is Chinas Energy Sector? The main sources of energy in Chinas electricity are coal and hydroelectric power,


and to a lesser extent nuclear. (See Figure 5). Together these three energy sources provide 95 percent of Chinas electricity. Thermal Power Coal is Chinas largest source of energy, accounting for 70 percent of total energy consumption (NBS). It is also used for around 77 percent of electricity production, generating 3.2 trillion kilowatt-hours (kWh) in 2010 (CEC, 2011). China produced 3.7 billion metric tons of coal in 2009, which was 44 percent of global production (EIA, 2010). Between production and use, the coal industry is also the largest industrial user of water in China, responsible for 20 percent of all water withdrawals (Schneider, 2011b). Water is needed to extract, wash, transport, and burn coal, and to control coal ash. At the plant, water is heated to almost 600 degrees Celsius in order to drive a turbine, and additional freshwater is used to cool down the steam before reinjection. According to researchers at Sandia National Laboratories, a typical 500-megawatt coal-fired plant in the U.S. burns 250 tons of coal per hour and uses 1.1 billion liters of water per day400 billion liters per year for cooling (Crane-Murdoch, 2010). To boost energy and water efficiency nearly all new coalfired power plants use air cooling. Hydropower China leads the world in hydroelectric power, generating 690 billion kWh in 2010 (16.2 percent of total electricity supply) with an installed capacity of 213 gigawatts (GW) (CEC, 2011). The 12th Five-Year Plan for Renewable Energy prioritizes dams by targeting 60 new medium and large dams. Thus, hydropower is still rapidly expanding, increasing on average 11.1 percent of installed capacity annually over the past five years, and with more room to grow through at least 2020. 542 GW of hydro resources are exploitable according to Chinese government estimates (Wang, Li, Du, 2011).

FiGure 5.

Coal Hydro Nuclear Natural Gas Wind Others

Source: NBS, CE. Coal accounted for 77% of Chinas 4.2 trillion kWh of electricity used in 2010.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Hydropower is Chinas second largest energy resource after coal. The Three Gorges Dam, fully completed in July 2012 at 22.5 GW, is the single largest power plant in China with an annual generating potential of approximately 100 billion kWh, roughly 2 percent of the countrys electricity demand (China Three Gorges Corp., 2012). (See Photo 2). Hydroelectric power is directly linked to water availability, and is impacted by seasonal variations in river flow in addition to extreme water shortages. Each liter decrease of water upstream is one less liter that can be converted into power at the dam. At their peak, recent droughts in China have caused up to a 20 percent decline in generation capacity (Kurtenbach, 2011). Dams hurt water ecosystems by reducing flows needed for fish species while reservoirs are a major source of water loss due to evaporation. Nuclear Power Nuclear power generated 75 billion kWh of Chinas electricity in 2011, 1.8 percent of the countrys total (CEC, 2011). Chinas most recent official plan (published in 2007) projects 40 GW of nuclear capacity by 2020. Unofficially, however, the Chinese government has signaled its intention to build up to 80 GW of nuclear


Photo 2. Three Gorges Dam. China leads the world in exploitable hydropower with 542 gigawatts. Photo credit: Wikipedia Commons.

power by 2020, from the current 10.8 GW. If those plants are built, nuclear power will meet five percent of the countrys energy needs by 2020 (World Nuclear Association, 2011a). Nuclear power plants use an enormous amount of water for cooling; hence, most are usually built in proximity to a lake, river, or ocean. All of Chinas 14 operating plants are on the eastern coastline. Similar to coal plants, water usage varies significantly by plant design. Where water is abundant, power plants prefer open-loop cooling (also known as once-through), although it discharges heated water back into the water supply. Plants can use closed-loop cooling where water is less abundant, but results in higher water losses due to evaporation. The total water withdrawals depend on the thermal efficiency, but on average, for every unit of heat converted to electricity two additional units are carried away by the water (World Nuclear Association, 2011b). Over the next decade, China will

continue to rely upon once-through designs, while closed-loop cooling is projected to become more prevalent following 2020. (See Table 1) Renewable Energy, Oil and Natural Gas Other energy sources use water in various ways, from hydraulic fracturing for natural gas extraction to pressurized water injection for enhanced oil recovery. Among renewables, concentrated solar thermal has the largest water footprint, where water is heated and compressed to generate electricitythough this still requires 10-20 times less water than nuclear plants (Bull, 2009). Photovoltaic solar and wind turbines use minimal amounts of water during operation, though the latter may have a larger impact in terms of manufacturing steel for wind towers. Untreated pollution emissions from solar panel production have become a growing concern in China as well. [Editors Note: See commentaries in this issue


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


TaBLe 1. NucLear Reactors in China BY Water CooLinG TYPe

Cooling Type Operational (2012) Planned (2012-2020) Proposed (2020-2030)


0 14

25 39

64 40

Source: Data for the internal NRDC nuclear geo-information system was compiled by Tom Cochran. Database design was done by Jerome Simons, Scoville Fellow, NRDC.

of CES for more detailed discussion of the water issues related to shale gas (Marsters) and renewables (Zheng & Fridley) in China]. Water as Chinas Unrecognized Energy Intensive Sector? Water is increasingly an energy-intensive sector, as governments need to move and clean ever larger quantities of water to supply the growing thirst of modern agriculture and booming cities and industries. (See Box 1 for California examples). Besides transporting water across mountains and even countries to satisfy demand in areas with falling groundwater tables and reduced rainfall, countries around the world are using larger amounts of energy to treat and reuse local wastewater. Conflicts between water and energy priorities are very significant in China where coal resources in the arid north cannot be fully developed without additional water supplies. To meet rising demand for water to tap coal and supply cities in the north, China is embarking on massive development of energy intensive water transfer projects, including the 3,000-kilometer South-North Water Transfer Project (SNWTP). The ambitious SNWTP includes the construction of three canals diverting water from the Yangtze River to the north. The eastern canal will begin delivering water in 2013 and after some logistical delays the central canal will come online in 2014. The most challenging canal will require drilling through mountains in Chinas far west. Despite

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

increasing dryness in Chinas southwest, this expensive western canal remains a priority because it would bring water to as of yet untapped coal reserves in Xinjiang (Schneider, 2011a). Another ambitious plan to quench coals thirst is a proposed pipeline delivering desalinated water from the Bohai Sea over 600 km to the coal fields in Inner Mongolia (Schneider, 2011b). These pipelines drive up the energy costs associated with providing each liter of water, which in turn should drive up water prices and promote conservation. According to most Chinese water analysts, water prices still remain too low and do not yet promote aggressive water-saving by industrial and domestic consumers. The United States also has pursued energy intensive water transfers, such as the California state water project, which pumps 2.8 billion m3 of water annually a distance of 715 km and up almost 700 meters over a mountain range to reach population centers in the south. This gravity-defying water transfer consumes up to 20 times more energy compared to using local groundwater (Beckman, et al., 2009). To date, the authors have been unable to locate estimates for the energy footprint of the South-North Water Transfer Project, but it is a calculation that could help Chinese policymakers view water supply infrastructure as a high-energy consuming industry and a sector requiring stringent energy conservation targets. Moreover, policymakers and energy managers need to calculate the energy cost of using water transfers to tap coal supplies as another environmental cost of coal use. California and Northern China: Delivering Water to Large Population Centers in Arid Regions Northern China and California face similar challenges of water scarcity. (See Figure 6). Chinas arid north and northwest is like Californias south, and both have large


BOX 1. Energy Down the Drain: The Heavy Toll of Delivering Municipal Freshwater in California
Globally, the energy consumed for delivering water is more than 940 million tons of coal-equivalent (mtce), which is 7 percent of total world energy consumption (Hoffman, 2004). Californiasimilar to northern China in terms of extreme water scarcitydevotes even more energy to the task. For San Diego County, approximately 5,600 watt-hours per cubic meter (Wh/m3) of electricity is used in the various stages of the life of a ton of water (1 m3 of water weighs one metric ton or 1.1 short tons). Source and Conveyance. Where surface water is unavailable, groundwater must be pumped up from below the surface at great economic cost. For example, in parts of the Central Coast of California, water is raised 60 meters at a cost of 240 Wh/m3. A lessenergy intense solution might include using recycled water. Desalination, a last resort in water scarce areas, consumes extraordinary amounts of energy, up to 4,400 Wh/m3 for one proposed plant in San Diego. Freshwater must frequently be pumped from natural sources over mountains to urban centers, sometimes thousands of kilometers of away. The California state water project uses 2433 Wh/m3 to pump water up over a 700-meter-high mountain range and down to southern California. Treatment. Groundwater and surface water generally require some purification before use. In many groundwater systems in the U.S., simple disinfection is sufficient. However, surface water treatments are becoming increasingly costly. The bulk of a treatment plants energy goes to pumping the treated water. Roughly 10% of the average 360 Wh/m3 direct electricity requirements of a surface water plant is used for treatment. Distribution. Transporting water from centralized plants to homes is also fairly energyintensive, with estimates for southern California ranging from 150-350 Wh/m3. A significant portion of this treated water typically from 6 to 15% is lost due to leaks in the system. End use. Heating and pressurizing water where its used, whether at a home or office building, or in a textile mill, can be the largest user of energy in the whole water supply chain. In the whole of San Diego County, 3,200 Wh/m3 (56%) of electricity is used for enduse applications. Wastewater Treatment. There is wide variance in the energy consumption used treating wastewater, depending on the size and technology of the plant and also on the quality standards required. One survey of San Diego treatment plants gave a range of 6501,050 Wh/m3, but this water was only used for ecological or agricultural purposes. More complete treatment options will be even more energy-intensive.
Source: Energy Down the Drain (Cohen, Nelson, & Wolff, 2004).


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


FiGure 6. SPatiaL DistriBution of AnnuaL PreciPitation in China anD CaLifornia

Precipitation Range (mm) < 50

50 - 100 100 - 200 200 - 400 400 - 600 600 - 800 800 - 1000 1000 - 1200 1200 - 1600 1600 - 2000 > 2000

Source: China Institute of Water Resources and Hydropower Research Retrieved 1 June 2011, from:

California Average Annual Precipitation (1971-2000)

Precipitation Range (mm) 76 - 100 100 - 200 200 - 400 400 - 600 600 - 800 800 - 1000 1000 - 1200 1200 - 1600 1600 - 2000 >2000

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

population centers, significant agricultural production and energy-intensive industries. Both regions must transport water thousands of kilometers to satisfy demand. Overall the United States uses 4 percent of the power generated for water supply

and treatment (Beckman et al., 2009). The percentage is much higher in drier regions where water is the largest single user of energy. In California, for example, the state water project supplies around 6 percent of the states water and consumes 2-3 percent (5 billion


kWh/year) of the states electricity (Cohen et al., 2004). Figure 4 compares massive water diversion projects in California and China. In total, 20 percent of Californias electricity use and over 30 percent of the non-power plant natural gas use is associated with water use, from extraction to treatment (House, 2006). The Overlooked Energy Footprint of Chinas Water Given the relative scarcity of water in China, the water sector requires tremendous amounts of energy. Studies are scarce in China on the water-energy nexus, but there is most likely a big difference in energy cost between the most energy-intensive and least energyintensive water, as there is in California, where the state water transfer project uses considerably more energy than pumping local groundwater. Water transfer projects currently in use, under construction or under serious consideration in China include large-scale desalination projects,2 the SNWTP, and the proposed Bohai sea pipeline (Schneider, 2011b). If completed, all three canals of the SNWTP will move 45 billion cubic meters of water per year, about two-thirds the discharge of the Missouri River, the longest river in the United States (Xinhua, 2012; USGS, 1990). The eastern portion of the SNWTP must raise the

water 45 meters, which could use upwards of 3 billion kWh of electricity annually (Schneider, 2011c). (See map in Figure 4.). Based on data from Chinas National Bureau of Statistics, the country-wide average energy intensity of non-agricultural water production and supply in 2007 can be estimated at 101 watt-hours per cubic meter (Wh/m3), an increase of 27 percent from 1997 (Holst, 2008). Nationwide the annual energy cost of production and supply of water in 2007 was 80.2 million tce (NBS, 2009), about 30 percent more than Beijings 62.9 million tce total energy consumption in the same year (Energy Statistical Yearbook, 2010). CONSERVING ENERGY THROUGH WAtER EFFIcIENcY IN CHINAS INDUStRIES While total agricultural water use has remained relatively stable over the last decade in China, industry and household water use have increased both absolutely and as a proportion of total water use. Industrial use in China increased from 20.72 percent (113.9 billion m3) in 2000 to 23.55 percent (141 billion m3) in 2010; and household water consumption increased from 10.46 percent (57.5 billion m3) in 2000 to 12.9 percent (77 billion m3) in 2010. Chinas industrial sector is 5 to 10 times more water-intensive than the world average, as measured by water use per unit industrial value-added output. In response, China has set a national water use intensity target and carried out a series of measures to conserve water and improve the efficiency of the largest water users, accounting for about 60 percent of all industrial water use (MIIT, 2010). These measures include: Establishing a national quota standard3 for water use in water-intensive industries such as: thermal power, petrochemical, iron & steel, textile, papermaking, chemical, and food industries to push more aggressive water conservation. Compiling a preferred equipment

FiGure 7. The ELectricitY anD NaturaL Gas InPuts to CaLifornias Water SuPPLY

Water supply 20%

Water supply 30%


Natural Gas

Source: House, 2006.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


(product) category for water conservation technologies, and encouraging the development of water efficiency industries. Implementing a certification and labeling program for water conserving products, and including water conserving products on government procurement lists. Developing a differential pricing system that imposes higher water prices on enterprises with high water use and pollution, and provides preferential prices for enterprises with greater water efficiency and lower or no water pollution. Recently, the Chinese government has focused on four industries to promote watersaving technologiesiron & steel, textiles, paper-making, and food fermentation. In this paper, we will focus on the textile industry, which is not only one of the most water intense, but also a major polluter of waterways in China. Chinas Textile Industry Chinas 50,000 textile mills generated $229 billion in trade volume in 2010, up 25

percent from the previous year (NBS, 2011b). According to surveys measuring natural resource use across all industries, textile dyeing and finishing mills rank at the top. Dyeing and finishing one ton of fabric can result in the pollution of up to 200 cubic meters of water from a suite of harmful chemicals, reducing local water availability and raising the cost of water treatment. The mills also consume tremendous amounts of energy to create hot water and steam (Greer, Keane, & Lin, 2010). In early 2006, China issued the 11th FiveYear Plan for constructing a water conservationoriented society, in which it set a target for the textile industry to reduce water use per industrial value-added by 20 percent from 191 m3/10,000 RMB in 2005 to 153 m3/10,000 RMB in 2010 (NDRC, 2007a). To reach the 11th FiveYear Plan target, the government in May 2010, released an industrial water use quota standard to promote advanced technologies and phase out outdated production methods and equipment (MIIT, 2010). The 12th Five-Year Plan for the textile industry does not report on

TaBLe 2. CLean BY DesiGns Ten Best Practices

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Percentage Resources Saved

Cost Insignificant

Payback Period <1 month

Leak detection, preventive maintenance, improved cleaning Reuse cooling water: From singeing From air compressor system From preshrink Reuse condensate Reuse process water: From bleaching From mercerizing Recover heat from hot rinse water Prescreen coal Maintain steam traps Insulate pipes, valves and flanges Recover heat from smokestacks Optimize compressed air system

Water: 2-5% Energy: 1.5-5% Energy: 1.6-1.8% Water: 2-5% Water: 2% Water: 1% Water: 2-3% Energy: 0.8-3.2% Water: 4% Water: 3% Energy: 2-12% Energy: 3% Energy:1-5% Energy: 0.01-0.5% Energy: 1% Electricity: 0.3-3%


<1 month

variable $3,000-$30,000 $44,000-$95,000 $35,000 Insignificant $4,500 $22,000 Insignificant

1 month-1 year <1 month 2-4 months 5 months <1 month <1 month 8 months <1 month


the progress of the 11th Five-Year Plan target, but does set a new target of reducing water usage per industrial value-added by 30 percent from 2010 to 2015 (MIIT, 2012). To address the rapidly increasing global presence of this industry, the Beijing and U.S. offices of the Natural Resources Defense Council (NRDC) and a group of apparel retailer and brand partners have spearheaded the Responsible Sourcing Initiative to curb pollution while saving the industry money. The initiative conducted a review of more than a dozen textile mills, looking specifically to: Identify the highest water and energyusing dyeing and finishing processes, and the accompanying savings potentials; Match high savings potentials with lowcost technology options, optimizing for an 8-month payback period; Present results in an easily understood format that is compelling for businesses; and, Educate and implement the low-cost technology and management options across the entire industry.

This resulted in ten simple, cost-saving opportunities to reduce water, energy, and chemical use via improvements in

FiGure 8. EnerGY Use of Chinas BuiLDinG anD Infrastructure Sectors

54% all other energy uses 25% operation of commercial and residential buildings 21% construction of buildings

The construction and operation of buildings and infrastructure accounts for almost half of all energy use in China.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

manufacturing efficiency. Table 2 sets forth these best practicesmany of which demonstrate the dual nature of water- and energy-saving technologies. Taken together, the Ten Best Practices described in Table 2 can save approximately 25 percent of the water and 30 percent of the energy used in a typical cotton fabric dyeing mill in Chinaall with initiatives that recoup costs in less than eight months. Furthermore, these practical, low-cost improvement measures, especially those focused on factory infrastructure improvements (such as improving the production of steam and water heating and recovering and recycling process water) are relatively easy to implement compared to process optimization methods (Greer et al., 2010). A fundamental best practice is for textile mills to install meters to track water, steam and electricity consumption both overall and at the process and equipment levels. A majority of mills in China could easily adopt this simple and inexpensive measure to help identify waste and save water and energy simultaneously. Other best practices, such as reuse of cooling water, condensating, and processing water, can save 1 to 4 percent of water use and have a relatively short payback period. China could apply these practices to other industries with


large water intakes and process effluents, such as the paper and pulp industry. Other possible improvements include (Greer et al., 2010): Process optimization: Modifying the pretreatment, dyeing and finishing processes themselves so they use less water, energy and chemicals. Process optimization requires improved discipline and standardization, which can be more difficult for some textile mills. Good housekeeping: Some simple behavioral changes can reduce waste and cost in many textile mills, and require little or no investment. These are promising and generally easy opportunities to increase process efficiencies, though the resulting savings are sometimes difficult to quantify. URGENcY FOR ENERGY AND WAtER EFFIcIENcY IN BUILDING CONStRUctION AND OPERAtIONS Constructing and operating buildings is extremely energy-intensive, and Chinas rapid growth of floor space has led central policymakers to target the construction sector as one of the most important energy intensity reduction efforts in the medium-term. Without
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

including the energy used in new building construction, the operation of Chinas buildings accounts for a quarter of total energy use of the country, which is larger than the cement, iron and steel sectors combined (Fung, et al., 2008). Energy use when constructing buildings and infrastructure (i.e., embedded energy) has risen in China over the last decade, reaching 589 million tce or 21 percent of total energy use in 2007 (Fu, 2010). (See Figure 8.) This energy footprint of buildings is becoming even

more acute as floor space continues to expand. In 2009 alone, 2.5 billion m2 of floor space was added (NBS, 2010). Building construction and operation also consume an increasingly large fraction of Chinas scarce water resources. Domestic water use (commercial and residential buildings) reached 76.7 million m3, or 12.9 percent of the countrys total, in 2010 (NBS, 2011a). This number is expected to reach 16 percent by 2030 (Wang, 2009). This growing gulp of Chinas water by buildings poses challenges for cities still struggling to expand wastewater treatment rates. The Chinese government reported that the 11th Five-Year Plan helped raise the percentage of municipal wastewater from 56 (in 2006) to 75 percent (in 2010). Keeping treatment rates high is a challenge as cities are expanding rapidly. At least 200 cities still have no treatment facilities at all and many cities turn off their facilities in times of energy shortages. In terms of improving overall water and energy resource efficiency, building operation and use present a number of challenges. China lacks market incentives to adopt and manufacture new water-saving technologies, such as new fixtures. Urban water recycling, already in operation for two decades in Beijing, has traditionally been costly and municipal agencies face many difficulties in incorporating the necessary infrastructure. Finally, the sheer number of ministries involved has stymied integrated thinking in areas such as low-impact development approaches in green building design that could lower energy and water use. Water Conservation and Water Efficiency Regulations for Buildings Chinas national water efficiency regulations for buildings predate and are in many respects more stringent than comparable energy


efficiency regulations. The National Program for Water-Saving (2001-2010) established a number of programs and institutions, which were codified in the Water-Saving Technology Policy, jointly released by five ministries including the National Development and Reform Commission (NDRC, 2005). These include: Water conservation offices. In each city, a local water conservation office sets policies for local water management and conservation in buildings and industries, and sets water quotas for public buildings and big water users such as factories and schools. Officials in Beijing and Shanghai revise these quotas biannually. Water-efficient product standards. Many current product standards for appliances, fixtures and equipment in buildings such as those for water recycling technology were adopted in 2002 (MOC, 2002). The standard for 6-liter toilets was made mandatory nationwide in 2008. Public facility water-saving technology adoption. Public facilities (i.e., government and school buildings) must meet stricter standards for water-saving technology; a main focus of which has been on water-cooled air conditioning systems. The recently released standard for water-saving in public buildings is now mandatory for new construction. The water source for landscape irrigation now cannot be municipal water or groundwater (MOHURD, 2010). Green building codes and labels. China adopted a nationwide Green Building Standard in 2006. The strictest rating dictates water efficiency improvements of 8 percent in residential and 25 percent in public buildings; and unconventional water use (which includes recycling, rainwater harvesting, and seawater) should be no less than 30 percent of total water use in residential and 60 percent in public buildings (MOC, 2006). Pilots for water-saving communities. The 2002 amendments to Chinas National Water

FiGure 9. InDoor Water Use in ResiDentiaL anD CommerciaL BuiLDinGs in China

23% toilet 12% lavatory 20% kitchen 30% bath 15% all other uses

65% toilet 30% lavatory 5% kitchen

Source: NRDC calculations based on (MOC, 2003). Toilet-flushing uses almost two-thirds of a commercial buildings indoor water in China.

Law called for considering water impacts in land-use and urban growth decisions, and set guidelines for pilot cities (NPC, 2002). The 2006 Green Building Standard also covers the water permeability of the buildings exterior. Cities and local governments have not always fully implemented these programs and institutions or integrated them into building energy-saving policies, regulations and standards. The largest challenge is fragmented governanceenergy-saving and water-saving policies are carried out by different ministries and with different objectives. The Chinese government developed water use regulations for buildings primarily in response to water scarcity and water pollution concerns, with little consideration of the heavy energy costs of transporting, heating and treating urban


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


BOX 2. Water-Strapped Beijing

Learns to Reuse
Beijings grey water recycling system is another example of achieving energy savings while improving water efficiency. Wastewater once moderately treated, can be reused in a variety of ways, termed grey water applications. On-site, grey water can be redirected to toilets and landscaping, and off-site it can cool power plants. Initiated in 1987, Beijings grey water recycling program now has nine central facilities and over 1000 distributed systems, recycling around 700 million m3, or 19% of the citys total water consumption, annually (Beijing Water Authority, 2011). The municipal government intends to achieve 98% wastewater treatment in the city center by 2015 (Schneider, 2011, May 3). In addition to a large network of grey water infrastructure, all institutes, schools and hotels larger than 30,000 m2 and new residential developments larger than 50,000 m2 are required to install grey water reclamation systems on-site. Electricity consumption of five such distributed water recycling systems ranged from 720 - 1500 watt-hours per cubic meter (Wh/m3) (Mels, Guo, Zhang, Li, Wang, Liu, Okke, 2006). In terms of supplying freshwater to northern China, this is less energy-intense than what can be expected from the South-to-North Water Diversion Project. However, problems remain. Weng et al. estimated that schools less than 45,000 m2 could not operate these systems profitably, and this was after over-estimating the value of recycled water based on Beijing freshwater rates (Weng, Chen, 2010). Mels et al.s financial analysis highlighted a large variability in return on investment, ranging anywhere from 2 to 13 years, largely due to the variance in the price of municipal water. These uncertainties, coupled with high operational costs and poor management, have caused some building operators to stop operation of grey water systems (Xiao, Van Dijk, 2008).
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

water. Conversely, the national building energy efficiency standard effective in 2008, primarily focused on space heating/cooling and lighting in residential and public buildings, ignoring the significant energy costs of heating water, which accounts for around 20 percent of an office buildings energy use in northern China (State Council, 2007; Fung et al., 2008). Saving Water in Low-Impact and High-Efficiency Green Buildings Green buildings must address a suite of water-consuming uses in order to be successful. In residences, toilet flushing accounts for almost a quarter of all water use.

For commercial buildings, this rises to twothirds. (See Figure 9). Hot water uses are also significant: bathing accounts for 30 percent of residential indoor water use. By comparison, in the United States, the top four water-using residential indoor appliances are toilets (27%); clothes washers (22%); showerheads (17%); and faucets (16%) (Cohen et al., 2004). Efficient hot water appliances generally incur a higher cost to deploy, but when energysavings are taken into account, the improvements pay for themselves. In terms of end-use energy, cold water appliances have a much smaller footprint, but lifecycle analyses have shown that the energy costs can still be great. For example,


FiGure 10. ChicaGo CitY HaLL

Source: Wikipedia Commons. Green, or living, roofs perform valuable water filtration, storm water control, and building insulation functions.

Green building design is intimately linked to environmentally sound urban planning. Preventing sprawl and incorporating green infrastructure are basic tenets of creating sustainable cities. The U.S. Environmental Protection Agency has recently launched a new strategic agenda on green infrastructure, partnering with ten cities with demonstrated success in this area. Examples of green infrastructure include concentrating housing to decrease impermeable roadways; restoring


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

one study in water-stressed southern California indicates that San Diego County could save up to 13 percent on water-delivery energy costs through end-use water efficiency improvements alone (Cohen et al., 2004). Such savings in arid northern Chinese cities could mark a big step in promoting water and energy security for everexpanding urban areas. Chinas first LEED Gold-certified building, the ACCORD 21 Building occupied by the Ministry of Science and Technology, is at the cutting edge of resource efficiency. Completed in 2004, the building cuts energy use by 74 percent, water use by 40 percent and wastewater generation by 60 percent.4 These efficiencies were accomplished using a suite of energy-saving appliances and special design features such as increased natural ventilation and a green roof that simultaneously cools the building in the summer and collects rainwater for reuse (Fung et al., 2008). Beijing (see Box 2) has begun piloting a number of water reuse initiatives, but Chinese urban planners and building managers also need to examine the broader water footprint of buildings. Specifically, while building construction and operations use considerable amounts of water, it is in fact land use and

landscaping on the grounds that represent the largest water footprint of buildings. A concept pioneered in water-scarce southern Californialow-impact development gives buildings a number of low-cost options to conserve water and reduce energy load through smart landscaping and land use. The central goal of such development is to preserve the pre-development hydrology of an area. Capturing and reusing storm water runoff, for example, avoids the need for additional energyintensive water treatment facilities; prevents unnecessary loss through leaky infrastructure; and reduces heating and cooling costs (Stoner, et al., 2009). Characteristic technologies for low-impact development include: Green/living roofs: Incorporating vegetation on the building exterior slows heavy runoff while simultaneously filtering wastewater for possible reuse in landscaping. (See Figure 10). Appropriate erosion control during construction: Preserving the quality of the land during building construction helps prevent erosion due to water runoff later on. Reducing and improving permeability of concrete surfaces: New technologies and smart planning can allow nature to safely absorb water, reducing the burden on storm water capture infrastructure, and preventing overflow pollution from combined sewer systems.5


and preserving natural wetlands for filtration and runoff collection; and installing separate sanitary sewer systems that are independent of storm water collection systems, thereby preventing sewage overflows during heavy rainfall (EPA, 2011). Such lessons will be vital for China to emulate as it continues the worlds fastest build out of cities. INcORPORAtING WAtER AND ENERGY GOALS INtO tHE TwELFtH FIVE-YEAR PLAN In Chinas 12th Five-Year Plan, the central government has again set ambitious goals for economic development and energy and water conservation. The challenge at all levels of government on how to meet those goals can begin to be addressed through five recommendations we offer: 1. Incorporate water-energy connections in policy design. Integrating water and energy policy will allow a more comprehensive evaluation of joint opportunities for efficiency. As we have shown in this paper, many smart water technologies are also smart energy technologies. Effective measures to meet energy reduction goals may be overlooked because they are considered as water efficiency measures, handled by separate ministries and under different laws. This is particularly relevant in the 12th Five-Year Plan given its numerous potentially overlapping energy and water targets. Tsinghua University and NRDC are currently collaborating on an analysis of these targets and opportunities for greater coherence. 2. Learn from international experience. China has proven very adept at incorporating international lessons in its national economic policymaking. Similarly, its options for solving water and energy scarcity problems

have precedents in other countries with similar climate and environmental conditions. To highlight one concern, some Chinese scientists worry that the South-toNorth Water Transfer Project will destroy the ecology of the southern rivers. California faced a similar challenge when diverting water to build the city of Los Angeles in 1913. The Owens Valley waterway has only recently begun restoration to the original ecosystem, at a cost of $39 million (Sahagun, 2011). 3. Enhance the role of the market through water price reform and smart incentives. A water price portfolio that takes into account time, season, and end-use can discourage waste, promote efficiency, and increase the attractiveness of retrofits and new investments. Incentive policies that encourage the development of energy service companies6 are already underway in China, and the 12th FiveYear Plan emphasized enhancing market mechanisms. Applying these lessons to the water sector could yield numerous dividends. For example, the government could separate utilities profits from the quantity of water soldknown as decoupling. Without a profit motive to sell customers more water, and instead focusing on better service, decoupling is a good way to engage these powerful stakeholders in promoting water efficiency. Numerous successful examples in the United States involving the power and natural gas sectors can provide invaluable lessons to Chinese policymakers interested in pursuing these types of pricing reform. 4. Expand textile mill program to other industries in China. The recommendation here is twofold: a. Deepen Existing Programs Within a Single Facility. In addition to the NRDCs


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Responsible Sourcing Initiatives Ten Best Practices, there are several other upgrades that textile mills could employ. These include cold pad batch dyeing and pretreatment, and heat recovery from setting machines. Other solutions with longer pay-back periods could also be considered if small-scale lending options and government incentives were strengthened. b. Transfer Proven Solutions to Other Industries. NRDCs Ten Best Practices provide a model for capturing low-cost efficiency improvements in the textile industry. As detailed above, by focusing on short pay-back periods and on presenting a strong business case, the industry has the tools necessary to make these improvements. Other industries could benefit as well from such a thorough review. By looking at 4 to 5 facilities in-depth, an easily understandable investment schedule could be created to encourage scale-up adoption in small- to medium-size facilities in other manufacturing sectors. 5. Accelerate and broaden green buildings work. One high-return to water investment in green buildings would be in controlling storm water runoff and sewer overflows thereby saving on water treatment costs and end-use applications such as landscaping. Incorporating green roofs and other low-impact development principles could help to ease northern Chinas water crisis. Two promising types of water work in green buildings would be: a. Expand Existing Programs and Implement Codes and Standards. Utilizing the green buildings standard and several municipal-level pilots, water-saving appliance adoption would likely increase. Expanding building retrofits is also a

ripe target, and can be accomplished by improving access to capital and benchmarking a buildings water and energy usage. b. Broaden Green Buildings Scope to Include Green Infrastructure and Smart Growth. Building improvements should be placed in the larger context of the infrastructure and urban growth plan upon which they rely. Roads, sewers and public lighting, for example, are infrastructural elements that influence how resourceintensive a given building is. Smarter growth patterns should take advantage of the successes of green buildings design and development in China. FINAL THOUGHtS Water is becoming increasingly scarce in China due to rapid industrialization and energy production growth. The energy costs of providing this water cannot be met sustainably without substantially rethinking the connection between water and energy infrastructure and policy. Implementing water efficiency and conservation measures in key sectors in Chinasuch as the textile industry and in buildingscan help alleviate both water scarcity and energy growth challenges. These low-cost solutions provide simple, yet effective tools in helping China reduce the strain on limited natural resources and green Chinas supply chain, imperative steps to help protect the health and welfare of Chinas citizens, environment, and economy.

Michael Davidson is a Masters Candidate and pre-doctoral student in the Technology and Policy Program of the Engineering Systems Division at the Massachusetts Institute of Technology. Prior to MIT, he was the US-China Climate Policy Coordinator


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


& Management, University of California, Santa Barbara, Technical Report. NRDC: New York. Beijing Water Authority. (2011). Improve urban water environment, promote use of recycled water activity launches. [Online]. Available: http://www.bjwater. aspx. Bull, Pierre. (2009, September 30). At the confluence of water use and energy production. Natural Resources Defense Council (NRDC). [Online]. Available: confluence_of_water_use_1.html. Chen Xiaorong. (2009, September 10). Seawater toilets help flush away water shortages. China Daily. [Online]. Available: http://www.chinadaily. content_8675129.htm. China Electricity Council (CEC). (2011). 2010 Statistical Bulletin of National Power Industry (Chinese). [Online]. Available: http:// w w w. c e c . o r g . c n / t o n g j i x i n x i b u / t o n g j i / niandushuju/2011-02-23/44236.html. China Three Gorges Corporation. (2012). Benefits and scope of the Three Gorges construction. [Online]. Available: gcgk.php?mClassId=003000013&mClassName =%C8%FD%CF%BF%B9%A4%B3%CC% B5%C4%D0%A7%D2%E6%D3%EB%B9%E6 %C4%A3 (Chinese). Cohen, Ronnie; Nelson, Barry; & Wolff, Gary. (2004). Energy Down the Drain: The Hidden Costs of Californias Water Supply. Natural Resources Defense Council, Pacific Institute: Oakland, CA. Cohen-Tanugi, David. (2010). Putting it into Perspective: Chinas Carbon Intensity Target. White Paper. Natural Resources Defense Council (NRDC). October. [Online]. Available: http://china.nrdc. org/files/china_nrdc_org/Chinas%20Carbon%20 Intensity%20Target%20in%20Perspective.pdf. Crane-Murdoch, Sierra. (2010, August 3). A Desperate Clinch: Coal Production Confronts Water Scarcity. Circle of Blue. [Online]. Available: http:// Energy Research Institute (ERI). (2009). Chinas Low Carbon Development Pathways by 2050----Scenario Analysis of Energy Demand and Carbon Emission. ERI: Beijing, China. September. Environmental Protection Agency (EPA). (2011). Managing wet weather with green infrastructure. [Online]. Available: home.cfm?program_id=298. Fu Feng. (2010). Promoting Energy Conservation in China: Findings from an Input-Output Analysis of Chinas Energy Consumption. Presentation, Energy Technology Innovation Policy / Consortium Energy Policy Seminar, Harvard Kennedy School, Cambridge, Mass. November 9.

at the Natural Resources Defense Council in Washington, DC, spearheading several bi-lateral projects on clean energy policy. Previously, he was a Fulbright Scholar to Tsinghua University in Beijing and a graduate of Case Western Reserve University with degrees in Physics, Mathematics, and Japanese Studies. He can be reached at: Gretchen Greene is an attorney at Ropes & Gray and a mathematician with national and international experience in energy, environment and transportation. Her experience as a scientist, lawyer and policy analyst includes water and energy policy in Beijing and air and climate litigation in D.C for the Natural Resources Defense Council, transportation and energy policy in Costa Rica, research assistance for a consortium of small island nations at the COP15 climate negotiations, tribal energy economic development for the U.S. Department of Justices Office of Tribal Justice and energy, environment and transportation projects as a mathematician at the U.S. Department of Energys Lawrence Livermore National Lab. She has advanced degrees in mathematicsfrom UCLA and a J.D. from Yale Law School. She can be reached at: Mingming Liu is a policy analyst at the Natural Resources Defense Council in Beijing, China, working with the Demand Side Management technical center on promoting energy efficiency and DSM programs in industrial sectors. Before joining NRDC, sheheld a postdoctoral position at Tsinghua University and focused on energy and economic analysis and climate change. She can be reached at:

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Beckman, David S.; Garrison, Noah; Wilkinson, Robert C.; & Horner, Richard. (2009). A Clear Blue Future: How Greening Californias Cities Can Address Water Resources and Climate Challenges in the 21st Century. Natural Resources Defense Council (NRDC) and Bren School of Environmental Science


Fung, Justin; Michael, David; Nettesheim, Christoph; Finamore, Barbara; Jin Ruidong; & Mo, Kevin. (2008, October). From Gray to Green: How Energy-Efficient Buildings Can Make Chinas Rapid Urbanization Sustainable. Natural Resources Defense Council (NRDC). Greenpeace. (2008). True Cost of Coal. [Online]. Available: china/en/press/reports/the-true-cost-of-coal.pdf. Greer, Linda; Keane, Susan Egan; & Lin Zixin. (2010). NRDCs Ten Best Practices for Textile Mills to Save Money and Reduce Pollution. Natural Resources Defense Council: New York. House, Lon W. (2006, December). Water Supply Related Electricity Demand in California. Water and Energy Consulting. Final report of the Water Supply Electricity Demand Project of the California Energy Commission. Berkeley, CA: Demand Response Research Center, Lawrence Berkeley National Laboratory. [Online]. Available: http:// pdf. International Energy Agency (IEA). (2012). World Indicators. IEA World Energy Statistics and Balances (database). doi: 10.1787/data-00514-en. Kurtenbach, Elaine. (2011, May 17). Drought worsens China power supply crunch. Associated Press. [Online]. Available: ap/20110517/ap_on_bi_ge/as_china_energy_crisis. Lawrence Berkeley National Laboratory (LBNL). (2011). Chinas Energy and Carbon Emissions Outlook to 2050. Berkeley, CA. [Online]. Available: http://china. Mels, Adriaan; Guo Shuji; Zhang Chang; Li Xiangbin; Wang Haoran; Liu Shenghe; & Okke, Braadbaart. (2006). Decentralised wastewater reclamation systems in BeijingAdoption and performance under field conditions. Presented at SWITCH Scientific Meeting, University of Birmingham, United Kingdom. January 9-10. [Online]. Available: http : / / w w w. s w it c hu r b a nw at e r. e u / output s / pdfs/CBEI_PAP_Decentralised_wastewater_ reclamation_systems.pdf. Ministry of Construction (MOC). (2002). Industry standards for water-saving residential appliances. Beijing, China. Available: jsb/fg/1-4.htm (Chinese) Ministry of Construction (MOC). (2003). Code of design of building water supply and drainage (GB 50015). Beijing, China. Ministry of Construction (MOC). (2006). Evaluation standard for green building (GB/T 50378-2006). Beijing, China. Ministry of Environmental Protection (MEP); National Bureau of Statistics & Ministry of Agriculture. (2010). Release of the 1st National Pollution Survey (Chinese). [Online]. Available: jrzg/2010-02/10/content_1532174.htm. Ministry of Housing and Urban-Rural Development

(MOHURD). (2010). Standard of Water Saving Design in Civil Building (GB 50555-2010). Beijing, China. Ministry of Industry and Information and Technology (MIIT). (2010). Notice on Further Enhancing the Implementation of Industrial Water Conservation. MIIT: Beijing, China. Ministry of Industry and Information and Technology (MIIT). (2012). The 12th Five Year Plan for the Textile Industry. MIIT: Beijing, China. National Bureau of Statistics (NBS). (2001-2010). China Statistical Yearbook. NBS: Beijing, China. National Bureau of Statistics (NBS). (2011a). Statistical Communique on 2010 National Economic and Social Development. NBS: Beijing, China. National Bureau of Statistics (NBS). (2011b). China Statistical Yearbook 2011. NBS: Beijing, China. National Development and Reform Commission (NDRC); Ministry of Science and Technology; Ministry of Water Resources; Ministry of Construction; Ministry of Agriculture. (2005). National Outline for Water-Saving Technology. NDRC: Beijing, China. National Development and Reform Commission (NDRC), Ministry of Water Resources, Ministry of Housing and Urban-Rural Development. (2007a). The 11th Five Year Plan for Constructing a Society of Conserving Water. NDRC: Beijing, China. National Development and Reform Commission (NDRC). (2007b). Chinas National Climate Change Programme. [Online]. Available: http://www. pdf. National Development and Reform Commission (NDRC). (2011). Energy-savings and emissions reductions achieved noticeable success: a look back on the 11th Five-Year Plan (Chinese). [Online]. Available: t20110310_399044.htm National Peoples Congress (NPC). (2002). Water Law of the Peoples Republic of China. Natural Resources Defense Council (NRDC). (2009). Water efficiency saves energy: Reducing global warming pollution through water use strategies. [Online]. Available: files/energywater.pdf. Sahagun, Louis. (2011, July 25). Tule vegetation infests Lower Owens River. Los Angeles Times. [Online]. Available: local/la-me-tules-20110725. Schneider, Keith. (2011a, March 1). A dry and anxious north awaits Chinas giant, unproven water transport scheme. Choke Point: China Report. [Online]. Available: waternews/2011/world/a-dry-and-anxious-northawaits-china%E2%80%99s-giant-unproven-watertransport-scheme/ Schneider, Keith. (2011b, April 5). Bohai sea pipeline could open Chinas northern coal fields. Choke Point: China Report. [Online]. Available: http://


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

CES | SPecIAL ReVIeW desalinating-the-bohai-sea-transcontinentalpipeline-could-open-chinas-northern-coal-fields/. Schneider, Keith. (2011c, May 3). Off the deep end Beijings water demand outpaces supply despite conservation, recycling, and imports. Choke Point: China Report. [Online]. Available: http://www. vation-recycling-andimports/. State Council. (2006). The 11th Five Year Plan for National Economic and Social Development of Peoples Republic of China. March. State Council. (2007). Regulation on Energy Efficiency of Civil Buildings. State Council. (2010). State Council Decision Regarding Accelerating Water Reform and Development (Chinese). Available: State Council. (2011). The 12th Five Year Plan for National Economic and Social Development of Peoples Republic of China. March. Stoner, Nancy; Kloss, Christopher; & Calarusse, Crystal. (2009). Rooftop to Rivers: Green Strategies for Controlling Stormwater and Combined Sewer Overflows. Natural Resources Defense Council: New York. United States Geological Survey (USGS). (1990). Largest Rivers in the United States. [Online]. Available: Wang Jing; Li Tong; & Du Yanfei. (2011, January 6). Zhang Guobao: Strive to have non-fossil energy reach 11.4% of primary energy by end of 12th FiveYear Plan. Renmin Wang. [Online]. Available: http:// Wang Yi. (2009). Chinas water issues: Transition, governance and innovation. In Jos Albiac & Ariel Dinar (Eds.), The management of water quality and irrigation technologies, (pp. 117-134). Earthscan Publications. Weng Jianwu; & Chen Yuansheng. (2010). Suitability evaluation for the construction of decentralized wastewater reclamation facilities in Beijing. Journal of Resources and Ecology, 1(3) 238-248. The World Bank. (2009). Addressing Chinas Water Scarcity: Recommendations for Selected Water Resource Management Issues. The World Bank: Washington, DC. The World Bank. (2012). World Development Indicators. [Online]. Available: World Nuclear Association. (2011a). Nuclear power in China. World Nuclear Association. [Online]. Available: html. World Nuclear Association. (2011b). Cooling power plants. World Nuclear Association. [Online]. Available: cooling_power_plants_inf121.html. Xiao Liang; & Van Dijk, Meine Pieter. (2008). Economic and financial analysis of decentralized water recycling systems in Beijing. Presented at SWITCH Scientific Meeting, Belo Horizonte, Brazil. March 12. [Online]. Available: http://www.switchurbanwater. eu/outputs/pdfs/W6-0_PAP_BH_Session7c_ Financial_and_economic_analysis.pdf. Xinhua. (2011, February 27). Online dialogue between Premier Wen Jiabao and netizens (Chinese). [Online]. Available: http://www.xinhuanet. com/2011wjbft_wzzb_3.htm. Xinhua. (2012, January 8). Tunnel completed beneath Yellow River for Chinas south-north water diversion project. [Online]. Available: http://news.xinhuanet. com/english/china/2012-01/08/c_131348787.htm. Xinhuawang. (2006, June 2). Irrigation Chinas largest water user and sector for greatest conservation potential.

1. The UNDP, UNEP, the World Bank and World Resources Institute define water scarcity as 1000m3/ person per year. 2. The Chinese government plans to increase its desalination from 600,000 tons a day currently to 2.5 to 3 million tons a day by 2020. See: http:// chinas-desalination-plans-and-its-water-energynexus/. Producing one ton (one cubic meter) of desalinated water requires up to 4 kWh of electricity. 3. See for example, GB/T18916.1-2002 for thermal power, GB/T18916.2-2002 for iron & steel, and GB/ T18916.3-2002 for petroleum processing. Among others, industries included should have their waterintake meet the standard. 4. The energy and water baselines for these figures are different. The energy baseline for presenting energy efficiency improvements is the performance of building in the 1980s. The water use baseline comes from the water use quota by local Water Conservation Offices, which may change year by year. 5. In older cities, excess storm water flows into the same pipes used for sewage, which sometimes triggers an overflow dumping untreated waste into waterways. 6. Energy service companies (ESCOs) are enterprises that absorb some of the risk of energy efficiency upgrades by performing audits and assisting in implementation and monitoring on behalf of their clients, which could range from factories to schools.


C H I N A E N V I R O N M e N T S e R I es 2012 /2013


A Pinch of SaLt

Why Chinas Brute Force Push Toward Desalination May Leave the World Better Off
by David Cohen-Tanugi

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

n the face of water shortages across the nation, China is betting on desalination technologies to tackle an arid future. The countrys first industrial park dedicated to seawater treatment technology was unveiled outside Hangzhou in 2011, revealing how desalination symbolizes both a water security option and a platform for economic competitiveness. Chinese officials project that within ten years the country will be getting as much as 3 million metric tons of daily fresh water from desalination. And even though the technology remains expensive and energy-intensive, the nations massive economies of scale, and the local governments willingness to pioneer new technologies, may help bring down the cost of desalination for the rest of the world. MEGAPROJEctS FOR A MEGA-NAtION The idea of desalinationthat is, removing salts and other impurities to make seawater or brackish water safe for drinking and crop irrigationdates as far back as Aristotle. In practice, however, desalination is costly and requires vast amounts of energy. For example,

the Almera region in Southern Spain gets most of its fresh water from desalination, but the local desalination plant hogs over 30 percent of the regions total power consumption. Because of this, desalination has only made sense for oil-rich countries like Saudi Arabia, or unusually wealthy ones like Singapore. China hardly fits either category. Nevertheless, Chinese policymakers are intent on expanding the role of desalination. In the current 12th Five-Year Plan (20112015), the State Council has called for a fourfold increase in seawater purification capacity by 2015. Meanwhile, the National Development and Reform Commission, Chinas central planning agency, has hinted at a panoply of measures ranging from the creation of a new industrial alliance to financial incentives for domestic desalination technology firms. Officials also predict a tenfold increase in desalination projects over the next ten years. These policies come with a steep price tag: each of the billion-dollar desalination facilities will produce water at roughly double the retail price in the area and multiple times the cost of water-saving measures, with local governments subsidizing the extra cost.



Given its economics, desalination hardly seems like an attractive solution to increase water availability. But however confounding, Chinas newfound interest in desalination fits a pattern. Just like the mammoth South-North Water Transfer Project, desalination is just the sort of undertaking the Chinese government seems to love: a megaproject that leverages massive amounts of engineering and resources in exchange for scale and international recognition. Indeed, Chinas efforts in the energy sector show that when faced with worldrecord economic growth and rapid structural changes, Chinese decision-makers are more eager to focus on hard supply optionsthe Three Gorges Dam is another prime example than on soft efficiency projects or programs to reduce demand. Though the government is intent on pushing ahead with desalination, environmentalists in China are concerned about the negative impacts that these largescale projects might have in local areas, and worldwide. Highly concentrated brine can

new $2.2 billion plant in nearby Tangshan to begin supplying its own water-thirsty industries. Qingdao has ambitious plans for 10 desalination plants to supply its burgeoning water needs. And to the south, provinces like Zhejiang and Guangdong are also heavily investing in desalination facilities for industrial and residential water use. A DOMEStIc MARKEt READY tO AwAKEN Wherever money, water security, and economic growth are at stake, protectionism looms. Without a doubt, Chinas desalination story will show the same tensions over domestic competitiveness that have plagued the renewable energy field in past years. Until recently, the prospects for Chinas domestic desalination industry looked rather scant. Shuangliang Energy and CIMC, the two largest desalination companies in China, had virtually no desalination orders over the past years and focused on other niche markets like food and chemical processing. Even today, 60 percent of Chinas desalination equipment is foreign-made. But this may change very soon, as the new industrial park outside Hangzhou demonstrates that the Chinese government regards desalination as an economic opportunity as much as an environmental one. In Beijing, policymakers are tailoring the nations desalination strategy to encourage the future dominance of Chinese firms. The Ministry of Science & Technology is aiming to ramp up the domestic share of the countrys key desalination equipment to 75 percent, in an industry that remains largely governed by European and Israeli firms. Financial analysts predict that the government will boost investments in desalination to over 14 billion RMB in the next ten years, and it is safe to assume that Chinese and foreign companies will spare no efforts to seize a share of the pie.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

permanently harm coastal vegetation and disturb local ocean salinity; not to mention desalinations high carbon footprint: a large plant emits as much CO2 each year as a couple hundred thousand cars on the road. It remains unclear howor whetherthese concerns will be addressed. Meanwhile, Chinese cities are pushing ahead. The northern city of Tianjin, which has been purifying seawater since the 1980s, is ramping up its desalination capacity as an alternative to diverted water from the south of the country. Beijing is eagerly awaiting a


CHINAS DESALINAtION PLANS: AN OPPORtUNItY IN DISGUISE? Despite economic and environmental hurdles, Chinas desalination story may prove to be a boon for other countries. China boasts significant economies of scale and a taste for risk that could enable growth in nextgeneration water technologies, ultimately bringing down the cost of desalination for other water-challenged nations. The scale is certainly dizzying. Chinese officials have announced that by 2015, China may be producing up to 2.6 million tons of fresh water from desalination daily, a fourfold increase over current levels. By 2020, government sources predict as much as 3 million tons per day. In absolute numbers, this is less than the Middle East (Saudi Arabia alone was already desalinating this amount ten years ago), but Chinas concern for domestic oil security makes it safe to assume that its leaders will place a stronger emphasis on energy-efficient solutions than their Arab counterparts. Thus far, China has done exactly that. Instead of relying on proven techniques,

Chinese desalination projects have been pioneering new technologies with lower costs and lower carbon footprints. For example, China has been experimenting with technologies from Norway and Arizona, such as advanced pressure exchange and forward osmosis. Shandong Province is also researching the cogeneration of nuclear power and desalination. By riding the emerging Chinese water market, these new technologies will invariably help make desalination incrementally more efficient and environmentally friendly for the rest of the world.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

David Cohen-Tanugi is a Ph.D. candidate at MIT in materials science & engineering. His research focuses on designing novel nano-materials for clean water technology. Prior to joining MIT, David served as the China-US climate and energy policy liaison for the NRDC in Washington. He holds a degree in Physics from Princeton University and has traveled to and worked in China on numerous occasions. He can be reached at:



A RevoLution on the HoriZon

The Potential of Shale Gas Development in China and its Impacts on Water Resources
by Peter V. Marsters

here has been considerable controversy in the United States surrounding the development of shale gas. The countrys proved shale reserves have been hailed by many as a domestic energy savior by adding another 100+ years to its natural gas supply, lowering energy costs, and strengthening the countrys energy independence. However, some environmentalists have called the U.S. shale gas revolution a catastrophe due to shale gas extractions use of millions of gallons of water, risk of severe pollution, and potentially limited climate benefits. Shale gas in the United States, it seems, has created a new energy revolution, and now China is also making headlines on the shale gas front. Surveys by the U.S. Energy Information Agency, private consultancies, and Chinas Ministry of Land and Resources currently put Chinas shale gas reserves as the worlds largest with recoverable resources estimated at 1,115 trillion cubic feet (Kuuskraa, Stevens, & Moodhe, 2013). These reserves are potentially

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

capable of producing enough energy to meet Chinas natural gas needs for around 216 years at current consumption rates (Bluestein, Vidas, Rackley, Adams, & Hugman, 2012). At 2012 Chinese market prices, these reserves are worth a whopping 4.6 trillion U.S. dollars (At the Wellhead, 2012). This bountiful supply of shale could also help China lower its dependence on coal, promoting cleaner skies and protecting citizen health, and lower greenhouse gas emissions. In short, shale could revolutionize Chinas energy sector. This article, based on 10 months of fieldwork in Sichuan Province as part of a U.S. Fulbright grant, offers a bottom-up examination of the current state of shale gas development in China and reflects on potential environmental effects as the industry grows in size. In this article I first review the current progress and hurdles to Chinas shale gas development and then delve into the issues of water supply and disposal. CURRENt DEVELOPMENt While the potential growth of shale gas


wells seems encouraging, the industry in China is still nascent and growing slowlyboasting only around 100 shale gas test wells in 2013 compared to over 100,000 in the United States. With Chinas current demand for energy potentially reaching nearly 4,500 metric tons coal equivalent (mtce) by 2050a near doubling of todays energy demand of 2,250 mtce (Zhou, Fridley, McNeil, Zheng, Ke, & Levine, 2011)shale and other unconventional gas reserves could be critical in meeting a significant portion of the countrys overall energy demand. Indeed, according to a report by the International Energy Agency, China will be the worlds fastest growing gas market, and the International Energy Agency (2012) predicts the countrys gas consumption will increase from 130 billion cubic meters (bcm) in 2011 to 273 bcm in 2017. Shale could be key to meeting this gas demand. In the meantime however, this demand will be met by imports and limited domestic conventional natural gas resources. Chinas imports are expected to reach 77 bcm by 2020 (Berdikeeva, 2012) . Currently about half of Chinas natural gas imports are LNG imports from Australia, Malaysia, Indonesia, and Qatar, and the other half comes from pipelines from Turkmenistan, Uzbekistan, and Kazakhstan (Energy Information Administration, 2012). For shale gas development, the National Energy Administration has set national targets within the 12th Five-Year Plan of 6.5 bcm of shale gas production by 2015 and 60-100 billion cubic meters by 2020. However, the first of the targets will not likely be met within the timeframe due to conditions on the ground. Nevertheless, these very ambitious targets set by the National Development and Reform Commission and the State Council signal the leaderships faith in shale gas as key to revitalizing domestic gas resources and significantly reducing Chinas dependence on gas imported from Central Asia and Australia. The ultimate goal of Chinese policymakers

FRAcKING wItH CHINESE CHARActERIStIcS Chinas shale gas industry is applying lessons learned from the U.S. experience to Chinas unique geological and political environment. To this end, their methods have included everything from obtaining specific operational knowledge by allowing foreign companies to set up joint ventures with Chinese oil companies to employing incentives such as encouraging market competition, providing tax incentives, and raising natural gas prices. To kick-start the industry, the Ministry of Land and Resources (MLR) has identified and designated 180 areas as high-potential for shale gas development (National shale gas resources potential, 2012). MLR is parceling and auctioning off these areas to domestic Chinese


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

and leading oil and gas companies is to create a shale gas industry on a scale akin to that of the United States. As of 2013, most of Chinas mere 100 shale wells are vertical test wells, and foreign companies and governments have invested or are planning to invest several billion U.S. dollars into the industry (Chen, 2012). However, due to local geological, logistical, and political conditions, the ultimate potential of Chinas shale gas reserves is still very much in question. Only around 24 of these wells have produced commercial gas which may imply that China will have difficulty meeting a 2015 target (Will China Embrace, 2012). Although this may seem like a poor success rate, it should also be taken with a grain of salt; industry officials have stated that 7 to 8 wells are needed just to get an initial idea of the overall resource potential. Additionally, there is a significant lack of third party oversight in the Chinese oil and gas industry, which, in practice, means many of the companies self-regulate. Owing to this lack of oversight, the development of shale gas could potentially have severe environmental and social consequences.


BOX 1. Primer on Hydraulic

Fracturing and Horizontal Drilling

Hydraulic fracturingoften referred to as frackingis the process of increasing the porosity of hydrocarbon rich shale source rocks. Most of these source rocks are oriented horizontally making them uneconomical to exploit with traditional vertical drilling. In the late 1990s, some U.S. companies combined the ability to drill horizontally with the process of hydraulically fracturing, which allowed for the economic extraction of hydrocarbons primarily natural gas. The process follows these steps: (1) A borehole is drilled along the length of the shale deposit. (2) Using explosives, the rock is cracked in what are called frack stages. (3) Anywhere from 1 to 7 million gallons of fluid consisting of chemicals and solids used to prop open the cracks made by the explosions is pumped at high pressure down the wellbore creating further cracks and increasing the porosity of the shale to a point which hydrocarbons are able to flow out the wellbore. (4) Anywhere from 20 to 70 percent of this fluid is then returned along with the hydrocarbons.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Source: Briana Mordick, NRDC.


Geologic Complications There have been significant challenges dealing with the geological composition of the shales in China because they are more geologically complex than those found in the United States. Developers are having trouble cracking the code for turning resource potential into economic production. This code is the combination of drilling in the correct location


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

bidders. From these areas, the shales of the Longmashi and the Qiongzhusi formations which lie beneath Chinas southwestern provinces have received the most attention. The Chinese have chosen these areas because the geologies are promising for development, there is some pre-existing natural gas infrastructure, and water resources are relatively abundant. The Chinese government put these blocks up for auction to the domestic oil companies who, desiring operational experience, have elected to invite foreign companies to come in and provide both capital as well as operational knowledge. To assist this process, there has been some high-level U.S.-Chinese government cooperation on shale gas regulation, technical assistance, reserve estimates, training, and the like, as part of the Obama-Hu clean energy agreements of 2009. Notably, large Chinese and western oil companies have been at the lead in directing the substantive topics in these dialogues. Despite ambitious shale gas production targets, as of April 2013, there was essentially no commercial-scale production of shale gas. The challenges in development, which has been focused primarily in the southwest, arise from the complexities of developing logistics for a new industry, difficulties within local geologies, and the political economy of natural gas development in China. Shale gas in other areas, such as the Tarim Basin, will potentially face even more difficult geological and environmental challenges.

and using proper fracturing methods. The depths of the shale in China are anywhere from 4 to 6 kilometers, which is deeper than the U.S. average. Additionally, there are high concentrations of CO2, nitrogen, and hydrogen sulfide in Chinas shale, which require different handling and refining steps as hydrogen sulfide is highly corrosive and toxic (Che, 2011). While these challenges are solvable, it will take Chinese drilling companies time to figure out what combination of fracking processes will yield the best results. Potential low yields will mean that China may have to drill more wells to obtain the same amount of gas. This is significant because the greatest determinant of environmental impact is the number and scope of wells. Additionally, a well drilled in areas with poorer quality shale may require more frack stages in order to yield the same amount of gas. It is too early to tell whether or not this success rate is indicative of shale quality or simply that the industry is relatively new. Notably, a large portion of shale in China is continental shale, originating from ancient lakes rather than marine sources. This type of shale has never been proven commercially viable anywhere. Such shale types which underlie the Eastern part of China mainly in Hunan, Hubei, Zhejiang, Jiangxi, and Henan, were a major component of the second round of shale auctions in 2012, and will see major investment from domestic private companies (Koh, 2012). However, the development of continental shales will require new methods and technology if they are ever to reach commercial rates of production. The success or failure of the development of continental shales will be a major component of the future of shale gas development in China. Notably, in an October 2012 auction, large portions of these continental shales were auctioned off to companies lacking experience in oil and gas (Ma, 2012). Chinas large state-owned companies conspicuously were not as interested in acquiring these shales.


Logistical Difficulties The second major hurdle to bringing Chinas shale to commercial scale is logistics. Many of these well sites are located in hilly rural areas, which often lack supporting infrastructure such as paved roads and pipelines, adding time and extra costs to construction and well development. In addition, some rural well areas have high population densities, which exacerbate environmental and social impacts and constrain well locations (Li, 2011). These issues have slowed Chinas development of the shale gas industry and present significant hurdles for its future success. Political Economy For now, both Chinese and international companies seem willing to invest a fair amount of initial capital in order to see if shale gas in China will be worth the investment. One of the main determinants of success for the shale gas industry will be the economic incentives for drilling, which will depend highly on how the gas is used. Currently, gas prices are at an average of 1.155 yuan (~$0.19) per cubic meter, which is generally considered quite low compared with international prices. In
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

the United States, current low gas prices are reducing the incentives for shale gas drilling. With lower prices and higher capital costs in China, it may be some time before the industry becomes economically self-sufficient. Significant natural gas price reforms are underway to increase incentives for shale gas drilling. For example, Chinas Ministry of Finance announced in November 2012 that the central government will provide a subsidy of 0.40 yuan ($0.06) for each cubic meter of shale gas produced (Stanway & Wong, 2012). Moreover, pilot programs in Guangdong and Guangxi are seeking to tie the price of natural gas to imports of oil, which would significantly raise the price for upstream natural gas and help the economics of the shale industry in China China Initiates Pilot Reforms, 2012). Shales Independence The development of shale gas has been a case of Chinas internal conflicts of interest between increased market liberalization and continued state control of industry. One of the keys to the U.S. shale success has been the benefits of a marketplace that encourages rapid development and competition. The Chinese

Chinas central government aims to produce 100 billion cubic meters (3.5 trillion cubic feet) of shale gas annually by the end of the decade. Reaching this target would require more than 17,000 new shale gas wells, like the Wei-201H3 well pictured here, to be drilled over the next eight years, assuming that each well would perform as well as the typical U.S. shale gas well. Photo credit: Circle of Blue.


central government realizes shales huge energy potential and therefore has enacted some fairly novel policies for shale gas development. China hopes to emulate the success of the U.S. shale model via market reforms. The State Council recently approved shale gas as an independent resource, which releases this form of energy exploration from the exclusive purview of the big state-owned oil companies, mainly CNPC, Sinopec, and CNOOC. The idea behind this policy was to set up a dynamic, competitive, and efficient market for shale gas. This decision has been controversial as it shifts a fair amount of power away from the national oil companies and thus away from the central government itself. This move, however, has received pushback from the large national oil companies who had hoped to keep things within state-owned enterprises control (Lu, 2012; Chen, 2012). Solvable Problems Although challenges surrounding shale gas development in China will take time to solve, they are not insurmountable. Experts doubt that the 2015 targets can be met, but are bullish on the 2020 targets. Two years is too short of a timeframe to achieve a large-scale shale industry, yet the aggressive actions of the central governmentsignificant production subsidies, encouragement of market-oriented policies, and aggressive goals within the FiveYear Plansare impressive. If these efforts continue, there is a very good chance that in five to seven years there may be a large-scale shale industry in China. This shift would, however, have a significant impact on the nations water resources. QUENcHIN SHALES THIRSt The potential environmental damage of shale gas is huge, especially as it relates to water resources. Shale gas development requires significantly more water than

conventional oil and gas extraction techniques. Moreover, this form of energy development poses significant risks of surface and ground water contamination, methane leakage and migration, as well as far-reaching negative social impacts. The overall pollution impact is directly dependent on the care taken by operators, whose incentive to comply with regulations will require strong enforcement. Even assuming perfect regulation, the impact on water could be significant on a local scale due to risks inherent to oil and gas extraction. Water Use and Treatment The water demands of shale gas are intense, but temporary. In the United States, the fracking process requires several million gallons of water in a timeframe of about a week, depending on local geology and extraction processes. This water can be considered a hazardous substance and needs to be treated as such. After the fracking process is complete, anywhere from 30 to 70 percent of the water flows back to the surface and requires treatment and disposal. Most other issuescontamination of aquifers, catastrophic blowouts, methane leakage, site rehabilitation and restorationare common challenges faced by conventional oil and gas development, but still require adequate oversight and regulation. It is very hard to obtain accurate, average water use data and flowback rates per well, as they both depend highly on local geologies, number of frack stages, and various other factors. This water, according to Chinese law, industries must treat water to discharge standards or dispose of it properly. Treatment methods include disposing the water deep into injection wells, using technology to treat the water to acceptable standards, and diluting and re-using. Regardless of process of treatment or disposal, fracking will likely be a significant strain on water infrastructure, especially in rural areas not accustomed to handling industrial wastewater.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

According to conversations with local drillers in Sichuan, the majority of this water is coming from surface sources such as reservoirs, due to sensitivities about groundwater in China. According to a conversation with a local shale manager, water is currently purchased from localities through negotiations by oil companies and the price does not seem to be an economic hurdle. Because shale gas in China is still in its nascent stages, the strains on local water supplies will become much more intense as the well count increases. The responsibility for the distribution of local water supplies falls on county and provincial water resource departments, environmental protection departments, as well as land and resource departments. Chinese law requires operators to apply for withdrawal permits that state their water impact on a project level rather than on an individual well basis. This permit is supposed to be prepared in conjunction with an environmental impact assessment (EIA). Meeting the Chinese governments target of 6.5 bcm of shale gas would require a rapid increase in the drilling of wells, with a majority of them producing commercially viable gas. According to the authors calculations, to meet this number, China is likely to need anywhere from 1,200 to 2,500 wells within the next five years depending on the timeframe

of development. This estimate is assuming production rates that are comparable to that of U.S. shales, which is by no means guaranteed. Assuming similar water requirements as U.S. wells, this number equals roughly several hundred million gallons of water use per year nationally. While this number is not large when compared to other industrial demands, the intense, intermittent demand of shale drillingseveral million gallons over the span of a week or socan cause severe disruption to local supplies and flows. Tables 1 and 2 show the overall water resources and water use in China in key shale provinces as well as what water demand due to hydraulic fracturing might look like if China were to meet its 2015 production goals. Shale Snapshot in the Sichuan Basin Marine shale deposits in the Sichuan Basin underlie Yunnan, Guizhou, Chongqing, and Shanxi provinces, and water use in Sichuan Province can be seen as a good example of the shale industrys water use as a whole. Water and shale development are primarily local issues and have very localized impacts. Therefore, even taking a provincial-level view may not be specific enough to assess the broader environmental impacts. To put water demand of shale into context, the 2010 total water industrial water use in

TaBLe 1. Chinas 2010 Water Resources anD Water Use (in 100 MiLLion CuBic Meters)

Available Water Resources Total Countrywide Sichuan Province Chongqing Xinjiang Autonomous Region Shaanxi Province 30,906 25,73.3 464.3 1,113.1 507.5 Total 6,022 230 86.4 535.1 83.4 Agriculture 3,689.1 127.3 19.8 484.6 55.5

Water Use Industry 1,447.3 62.9 47.4 11.2 12.1 Domestic Ecological Consumption Protection 765.8 38 18.6 12.8 14.8 119.8 2.1 0.5 26.5 1

Source: China Statistical Yearbook 2011.


TaBLe 2. Chinas PotentiaL GroWth of ShaLe Gas WeLLs anD AssociateD PotentiaL Water DemanD

Total Gas Production (mmcm) New Shale Gas Wells Total Number of Shale Gas Wells Annual Water Requirement (millions of gallons)

2013 362 65 75 260

2014 950 146 220 580

2015 1,887 260 480 1,040

2016 6,500 1,041 1,522 4,170

50 10 10 40

Source: China Statistical Yearbook 2011 and calculations by author assuming Chinas wells would have a production rate of 4 million gallons/well, which is an average rate of wells in the Barnett Shale Play in the United States. For reference, residential use in Beijing is about 400 billion gallons per year and in 2016 shales water use could be roughly 1 percent of that.

Shale Snapshot in the Tarim Basin Water supplies will be a more significant limiting factor to shale gas development in the Tarim Basin in Xinjiang Autonomous Region where in 2010 industrial water use was 295 billion gallons and overall water resources totaled 29.4 trillion gallons (National Bureau of Statistics, 2011). As shale development starts in the Tarim Basin, methods such as using propane or CO2 to frac, while significantly more expensive than using water, may be more economically viable. Strikingly, there has yet to be a case anywhere in the world where water scarcity has stopped shale development. If the economics work, shale development proceeds.

Water Costs As in the United States, the direct cost of water does not seem to be a limiting factor; however water managers may eventually impose restrictions in order to ensure adequate water supplies for municipal and agricultural demands. The commercial water price in Sichuan is currently around 2.55 yuan/ton with seasonal and local variations (Water price, 2012). For a well with 11 frack stages, which requires around 3,000 cubic meters per frack stage, the total price of water for a single well would be around 13,000 U.S. dollars, meaning that the total cost of the water itself is negligible in cases where wells can cost up to 16 million U.S. dollars each (Tu, 2012). However, this price does not include the cost of transport and disposal which, depending on location, can be significant (Hefley, et al., 2011). Disposal,


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Sichuan was 1.66 trillion gallons (National Bureau of Statistics of China, 2011). Largescale shale usefor example a drilling rate of 1,000 wells/yearwill require around 4 billion gallons, increasing demand by roughly 0.25 percent. In 2010, Sichuans available water supply was reported to be 67.9 trillion gallons. As most of the immediate development is predicted to be in this basin, we can assume the majority of the water demand will be found here, as well. Overall, water supply in the Sichuan basin is relatively abundant and will not be a limiting factor to shale gas development.

Shale Snapshot in Other Basins Depending on the success of continental shale exploitation in China provinces such as Hunan, Hubei, Zhejiang, Jiangxi, and Henan may see similar impacts to that of Sichuan. It remains to be seen whether or not these reserves are economically exploitable. As an EIA stated in a 2011 assessment of Chinese shale, these non-marine shale basins are likely to be clayrich and thus less prospective (Kuuskraa, Stevens, Leeuwen, & Moodhe, 2011).


if done according to law, will be the most significant water cost for companies. MANAGING WAStEwAtER The main concerns with shale development in regards to water pollution are ensuring wellbore integrity and adequate management of surface water. Poor quality cement used to line wells can lead to migration of wastewater and natural gas into aquifers and can even cause explosions. Currently in China, government regulators do require samples of the cement used in the well. This regulation is a very important factor in shale gas management; however, the larger problem is what to do with the wastewater that flows out of the well. Flowback Water As mentioned above, after water is injected to frack, anywhere from 20 to 70 percent is returned along with gas production. This water contains all the chemicals used to frack and can contain hazardous substances such as hydrochloric acid, diesel fuel, and citric acid, among others (Chemical Use). The exact composition of this water can vary depending on company and local shale conditions. Regardless of composition, Chinese law requires that industries treat or properly dispose of this water flowback. For China, flowback rates have varied from 18 to 70 percent per well (Du, 2012). Usually, the amount of water returned is an indicator for the quality of a well, with less flowback suggesting a more productive well. Less productive Chinese wells will mean higher flowback rates as well as more wells. Data suggests that China will require more water per well, and hence more water treatment per BTU produced (Energy Information Administration, 2012b). The storage of this water, which is usually done in large above ground pits, has huge potential for leakage into the environment if industries do not use the proper lining or are careless in handling the water. A core problem with water in shale gas is not

supply or disposal, but rather management of water use. The amount of water needed for shale gas extraction compared with other industrial and commercial uses is not significantly larger. However, if disposal and treatment are not managed correctly there can be extreme consequences in regards to polluting water resources. Effective management inherently relies on communication with and adaptation to on-the-ground realties, as well as effective laws coupled with adequate enforcement capacity; specifically the central government needs to grant local enforcement agencies sufficient independence and resources. Disposal Currently, shale gas drillers are disposing of the majority of frack flowback water in Sichuan in deep injection wells, which is common practice in the United States. However, in Sichuan the number of deep injection wells is limited, and there may be potential seismicity issues related to injecting wastewater (Airhart, 2012). Local wastewater treatment plants cannot handle the high salinity of returned frack water, especially if the frack water has been used multiple times on-site, and so specialized water treatment is necessary. Furthermore, limited water treatment infrastructure, namely this lack of disposal wells, could make water treatment and disposal a huge and potentially limiting factor in shale development in Sichuan in the long run. Companies specializing in such treatment have had their eyes on China as a potential emerging market. General Electric notably has established a new research center in Chengdu, predicting a large demand for wastewater treatment equipment as well as natural gas turbines and other equipment (Du, 2012). However, the level of demand for water treatment technology will be directly correlated to how much water drillers need to treat and how effectively environmental agencies enforce existing pollution control laws. Water pollution


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

accidents by Chinese industries and mines have increasingly made headlines over the past few years, underscoring weaknesses of Chinas environmental regulators. LAwS, REGULAtIONS, AND ENFORcEMENt As all eyes are on the current development of shale gas in China and the foreign companies involved, the industry is adopting and implementing best practices. For now, the environmental impact of shale operations in China is comparable to that of similar size operations in the United Sates. However, the potential massive increase in scale of development and the entrance of smaller, lessaccountable, private companies into the market will mean that it will be harder to ensure safe development of shale resources in China. Rigorous and enforceable regulations need to be in place; however, some officials fear that adequate regulations may take 3 to 5 years to

Chinas first three deep shale gas wells were drilled close to this once serene community in Sichuan Province. According to reporting by Circle of Blue and the Wilson Centers China Environment Forum (Schneider 2012), the drilling activities have made significant impact on local farmers lives. Liu Zhongqi, above, said that his fish has gotten some sort of sores, and his land is not producing as much. He called local authorities about these conditions, but nobody would help. Photo credit: Circle of Blue.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

publish and enact (Wang, 2012). Under Chinas Water Pollution Control Law, the Ministry of Environmental Protection (MEP) serves as the countrys water pollution watchdog. However, MEP and its local Environmental Protection Bureaus (EPBs) do not possess administrative authority over underground developments. Moreover, in the face of shale gas pollution, local EPBs lack the financial and political resources to enforce the water and soil pollution control laws that are set by the central government. Every energy and industrial project in China requires an EIA before construction starts. These EIAs incorporate all water use as well as plans for dealing with the wastewater. Approval for these projects needs to come from the Ministry of Land and Resources, local Water Management Bureaus, and local EPBs. Chinas EIA system, however, is not sufficiently rigorous and industries often complete construction of projects and make up EIAs afterwards. States such as Colorado and Pennsylvania in


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

the United States and provinces such as Alberta in Canada have established relatively rigorous and comprehensive regulations that specifically target shale gas operations. China is looking to the United States as it forms its own domestic shale gas regulations. Chinas problems in ensuring the safe development of the shale gas industry, however, are significantly different from those of the United States. Currently in China, there is no qualified or capable on-the-ground independent environmental enforcement capacity to oversee oil and gas extraction, particularly for shale. This gap in environmental regulatory effectiveness is at the heart of nearly all pollution and natural resource extraction problems in China. This enforcement gap will be the biggest hurdle to maintaining adequate environmental enforcement in the development of shale gas. Indeed, as with all environmental laws in China, there is a severe disconnect between the laws on the books and the practice on the ground. Because local officials are promoted based on economic performance, and local environmental regulators lack enforcement capacity, local governments have little incentive to obey many, if not all, of the environmental protection laws on the books (Wang, 2007). Technically, shale gas processes are subject to the following national level laws, among others: Mineral Resources Law of the Peoples Republic of China Environmental Protection Law of the Peoples Republic of China Law of the Peoples Republic of China on Evaluation of Environmental Effects Water Law of the Peoples Republic of China Law of the Peoples Republic of China on Water and Soil Conservation Law of the Peoples Republic of China on Prevention and Control of Water Pollution Law of the Peoples Republic of China on the Prevention and Control of Atmospheric Pollution

Law of the Peoples Republic of China on Prevention of Environmental Pollution Caused by Solid Waste

In addition to enforcement issues, there are also problems with the content of the legislation. Environmental laws in China often lack relevant research and central authorities implement them too quickly. As a result, many of these laws may sound substantive on the surface level but, in reality, lack the necessary elements of procedure that can link the laws to actual implementation (Wang, 2007). In many cases, the consequences of breaking the law are not a strong enough deterrent to alter the behavior of heavy polluters. For instance, the fines may not be enough to outweigh the companys profits based on its current polluting track. The lack of proper implementation procedures, combined with insufficient legal penalties as deterrents, the governments fear of a lagging economy, and the lack of public participation has allowed many environmental laws in China to remain ineffective. Potential for Change Chinas approval of shale gas as an independent mining resource gives it a different legal status from conventional oil and gas, making the industry subject to different environmental enforcement. It is within this power shift that there lies significant opportunity to help local EPBs bypass previous obstacles to enforcing existing environmental laws. This is an opportune time for the Ministry of Environmental Protection and Ministry of Water Resources to flex their political muscle over smaller private companies and to enforce environmental rules for shale specifically. Previously, such a shift would not have been feasible due to the political power of the stateowned enterprises (SOEs).


FINAL THOUGHtS The central government has an interest in developing shale gas quickly and sustainably, as the resource has broad economic, environmental, and energy security implications for China. But, the commercial scale of these shale gas resources will not be significant for several years to come, with most estimates forecasting commercial production ranging from 2015 to 2020. Once commercial shale production begins, however, it has the potential to radically change Chinas energy landscape. If this increased supply of natural gas from shale can be used to replace a significant amount of coal, the carbon benefits could be significant. In China, the end use for natural gas is primarily in industry and the production of chemicals, thus, significant carbon benefits would not be seen until natural gas consumption is sufficient enough to begin to replace coal. However, if care is not taken in limiting the amount of methane released into the atmosphere in the shale gas extraction process, the climate benefits could be negligible when compared to using coal (Bradbury, et al., 2013). The consequences of shale gas development on water resources are potentially significant, especially in terms of surface and ground water contamination. This could have detrimental and wide-ranging effects on social stability as well as public health. The quality of operator care and quality of environmental policy enforcement will determine the ultimate scale of these impacts. As with most environmental issues in China, critical to the safe development of shale gas will be creating an independent third-party enforcement system that is not beholden to local GDP concerns or behemoth SOEs. With the independent classification of shale gas, there is an opportunity to bypass some of the old political power structures and develop a significant expansion of natural gas generating capacity in China, whichif

done wellcould bode well for lowering CO2 emissions in this energy hungry nation.

Peter V. Marsters was a 2011-2012 Fulbright Research Fellow based at Sichuan University in Chengdu working on the development of shale gas resources in China as they relate to water. Previously he was the China Environment Forum program assistant at the Woodrow Wilson International Center for Scholars in Washington D.C. In that capacity, he focused on the water-energy nexus, coal production and use, and water pollution. He is a 2009 graduate of BatesCollege. In the fall of 2013 he begins a Masters Program at University of California Berkeleys Energy and Resources Group. He may be contacted at

Airhart, Marc. (2012, August 6). Study Finds Correlation Between Injection Wells and Small Earthquakes. [Online]. Available: news/2012/08/06/correlation-injection-wells-smallearthquakes/. At the Wellhead: Chinas domestic natural gas production throttles back. (2012, August 16). Platts. [Online]. Available: oilblog/2012/05/21/at_the_wellhead_14.html. Berdikeeva, Saltanat. (2012, June 19). China Turns to Natural Gas to Fuel Their Economic Growth. [Online]. Available: http://oilprice. com/Energy/Natural-Gas/China-Turn-to-NaturalGas-to-Fuel-their-Economic-Growth.html. Bluestein, Joel; Vidas, Harry; Rackley, Jessica; Adams, Briana; & Hugman, Robert. (2012). New Natural Gas Resources and the Environmental Implications in the U.S., Europe, India, and China. ICF Consulting and RAP. Bradbury, James; Obeiter, Michael; Draucker, Laura; Stevens, Amanda; & Wang, Wen. (2013, April). Clearing the Air: Reducing Upstream Greenhouse Gas Emissions from U.S. Natural Gas Systems. World Resources Institute. [Online]. Available: Che, Changbo. (2011, September 25). Presentation at the U.S.-China Oil and Gas Industry Forum. Chemical Use. [Online]. Available: Chen, Aizhu. (2012, January 4). China Approves W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S



Shale Gas as Independent Resource. Reuters. com. [Online]. Available: http://www. Chen, Weidong. (2012, June 18). Shale Gas: No gas without money. China Energy News, 13. [In Chinese]. China Initiates Pilot Reforms for Natural Gas Pricing Systems in Guangzhou and Guangxi. (2012, January 18). [Online]. Available: http://www. NaturalGasPricingSystemsGuangdongGuangxi. aspx. Du, Juan. (2012, November 14). GE in Shale Gas Discussions with Chinese Oil Companies. China Daily. [Online]. Available: http://www.chinadaily. Du, Weidong. (2012, September 10-12). Presentation at the U.S.-China Oil and Gas Industry Forum, 12. Energy Information Administration. (2012a, September 4). China Analysis. [Online] Available: http://www. Energy Information Administration. (2012b). Golden Rules for a Golden Age of Gas. World Energy Outlook, 116. Hefley, William E.; Seydor, Shaun M.; Bencho, Michelle K.; Chappel, Ian; Dizard, Max; Hallman, John; Herkt, Julia; Jiang, Pei Jiuan; Kerec, Matt; Lampe, Fabian; Lehner, Christopher L.; Wei, Tingyu (Grace); Birsic, Bill; Coulter, Emily; Hatter, Erik M.; Jacko, Donna; Mignogna, Samuel; Park, Nicholas; Riley, Kaitlin; Tawoda, Tom; Clements, Eric; & Harlovic, Roman. (2011). The Economic Impact of the Value Chain of a Marcellus Shale Well. Pitt Business Working Papers. [Online]. Available: uploads/media_items/the-economic-impact-of-thevalue-chain-of-a-marcellus-shale-well-universityof-pittsburgh-joseph-m-katz-graduate-school-ofbusiness-august-2011.original.pdf. International Energy Agency. (2012). Medium-Term Gas Market Report 2012, 13. Koh, Quintella. (2012, October 25). Chinas Second Shale Gas Block Auction Garners 152 Bids. Rigzone. [Online]. Available: oil_gas/a/121613/Chinas_Second_Shale_Gas_ Block_Auction_Garners_152_Bids. Kuuskraa, Vello; Stevens, Scott; & Moodhe, Keith. (2013). Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States. U. S. Energy Information Administration, XX. Kuuskraa, Vello; Stevens, Scott; Leeuwen, Tyler Van; & Moodhe, Keith. (2011). World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States. U. S. Energy Information Administration, XI-14. Water price to rise in Deyang, Sichuan. (2012, May 28). [Online]. Available: html/2012/05/1361338167549_1.shtml. [In Chinese]. Li, Luguang. (2011, September 25). Presentation at the U.S.-China Oil and Gas Industry Forum. Chengdu, China. Lu, Sophie. (2012, June 29). The four squabbling fiefdoms in Chinas shale-led political transition. Foreign Policy. [Online]. Available: http://oilandglory. wrap_june_29_2012_part_ii. Ma, Wayne. (2012, December 6). China Shale-Gas Auction Yields Strange Result. The Wall Street Journal. [Online]. Available: article/SB10001424127887324640104578162873622 094416.html. National Bureau of Statistics of China. (2011).China Statistical Yearbook 2011. Beijing: China Statistics Press. National shale gas resources potential investigation and assessment, and favorable zones selection results. (2012, March 2). China Land and Resources News. [Online]. Available: jrxw/201203/t20120302_1069466.htm. [In Chinese]. Schneider, Keith. (2012, December 3). Chinas Water Reserves and Worlds Warming Atmosphere Wait For Natural Gas Breakthrough. Choke Point: China. [Online]. Available: waternews/2012/world/chinas-water-reserves-andworlds-warming-atmosphere-wait-for-natural-gasbreakthrough/. Stanway, David; & Wong, Fayen. (2012, November 5). UPDATE 1-China to give subsidies to shale gas developers. [Online]. Available: Tu, Kevin Jianjun. (2012, October 10). Business Asia: Beijings Problem With Shale. The Wall Street Journal. [Online]. Available: article/SB10000872396390444734804578062402954 326178.html. Wang Canfa. (2007). Chinese Environmental Enforcement: Current Deficiencies and Suggested Reforms. Vermont Journal of Environmental Law, 8, 169-170. Wang Xiaocong. (2012, November). China Environmentalists Fret as Fracing Takes off. Market Watch. [Online]. Available: http:// industries/35255510_1_shale-gas-shale-gas-cubicmeters. Will China Embrace a Shale Gas Boom? (2012, July 2). China Daily. [Online]. Available: http:// content_15542656.htm. Zhou, Nan; Fridley, David; McNeil, Michael; Zheng, Nina; Ke, Jing; & Levine, Mark. (2011). Chinas Energy and Carbon Emissions Outlook to 2050. Lawrence Berkeley National Laboratory, IX.


C H I N A E N V I R O N M e N T S e R I es 2012 /2013


The water-food-energy choke point is forcing a new 21st-century reckoning.

Three colliding trendsdeclining freshwater reserves, uncertain grain supplies, and booming energy demand are disrupting economies, governments, and environments around the world. Unlike food or energy, we cannot grow or easily produce more water. That is especially true in the era of climate change, when more severe droughts and floods tighten the food and energy choke points already caused by waste, pollution, and mismanagement of water. Complex challenges demand integrated analyses and innovative solutions. Research teams from the Woodrow Wilson Center and Circle of Blue are reporting from China, Australia, the United States, India, and the other front lines of the worlds water-food-energy crisis. For instance, we were the first to report that Chinas coal sector consumes nearly 20 percent of the countrys scarce water resources.


production as deeper droughts and fiercer storms lash the nation. One of the most critical economic and environmental questions the U.S. must answer is how to develop new supplies of energylike shale gas and grain across a landscape where moisture is limited and confrontations over water are increasing.

U.S. Energys Water Footprint: A dramatic shift is occurring in energy

Chinas Thirsty Coal: Coals water footprint, which saps Chinas freshwater reserves and displaces agriculture, is likely to grow as coal consumption increases by 30 p ercent by 2020. Dwindling water supplies are the primary impediment to Chinas soaring coal production, forming a choke point that threatens to upend the countrys impressive economic progress. Outsourcing Water-Intensive Industries: The confrontation over water, food, and energy produces choke points that ripple around the globe. In Australia, foreign investments in coal and liquefied natural gas are disrupting irrigation in farming communities. Water scarcity has forced Saudi Arabia to shut down its wheat farms and invest in temperate lands in Africa.


Water uses energy. Energy uses wa

50% 20%

Megacities lose more than 50% of their water due to mismanagement and poor infrastructure. Saudi Arabias desalination plants used 1.5 million barrels of oil every day in 2010or one-sixth of its outputto quench the thirst of its inland cities. Electricity accounts for 80% of the cost of processing and distributing municipal water in the United States.

of the worlds population lives in cities

increase in city dwellers by 2030, expanding global urban population to 4.9 billion

70% 28%

of energy produced globally is used by cities


of water used globally goes to cities

Agriculture is the most water-intensive sector, constituting 70% of freshwater withdrawals globally and up to 90% in developing countries. Each year, 30% to 50% of global food production is wasted. The water footprint of this waste is 550 billion cubic meters, roughly equal to what China uses in a year.

The water-food-energy nexus

Sources: Electric Power Research Institute, Inc.; Harvard International Review; IEA; Institution of Mechanical Engineers; McKinsey; The New York Times; UNESCO; UN-Water Decade Programme on Advocacy and Communication; Water Footprint Network

ater. Agriculture needs both.

Energy demand in Chinas cities will more than double by 2030, accounting for roughly 20% of global energy consumption. By 2030, cities in developing countries will account for 80% of the growth in global urban energy consumption.
Delhi, India: Water and the electricity to pump and move it are heavily subsidized for industry and agriculture in India, but the urban poor wait hours for a trickle of salty, smelly water to fill their buckets.



New South Wales, Australia: A coal loader eats away at a mountain of black coal. In 2011, the coal mines, trains, and loading terminals here shipped about 114 million metric tons of coal.

Beef production requires 13 times more water than that of wheat. By 2050, global meat consumption is likely to double, due in large part to rising afuence in cities.

is a citys foundation.
Photo Credits: Cover, Top to Bottom: Heather Rousseau / Circle of Blue, Heather Rousseau / Circle of Blue, Aaron Jaffe / Circle of Blue, J. Carl Ganter / Circle of Blue. This Page, Top to Bottom: Anita Khemka / Photoink / Contact Press Images for Circle of Blue, Aaron Jaffe / Circle of Blue, J. Carl Ganter / Circle of Blue. Back Cover: J. Carl Ganter / Circle of Blue.

Chengdu, China: Water-intensive coal-to-chemical factories supply Chinas huge fertilizer demand. Organic farms, such as this one near Chengdu, help reduce the countrys severe agricultural runoff problem.

The Wilson Center and Circle of Blue combine in-depth environmental research expertise, unparalleled networks, and first-rate multimedia reporting skills to generate strategic insights into the complex water-food-energy choke points. The Wilson Centers Jennifer Turner has established the China Environment Forum as one of the most reliable sources for information on Chinas environment. She has testified before the U.S. Congress, led trainings for Chinese officials, and assisted international and Chinese NGOs and researchers in developing projects. In 2012, Circle of Blues founder, J. Carl Ganter, won the Rockefeller Foundations Centennial Innovation Award in recognition of his innovative work on the water-food-energy crisis. He also serves as vice chairman of the World Economic Forum Global Agenda Council on Water Security. In its first two years, Choke Point has informed policy, shifted business practices, catalyzed new governmental research, and convened thought leaders and the global media around the water-food-energy nexus. Choke Point: China is significantly influencing the work of Greenpeace China, Chinas Ministry of Environmental Protection, and the World Economic Forum, among others.
Contact: Jennifer Turner at J. Carl Ganter at

Indias common practice of pump-and-flood irrigation is draining aquifers and increasing electricity usage.


The China Water-Energy Team will map the policy, technical, and governance steps China must take to meet its pressing water-energy needs. Choke Point: India investigates the water-food-energy nexus where resource mismanagement threatens stability, from Himalayan glaciers to Rajasthans deserts to Mumbais slums. Choke Point: Cities examines the recklessly expanding water and energy footprints of growing urban areas around the world and identifies innovative solutions. Choke Point: Index captures and analyzes big data across sectors, spots early trends, and informs further Global Choke Point projects, in partnership with Lawrence Berkeley National Laboratorys Institute for Globally Transformative Technologies, using the latest open source tools and scientific modeling. Choke Point: Conflict Zones will tap aid agencies, journalists, and others working in conflict zones to better understand the relationships between resource scarcity, geopolitical conflict, and peacemaking.

For the past 2 years, Choke Point has been supported by the China Sustainable Energy Program, Rockefeller Brothers Fund, the Skoll Global Threats Fund, USAID, and the Vermont Law School.


SustainaBLe Coffee GroWinG in Yunnan

by David Tyler Gibson

n September 7, 2012, the largest of at least seven Mekong River hydroelectric power stations came online in Puer, Yunnana southwestern province that is Chinas most biodiverse. The Nuozhadu hydroelectric station, Asias tallest dam, turned on the first of its nine generating units that will eventually supply 23.9 billion kilowatts of electricity by 2014. Perhaps by chance, the dam is located at the epicenter of Chinas coffee growing boom. Puer began turning into Chinas coffee capital after a major price bubble temporarily collapsed the eponymous Puer tea market in 2008. The tea has rebounded recently, but coffee continues to thrive in Puer. The land acreage devoted to coffee cultivation in the province has doubled since then, and officials want to increase Yunnans coffee output fivefold by 2015 (For all the Coffee, 2012). But the confluence of the Puer areas new dam, coffee boom, and a province-wide four-year drought are emblematic of Chinas pressing confrontation between water, energy, and food. Such a confrontation could make the official coffee production target unreachable, as well

as impact other agriculture production in the province. Whether by coincidence or design, the reservoir created by the dam will undoubtedly serve as a source of water for agriculture, including expanding coffee industry in the area, perhaps even protecting it from the threat of drought that has plagued the rest of the province. Indeed, the Chinese governments tool of choice in preparing for droughts has been investment in large infrastructure projects (Zhang, et al., 2012). The local government has been promoting the dams benefits as a source of irrigation for all types of farming, and encouraging the people displaced by the reservoir to enter the coffee growing industry. In effect, the dam has become an insurance policy for Puers thirsty and lucrative coffee investment. Or is it? The answer to that question ultimately depends on the urgency of Chinas electricity needs and the water efficiency of the coffee industry. The industrys water efficiency is a major focus of a Starbucks-Conservation International initiative called C.A.F.E Practices, created with the goal of sourcing ethically


C H I N A E N V I R O N M e N T S e R I es 2012 /2013


and sustainably produced coffee. Water use efficiency measures in such supply chains have the potential to insulate multinational firms from the risks of choke point disruptions. WAtER ScARcItY: THE FOUR DS OF YUNNANS WAtER-ENERGYFOOD CHOKE POINtS In a striking example of Chinas waterenergy-food choke points, the confluence of four Ds, Drought, Dams, Development, and Deforestation, threaten Yunnans water resources. Beginning in 2009, a devastating three-year drought that left 8 million people without water in 2010 has also wrought havoc on the provinces agriculturally based economy. Yunnan is a leading producer of Chinas fresh flowers, tobacco, tea, sugar, and coffee, and the drought halved yields for all of these crops (Drought continues to wreak havoc, 2010). In 2011, lake levels have dropped by over 70 cm in Yunnan and Guangxi, while some 270 rivers and 410 small reservoirs have completely dried up in Yunnan alone (Ms. Fangs parched patch, 2012). The drought also has caused a 47 percent decrease in reserve hydropower capacity in the region, undermining the investments made in Yunnans 21 dams.1 The drought is showing no signs of letting up in 2013. According to Liu Xiaokang of the Yunnan Green Environment Development Foundation, an NGO in Kunming, climate change has been a contributing factor in changing weather patterns and the most affected areas of Yunnan are those with the fastest rate of development and most extensive deforestation (Ms. Fangs parched patch, 2012). Water consumption in Yunnans agriculture, industry, and cities is growing and deforestation can decrease the soils ability to retain water through topsoil erosion and exposure to direct sunlight. Agriculture is an integral piece of the waterenergy-food nexus and a major contributor to Yunnans water scarcity. Overuse of pesticides

and chemical fertilizer in Chinas agriculture industry make it the countrys largest water polluter. Furthermore, this pollution exacerbates already existent water scarcity problems by rendering water unfit for further use. Agriculture in Yunnan requires greaterthan-average amounts of water due to its karst topography, which is characterized by poor water retention (Circle of Blue & Woodrow Wilson Center 2007). Also exacerbating Yunnans water scarcity is rampant deforestation, driven in part by booming demand for arable land for rubber, pulp and wood. According to Xu Jianchu, an ecologist at the Kunming Institute of Botany, natural forests are a key regulator of climate and hydrological processes (Qiu 2010). Despite the ongoing logging ban and policies to promote slopeland reforestation, The Economist observed that in the Puer region, hillsides were being clear cut of trees to make way for coffee growing and tree plantations. The largest culprit behind Yunnans deforestation, however, has been the rise of eucalyptus and rubber tree cultivation in the province. Over the past fifteen years, China has become the largest exporter of rubber products in the world; therefore, domestic demand for the raw material has skyrocketed. In fact, China has been the worlds largest importer of raw rubber since 2003. China also has been trying to ramp up domestic production of rubber to meet demand. Since 1976, over 67 percent of Yunnans rainforests have been lost due to rubber plantations, which have significantly reduced the regions biodiversity (Shen, 2008). Rubber trees have also depleted the areas water resources because they act as a water pump, allowing for rapid evaporation of ground water via the tree itself (Tan, Zhang, Song, Liu, Deng, Tang, Deng, Zhou, Yang, Yu, Sun, and Liang, 2011). According to an article in Nature, in the Ailao Mountains in northern Puer Prefecture, deforestation to accommodate massive


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Chinas Imbalances: Putting Yunnan in Context These confrontations in Yunnan are just a smaller piece in the larger story of the waterfood-energy nexus in China. Broader national development and resource trends impact the choke points in Yunnan. In the western press has made much about Chinas economic imbalances. The constant refrain of its citizens save too much and dont consume enough and its overly reliant upon exports and investment have become clich in western editorials on China. However, Chinas development patterns and uneven distribution of water are creating other imbalances. The far western provinces


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

planting of eucalyptus trees in Yunnan has contributed to the provinces drought (Qiu, 2010). Driven by demand in the paper industry, over 2 million hectares of the non-native trees have been planted in Yunnan, creating an ecological disaster (Chen, 2010). Called the despot tree by locals, eucalyptus trees have destroyed biodiversity in Yunnan as the paper industry cleared the forest to plant them; the eucalyptus trees have left the soil barren, and use more water than any other tree species due to their fast growth rate (Zhang 2012). Such large-scale deforestation removes the valuable ecological services natural forests provide, says Liu Wenyao, an ecologist at the Xishuangbanna Tropical Botanical Garden, a research institute under the Chinese Academy of Science in Menglun in southwestern Yunnan. The impact of deforestation on hydrological processes becomes particularly acute during prolonged droughts (Qiu, 2010). Such hydrological impacts are particularly relevant to Chinese coffee farmers, as many of them practice monoculture rather than cultivating shade-grown coffee.

in China, including Yunnan, have long lagged behind the coastal provinces in terms of economic development. The eastern provinces, which have benefitted from their 25-year headstart in economic development, are demanding more and more electricity as they grow. In fact, electricity shortages could strangle Chinas still-booming coastal development. The grain belt in north-central China is rich in coal but lacks the water necessary to fully develop the industry while maintaining its wheat and corn output.

Engineering Solutions Instead of addressing the sources of these water and energy imbalances through conservation and other demand management techniques, Chinas policymakers are feeding the beasts by undertaking two huge infrastructure projects. The first is the SouthNorth Water Transfer Project, the largest infrastructure project in the world, which will eventually transfer 35 billion cubic meters of water every year from Chinas wet south to its dry north.2 The second colossal project, the WestEast Electricity Transfer Projectinitiated in the Tenth Five-Year Plan (2000-2005)was designed to bring investment and development to Chinas lagging west while satisfying the growing electricity needs of the countrys eastern provinces. The projects first component is continuing to expand the western provinces electricity-generating capacity, primarily through the construction of new coal bases and hydroelectric dams. The projects second, ongoing component is the construction of three electricity-


transmission corridors, which will connect newly built capacity in the north, central, and south to Chinas electricity-hungry coast. (See Map 1). The Chinese planners expect that each of the corridorswhich are essentially vast, regional, bundled networks of transmission lineswill exceed 40 gigawatts (GW) in capacity by 2020a combined capacity equivalent to 60 Hoover Dams. Central planners tout the construction of the Puers Nuozhadu Dam as part of the backbone of the southern corridor, sending two-thirds of its electricity output to Guangdongthe leading province in export manufacturing (Huaneng Nuozadu Power, 2012). Some other notable facts about Chinas West-East Electricity Transfer Project that underscore its importance to Chinas energy security include: The recipient eastern provinces of Beijing, Tianjin, Hebei, Shanghai, Zhejiang, Jiangsu, and Guangdong together consume nearly 40 percent of Chinas electricity. The Three Gorges Dam is an integral component in the central corridor, sending 35 percent of its electricity to the Yangtze River DeltaChinas second largest manufacturing region. The southern corridor also receives energy from the Three Gorges Dam, albeit only about 16 percent of the dams output. The longest, single Ultra High Voltage Direct Current line in the world connects the Xiangjiaba Dam on the Yangtze River (between Yunnan and Sichuan provinces) to Shanghai. It is 2,071 km (1,287 miles) long and has a capacity of 6.4 GW. These lines are known for their efficient transmission of electricity.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

With water flowing north and electricity from coal and hydropower flowing east, agriculture in the southwest could be increasingly stressed. While Yunnans rivers are only a modest part of the South-North Water Transfer Project, there are worries about the regions ongoing three year drought. If the south and the north experience drought at the same time, and if Guangdong Province is still demanding power from Yunnan, agriculture could potentially be limited in accessing the reservoirs of hydroelectric dams for irrigation needs. In fact, Yunnans drought has already had impacts in Guangdong. In the summer of 2011, some factories in Guangdong Province were forced to cut power at different hours of the day for varying lengths of time because dams in Guizhou, Guangxi, and Yunnan were producing electricity far below capacitysome as low as 10 percent of normal daily output (Yang, 2011). In Puer, this drought-energy crunch could mean that supplying power to Guangdong Province takes priority over its other touted benefit as a source of agricultural irrigation. After all, the Nuozhadu Dam in Puer is targeted to send two-thirds of its electricity to Guangdong. Moreover, in early 2012, reserve hydropower capacity in the three provinces of the Southern corridor was already down 47 percent year-on-year, thanks to the ongoing drought (Ms. Fangs Parched Patch, 2012). All these signs do not bode well for farmers who may come to depend on reservoirs for water during the drought. Indeed, the looming water shortage in Yunnan Province has critical implications for Starbucks sustainable water use practices. YUNNANS COFFEE BUZZ Although coffee cultivation is but a drop of water in terms of Yunnans overall agricultural production, the province constitutes Chinas only significant coffee production region, accounting for 98 percent of the countrys

Following the logic flowing from the two projects names, these two massive transfer projects have the potential to put significant strains on southwest Chinas water resources.


Electricity on the Move

Northern Corridor
The Northern Corridor connects hydropower stations on the Yellow River and coal bases in Inner Mongolia, Shanxi, Shaanxi, Xinjiang, Qinghai, and Gansu provinces to Hebei Province and two megacities: Beijing and Tianjin.

Chinas Network of Transmission Lines Moving Coal Power and Hydropower Eastward

Mammoth energy infrastructure development is keeping Chinas economic engine running at a fast clip. Nevertheless, Chinas urban and industrial centers on the east coast still face energy shortages, in large part because most wind, coal and hydropower plants are concentrated in the countrys inland provinces.

Central Corridor
The Central Corridor connects hydropower stations in the upper reaches of the Yangtze River in Qinghai, Sichuan, Northern Yunnan, Chongqing, and Hubei (and will include Tibet by 2020) to Chinas Yangtze River Delta (YRD) mega-region incorporating Zhejiang, Jiangsu, and Shanghai. These three provinces consume nearly 20 percent of Chinas electricity. The Three Gorges Dam is integral to this Central Corridor, sending 35 percent of its electricity to the YRD.

Net Energy Importer 30% n/a

Net Energy Exporter






The West - East Electricity Transfer Project, initiated in the Tenth Five-Year Plan (2000-2005), was designed to bring investment and development to Chinas lagging west while satisfying the growing electricity needs of the countrys eastern provinces. The projects first phase has been and is continuing to expand the western provinces electricity-generating capacity, primarily through the construction of new coal bases and hydroelectric dams.

Southern Corridor
Hubei, Electricity Transfer

Hebei, Electricity Transfer

50 25 Exported 0 25 Imported

% Energy Exported 25

% Energy

% Energy Imported 25
50 1990 1995 2000 2005 2010 1990 1995 2000 2005

% Energy

50 2010

The Southern Corridor sends electricity to Chinas manufacturing hub in Guangdong Province from new coal bases in Guizhou, Guangxi, and Yunnan provinces and from new hydropower stations in those provinces on the Salween, Mekong, and other rivers. Most of the 60 new medium and large dams targeted in the 12th Five-Year Plan would be built in this region. The southern corridor also receives energy from the Three Gorges Dam, albeit only about 16 percent of the dams output.

Guizhou, Electricity Transfer


Shanghai, Electricity Transfer

50 50k

Country-Wide Electricity Production (kWh/h)

% Energy 25 Exported
0 25 Imported 40k 30k

The projects second, ongoing component is the construction of three electricity-transmission corridors, which are essentially three vast networks of electrical transmission lines that connect newly built generation capacity in the North, Central, and South to Chinas electricity-hungry coast (see arrows on map). Each of the corridors is expected to exceed 40 gigawatts (GW) in capacity by 2020a combined capacity equivalent to 60 Hoover Dams. The seven recipient provinces Beijing, Tianjin, Hebei, Shanghai, Zhejiang, Jiangsu, and Guangdong together consume nearly 40 percent of Chinas electricity.
% Energy Exported 25

% Energy Imported 25
50 1990 1995 2000 2005 2010 1990 1995 2000 2005

% Energy
50 2010

20k 10k 0 50

Yunnan, Electricity Transfer Guangdong, Electricity Transfer


Growth in electricity exports from Chinas western provinces brings energy security to the east coast, but exacerbates water and food insecurity in western Chinas ecologically fragile ecosystems. Because Chinas eastern economic powerhouses rely on western-made electricity, energy sectors in the western province stake priority over residential and agricultural water users.
% Energy Exported 25






% Energy 25 Exported
0 25 Imported 1995 2000 2005 2010 1990 1995 2000 2005 50 2010

In other words, since so much of Chinas GDP depends heavily on electricity produced in its western provinces, the energy sector trumps all other users when it comes to water. China must address these vulnerabilities or choke points to sustain its current growth.
% Energy Imported 25
50 1990

% Energy

Cartography by James Conkling and research by Tyler Gibson. Special thanks to Zifei Yang for her help in finding the data, and Jennifer Turner and Katie Beck for their valuable input. We also want to acknowledge the support of the funders of CEFs energy and water workVermont Law School, USAID, Skoll Global Threats Fund, Rockefeller Brothers Fund and blue moon fund. Source: China Energy Yearbook 2003, 2007, 2010; China Statistical Yearbook 2011


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


coffee production, 70 percent of which is exported (The Coffee Sector in China, 2010). Coffee production in Yunnan (and in China as a whole) began in earnest in the 1980s with a joint project between Nestl, the Chinese government, and the UN Development Program. Since 1997, Nestl has sourced all of its coffee for the Chinese market in Yunnan. Coffee production in the province has soared and currently, Puer produces 60 percent of Yunnans coffee. Since 2008, land area in the Puer region used for coffee production has doubled from 14,000 hectares to 28,000 in 2011. That number is likely to double again by 2015. Despite this remarkable growth, demand has still outstripped supply. Over the same period, coffee bean prices have doubled, rising from 16 yuan a kilo to 30 yuan a kilo (For all the Coffee, 2012). These high prices give farmers incentives to switch from tea to coffee cultivation, and to clear forested areas for its production. According to the local Puer Coffee Industry Development Office, a family with a hectare of coffee can earn more than $10,000 a year; triple the amount they would earn cultivating tea, and five times more than for maize or rice (For all the Coffee, 2012). Yunnan officials want coffee production to increase from 40,000 metric tons to 200,000 metric tons, a fivefold increase, by 2015 (For all the Coffee, 2012). In comparison, Vietnam produces 1.1 million metric tons of coffee each year. While certainly good for Chinese coffee drinkers, there are questions about the sustainability of Yunnans coffee boom. According to an article by Julie Craves, a scientist at the University of Michigan, most of the coffee grown in Yunnan is sun grown, as opposed to shade grown. Sun-grown coffee requires heavier use of chemical fertilizers, and it can be harmful to biodiversity. On the other hand, shade-grown coffee is higher quality, does not require extra fertilizers. Thus, if the

BOX 2. Starbucks in China at a Glance

First opened in China in 1999. Currently has over 500 stores in Mainland China; plans to have 1,500 by 2015 China and Asia Pacific retail sales accounts for only about 5% of Starbucks total revenue. In early 2009, Starbucks introduced its South of the Clouds blend, which featured beans sourced from Yunnan. Between 2007 and 2010, Starbucks purchases of Yunnan coffee beans increased twentyfold.
Sources: Starbucks Celebrates (2011) and Bardsley (2011).

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

coffee planting is done in a way that protects forest habitat, the biodiversity loss could be lower than traditional sun-grown coffee plantations. Notably, Starbucks only purchases shade-grown coffee, which underscores the potentially large environmental benefits of the companys program to promote sustainable coffee farming in the province. Starbucks in China Starbucks is the face of the coffee boom in Yunnan. The company first opened coffee houses in Mainland China in 1999, but it was not until 2006 that Starbucks considered sourcing coffee beans from China. In 2009, the company rolled out its first line of coffee featuring beans from Yunnan, called South of the Clouds (a literal translation of the name Yunnan). Since then, Starbucks has been working with local governments, firms, and the Yunnan Academy of Agricultural Science (YAAS) to expand its coffee production, increase quality,


and improve sustainability. In 2010, Starbucks signed an agreement with YAAS and the Puer city government to establish its first coffee bean farm in the region. In addition, the agreement included plans for a coffee development center, a farmer support center, and coffee processing centers. In 2011, Starbucks set up a local joint venture (JV) with Ai Ni Groupan established coffee operator and agricultural company in Yunnanto expand its coffee sourcing network in the region and to more fully implement best practice coffee processing methods. Starbucks will have operating control of the JV, which will purchase, process, and export coffee beans to the United States for roasting.

In 2011, Chinas coffee production was 40,000 tons. By comparison, China produced 1.47 million tons of tea. Using the average virtual water content of green coffee beans (17,627 m3/ton), Chinas 2011 coffee water footprint was over 705 million m3. The virtual water content of Chinese tea is 16,604 m3/ton, making teas water footprint 24.4 billion m3.

Sources: Chpagain and Hoekstra (2007) and Xin, Li, & Li (2012).

LAUNcHING tHE C.A.F.E. StANDARDS IN PUER Since Starbucks entered into Yunnan, it has been slowly encouraging its local suppliers


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

BOX 3. A Comparison of the Water Footprint of Chinas Coffee and Tea

Coffee and Water Coffee is a surprisingly water-intensive product. Beyond brewing the ubiquitous drink, coffee producers need water to grow the coffee plants and process the beans. Coffee processing can require substantial volumes of water which produces coffee effluentindustrial wastewater that must be properly treated.3 Because processors discard so much of the coffee plant during the processing phase, the virtual water content of coffee is much higher than one might expect. Dutch scientists estimated that it requires 140 liters of water to produce one cup of coffee (Kaye 2011). The same scientists calculated that on average, to produce one ton of roasted coffee bean requires 20,987 cubic meters of water. By comparison, one ton of tea requires 16,604 cubic meters of water to produce. Well aware of coffees water intensity and other problems associated with coffee cultivation in the developing world, Starbucks began implementing a set of environmental, social, and economic guidelines in 2004 to source ethically produced coffee globally. Called Coffee and Farm Equity (C.A.F.E) Practices, these standards include waterconservation measures in the growing and processing phases of production and require proper waste-water disposal techniques. While these standards cover 86 percent of Starbucks coffee, the extent these standards apply to Starbucks Chinese suppliers is unclear because Starbucks only introduced the program in 2011. Starbucks and Conservation International are currently working with Chinese suppliers to meet the basic C.A.F.E Practices. Eventually, Starbucks and CIs goal is to achieve preferred or strategic status for all of their Chinese suppliers.


BOX 4. C.A.F.E. Practices at a Glance

Starbucks has worked with Conservation International since 1998 to develop and implement a set of environmental, social, and economic guidelines used to source coffee called the C.A.F.E. Practices (Coffee and Farm Equity). These practices were first launched in 2004, and now over 86 percent of Starbucks total coffee is certified by C.A.F.E. By 2015, Starbucks wants to source 100 percent of its coffee from Fair Trade, C.A.F.E., or other third-party verified suppliers. The programs ultimate goal is to raise the bar on work and coffee-processing practices that will serve to improve producer livelihoods and conserve the natural habitat necessary to maintain ecosystem services for communities, coffee production and nature conservation (Semroc, Baer, Sonenshine, and Weikel. 2012). In environmental terms, the C.A.F.E standards offer a robust set of best practices divided into protection and conservation for water resources, soil, biological diversity, and overall ecosystem functions. Some of these C.A.F.E. requirements include: A buffer zone between the cultivation area and any permanent bodies of water, No application of agrochemicals within 10 m of any permanent body of water; Maintaining coffee shade canopy; Restrictions on certain classes of pesticides and all other pesticides are applied only after organic measures fail; and, For coffee processing, the suggested best practices include water and energy usage tracking and managing wastewater to limit its impact.

There are over 108 indicators for environmental leadership. Suppliers are scored for each category of suggested best practices that they adopt based on these indicators. For example, for coffee growing, there are a total of forty points possible for environmental leadership; for coffee processing, there are twenty possible points. Overall, environmental leadership, economic accountability, and social responsibility create a total number of 60 to 100 possible points, depending on the supplier type (grower, processor, or both). By implementing these best practices, suppliers can earn a status rank: verified, preferred, or strategic. Verified means that the suppliers practices have been independently verified, and they meet the bare minimum requirements: coffee quality, all economic accountability requirements, and 14 points in social responsibility for adequate wages and benefits and for having policies against child labor, forced labor, and discrimination. In other words, to achieve verified status, a supplier does not technically have to earn any points for environmental leadership (in practice, most suppliers earn at least a few points in this category). However, to earn preferred or strategic status, significant environmental leadership is required. To be granted preferred or strategic status, suppliers must earn 60 or 80 percent, respectively, of the possible environmental leadership indicators. These two ranks receive special perks: both preferred and strategic suppliers can forgo re-verification for three years (verified suppliers must re-verify every year), and strategic suppliers get a 5 cent per pound premium for their green coffee. These incentives play an important role in driving the yearly increase in the number of suppliers with preferred or higher status.


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

According to Starbucks own evaluations, the overall implementation of the C.A.F.E. Practices has been a success. About half of the coffee suppliers certified in the C.A.F.E. program have achieved preferred or strategic status, up from only 30 percent in 2006, and it is likely that this number will continue to rise. However, in Asia, this figure is much lower. Starbucks is investigating whether any barriers exist that prevent Asian suppliers from achieving higher status. Field surveys and KPI (Key Performance Indicator) analysis both point to improved environmental practices over the lifetime of the program, especially in Central and North Americawhere Starbucks sources the majority of its beans. Over half of farms in the program maintained buffer zones along all water bodies and more than three-quarters were not applying agrochemicals within 10 meters of water bodies. A field survey of farms in Guatemala concluded that over the course of the program, agro-chemical use went down, and that wet-mill processors were more likely to report that their water use went down. The incentives created by C.A.F.E. Practices are an effective system for Starbucks suppliers to improve their environmental protection, allowing their customers to sip their coffee worry free.
Sources: C.A.F.E. Practices Generic Evaluation Guidelines, C.A.F.E. Practices Generic Scorecard, C.A.F.E. Practices Verifier and Inspector Operations Manual, Assessment of the Starbucks Coffee and Farmer Equity (C.A.F.E.) Practices Program FY08 - FY10, and Measuring the Impact of C.A.F.E. Practices Guatemala Field Survey.

to follow C.A.F.E. Practices. Starbucks first certified its Yunnan suppliers in 2011, two years after it began sourcing beans for the South of the Clouds blend. In December 2012, Starbucks opened its Farmer Support Center in Puer. Starbucks declined to comment on the implementation of C.A.F.E. Practices in Yunnan, citing their ongoing nature. However, the company has publicly stated that it hopes to source 100 percent of its coffee from C.A.F.E. certified farms by 2015. Presumably, this means that all of Starbucks Yunnan suppliers will be C.A.F.E. verified by then. As explained above, being verified, does not guarantee environmental best practices or water efficiency, unlike C.A.F.E.s more stringent preferred and strategic certification levels. Importantly, according to Joanne Shoenshine, who works with Starbucks on the C.A.F.E. Practices at Conservation International, having reliable sources of water nearby improves the extent to which C.A.F.E. Practices can be implemented by farmers. In other words, a consistent source of water makes it easier for farmers to stick to

THE BREwING WAtER-ENERGY-FOOD CHALLENGES BEYOND YUNNAN Yunnan is a microcosm of the intertwined challenges facing China; climate change, strained water resources, and rising energy and food demand to meet the demands of the worlds largest country are together forming


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

the C.A.F.E. Practices. Abundant water means a higher concentration of naturally occurring climate-change impact mitigators, like shade trees. The trees improve soil quality, water retention, and crop yields while reducing the need for fertilizers. Furthermore, the farmer support center in Puer will likely encourage farmers to become more water efficient and sustainable. All of these are encouraging signs in what is frankly a bleak picture of the future of water management in Yunnan. If Starbucks can implement its C.A.F.E. Practices fully in Yunnan, then they will provide hope for weathering the looming storm of water-energy confrontations threatening the province, and China as a whole.


a choke point that cannot be ignored. If not well managed, the booming coffee industry in Yunnan could exacerbate the water-energy food confrontations in the province. But Starbucks C.A.F.E. Practices, if they can be implemented successfully, offer farmers the tools they need to adapt to and withstand these choke points, while simultaneously reducing their industrys strain on the environment. These practices could potentially be a model for sustainable, commercialized agriculture throughout China, and if implemented, could potentially reduce farmings impact on water and the greater environment. Providing training and assistance and educating famers about proper water, pesticide, and fertilizer use are necessary to reduce agricultures twofold impact on water scarcity through pollution and inefficient use. There is significant room for greater water efficiency in Chinas agriculture; agriculture accounts for 65 percent of Chinas water use, but 55 percent of that water is wasted due to poor irrigation techniques and outdated equipment (coffee cultivation, however, does not use irrigation). In comparison, in developed countries, only 20-30 percent of water is wasted in the irrigation process. In other words, China could reduce its total water consumption by as much as 16 percent by modernizing irrigationan area of major investment that the central government is undertaking at a massive scale in Chinas northeast (Schneider, 2012). Such upgrades would not only save farmers money, but would better insulate them and the country as a whole from choke points induced by water scarcity. Price incentives to encourage minimal use of pesticides and fertilizers would make a huge dent in Chinas water pollution problem; over 30 percent of Chinas surface water is unsuitable for drinking, with agriculture being the largest contributor to pollution. Unsustainable agricultural practices from overuse of fertilizer to water overuse and wasterepresent a widespread and entrenched

problem in China that will require multi-agency and multi-stakeholder solutions. However, efforts to promote more water use efficiency and other sustainable farming practices could have major environmental and economic benefits for China. Furthermore, reforming agricultural practices through economic incentives like those in the C.A.F.E Practices presents Chinese policymakers with a potential way to ease tension in Chinas water-energyfood crisis. Indeed, this is where Starbucks C.A.F.E. Practices are most successful; they use market incentives on a small scale at the grass roots level to encourage sustainability. However, implemented throughout Starbucks supply chain, the C.A.F.E. Practices could make a significant impact. Imagine if such a system were to be implemented throughout China. Chinas leaders have been masterful in using market incentives to reform agriculture in the pastand there is a new opportunity for them to do it again and promote sustainable water use.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

David Tyler Gibson is a Cross Program Associate at blue moon fund. Previously, he was a research assistant at the Woodrow Wilson Centers China Environment Forum. Originally from Houston, he graduated with Honors from Middlebury College in February 2012, earning a degree in International Politics and Economics. Tyler now lives in Charlottesville, VA.

Bambi Semroc, Elizabeth Baer, Joanne Sonenshine, and Marielle Canter Weikel. (2012, March) Assessment of the Starbucks Coffee and Farmer Equity (C.A.F.E.) Practices Program FY08 - FY10. Pg 8. Bardsley, Daniel. (2011, 28 March). Tea-loving China warms to coffee. The National. [Online]. Available: Starbucks Celebrates Its 500th Store Opening in


1. Reserve Hydropower Capacity is the total amount of generating capacity minus the capacity that is currently being utilized. In other words, it is the available capacity in hydroelectric stations that operators can use in case of generator loss elsewhere in the system or sudden peaks in demand. Because hydropower capacity depends on the potential energy of falling water, a decrease in reserve hydropower capacity means that the reservoir levels have dropped significantly. 2. A project originally conceived by a whimsical comment made by Chairman Mao: Southern water is plentiful, northern water scarce. If at all possible, borrowing some water would be good. 3. Water usage in coffee processing can vary depending what type of processing method is usedwet or dry.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Mainland China. (2011, October 25). [Online]. Available: display.cfm?article_id=580 C.A.F.E. Practices Verifier and Inspector Operations Manual. Starbucks Coffee Company. Version 4.4. pg. 47. Chen Chenchen. (March 10, 2010). Eucalyptus as a Hidden Cause of Yunnans Drought. The Global Times. [Online]. Available: http://www.globaltimes. cn/opinion/observer/2010-03/515438.html Chpagain, A.K.; Hoekstra, A.Y.. (2007). The water footprint of coffee and tea consumption in the Netherlands. Ecological Economics. No. 64 pp. 109-118. [Online]. Available: h t t p : / / w w w. w a t e r f o o t p r i n t . o r g / R e p o r t s / ChapagainHoekstra2007waterforcoffeetea.pdf Circle of Blue & Woodrow Wilson Center. (2007). Hidden Water and Dragons in the Deep. [Online]. Available: The Coffee Sector in China. (2010). Geneva: International Trade Centre. [Online]. Available: aspx?id=37584 Drought continues to wreak havoc on southwestern China (2010, March 17) [Online]. Available: http:// Food and Agriculture Organization of the United NationsProduction. [Online]. Available: http:// For all the Coffee in China (2012, January 28). The Economist. [Online]. Available: http://www. Huaneng Nuozadu Power Plant to Transport More than 2/3 of Power Production to Guangdong. (September 9, 2010). China Energy Net. http:// Kaye, Leon. (2011, June 17). Companies must address use of water in coffee production by. The Guardian. [Online]. Available: sustainable-business/water-use-coffee-sustainableprofitable. Ms. Fangs parched patch (2012, April 14). The Economist. [Online]. Available: http://www. Qiu, Jane. (2010, May 11). China drought highlights future climate threats. Nature. [Online]. Available: http://w w full/465142a.html. Schneider, Keith. (2012, November 9). Scarcity of Water and Land Shifts Geography of Food Production and Irrigation Networks to Chinas Northeast. Circle of Blue. [Online]. Available: http://www.circleofblue. org/waternews/2012/world/scarcity-of-water-and-

land-shifts-geography-of-food-production-tochinas-northeast/. Shen, Rujun. (2008, April 6). Rubber trees for tire industry shrink China rainforests. Reuters. [Online]. Available: ar ticle/2008/04/07/us-china-r ubber-forestidUSSHA7974020080407. Xin Dingding, Li Yingqing and Li Woke. (2012, March 10) Yunnan seeks to associate itself with coffee production. China Daily. [Online]. Available: content_14805243.htm. Yang Xingyun. (2011, September 5). Drought, Mine Closures Cut Power. The Economic Observer. [Online]/ Available: ens/2011/0913/211121.shtml. Zhang, Q., Y. Kobayashi, M. Howell Alipalo, and Y. Zheng. (2012). Drying Up: What to do about droughts in the Peoples Republic of China. Mandaluyong City, Philippines: Asian Development Bank. [Online]. Available: pub/2012/drying-up-prc.pdf. Zhang Zhilong. (2012, July 18). Yunnans endless drought. The Global Times. [Online]. Available: Zheng-Hong Tan; Yi-Ping Zhang; Qing-Hai Song; WenJie Liu; Xiao-Bao Deng; Jian-Wei Tang; Yun Deng; Wen-Jun Zhou; Lian-Yan Yang; Gui-Rui Yu; XiaoMin Sun; and Nai-Shen Liang. (2011). Rubber plantations act as water pumps in tropical China. Geophysical Research Letters, Vol. 38. [Online]. Available: cas/yw/ywlw/201201/P020120116378206212653. pdf.



QuenchinG Chinas Thirst For ReneWaBLe PoWer

Water Footprint of Solar, Wind, and Hydro Development

by Nina Zheng & David Fridley

s the worlds leading electricity consumer, China is hungry for energy. Over the last three decades, Chinas electricity consumption has grown at an astounding average annual rate of over 9.5 percent. Accelerated economic growth, urbanization, and industrialization have increased this electricity hunger to over 13 percent per year over the past decade (National Bureau of Statistics, 2010). This unprecedented growth in electricity demand created power shortages that reached an all-time high of 30 GW in the summer of 2011 and 18 GW in the summer of 2012 (Xinhua, 2012). Chinese policymakers have increasingly looked to renewable energy to satisfy Chinas rapidly growing electricity demand, as well as to lower greenhouse gas1 and other air pollutants from coal burning. Chinas two most recent five-year plans have set a high bar for renewable energy goals, striving to meet 11.4 percent of the countrys total energy

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

consumption from renewable and other nonfossil sources by 2015 and 15 percent by 2020. As a sign of commitment to these targets, China is now the world leader in overall renewable energy finance and investment as well as wind turbine and solar photovoltaic (PV) module production (Pew Charitable Trusts, 2011). But as Chinas renewable sector continues to grow, an important constraint will be the water resources needed to build, operate, and maintain the new solar, wind, and large hydropower plants. A closer look at the cradle-to-grave life cycle of planned solar PV and concentrated thermal, wind, and large hydropower generation technologies reveal that Chinas thirst for clean energy will lead to demand for more water, a resource that is already extremely scarce and polluted. EVOLUtION OF CHINAS RENEwABLE SEctOR Renewable and alternative energy development has received regulatory and financial support under a flurry of laws and


regulations in China over the past decade. The 2005 Renewable Energy Law and its 2009 amendments mandated market shares and purchase of renewable power generation and launched feed-in tariffs for biomass and wind power. The 2007 Medium and Long-term Development Plan for Renewable Energy set official capacity targets for the first time, which have since been revised upward in the 2010 Draft Development Plan for Emerging Energy Technologies. (See Table 1). As a result of these strong policy drivers, China met all of its 2010 renewable targets and also became the world leader in total installed clean energy capacity, with unprecedented investment in grid construction and expansion. The most recent accomplishments of Chinas renewable sector include: Wind: onshore wind power capacity doubled every year since 2005 with 18.9 GW added in 2010 and 17.6 GW added in 2011; first commercial offshore wind farm (102 MW) in operation; Solar PV: annual installed capacity more than tripled from 45 MW in 2008 to 160 MW in 2009, then skyrocketed to 500 MW in 2010 and 2.2 GW in 2011; Concentrated Solar Thermal: 1.5 MW pilot

concentrated solar power (CSP) tower plant is under development in Beijing; Large Hydro: annual growth rates of 10 percent since 2000 with doubling of installed capacity from 2005 to 2010 reaching nearly 230 GW in 2011.

TaBLe 1: ReneWaBLe DeveLoPment MiLestones

Total Renewable Power Hydropower Wind Off-shore On-shore Solar Power PV Total Solar Thermal

2010 Target
195 190 5 0.2 4.8 0.3 0.3 0.1

2010 Actual
259 213 45

2020 Target
332 300 30 1 29

Revised 2020 Target (as of 2011)

470 300 150


1.8 1.6 0.2


Sources: 2010 and 2020 Targets from 2007 Medium and Long-term Development Plan for Renewable Energy in China; 2010 Actual from National Energy Administration, 2011; Revised 2020 Targets from 2011 Draft Plan for National Economic and Social Development (National Development and Reform Commission, 2011).


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

While certainly impressive, the growth of Chinas renewable sector has masked crucial barriers and resource constraints facing the massive deployment of renewable technologies on a scale needed to sustain planned economic growth of over 7 percent per year through 2015 and to meet subsequent energy demand. For relatively new technologies that have not achieved commercialization, such as concentrated solar towers, China also faces many technical limitations in expanding the scale of installed capacity. Other technologies, such as hydropower, have been slowed by uneven and often changing market and policy support. The renewable leaders of wind and solar PV have also encountered physical and institutional barriers to grid integration. Policies, market reform, and investment can help overcome most of these technological and institutional barriers, but the hidden material and water resource constraints on renewables are more difficult to address. Continuing the


growth of installed wind capacity requires manufacturers to churn out more wind turbines, but there is an increasingly limited supply of neodymium, a rare earth used in the development of wind turbines high strength magnets. In addition to competing demand for neodymium from manufacturers of motors, sound equipment, and even Priuses, severe air and water pollution problems associated with its mining and processing are increasing. (See Box 1). Likewise, advanced thin-film solar PV cells require additional rare earth metals such as indium, gallium, selenium, and cadmium telluride, contending with flat panel display and electronic and wireless application production for limited virgin resources. While China has already grasped the threat of rare earth metal shortages by establishing a tightly controlled export quota system and imposing taxes on mining, the looming water shortages and pollution from renewable development has gone largely unnoticed.

WAtER FOR RENEwABLE DEVELOPMENt Coal, oil, and shale gas production are the usual poster children for water-intensive energy development. Chinas coal-heavy energy sector that provides 70 percent of the countrys electricity is not only a major air polluter, but has a huge water footprint. The entire mining, production, use, and disposal lifecycle of coal is using between 11 and 20 percent of the water consumed in this waterstressed country (Schneider, 2011; Lingying, et al., 2012). However, renewables also can have a significant water footprint. For example, life-cycle analyses of renewable energy technologies in China and abroad highlight the high water input requirements needed to sustain renewable development.2 (See Table 2). Concentrated Solar Power (CSP) Of all the renewable energy technologies,

Rare Earths Mining

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

BOX 1. Water Contamination from

Neodymium is one of seventeen rare earth elements and it forms the basis of the chemical compound Nd2Fe14B used in high-strength permanent magnets driving motors and generators, with nearly a ton of magnets needed per MW of wind capacity (Lifton, 2010). Rare earth elements are typically dispersed in the Earths crust and are often produced as by-products of other metals or through reprocessing. In the case of neodymium, China accounts for over 80 percent of global supply and its 2011 production reached 83,000 tons (PRWeb, 2012). Neodymium extraction and processingalong with the mining and processing of other rare earth metalshave toxic effects on air and water quality that are already being felt in villages throughout China. Near the city of Baotou in Inner Mongolia, seven million tons of waste, including radioactive tailings from neodymium processing, are discharged annually into a local lake along with toxic dust and airborne radiation (Parry, 2011). Over two hundred illegal make-shift rare earth mines in the villages of Guangdong Province were also closed down, where waste runoff to the local river were reported to have contaminated local reservoirs and destroyed fish-farm stock and rice crops (Lee, 2008).


TaBLe 2: Lifetime Water Requirement for ReneWaBLes anD PotentiaL GroWth in China

Renewable Energy Technology Hydro Large Hydro Reservoir Cadmium indium gallium selenide (CIGS) Solar PV Mono Silicon Crystalline Poly Silicon Crystalline Amorphous Silicon Crystalline Wind Concentrated Solar On-Shore Concentrated Solar Tower

Lifetime Water Requirement (tons/MW) 154* 25 494 494 615 1,767 48,667

2010 Share of Installed Capacity 22%

Possible 2030 Share of Installed Capacity** 16% 0.2%

All PV: 0.1%

1.6% 0.2%

3% -

14% 0.2%

Sources: Hydro water intensity based on study of Brazils Itaipu Dam (Ribeiro & da Silva, 2010); solar PV data from European PV studies in Jungbluth, Stucki, & Frischknecht (2009); wind from Chinese study of 30 MW on-shore wind farm in Guangxi (Chen, Yang, & Zhao, 2011); solar tower data from Chinese pilot plant under development in Beijing (Chen, Yang, Zhao, & Wang, 2011). *Lifetime water requirements refers to water use through all phases of the life of a renewable power plant (manufacturing, construction, operation, maintenance, and decommissioning) except in the case of hydro, which only includes direct water consumption during construction due to water allocation and boundary issues. ** 2010 share of installed capacity defined as each renewable sources installed generation capacity as share of total national installed electricity generation capacity (e.g. GW of capacity) as calculated from data given in National Energy Administration, 2011. Renewable sources possible 2030 shares of total installed electricity generation capacity in Chinas power sector based on LBNL China Energy End-Use Model power sector module, with the underlying assumption that China meets all of its 2020 capacity targets and that installed capacity continues to grow at similar paces through 2030. More details given in Zheng and Fridley, 2011.

FiGure 1: Chinese ConcentrateD SoLar

CSP towers require by far the most water with a lifetime average of 48,000 tons of water per MW of installed capacity (a large coal-fired or nuclear power plant typically has an installed capacity of 1,000 MW). Huge amounts of water are required on a daily basis for different processes of operating and maintaining concentrated solar towers, even though the pilot solar tower in China has a very small installed capacity. (See Figure 1). The daily 200 tons of water consumption by Chinas current solar towers is equal to the annual tap water consumption for three Chinese residents.3 Over its twenty year lifetime, Chinas pilot solar tower would consume 73,000 tons of water. Although the technology is too nascent for water to be a constraining factor now, the development of large-scale, water-intensive solar CSP towers in the western solar-rich

PoWer ToWer DaiLY Water Use

Cleaning solar collectors Chemical feed water

Plant water consumption

Turbogenerator system

Auxillary cooling water

Circulating cooling water

Breakdown of Solar Tower's Daily Water Consumption of 200 tons

Source: Chen, Yang, Zhao, & Wang, 2011.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


regions of China will intensify the demand for water in an already water-scarce region. Wind Turbines Water is also needed to construct and maintain Chinas growing fleet of wind turbines, with the second highest life-cycle water input requirement per MW of capacity among renewable energy technologies. Although the life-cycle 1,767 tons of water required per MW of wind development is much lower than that needed for conventional coal-fired and nuclear power plants,4 the rapid scale of planned deploymentpredominantly in Chinas dry northern and western regions with a nationwide capacity target of 150 GW by 2020 translates into burgeoning water consumption. Solar PV The full lifecycle of solar PV (e.g., production, use, and maintenance) requires varying amounts of water, depending on the type of technology. For example, the water needs for different types of cells range from a very low 25 tons/MW for advanced thinfilm CIGS solar panels to a high of 615 tons/ MW for amorphous silicon crystalline cells. Most of the water for solar PV development is used in manufacturing PV cells, power plant operations, and maintenance, such as the washing of PV panels. Poly-silicon crystalline PV, which is expected to dominate the solar PV market in coming years, needs nearly 500 tons/ MW. China is targeting 14 GW total energy production from poly-silicon crystalline PV by 2020 (out of the total 20 GW solar PV target), which means the water footprint for solar will increase significantly. Hydropower Hydropower, Chinas largest source of renewable power, has relatively low direct water requirements per unit capacity in reservoir dam construction due to its very long lifetime of 100

years. However, hydropower faces resource constraints due to droughts, challenges with water rights management, and significant negative environmental impacts, such as water loss due to evaporation. For example, the future development of hydroelectric dam projects in southern and central China is threatened by droughts and lower water flows in the usually water-rich Yangtze River Basin. The basin has experienced five major droughts over the past three years and, in the summer of 2011, officials ordered the release of water stored for irrigation and drinking from the Three Gorges Dam to sustain hydropower production. Continued droughts threaten to reduce or stop hydropower generation, exacerbating Chinas electricity shortages. LONG-tERM WAtER IMPLIcAtIONS FOR RENEwABLES Over the next twenty years, if China is to meet its renewable targets and continue to undertake energy efficiency improvements to slow growth of electricity demand, its renewable development will require between 30 and 50 million tons of water annually.5 Most of this water requirement will come from the expansion of wind power and the slower but growing development of solar CSP. (See Figure 2). The projected 813 million tons of cumulative water demand for renewable development from 2010 to 2030 equals nearly a years worth of total water supply for all Beijing residents, the equivalent of the population of the entire state of New York. (NBS 2010). More problematic than the total water demand for renewable development is the geographical disparity in resource availability between water and renewable energy. Both wind and solar resources are abundant and heavily concentrated in the remote regions of northwestern China, where water resources are scarce. This is especially true in the case of wind development, where the majority of


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

FiGure 2: AnnuaL Water Use for Chinas ReneWaBLes

50 45 40
Million tons of Water

Hydro* Wind Solar CSP Solar PV

capacity are all in the bottom 10 provinces in terms of water resource availability. (See Table 3). Regional water availability will become an increasingly important constraint in China as it advances its renewable development. CONcLUSIONS In spite of a global economic downturn, Chinas renewable energy development has accelerated in the last few years. The extraordinary doubling of installed capacity for wind on an annual basis and the 50-fold increase of solar PV installed capacity from 2008 to 2011 have been met with optimism from Chinese policymakers, who continually revise future targets upwards. Against Chinas promising future of renewables is a palpable disconnect in recognizing the water-energy nexus, specifically, the large and growing water requirements for renewable energy development. Besides the sheer magnitude of water needed for capacity expansion on the scale needed to achieve Chinas planned renewable energy development are various other water-related problems. The detrimental effects of rare earth metal mining on water and air quality are gaining visibility, challenging

35 30 25 20 15 10 5 0 2010 2020 2030

Source: Zheng & Fridley, 2011. Note: *Annual water requirements refers to annualized water use through all phases of the life of a renewable power plant (manufacturing, construction, operation, maintenance and decommissioning) except in the case of hydro, which only includes direct water consumption during construction due to water allocation and boundary issues.

TaBLe 3: Chinas WinD DeveLoPment anD Water Resource AvaiLaBiLitY

Province/Region Inner Mongolia Hebei Liaoning Jilin Heilongjiang Shandong Gansu Jiangsu Xinjiang

2009 Installed Wind Capacity (MW) 9196 2788 2425 2064 1709 1229 1188 1097 1003

Total Available Water Resources (billion tons) 37.8 14.1 17.1 29.8 98.9 28.5 20.9 40 75.4

2009 Wind Capacity Rank 1 2 3 4 5 6 7 8 9

Water Resources Availability Rank 20 26 25 22 8 23 24 19 14

Sources: Data from Cheung, 2011 and NBS, 2010. Ranking done by author based on data.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

the unprecedented growth has taken place in some of the most water-constrained provinces of China. Inner Mongolia, the leading province for wind development, with onethird of the total installed wind capacity in 2009, is ranked 20 out of 31 in terms of water resources. Likewise, the other three of the top four provinces in terms of installed wind


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

the image of wind and solar power as clean energy sources. Construction stages of large hydropower dams have very low lifetime direct water input requirements but face barriers in the form of water shortages due to droughts and water rights management. Regional variations in water resource availability will also determine the extent to which water will be a limiting factor for solar and wind development. These problems illustrate that future renewable energy development will be closely linked to how water quantity and quality concerns are addressed. In shaping Chinas energy future, it will become increasingly important for Chinese policymakers to take the life-cycle water footprintand not just the direct impactsof energy resources into consideration when formulating national energy policy and establishing priorities for both new energy supply and conservation measures. At the same time, technical and policy steps can be undertaken to lower the water, energy, and material footprint of Chinas future energy consumption by lessening the need for construction of new energy supply. Accelerated gains in energy efficiency, for example, would allow reduced dependence on high-water-use coal generation, boosting the supply share of renewables.

Laboratory. He has over 30 years of experience working and living in China with extensive experience in the petroleum industry. His recent research involves extensive collaboration with the Chinese on end-use energy efficiency, energy modeling, and policy analysis and ecological limits of biofuels. He can be reached at

Chen, G. Q.; Yang, Q; Zhao, Y.H.; & Wang, Z.F. (2011). Nonrenewable energy cost and greenhouse gas emissions of a 1.5 MW solar power tower plant in China. Renewable and Sustainable Energy Reviews, 15 (4), 1961-1967. Chen, G. Q.; Yang, Q & Zhao, Y.H. (2011). Renewability of wind power in China: A case study of nonrenewable energy cost and greenhouse gas emissions by plant in Guangxi. Renewable and Sustainable Energy Reviews, 15 (5), 2322-2329. Cheung, Kat. (2011). Integration of Renewables: Status and Challenges in China. Paris: International Energy Agency. Fthenakis, Vasilis & Kim, Hyung Chul. (2010). Lifecycle uses of water in U.S. electricity generation. Renewable and Sustainable Energy Reviews, 14, 2039-2048. Jungbluth, Neils; Stucki, Matthias & Frischknecht, Rolf. (2009). Photovoltaics. In Dones, R (ed.) et al., Sachibilanzen von Energiesystemen. EcoInvent Report No. 6-XII. Dubendorf, CH: Swiss Centre for Life Cycle Inventories. Kenny, J.F., Barber, N.L., Hutson, S.S., Linsey, K.S., Lovelace, J.K., and Maupin, M.A. (2009). Estimated use of water in the United States in 2005. Reston, VA: U.S. Geological Survey. Lee, Yong-tim. (2008, February 22). South China Villagers Slam Pollution from Rare Earth Mine. Radio Free Asia. Lifton, J. (2009). Braking Wind: Wheres the Neodymium Going to Come From? [Online] Available: http:// html. Lingying Pan, Pei Liu, Linwei Ma, Zheng Li. (2012). A Supply Chain Based Assessment of Water Issues in the Coal Industry in China. Energy Policy. Volume 48, pp93-102. [Online]. Available: http:// w w S0301421512002686 National Bureau of Statistics. (2010). Chinas Statistical Yearbook 2010. Beijing: China Statistics Press.

Nina Zheng is a Senior Research Associate in the China Energy Group at the Lawrence Berkeley National Laboratory. Her research focuses on enduse energy efficiency and energy modeling and policy analysis in China. She holds a B.S. in Science, Technology and International Affairs from the Walsh School of Foreign Service at Georgetown University and a M.S. in Energy and Resources from University of California at Berkeley. She can be reached at: David Fridley is a staff scientist in the Energy Analysis Program at the Lawrence Berkeley National



W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

National Bureau of Statistics. (2010). Chinas Statistical Yearbook 2010. Beijing: China Statistics Press. National Development and Reform Commission. (2011). Report on the Implementation of the 2010 Plan for National Economic and Social Development and on the 2011 Draft Plan for National Economic and Social Development (in Chinese). Beijing: National Development and Reform Commission. National Energy Administration. (2011). 2010 Energy Economy Situation and 2011 Outlook (in Chinese). [Online]. Available: t20110128_393339.htm Parry, Simon and Ed Douglas. (2011, January 29). In China, the true cost of Britains clean, green wind power experiment: pollution on a disastrous scale. U.K. Daily Mail. Pew Charitable Trusts. (2011). Whos Winning the Clean Energy Race? 2010 Edition. Washington, DC: the Pew Charitable Trusts. PRWed. (2012, September 8). China Rare Earth Market Trends and Permanent Magnet Industry Analyzed in Market Research Reports Available with [Online]. Available: prweb9879926.htm. Riberio, F.M. and da Silva, G.A. (2010). Life-cycle inventory for hydroelectric generation: a Brazilian case study. Journal of Cleaner Production, 18 (1): 44-54. Schneider, Keith. (2011, February 15). Choke Point: China Confronting Water Scarcity and Energy Demand in the Worlds Largest Country. [Online]. Available: choke-point-chinaconfronting-water-scarcity-andenergy-demand-in-the-worlds-largest-country/. Xinhua. (2012, June 13). China to face mild power shortages this summer. Xinhua News. [Online].

Available: china/2012-06/13/c_131651053.htm Zheng, Nina and David Fridley. (2011). Chinas Alternative Energy Development. Berkeley, CA: Lawrence Berkeley National Laboratory.

1. China has pledged to reduce CO2 emissions per unit GDP by 40 to 45 percent from 2005 levels by 2020, as well as to reduce energy and CO2 emissions per unit GDP by 16 and 17 percent, respectively, during the 12th Five-Year Plan period. 2. Geothermal power generation is not discussed due to its limited scale and applications. Nuclear power is also excluded due to complex water boundary issues regarding the use of recirculating and cooling of freshwater and seawater. 3. According to NBS, the 2009 reported daily per capita tap water consumption for residential use was 176 liters, or 0.176 metric tons per person (NBS, 2010).. 4. One U.S. study (Fthenakis and Kim 2010) found that water withdrawal factors for coal-fired and nuclear power plants (ranging from 2.5 96.4 tons/MWh and 3.9 120 tons/MWh depending on cooling type, respectively) are significantly higher than PV and wind power plants (ranging from 0.23 1.9 tons/ MWh). 5. This is derived from a Continued Improvement scenario of continual energy efficiency improvements and renewable capacity expansion at a pace that allows China to meet all of its 2020 targets and continue growing thereafter. More details on the scenario and assumptions are given in Zheng & Fridley, 2011.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013


LoWerinG the Water FootPrint of SoLar PV ProDuction in China

by Jodie Roussell


olar photovoltaic (PV) production can be a water intensive and dirty process and as the industry has boomed in China, so has its water footprint. Trina Solarone of the worlds leading PV companies with its factory and worldwide headquarter located in Changzhou, China and with offices in approximately 20 locations around the worldhas made significant investments to improve the environmental impact of its manufacturing, focusing on water and energy efficiency. In producing clean energy for industry, residential, and commercial applications worldwide Trina Solar aims to make its production clean and lean through equipment installation and new production and management measures to reduce water and energy use. Trina Solar is subject to a variety of government regulations related to environmental protection and the prevention and control of water, air, solid waste and noise pollution. The company has built environmental facilities to ensure that waste water, gases, and pollutants are treated to meet national and local

environmental standards. As an advocator and facilitator of clean energies, Trina Solar has always been aiming at the objective to create a harmonious living environment. In fact, principles of sustainable development have become an inseparable commitment to the company. In an effort to fully commit to the companys sustainable development priorities, Trina Solar started major investments to lower water and energy consumption and reduce wastewater emissions. By following the 3Rs principle of reduce, reuse and recycle the company has significantly lowered its water consumption. Even though the manufacturing plants are not located in a water scarce region (Chanzhou, China), the company shows commitment to their environmental responsibility. Since 2008, Trina Solar reduced electricity consumption per MW module production from 800.7MWH in 2008 to 281.8MWH in 2011. The company reduced its electricity consumption by: Recovery and utilization of residual heat in monocrystalline silicon plant cooling water.


Optimizing use of refrigeration units and air-cooled heat pumps Collection and reuse of Reverse Osmosis concentrate water. Reduction of Compressed Dry Air system regeneration time. Use of better technology to shorten monocrystalline silicon furnace operating cycles.

The companys water consumption has followed the same downward trend as electricity consumption. Water consumption per MW module production was reduced from 8,018 m3 in 2008 to 2,982 m3 in 2011. In fact, Trina solar was able to reduce the water consumption in manufacturing by 63 percent over the past two years. Several projects made this possible: External Water Recycling: The company replaced tap water as cooling water for their machines with Reverse Osmosis membrane concentrated water. This modification does not affect the operation of their machines but leads to water savings of 136,000 tons per year.

Trina Solar 2011 Quarterly Water Consumption (M3/MW)

2008 10108 9278 7082 5485 3410 2777 3834 2948 4199 3551 3151 3397 3371 7501 7501









4543 3001 3529 2982







W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Internal Water Recycling: Overflow water from rinsing tanks is recycled at two cell plants. In the second sell plant, process cooling water is used instead of tap water as a coolant in the vacuum system. Water Recycling Measures: Through an agreement with Wuxi Debao Water Company concerning the treatment and reuse of waste water, Trina Solar built a new water recycling plant using advanced dual-membrane technology (micropore filter plus reverse osmosis) to treat industrial waste water created during the manufacturing process. The treated water is then sent back as supplementary raw water supply. Waste Water Treatment Plant Project: Four wastewater treatment plants were built, which ensure that all the wastewater from the manufacturing process is adequately treated prior to discharge into the sewer system. The combined maximum treatment capacity is now nearly double the companys current organic and inorganic waste water emissions. The average amount of chemical oxygen demand in the treated effluent is around 200 milligrams/liter


(mg/l), which is much lower than Chinas legal requirement of 500 mg/l. The average amount of fluoride in the treated effluent is less than 10 mg/l, which is also below the legal requirement of 20 mg/l. Multi-wire Saw (MWS) Slurry Recycling and Mixing Project: The company invested in the construction of a MWS Slurry recycling and mixing center in 2008. MWS Slurry contains silicon carbide, polyethylene glycol, and small amounts of sand. Of these substances, polyethylene glycol readily forms an emulsion water, and is a significant organic pollutant. The disposal of MWS Slurry in wastewater therefore tends to cause organic pollution in bodies of water. Our MWS Slurry recycling and mixing center separates silicon carbide and polyethylene glycol from MWS Slurry, and reuses these substances. Since this project was completed in August 2009, the company has been able to conserve raw materials and create value, and reduce industrial waste and organic pollution.

even though the manufacturing has gone up over the past few years, Trina Solar was able to reduce its water and energy consumption. The water consumption efficiency improvement resulted from two aspects: (1) water conservation projects; (2) efficiency increases with production capacity. The conservation projects and efficiency increases led to a winwin; Trina Solar saves money, with less water consumption, and ensures that the company does its part to protect the environment. Trina Solars leadership in the environmentally sound manufacturing was recognized by the Silicon Valley Toxics Coalition (USA) as the world leader in sound Photovoltaic manufacturing in 2011.


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

To ensure that these conservative water consumption practices work effectively, the company performs water balance measurements in conjunction with the Changzhou Water Conservation Office. And

Jodie Roussell serves as Director of Public Affairs, Europe for Trina Solars European and Maghreb operations. She co-founded and served as Chief Operating Officer of the American Council on Renewable Energy (ACORE), a Washington, DC based non-profit, worked later as Director of Strategic Planning & Corporate Development for NASDAQ listed JA Solar (Shanghai) and worked then as Head of Energy Utilities & Technology at the World Economic Forum. She can be reached at:


Inner MonGoLia: CoaL Heaven, Water HeLL

by Troy Sternberg, Caitlin Werrell & Francesco Femia

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

hinas richest city is no longer Shanghai or Hong Kong. Now, it is dusty Ordos, in dinosaur fossil-laden Inner Mongolia, a town built on near waterless land, to be more exact, on coal. Amazing wealth has been created as Inner Mongolia has become Chinas economically fastest growing region and the number one domestic source of energy. The 7,000 super rich residents (whose net worth is greater than $100 million each) (China Daily, June 2011) are building themselves a $5 billion new city in which to invest their wealth, park their Maseratis and enjoy life. Ten years ago, Ordos was desperately pitching itself as the home of Genghis Khans tomb (Mongolians disagree); today, it has turned into a playground for the wealthy. COAL HEAVEN Ordos reflects the story of Inner Mongolia writ large, a region where the arid, infertile lands of the Gobi desert have yielded a new black gold. Coal is found throughout the province, often near the surface, which has encouraged a proliferation of informal and

illegally operating wildcat mines. Insatiable demand for the end product means that those who control the landthe government and the private developersfocus on profits while resources are extracted at the expense of the environment and water. The recent oil price spikes resulting from the Arab Spring have driven the search for domestic replacements for foreign fossil fuels and increased the importance of the provinces vast coal reserves. As shrewd businessmen, the coal bosses are quick to develop new uses for their product. GASIFIcAtION

Enter gasification, a process perfected by Germans and South Africans in the 20th century to transform coal first into hydrogen gas and carbon monoxide gas, and then into liquid fuel, primarily diesel for heavy trucks and energy production. The process of gasification requires a significant amount of water, and generates by-products including coke, sulphur, ammonia, and soil and groundwater contaminants. Despite the drawbacks, gasification has strong advocates in China. The process helps increase the utility of



Inner Mongolias coal reserves, and is seen as an important step towards Chinas goal of energy independence and security. China currently imports approximately 8 percent of its coal over 600 million metric tonsand more than half of its oil. Gasification is also promoted as a cleaner alternative to burning coal in terms of air pollution and greenhouse gas emissions. However, while gasification is often touted as being more economically and ecologically sound, it may prove difficult to sustain in the parched, desolate stretches of Inner Mongolia. WAtER HELL Gasification combines coal with copious amounts of water to make a slurry that is crushed into liquid energy. However, in arid Inner Mongolia, every drop of water counts. Stepping into Ordos, the capital, Hohhot, or elsewhere in the autonomous region, one quickly realizes that Inner Mongolia is a great drylandlarger than France and Spain combined. In an area where rainfall is as little as 50mm per year, water scarcity is the defining feature throughout the province: across the steppe grassland, in the regions east, and the worlds highest sand dunes, in the west.
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Even without coal mining and gasification, this water-deprived land is considerably pressured by human activities. Agriculture, the regions main livelihood, presents a perennial stress on the regions water table. Water is, of course, essential for crops and

pasture vegetation. Furthermore, in the last 50 years, the immigration of Han Chinese has led to an increased number of mouths to feed, leading to repeated attempts to increase agricultural productivity through an intensified use of groundwater, irrigation and fertilizers. Pastoralism, the traditional lifestyle of Inner Mongolias indigenous people, also plays its part in the regions scramble for water.The indigenous Mongols, once nomadic pastoralists are often the target of ecological resettlement, compelled to practice de facto sedentary livestock raising. Prevented from roaming as they once did, pastoralists are forced to use less land more intensively for grazing, which places a heightened burden on the regions water resources (not to mention being a source of ethnic tension and conflict). Lastly, urbanization, a more recent and rapid phenomenon, is also taking its toll. Industrialization and urban migration contribute to an increased demand for water and energy in Inner Mongolias cities. With people comes powerlocal governments pursue income first, with hopes of becoming the next Ordos. In addition to a steady increase in water demand within the region, in some instances there is actually a water supply deficit. Groundwater that has been stored beneath the soil for hundreds if not thousands of years is being extracted faster than it can be replenished. Based on the current level of consumption, it will not be long before the wells begin to run dry. And indeed, some already have.


Coal & Water Demands Not Going Away Inner Mongolia is famous for its vast beautiful grassland and endless skyline, stated a Beijing resident during an interview. Recent news on Inner Mongolia is always about how rich it has become and the number of luxury cars. The government needs a clear vision rather than building gigantic but empty cities for government employees. Yet the desire to create cities like Ordos, dusty yet shining beacons in the desert, threatens to overwhelm and outstrip efforts to promote sustainability and a secure water supply in Inner Mongolia. Unfortunately, this picture presents an alltoo familiar development trajectory, with stakeholders manipulating limited water resources to their own advantage. Once it was thought that rain follows the plow. Now water follows the money. Cash locked

Francesco Femia is co-founder of Center on Climate and Security. Francesco holds a Masters degree from the London School of Economics and Political Science. He can be reached at ffemia@

China Daily. (2011, June 10). Behind Ordos boom. [Online]. Available: cn/epaper/2011-06/10/content_12672328.htm


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Drought & Climate Change: Threat Multipliers To make matters worse, in early 2011, China experienced its worst drought since the founding of the PRC in 1949, with millions of people and livestock impacted. The central government sent a special drought relief team to the region to help. Lack of precipitation means agricultural production decreasing, livestock having less vegetation to graze, cities facing water shortages, and power plants having less water to generate energy. Climate change predictions for the region paint an even more dire picture, with climate records showing trends of precipitation decreases and temperature increases. The combination of drier and warmer conditions will intensify water shortages, resulting in a decline in water runoff into major rivers and lakes and a decrease in groundwater recharge rates. In some instances, the reduction in runoff to lakes and high withdrawal rates mean lakes may disappear. In short, the drought is exacerbating an already problematic situation, and climate change may herald a new norm.

up in the ground in the form of coal seems to spell quick riches. Competing interests will chase less water, leaving a veritable dust cloud of questions to answer. Where will the water come from for gasification? How can the region develop sustainably? In Inner Mongolia, the remains of ancient dinosaurs are giving way to modern mega-challenges.

Troy Sternberg researches hazards, environment and people in the Gobi Desert. Based at Oxford University, he works with the Institutes of Geography in Mongolia and China. He publishes on drought, climate and livelihoods in the region and thanks the British Academy and Royal Geographical Society for their enthusiastic support. He can be reached at: Caitlin Werrell is co-founder of the Center for Climate and Security. Her primary research interests include climate change, water policy and international security. She holds a Masters degree in Water Science, Policy and Management from the University of Oxford and can be reached at

by Peter Bosshard & Katy Yan

Chinas Hydropower Sector Meets the Limits of Growth

hina, as the worlds factory and fastest urbanizing country in the world, is confronting nearly insurmountable challenges of limited natural resources. There are signs that the countrys expanding cities and booming economic growth are reaching the limits of the ecosystems ability to provide resources and services. Nowhere is this more apparent than where the nexus of water and energy meet over hydropower dams. BALANcING Act The 12th Five-Year Plan, which charts Chinas development path for the 2011-2015 period, is trying to achieve a difficult balancing act. While targeting seven percent annual GDP growth, Chinas leadership faces pressing energy, climate, and environmental challenges, such as: Ensuring sufficient electricity production in order to maintain economic growth; Limiting the growth of greenhouse gas emissions so that China achieves its 2009 commitment of reducing carbon intensity by 40-45 percent from 2005 levels by 2020;

Taking into account the safety risks of the worlds fastest expansion in nuclear power generation; and, Protecting Chinas stressed marine, terrestrial, and freshwater ecosystems from further degradation.

The energy production and conservation targets in the overall plan are ambitious. During this five-year period the government committed to: Cut energy consumption per unit of Chinas economic output by 16 percent, and water consumption per unit of valueadded industrial output by 30 percent; Approve 140,000 megawatts of new hydropower capacity by 2015; and, Raise the share of non-fossil fuels from 8.3 to 11.4 percent of primary energy consumption.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

China is already the worlds biggest hydropower producer with a capacity of approximately 231,000 megawattsslightly more than Russias overall installed electricity capacity. The planned addition of 140,000 megawatts amounts to more than seven Three


Gorges Dams, and would result in more hydropower capacity than any other country has built in its entire history. The government is currently considering approving new dam cascades on the Nu (Salween) River; the middle and upper reaches of the Yangtze including several Yangtze tributaries; and projects on the Lancang (Mekong River) to reach this ambitious target. CHANGING COURSE

Year Plan. This announcement suggested that well-connected hydropower companies and provincial governments had managed to use Chinas commitment to a low-carbon diet as a means to facilitate vast expansion of the hydropower sector. Around the same time, the

Ministry of Environmental Protection, under strong political pressure, agreed to reduce the size of the critically important Upper Yangtze Rare and Endemic Fish Nature Reserve so that the Xiaonanhai Dam project could move forward. Additionally, several government officials began floating new proposals for a dam cascade on the Nu River, one of the last undammed rivers in the country.
W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Approximately half the worlds 45,000 large dams exist within Chinas borders. River fragmentation, water withdrawal, and pollution have had massive impacts on the countrys freshwater ecosystems. Large sections of Chinas major rivers are unfit for drinking, agricultural use, and even industrial production. Wild inland fishery output has plummeted, and important aquatic species such as the Yangtze River Dolphin, the Yangtze Finless Porpoise, and the Chinese Sturgeon are extinct or threatened. In recent years, the Chinese government has become more cautious regarding the damming of major rivers. In 2007, some scientists and provincial officials warned of an environmental catastrophe if the central government did not effectively mitigate the serious impacts of the Three Gorges Dam. In 2004 and 2009, Premier Wen Jiabao personally intervened and suspended hydropower projects on the Nu River and the middle reaches of the Yangtze that had not received environmental clearance from the Ministry of Environmental Protection. Because of this deceleration in hydropower development, hydropower advocates in China have referred to those five years as wasted years. Chinas National Energy Administration announced in February 2011 its goal to approve 140,000 megawatts of new hydropower capacity under the 12th Five-

SqUARING tHE CIRcLE Throughout 2011, the following developments illustrated that the renewed hydropower boom would not succeed in squaring the ecological cycle: Protecting Citizens and Basin Ecosystems: On May 18, the State Council, Chinas highest government body, officially acknowledged the problems of the Three Gorges Dam for the first time. The Council maintained that, the project is now greatly benefiting the society in the aspects of flood prevention, power generation, river transportation and water resource utilization, but [it has] caused some urgent problems in terms of environmental protection, the prevention of geological hazards and the welfare of the relocated communities (General Office of the State Council, 2011). The government also announced concrete measures to improve the living conditions of those displaced by dam



C H I N A E N V I R O N M e N T S e R I es 2012 /2013

construction, protect the Yangtzes ecosystem, and prevent geological disasters. Damaging Droughts: In the spring of 2011, central China experienced its worst drought in more than 50 years. More than 1,000 hydropower stationsincluding the Danjiangkou Dam at the beginning of the South-North Water Transfer Projects middle leg had to suspend operations due to reduced water flow. Critics claimed that Chinas ever more frequent droughts were a consequence of the construction of the Three Gorges Dam. While no one has proven such a link, the drought did illustrate that hydropower projects compete with each other, with agriculture, and with vital ecosystems for dwindling water resources. The drought also served as a warning that under climate change increasingly unpredictable rainfalls will make hydropower projects both less economical and less safe. Increasingly Vulnerable Dams: The disastrous earthquake that struck Japan in March of 2011 demonstrated the vulnerability of large-scale infrastructure projects, such as the Fukushima nuclear power plants, and raised serious questions regarding the safety of the proposed dam cascades in China. The mountains of southwestern China, which lie at the center of the proposed expansion of hydropower, are crisscrossed by fault lines that mark the borders of the Eurasian and IndoChinese plates. There is growing scientific consensus that the reservoirs of high dams can trigger earthquakes (International Rivers,

2009). This supposed risk is particularly relevant for the proposed cascade in the Nu River Valley, where earthquakes can reach a level of 7-8 on the Richter scale. In February 2011, two senior Chinese scientists who after completing a research trip in the region warned Premier Wen Jiabao, a fellow geologist by training, against building dams in the seismically active Nu Valley. THE NU RIVER UNDER THREAt The Nu Valley lies at the heart of the Three Parallel Rivers World Heritage Site in Southwest China, and is renowned as the epicenter of the countrys biodiversity. According to UNESCO, this World Heritage Site contains over 6,000 plant species and is believed to support more than 25 percent of the worlds (half of Chinas) animal species. The Nu Valley is also home to over 300,000 people from 13 different ethnic groups, including the Lisu, Nu, and Tibetan peoples. Over the years, these communities have learned to live under the threat of torrential rains, landslides, and earthquakes. Dozens die each year from geologic disasters. On 18 August, 2010, a mudslide wiped out an entire village, leaving two dead, 90 missing, and 48 injured. On a recent trip to the Nu Valley, International Riversan organization dedicated to protecting rivers and the rights of communities that depend on themvisited the site where a large stone inscribed with 8.18 still recalls the tragic date. The trip documented several other recent landslides caused by rain and seismic activity, and evidence of survey work at proposed dam sites. Should the proposed hydropower cascade move forward, the risk of earthquakeinduced dam failures



could provide the ecological and geological tipping point for a valley whose population lives with an already delicate balance with its natural environment. The threat of dam building has spread north into Tibet and south into Myanmar. On the upstream stretch of the Nu River in Tibet, the Chinese government has proposed or began construction on another 15 dams ranging from 330 to 1,500 megawatts in capacity (it is not always clear whether they are on the mainstream or a tributary). In Myanmar, where the Nu becomes the Salween, Chinese hydropower companies and the Myanmar government are considering the construction of five large dams with Chinese financing or construction in active ethnic conflict zones. Regarding the section of the Nu River in Yunnan, Chinese authorities have so far exhibited great ambivalence regarding how to move forward. The secretary of the Communist Partys Yunnan Provincial Committee has publicly stated that the government would approach the dam cascade with caution and consideration to the impacts on downstream countries and ecosystems. On the other hand, the Huadian Corporation, which has been tasked with development of projects on the river, has already published dam development plans that include the Nu River in its new fiveyear plan. LESSONS FROM tHE THREE GORGES EXPERIENcE While discussing the 12th Five-Year Plan in a February 2011 internet chat, Premier Wen Jiabao, warned that we must no longer sacrifice the environment for the sake of rapid growth and reckless [investment] (Jacobs, 2011). This statement further emphasized the previous Chinese leaderships fundamental goal of ecological civilization, a concept introduced in 2007 by President Hu Jintao. However, the proposed unprecedented boost

of new hydropower projects could break the ecological carrying capacity of Chinas great rivers. Chinese scientists in the 1980s and 1990s predicted many of the current problems which have plagued the Three Gorges Dam, but the construction companies ignored and silenced their voices. Learning from this experience, Chinese authorities should invite a broad scientific and public debate of the costs and benefits of future hydropower projects. They should avoid building dams on the mainstreams of major rivers, which tend to cause the most serious environmental/ecological damage, and should enforce the strict compliance of project development with Chinas environmental laws and regulations. Easy options for the development of Chinas energy sector no longer exist. Given the serious environmental and human health impacts of coal, hydropower plants, and the risks associated with nuclear power generation the government should give the utmost priority to the promotion of efficiency improvements, the optimization of existing energy infrastructure, and the expansion of renewable energy sources. At the same time, Beijing will need to accelerate the countrys transition to a less energy and resource-intensive economy so that it does not need to sacrifice its long-term environmental security for short-term economic growth.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Peter Bosshard is the Policy Director of International Rivers and also directs the organizations China program. He has a Ph.D. from Zurich University, and has worked to strengthen international social and environmental standards since the early 1990s. He can be contacted at peter@ Katy Yan is a program associate for the China and Climate programs at International Rivers. She received her B.S. and M.S. from Stanford University


issues warning on climate and growth. The New York Times. [Online]. Available: http:// w w w. ny t i m e s . c om / 2 0 1 1 / 0 3 / 0 1 / w or l d / asia/01beijing.html?_r=0. Li, Jing. (2011, April 19). Expert says rush to build hydropower poses risks. China Daily. [Online] Available: china/2011-04/19/content_12349192.htm. UNESCO. Three Parallel Rivers of Yunnan Protected Areas. [Online] Available: http:// Watts, Jonathan. (2011, February 4). China plots course for green growth amid a boom built on dirty industry. The Guardian. [Online] Available: world/2011/feb/04/china-green-growthboom-industry. Xie Liangbing & Chen Yong. (2011, January 24). Making Up for Lost Time: Chinas Hydropower Push. The Economic Observer. [Online] Available: index.php?option=com_docman&task=doc_ view&gid=1621&Itemid=46. Zhang Ke. (2011, February 24). Experts send letter to central authorities expressing concern over potential disaster posed by construction of hydroelectric dam on Nu River. [Online] Available: news/20110224/3476900.shtml.

with a focus on water and education. She can be reached at

Bosshard, Peter. (2011, March 8). Dam Nation. Foreign Policy. [Online] Available: http://www. nation. General Office of the State Council. (2011, May 18). State Council routine meeting passes Three Gorges Post-Construction Plan. [Online] Available: Hu Yuanyuan. (2011, February 28). Premier sets 7% growth target. China Daily. [Online] Available: china/2011-02/28/content_12084841.htm. International Rivers. (2009, March 11). A Faultline Runs Through it: Exposing the Hidden Dangers of Dam-Induced Earthquakes. [Online]. Available: http://www.internationalrivers. org/resources/a-faultline-runs-throughit-exposing-the-hidden-dangers-of-daminduced-earthquakes-2645. Jacobs, Andrew. (2011, February 28). China


C H I N A E N V I R O N M e N T S e R I es 2012 /2013


Risks of Intensified Development of Hydropower in Southwestern China

by Su Liu

DAM RISKS tO CARBON EMISSIONS REDUctION verything in China is fastfrom its overall economic development to its high-speed trains. Chinas dam development is also the fastest in the world, with construction of hydropower generating units going in faster than the transmission infrastructure. Taking advantage of the lag in transmission lines, local governments in Chinas southwest are seeking ways to consume electricity locally by encouraging the establishment and continued operation of so-called three high factories, despite the central governments efforts to phase out these industries. These high pollution, high emission, high energy use industries certainly pose environmental risks to Chinas ecologically-vulnerable southwest. Rich in mineral resources, Chinas southwest hydro-development zones are linking mining operations with electricity generation. Hydropower provides inexpensive electricity to the energy-intensive mining operations, and the mining sector provides secure demand for both current and new hydropower projects.

This seemingly mutual-beneficial relationship has increased energy demand in the region, encouraging the construction of both new hydropower projects and coal-fired power plants, primarily to secure electricity supply in dry seasons. The simultaneous development of coal and hydropower casts doubt on the amount of carbon emissions reduced in hydropower development. The Chinese Government should thoroughly evaluate alternative options in order to choose a scientifically and environmentally sound way to reduce carbon emissions. Other approaches that are worth considering include: Relatively inexpensive and small-scale hydro projects; Advanced energy efficiency technologies in coal-fired power plants; Increased urban planning that promotes lower energy footprints of transportation and buildings; Power transmission efficiency improvements; and, Reform in energy demand management and electricity pricing.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


RISKS tO tRANSMIttING POwER FROM WESt tO EASt Another important goal of hydropower development is to address the power shortage in eastern China by fostering energy development in the west and transmitting it to the east. However, the most significant obstacle to this plan is the cost of building and maintaining the transmission infrastructure in the geologically complex southwest. Indeed, electricity prices in western China hardly reflect the real costs of transmission, nor does the current pricing system reflect the environmental, ecological, and social costs of energy production. Including environmental costs in electricity pricesan admittedly difficult taskwould put the affordability of electricity under question.

RISKS tO NAtIONAL SEcURItY AND SOcIAL StABILItY Environmental Security Risks Posed by the Kill the River for Power Approach Dont let a single drop flow in vain, seems to be the current attitude of local Chinese governments towards hydropower development. In the drive to generate electricity from hydropower, local governments are demanding the damming of rivers and their tributaries, turning a blind-eye to the severe damage done to ecosystems by such actions Relocation and Risks to Social Stability Current plans to relocate residents due to the building of dams do not thoroughly consider or prioritize peoples livelihoods or their long-term interests. Moreover, authorities in charge of the relocation process often make little concerted effort to preserve ethnic and cultural heritage in the region.

C H I N A E N V I R O N M e N T S e R I es 2010 /2011

The Min River, 2010. Photo credit: Su Liu.


International Relations at Risk Some rivers flowing through China are the upstream stretches of international rivers. For example, the Yaluzangbu, Nu, and Lancang rivers are upstream of the Brahmaputra of India/Bangladesh, the Salween of Myanmar, and the Mekong of Vietnam, respectively. Not only are these rivers extremely important to Chinese citizens, they are also an important source of water for Chinas neighbours in Southeast Asia. By damming these rivers and using them to generate electricity, China would not only significantly damage ecosystems, but it would also potentially severely harm relations with bordering countries. Secondary risk of geological disaster In southwest China, hydropower is generated primarily from the six major rivers flowing from the Hengduan Mountain range, known as one of the most geologically active regions on Earth. Geological activities are likely to damage large-scale projects, and the construction of those projects poses further risks of triggering or intensifying geological activities. Geologic and seismic experts view the Nu River as unsafe for large-scale hydro projects. Risks to Chinas Future Competitiveness Indeed, energy and climate change policies should carefully consider the protection of ecological and natural resources. A countrys future development and competitiveness will not be determined by its current GDP and growth rate, but rather by its availability of natural resources and the sustainability of

its ecosystems. Protecting the southwest, its rivers and biodiversity simultaneously protects Chinas most vital interests and national security. FINAL THOUGHtS ON SLOwING DOwN Accelerating hydropower development in the name of reducing carbon emissions, without first evaluating alternatives, amounts to putting the cart before the horse. Achieving carbon emission reduction could actually sacrifice the long-term well-being of the people and the resources needed for continued sustainable development. If planned and built properly, hydropower can be an appropriate sustainable energy source. However, hasty decision-making, disorderly development, and over-development will most likely destroy the nations water resources. Hydropower also has the collateral effect of taking away peoples livelihoods, undermining social stability, wasting the resources for future competitiveness, upsetting Chinas relations with its Southeast Asian neighbours, and even putting national security at risk.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Su Liu was a professional public opinion pollster and a communication strategist. She is now Greater China Coordinator and Policy Researcher of the Hong Kong-based Civic Exchange. She can be reached at


by Sam Geall

Science, Controversy and Climate Change Journalism in China


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

It is clear that the Tibetan Plateau, known as the Third Pole or Headwaters of Asia, now faces definite changes that will not only impact local residents, but also affect people across China and the entire world (Li & Zhang, 2008).

his statement appeared in a dispatch from Tibets melting glaciers by Li Hujun and Zhang Ruidan, then reporters for Caijing magazine. Articles that discuss the gravity of global-warming impacts in China such as Li and Zhangs report that features the perspectives of local herders, meteorologists and glaciologists, all of whom are witnesses to climate change effectscan be found with increasing frequently in the Chinese media. Climate change coverage in China has increased significantly in quantity, originality, and detail over the past few years. For example, in 2011 prominent newspapers, including Southern Weekend and 21st Century Business Herald, introduced regular environment, climate change, or low-carbon sections. The question then is: do Chinese media reports tend to confuse or enlighten the public

regarding the science and politics of climate change and low-carbon development? To what extent do obstacles, political or professional, exist to the publication of high-quality climate change journalism? These are the questions I wanted to answerand in order to address them I spent a year in Beijing doing field research, including in-depth interviews with Chinas leading environmental journalists. Some tentative conclusions to these questionsand a set of recommendations for international actorswere published in May 2011 by chinadialogue, Caixin Media, and International Media Support as Climate change journalism in China: opportunities for international cooperation (Geall, 2011). In that report, I identified a number of obstacles, including limited access to information and the sense that journalists must consider the national interest when conducting climate change reporting. However, here I will briefly introduce another trajectory from my research that I hope fits productively with this special issue of China Environment Series: Chinese journalists approaches to science, controversy, and lowcarbon development.

ScIENcE AND BALANcE Many journalists like me dont have a scientific background, so we can only get information from scientists, NGOs, and the government. I think our biggest obstacle is that we dont have good training on climate change issues and scientific topics. (Geall, 2011, 13)

This comment from a Chinese newspaper journalist echoes a common refrain that I heard throughout the course of my research. Most reporters I interviewed had educational backgrounds in journalism, philosophy, sociology, or similar disciplines rather than in the hard sciences. Chinese environmental journalists, I found, had complicated relationships with science and scientists. Many expressed discomfort in writing about scientific concepts. For example, none of the reporters that I surveyed had ever written about scientists forecasts of global climate-change impacts, such as sea-level rise, tipping points, or melting ice-sheets. Only a few said they had ever read peer-reviewed articles; when it came to scientific stories, most did not read the original studies, but looked at other reports in the media or summaries produced by NGOs. However, many reporters had covered scientific controversies concerning climate change and cited their lack of scientific training as a reason to always balance such stories with skeptical opinions that suggest global warming is not happening, or is not caused by humans. To the extent that this balance presents a debate comprising two similar sides, this approach misrepresents the scientific discussion on the causes of climate change, since there is consensus among most scientists that climate change is anthropogenic, as represented by the updated assessment by the Intergovernmental Panel on Climate Change


(IPCC)1 of peer-reviewed scientific research. This is an argument that resonated with Li Hujunthe correspondent cited at the top of this article, now at Caixin Media, and a rare science graduate among environmental journalistswho in an interview with me expressed this concern about Chinese climatechange reporting: [I]f we put too much emphasis on so-called balance, we might misguide policy-makers and the general public. In other words, we need to quote words or opinions from both sides, but we also need to examine if their words are based on strong scientific evidence or not, and do not necessarily regard different voices too equally. (Geall, 2011, 55)

The perception of an unsettled debate on the climate had an effect on Chinese coverage of the so-called Climategate scandal in China. In late 2009, as China Environment Series readers will no doubt recall, hackers stole thousands of emails and other documents from the Climatic Research Unit at the University of East Anglia, in the United Kingdom, which global-warming skeptics said showed misconduct among climate scientists. These allegations received widespread media coverage, but were later rejected by three, farless-reported official inquiries. The controversy coincided with the UN-led Copenhagen Climate Change Conference and seemed to damage public confidence in climate change science (for an example of the effects on public opinion in the United States, see Leiserowitz, Maibach, Roser-Renouf, Smith, & Dawson, 2010). One Chinese newspaper reporter discussed the difficulties she encountered in covering such scientific controversies:


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

C H I N A E N V I R O N M e N T S e R I es 2012 /2013


Global warming is in dispute in the science world, and as a journalist I cannot say either yes or nojournalists shouldnt engage themselves in it. (Geall, 2011, 25-26)

developing countries. (Gou, 2010, 7) It should be noted that some Chinese journalists have publicly dismissed these arguments. For example, magazines like Science News Bi-weekly regularly provide detailed counter-arguments to the climate skeptics. But it was notable to me, in particular, that few journalists I interviewed had productive relationships with scientists that could properly inform reporting about these types of controversy. Few journalists had used scientists as onthe-record sources, and even fewer as deeper, background contacts to help distinguish useful data from noise or to explain complex scientific issues. One climate-change journalist had never interviewed a scientist and told me that any contacts interviewed for a story were found in databases by other staff, since she had no personal contacts for her reporting. LOw-cARBON DEVELOPMENt However, it is important to note that everyone I interviewedregardless of their stance, or lack of one, on the science of climate changeagreed that individuals have a responsibility to reduce their reliance on fossil fuels, and that the media should encourage this transition. This apparent contradiction can be explained: every participant on the course thought that China had economic advantages to grasp in energy efficiency, clean technology, and carbon tradingand that carbon emissions reduction can bring environmental and health benefits. There was unanimous support for win-win low-carbon policies, even if not all of the reporters were convinced of the urgency of greenhouse-gas mitigation to address global warming. Asked about the science of global warming, one reporter replied: No comment. But I think that we need to reduce the use of fossil fuels


At first, Chinese reports about this controversy and the near-concurrent Glaciergate story, in which it emerged that IPCC researchers had overestimated the rate at which the Himalayan glaciers could melt as a result of global warming, did not differ greatly from international news agency coverage. However, in January 2010, Xie Zhenhua, then Chinas top climate-change envoy, said that he was keeping an open mind on whether global warming was man-made or the result of natural cycles. This comment was later defended in the state media by L Xuedu, deputy director of the National Climate Center, who said at least 10 percent of the worlds climate scientists do not believe in the consensus on anthropogenic climate change. Their views have pushed forward the progress of climatic science, L said. By contrast, one academic who tested this hypothesis found that of 928 abstracts, published in peer-reviewed scientific journals between 1993 and 2003 and listed with the keywords climate change, not one of the papers disagreed with the consensus position. (See Oreskes, 2004.) Around this time, the media began to cover the opinions of Chinese climate-change skeptics like Bai Haijun, author of Carbon Empire (Bai, 2010), and Gou Hongyang, who writes in his book Low-carbon Plot: Humanitys actionsindustrialisation is it really the primary source of carbon dioxide? It evidently is not. [] Behind the back of the demonising of carbon, we must recognise that it is the sinister intention of the developed countries to attempt to use carbon to block the living space of the


and carry out economic restructuring anyway. Another said: The climate-change issue is not just an argument between politicians: its good for the boss whose company can reduce costs, and it helps every person to live a better lifestyle [] [A friend of mine] went to the United States, and was surprised that there is so often a blue sky this is the other reason I report climate change: protecting the environment is good for your children and your parents. (Geall, 2011, 27)

The only notable dissent from this view came from journalists who feared that the climate change agenda could distract from other environmental issues that might have a more direct impact on ordinary peoples lives. For some reporters, it was clear that low-carbon development does not necessarily mean green development. One said: I think the most urgent problem is not climate change but water pollution. However, the media do not pay enough attention to those problems. [...] I object to the fact that every conference is talking about climate changeits too much. Water pollution and climate change should both be noticed. (Geall, 2011, 27-28)

Understanding local reception, mediation, and interpretation of international debates within science and politics is always importantand particularly so in China, where climate change impacts could include diminished crop yields as freshwater resources shrink, and potentially catastrophic hazards in the Hindu-Kush Himalaya, the source of 10 major river systems providing irrigation,

power and drinking water for 1.3 billion people. Grasping how science, controversy, and low-carbon development are understood by Chinese journalists may give new insights into the shifting terrain of contemporary Chinese environmental politics, pointing both to risks and opportunities. One particular risk I have identified here is that few journalists have made contacts with scientists, who should ideally help to provide the background and facts needed for controversial, high-stakes scientific coverage in the media. Also, few reporters made distinctions between different groups of scientists and their specialised knowledge bases. Some, though not all, journalists viewed this group as naturally allied with government or business. This lack of differentiation by journalists between scientists in different fields can help scientists who make unreliable public statements about fields other than their own. It also means journalists are sometimes too reliant on NGOs, other media or other commentators for their analysis. However, opportunities exist for domestic and international actors that aim to encourage better science and climate change reporting. For example, small workshops aimed at improving understanding between scientists and journalistsinvolving field visits to laboratories, for the benefit of journalists, and newsrooms, for the benefit of scientists could facilitate more open discussions about the limits of Chinese scientific reporting; encourage deeper, more regular contact between scientists and journalists; encourage better distinction between different types of scientists and experts; and improve the long-term quality of Chinese climate-change reporting and public understanding about this vital issue.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Geall, Sam. (2011). Climate-change journalism in China: opportunities for international cooperation. Copenhagen: International Media Support. [Online]. Available: Guo, Hongyang. (2010). Ditan Yinmou (Low-carbon Plot). Taiyuan: Shanxi Economic Publishers. Leiserowitz, A. A, Maibach, E. W, Roser-Renouf, C, Smith, N, and Dawson, E. (2010). Climategate, Public Opinion, and the Loss of Trust. Yale University Working Paper. [Online]. Available: http:// Opinion_and_Loss_of_Trust_1.pdf. Li, Hujun & Zhang, Ruidan. (2008, September 29). Melting Third Pole. Caijing. [Online]. Available: [In Chinese]. Oreskes, Naomi. (2004). The Scientific Consensus on Climate Change. Science, Vol. 306, no. 5702 p. 1686.

Sam Geall is the Executive Editor of chinadialogue. He has a BA in Chinese from Leeds University, an MA in Anthropological Research from Manchester University and is a PhD candidate in Social Anthropology at Manchester University, studying the development of environmental journalism in contemporary China. He has also studied at Harvard University on a one-year scholarship from the Kennedy Memorial Trust. His writing has appeared in a number of international publications including, the Far Eastern Economic Review, Foreign Policy, New Internationalist, New Humanist, Green Futures and The Ecologist. He can be reached at

The author would like to thank International Media Support for funding the report Climatechange journalism in China: opportunities for international cooperation Caixin Media and chinadialogue provided valuable logistical support and advice. He is also supported in his Ph.D. research by the British Inter-University China Centre. The translations in this article are all by the author.

1. Two of the IPCCs notable conclusions are: Warming of the climate system is unequivocal, as is now evident from observations of increases in global average air and ocean temperatures, widespread melting of snow and ice, and rising global average sea level. And: Most of the observed increase in globally averaged temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations. Here very likely specifically denotes 90% or more certainty.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Bai, Haijun. (2010). Tanke Diguo (Carbon Empire). Beijing: China Friendship Publishers.



The Stewards of the Most Heavy Metal-Polluted River in China: Green Hunan
by Luan Dong

he Xiang River, a main tributary of the Yangtze River, meanders through Hunan Province, nurturing more than six million people in one of Chinas centers of manufacturing and agriculture. For many years, industrial factories have discharged untreated wastewater contaminated with heavy metals directly into the Xiang River, threatening the ecosystem of the basin and oftentimes rendering the water undrinkable. On the front line of this environmental crisis stands a small yet strong environmental NGO: Green Hunan. Founded in 2007, Green Hunan strives to combat basin-wide environmental pollution by promoting information transparency, environmental awareness, and extensive public participation. Three permanent staff members dedicate their time and passion to protect Hunans mother river. VOLUNtEER NEtwORK Dai Xiaoyan, Tang He, and Sun Cheng, the staff of Green Hunan, are not alone in their work to protect the Xiang. More than 100 volunteers, some 80 of whom are regular participants, form a Volunteer Observation

and Action Network that regularly monitors the water quality of the river. These stewards of the Xiang River monitor 10 locations in the basin, specifically where more than 180 factory wastewater pipes regularly empty their discharge into the river. Green Hunan provides the volunteers with training and some basic equipment to take pictures, collect water samples, and conduct water quality tests. Because many factories illegally discharge their waste water during the night, and local environmental protection bureaus (EPBs) are short staffed, on-the-ground volunteers are key in discovering and identifying the source of pollution. Once Green Hunan compiles and analyzes solid evidence of pollution submitted by the volunteers, its staff gives the information to the local EPBs. Green Hunan often becomes involved in the subsequent pollution investigation. In addition to submitting final reports to relevant government authorities and companies, Green Hunan and its volunteers use social media to spread information on their discoveries, which has proven to be an increasingly effective means to alert the community and pressure local authorities. In September 2011, a picture of scarlet wastewater flooding into the Xiang River

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


Green Hunan visiting Guitang River in Changsha, Hunan. Copyright Green Hunan. Photo credit: Lu Qixing.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

was posted on Weibo (Chinas Twitter) by two volunteers. During the following week, netizens reposted the picture more than 4,400 times and received 1,200 comments. The city EPB then contacted the volunteers who helped the officials identify the source of the pollution. The EPB ordered the polluting chemical company to halt production immediately. The chairman of the company subsequently published an open letter apologizing for his companys illegal discharge. HOMEGROwN FORcE A unique characteristic of Green Hunan is its strong and active involvement of local community members. The staff at this NGO believes that local residents should be the backbone of solving local environmental problems. The three young staff members are all from the Hunan and most of the volunteers are truly grassroots, living by, walking along, and interacting with the river on a daily basis. Thanks to their knowledge about the local environment, volunteers often come up with innovative ideas to pinpoint pollution sources,

spread the information, and learn from each other. Green Hunan also invites locals to tour well-preserved parks and rivers in Changsha (Hunans capital) and to attend seminars discussing local bird species, water crises, and other issues regarding environmental protection in the basin. At many of these events, parents of young children are the most vocal about their concerns. They are the most active in learning about how they can protect their environment and plant the seeds for longlasting environmental awareness in the next generation. None of Green Hunans effective watchdog and education activities would be possible if the NGO was based in Beijing, the home base for most of Chinas green civil society groups. Rather than merely encouraging public participation, Green Hunan is a powerful local advocate that catalyzes meaningful action. INFORMAtION TRANSPARENcY At the core of Green Hunans action, lies the philosophy that the disclosure of environmental


information is the foundation for action. Besides catalyzing grassroots information dissemination on pollution, Green Hunan encourages more open information from government agencies that regulate pollution through participation in a network of Chinese NGOs that contribute to the Pollution Source Information Transparency Index (PITI). PITI, an annual report published by Institute of Public and Environmental Affairs, quantitatively evaluates the level of pollution information transparency, law enforcement, and public engagement in more than 110 cities around China. In 2011, Green Hunan began to contribute to this national report by evaluating the transparency performance of eight cities in Hunan and ranking them on the index and sharing this information with the staff of local EPBs. According to Green Hunans staff, during this process officials at EPBs have become more aware of the governments adoption of the Open Government Information Regulations and familiarized themselves with the procedures needed to answer information requests.

LEARNING ABOUt AIR Long before Chinas air pollution crisis was brought to worldwide attention in January 2013, Green Hunan was aware of and started to act to address the bad air quality in Hunan, especially in its capital city Changsha. In 2011, Green Hunan started the Test Air Quality for Changsha program. Currently, there are 11 long-term trained volunteers who test air quality around the city using hand-held devices. They record and compare the results to official reports and share their results through Weibo, thereby educating residents and themselves about pollutants such as PM2.5 and its health consequences. Thanks to the awarenessraising activities at the grassroots level as well as top-down pressure and requirements, Hunan Province now officially publishes an air quality index and PM2.5 levels. Major cities, like Changsha and Zhuzhou, now publish live PM2.5 data, which is accessible online.
W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Green Hunan staff Tang He at a sewage outfall in Hengyang City, Hunan. Copyright Green Hunan. Photo credit: Dai Xiaoyan.



A volunteer taking a water sample at a sewage outfall. Copyright Green Hunan. Photo credit: Liu Dong.

HOPE IN DESPAIR There is still much to be done. Changsha, the location of Green Hunans office, still ranks only 77th among all 113 cities in the latest PITI report. The speed of action is far behind the speed of pollution. Occasionally, Green Hunan staff hears that Chinese environmentalists in other cities have quit their jobs out of despair. But these three remain hopeful. Aiming to create the happiest NGO in China, the staff and the network of passionate volunteers have friendly and tight relations. Their happiness is also generated by the progress the organization has helped bring about in protecting the Xiang River. Over the years, local EPBs in Hunan have become more open and receptive to Green Hunan and its requests. They have started to realize that environmental NGOs are not against themrather can be viewed as partners who can complement their work. In an interview with Green Hunan, Dai Xiaoyan stated that the government officials take volunteers information more seriously. They arrive at the pollution site more quickly, draw more water samples, and make more administrative orders

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

to stop factories. Drawing lessons from Green Hunan, Dai Xiaoyan noted that local EPBs have also become more effective in communicating with their constituencies, using social media to proactively explain the source and truth of pollutants. Green Hunan is becoming more well-known locally, nationally, and even internationally for its work to empower communities with information. Ultimately, however, it is the trust Green Hunan has built with local communities, volunteers, news media, and officials that heartens Dai Xiaoyan and her colleagues the most, for these newly built local networks are vital for protecting Hunans water, air, and people.

Luan Dong is a recent graduate from the Elliott School of International Affairs, The George Washington University, where he concentrated in international affairs and sustainable development. He is currently a research assistant at the Woodrow Wilson Centers China Environment Forum. He can be reached at:



Exploring Solutions for Sustainable Development and Water Conservation in Sichuan Province
by Li Zhang and Yayue Peng

ith the largest population of any country in the world, China consumes vast quantities of food and water, which puts intense pressure on the countrys natural resources and ecosystems. Agricultural pressures have contributed to
Freshwater resource in Pingwu County, Sichuan.

deforestation, degradation of grasslands, drainage of wetlands, and diversion and overconsumption of freshwater flows as rural economies try to keep pace with Chinas rapid urban development. Traditional agriculture depends heavily on fertilizers, pesticides, and energy sources primarily from timber.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

The 2008 Wenchuan earthquake seriously affected freshwater resources in Yujiashan Nature Reserve. The manager of Yujiashan Nature Reserve and a local villager stand in front of the former water bed.

Because of these pressures, communities that depend on intact biodiversity and stable water resources face tremendous challenges. Ensuring that people have both sustainable resources and can enjoy economic growth is the defining challenge of the 21st century. This challenge is one that every nation, business and individual must take responsibility for if we are to be successful. In 2007, an Ecosystem Service and Freshwater initiative was launched in Sichuan Province by Conservation International to address the challenge between development and environmental preservation. This initiative incorporates scientific research, best practices, policy measures, and behavioral modifications to generate a business case for conserving biodiversity and ecosystem services as a means of generating benefits within the larger contexts of human development, poverty alleviation, and land-use decision-making. PILOt PAYMENt FOR EcOSYStEM SERVIcES StUDY UNFOLDS IN YUJIASHAN NAtURE RESERVE The Pilot Payment for Ecosystem Service (PES) study was developed by Conservation International in Yujiashan Nature Reserve in 2007. Yujiashan Nature Reserve is located in Pingwu County, Sichuan Province, within the boundaries of Mupi Tibetan village, and contains 3.6 km2 of mountainous forests where endangered snub-nosed monkeys and giant pandas live. The Yujiashan area used to be a privately purchased logging camp and was rehabilitated in 1999, and with help from Conservation International, it was officially established as the first privately managed nature reserve in China in 2006. Yujiashan nature reserve provides a source of drinking water for the 28,000 people of Pingwu County. Over the past few decades, lack of investment in conservation, overuse of water resources, and decrease in water quality

have all become significant threats to the surrounding communities and species that depend on clean water. The 2008 Wenchuan earthquake in Sichuan seriously impacted local water resources, reducing the volume of river flow from 5,000m3 to between 2,000 and 3,000m3 per day. Seventeen households in the area, whose livelihoods are mostly centered on poultry, further worsen the water quality with their animal waste. Under these circumstances, Conservation International implemented the PES study to estimate the monetary values of water provision, carbon sequestration, and biodiversity provided by the reserve, and outlines a new business model where water users pay for conservation action in the reserve through a water-usage fee. The small grant has also provided local residents an opportunity to develop sustainable livelihoods, such as beekeeping, which helps to reduce dependency


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

on livestock breeding and subsequently, decreases the water pollution related to animal waste. PINGwU BIODIVERSItY AND WAtER CONSERVAtION FUND The Yujiashan PES study validates local water conservation efforts and a big challenge remains whether it can be implemented on a larger scale. The two main water systems in China are the Yellow and Yangtze Rivers, which originate in the Tibetan-Qinghai Plateau and provide freshwater resource benefits to more than three hundred million people downstream. However, the Yangtze River is one of the water systems most damaged by deforestation, erosion, water diversion, pollution, and overconsumptionand that damage is exacerbated by the growing threat of climate change. By focusing on these key issues and looking for effective ways to minimize freshwater threats from headwaters through the watershed, Conservation International began to expand the PES studies to the area around Yujiashan nature reserve within Pingwu County. Pingwu County is situated in the transition zone between the Sichuan Valley and the Tibetan-Qinghai Plateau. It is a key conservation zone, serving as a central habitat site for the giant panda and other globally important flora and fauna. Pingwu County also lies in the upstream watershed of Fujiang River, the major tributary of the Yangtze. The freshwater provided by this ecosystem supports 187,000 residents of Pingwu, as well as the 12 million people living along the Fujiang River. With rapid development in the area, poultry, agriculture, and industry production are increasing, with most of their energy sources coming from forest timber. These factors make it difficult to balance freshwater resource conservation and ecological capacity with community development.

In 2009, Conservation International collaborated with the Pingwu County government and local nongovernmental organizations to establish the Pingwu Biodiversity and Water Conservation Fund (the Water Fund), the first county-level freshwater payment for Ecosystem Services fund in China. Under the leadership of the Pingwu Government, the Water Fund has been supporting sustainable agricultural development and diversification projects in rural communities in the Huoxihe River watershed, a part of the upper branch of Fujiang River. The Water Fund aims to prevent deforestation, to improve the water quality of the Fujiang River by reducing pesticide and fertilizer usage, and to enhance the upstream forest protection of those important tributaries. The Water Fund is based on a market mechanism focusing on biodiversity conservation. It is a flexible platform designed to attract social capital for conservation work and satisfy competing demands. The transparent and open management of capital increases investors confidence. The Water Fund encourages local communities to evaluate and to propose potential activities. After discussion and selection by conservation and community experts, the Water Fund chose to support activities implemented in Yujiashan Nature Reserve, Haoziping Nature Reserve, Guanba Village, and Yangdishan hamlet in Mupi Tibetan District. One of these projects, the Guanba beekeeping project, strongly illustrates how PES work benefits both freshwater conservation and local economic growth. Guanba Village is located at a picturesque site along the Fujiang River in Pingwu County, Sichuan. The village covers an area of 97 km2 and includes a total of 408 people in 128 households. Similar to every traditional Chinese village, Guanba peoples lives entirely depend on the gifts of nature. They cut down trees for more agricultural land and daily use.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


1 | Guanba bee farming cooperative. 2 | Guanbas organic honey products. 3 | Guanba bee farming cooperative members are working on new types of bee hives, provided by support from the Water Fund.

This traditional model of livelihood comes at the expense of overconsumption of natural resources and also puts pressure on nearby water systems, as deforestation can cause soil erosion and landslides. Also, increased poultry breeding places stress on source water quality. Villagers and experts from the Water Fund noticed Guanba village has a long history of beekeeping. The main factors influencing honey quality are source plants nectar, climatic conditions, and soil conditions which are related to water and environmental health. However, a typical family keeps 100 to 150 hives in the village and, while a hive would generate 10 kg honey a year, this traditional beekeeping style is not very productive and is not enough to be the main income for local households.

To better understand these conditions, the Water Fund has been giving grants to assist the Guanba Bee Farming project to develop sustainable economic demonstrations. With the help of the Water Fund, the Guanba Bee Farming Cooperative has established new types of beehives delivered to cooperative household members. In addition, the project provided technical training and assistance in beekeeping to members, which also allowed them to better understand the relationship between clean water, environmental conditions, and honey quality. Following the suggestion of experts, the Guanba Bee Farming Cooperative applied for organic certification for their honey. With the new beehives, both honey production


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

and the selling price have doubled, and the honey quality has improved. Through the project, villagers from Guanba have learned about the possibility of making beekeeping an eco-friendly and reliable alternative source of income for the village. With the help of Marriott International, the organic honey from Guanba village now has the opportunity to reach customers in Marriott hotels. In 2010, Conservation International provided continuous support to the Water Fund by supporting a new round of community projects in Pingwu County. These projects included eco-compensation programs, such as beekeeping cooperatives and developing solar energy as an alternative to firewood, in the Guanba, Yujiashan, and Ruziping communities. In addition, Conservation International is committed to working with the Pingwu County Government to explore sustainable financing mechanisms for the Water Fund. The proposal is to reinvest part of the benefits gained from the projects back into the fund in order to keep it growing and benefiting more people. MOVING FORwARD The Pingwu project case study shows a high level of versatility, helping to conserve of watersheds, panda habitat, and forests as well as providing economic benefits to the local communities. By tracking the progress of the Pingwu Water Fund and utilizing lessons learned from projects implementation, Conservation International extended the Water Fund model to a second site, the DaxianglingQionglai Mountains, to test the possible duplication of the model. The Daxiangling-Qionglai Mountains are located in Yingjing County, Sichuan Province, which is situated in the Dadu River watershed,

another major tributary of the Yangtze. The bamboo forest in this area makes it a key habitat and corridor for giant pandas. However, much of the habitat is affected by exploitation of the forest through mining, traffic, and agricultural activities. Consequently the habitats in the region are highly fragmented due to illegal logging and local economic development. In April 2011, the Daxiangling Biodiversity and Water Conservation Fund project was launched in Yingjing County, Sichuan following the Pingwu Payment for Ecosystem model. Through the Daxiangling project, Conservation International is working to encourage community development of sustainable local economies which benefit conservation of the regions bamboo forest, critical for both panda survival and freshwater delivery to the regions people. The Pingwu and Daxiangling projects were successful in their ability to promote conservation and sustainable use of environmental services while still allowing for development that fosters quality of life improvement. These two projects can serve as an example for China as a whole as the country tries to balance development and conservation efforts.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Li Zhang worked on biodiversity and animal protection issues for International Fund for Animal Welfare and Conservation International in China. He is currently still active on wildlife trade policy/ CITES and elephant/tiger/panda research at Beijing Normal University. He can be reached at: Yayue Peng focuses on biodiversity conservation issues for Conservation International. She can be reached at:


by Tom Drennen & Darrin Magee

Nuclear Power Prospects in a Post-Tsunami East Asia

he magnitude 9.0 earthquake and subsequent tsunami that struck northeastern Japan, on March 11, 2011, led to partial meltdowns of three reactors at the Fukushima Daiichi nuclear complex, and forced the shutdown of several other nuclear plants in the area. While the worst crisis (an uncontained core meltdown) was averted, the disaster released a significant amount of radiation into the environment through contaminated water and steam. Early reports suggested the accident led to a release of about 770,000 terabecquerels in the first week following the quake, which amounted to 20-40 percent of the radiation released from the Chernobyl disaster. A notable difference is that the releases from Chernobyl were dispersed in the air, while in Japan significant quantities leaked into the ocean through liquid runoff and fallout. Those monitoring Japans crisis included Chinas leaders, who have set ambitious targets for Chinas domestic nuclear power development. China has plentiful coal reserves, but has committed to reducing the carbonintensity of the economy through construction of new non-fossil fuel power plants and

closures of the most inefficient coal-fired plants. Shortly after the quake, Chinese officials announced that they would perform rigorous safety inspections of existing nuclear plants, reexamine targets for new developments, and temporarily suspend approvals of new plants pending the release of revised safety regulations. China then developed its Twelfth Five Year Plan for Nuclear Safety. In June 2012, Chinas National Nuclear Safety Administration released drafts of a Nuclear Safety Plan and the Report on Safety Inspection of National Civilian Nuclear Facilities for public comment.1 The safety report concluded that the operation of Chinas nuclear power plants in compliance with Chinas nuclear safety laws and regulations and the International Atomic Energy Agency standards for responding to accidents. Importantly, the Nuclear Safety Plan also laid out short to longterm goals to improve safety of existing nuclear power plant facilities.2 Chinas official targets for nuclear power remain ambitious: 40 GW of total installed capacity by 2015 (quadrupling existing capacity) and between 70-86 GW by 2020. Officials have taken pains to assure skeptics


C h i n a E n v i r o n m e n t S e r i es 20 1 2/2013

that nuclear power is safe, and that Chinese plants are built to the strictest international standards. But perhaps the most pressing reason for Chinas unwavering commitment to a massive build-up of nuclear power is its commitment to reduce the carbon intensity of its economy. China has set forth targets for reducing its relative carbon intensity (amount of greenhouse gases released per unit of GDP) by 40 - 45 percent by 2020 compared to 2005 levels. Despite these ambitious goals, Chinas overall emissions will continue to grow due
TaBLe 1: Non-fossiL ELectricitY CaPacitY TarGets BY Five-Year PLan (GW)

Source/ Date Wind Solar Hydro Nuclear

(End 11th FYP)

(End 12th FYP)

(End 13th FYP)

45 0.45 210 11

90 10 270 - 300 40

150 50 330 - 430 86

to strong projected economic growth. Using Sandia National Laboratories China Energy and Greenhouse Gas Model, we analyzed different scenarios for achieving Chinese nuclear power development on carbon intensity targets. For the base case, we assumed China would reach the capacity targets for non-coal based sources summarized in Table 1. For this base case, total installed electrical capacity is projected to grow from 674 GW in 2010 to 1182 GW by 2020 (assuming 5.9 percent annual GDP growth.). CO2 emissions likewise are projected to increase from 7673 mtCO2 in 2010 to 9934 mtCO2 by 2020. Under this scenario, China misses its 2020 carbon intensity target, reaching only a 27.7 percent reduction by 2020 from 2005 levels. Should Chinas leaders decide to freeze

future nuclear development entirely, and install coal plants instead, CO2 emissions would reach 10,385 mtCO2 by 2020, 451 mtCO2 higher than the base case scenario. Under this freeze scenario, carbon intensity would be 24.4% lower in 2020 than 2005 levels. The relatively small difference in carbon intensities for two radically different (in terms of nuclear power expansion) scenarios illustrates just how difficult it will be for the Chinese to achieve the ambitious 40-45 percent cuts without either greater deployment of non-carbon based sources or significant cuts in energy intensity levels (or both). Chinas leadership has already made a significant effort to cut energy intensities by shutting down the most inefficient industrial facilities and replacing them with state-ofthe-art designs. According to the National Development and Reform Commission, retirements of inefficient and outdated iron, steel, and cement production capacity over the previous five-year period, ending in July 2010, totaled 87 MT, 60 MT, and 214 MT, respectively. Over the same period, the Promote Big, Squash Small (shangda yaxiao) policy, aimed at replacing smaller, outdated coal-fired power plants with newer, larger, more efficient ones, led to the closure of more than 70 GW of old thermal power plants. A third scenario assumes nuclear power is held at its current 11 GW capacity and the originally planned addition of 75 GW nuclear is met by renewables. Table 1 suggests the Chinese could replace the foregone nuclear capacity with hydro, although there would be significant hurdles associated with achieving that level of hydro development. Likewise, China could build more wind power. Yet offsetting the additional 75 GW of nuclear would require 200 - 225 GW of wind due to the much lower capacity factor of wind (not to mention problems with grid connectivity). Assuming average turbine size of 2.5 MW, this would require some 80,000 90,000 additional wind turbines.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


TaBLe 2: CarBon IntensitY Outcomes for Three NucLear Scenarios Installed capacity (2020) GW Base Nuclear Freeze Max Renewable 1182 1186 1461 CO2 emissions (2020) mtCO2 9934 10385 9941 Reduction in CO2 intensity from 2005 (%) 27.7 24.4 27.7

Table 2 summarizes the results of the three scenarios. (Note that the differences in 2020 installed capacity figures are due to the different capacity factors of the involved technologies). In the wake of the Fukushima incident, nuclear power faces increased international scrutiny. In response to the disaster, the Chinese government suspended all construction of new nuclear power plants and required safety inspections of existing plants. In October 2012, construction resumed only on coastal plants and ones with the most advanced technology, and the government announced expansion targets equally as ambitious as those that existed before the disaster. While the Fukushima disaster did not significantly curtail Chinas nuclear development targets, it forced the government to more closely examine the safety and security of the already existing plants. Those new regulations will presumably reflect the recommendations of a 2010 International Atomic Energy Agency review of Chinas nuclear regulatory framework, which concluded that the human, legislative, and financial resources for Chinas regulatory bodies need to be strengthened. Indeed, China lacks an overarching nuclear regulatory body. Civil nuclear development is still regulated by various ministries and bureaus with overlapping jurisdictions in China. Moreover, they lack the same level of scientific capacity that exists in the United States, making this rapid expansion even more worrying. Chinas energy plans and CO2 targets for the coming decade are challenging. Equally so may be the task of convincing the world that its nuclear

energy systemsin particular, dozens of new reactors scattered across the countryare safe and reliable in the face of natural disasters and other hazards.

Tom Drennen is Professor of Economics and Environmental Studies at Hobart and William Smith Colleges and a Senior Economist at Sandia National Laboratories. He models the economic and environmental tradeoffs associated with various energy options and is the PI on the China Energy and Greenhouse Gas Model at Sandia. He can be reached at: Darrin Magee is Assistant Professor of Environmental Studies at Hobart and William Smith Colleges and China consultant to Rocky Mountain Institute. He studies energy, water, and waste issues in China, is co-PI on the NSF-funded Integrative Dam Assessment Modeling project, and directs HWSs Asian Environmental Studies Initiative, supported by The Henry Luce Foundation. He can be reached at:

C H I N A E N V I R O N M e N T S e R I es 2010 /2011

1. Alvin Lin, Jingjing Li, Jason Portner and Christine Xu. (2012, December). China moves to strengthen nuclear safety standards and moderate the pace of its nuclear power development. NRDC Switchboard. [Online]. Available: blogs/alin/china_moves_to_strengthen_nucl.html. 2. Ibid.



Market Transformation for Urban Energy Efficiency in China

by Sha Yu, Meredydd Evans, Benchi Guo & Jianmin Zhang

hina surpassed the United States as the worlds top carbon dioxide emitter in 2006 (Vidal & Adam, 2007) and emissions will continue to rise as the country burns more coal to keep fueling the countrys rapid economic growth. As a strategy to address growing pollution problems from fossil fuels and growing energy shortages, Chinese policymakers set particularly aggressive targets in the 11th Five-Year Plan to reduce energy intensity by 20 percent between 2006 and 2010a target they reached and hope to replicate in the newest plan. The 12th Five-Year Plan aims to decrease carbon intensity by 40 to 45 percent by 2020 (compared to the 2005 level) (Li, 2011). This carbon reduction goal was notably subdivided targets by city. Chinese cities, which are expanding at a rapid rate, have struggled to find a balance between cutting energy consumption and maintaining economic growth. Indeed, adopting energy efficiency measures has great potential to help these cities offset considerable amounts of greenhouse gas emissions and conventional air pollutants, while maintaining economic development, closing the widening wealth gap, and improving living standards of local residents. In order to develop a model to facilitate the

implementation of energy efficiency measures in Chinese provinces and cities, the Pacific Northwest National Laboratory collaborated with the Global Environmental Institutea Beijing-based environmental nongovernmental organizationand the Energy Conservation Information Dissemination Center under Chinas National Development and Reform Commission in two pilot city projects. From 2008 to 2010, this team of U.S. and Chinese organizations concentrated on two cities Nanyang in Henan Province and Chongqing, a provincial-level city in Chinas southwest to develop viable strategies and approaches to catalyze market transformation that would allow energy efficiency programs to flourish. Figure 1 shows the location of these two pilot cities and their location in some of the top energy intensive provinces in China. CREAtING A BUSINESS MODEL FOR ENERGY EFFIcIENcY For the Nanyang and Chongqing pilot city projects the U.S.-Chinese research team adopted a business model development approach, patterned after successful citybased European and United States energy efficiency programs. This model brought together stakeholders and encouraged them

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


FiGure 1. EnerGY IntensitY of Provinces in China, 2005

Nanyang Chongqing

Energy Intensity
<1 1-1.5 1.5-2 >2 Pilot cities

(Tons of Coal Equivalent Per 10,000 Yuan GDP)

to participate in cooperative procurements of energy efficient equipment and adopt energysaving management practices. The program was chosen for the Chinese pilot projects

because it offers a least-cost approach to meeting future energy demand that can benefit each citys economic growth, competitiveness, and citizen health. One challenge to this energy efficiency program, however, is that Chinese city governments cannot easily procure equipment for non-municipal entities, such as private businesses and factories. However an intermediary, such as an energy service company (ESCO), local energy efficiency center or municipal energy company can step into this role and use its purchasing power to help residents and private businesses select, finance, and install green equipment, such as more efficient lighting, cooling, and heating. There are several promising options to explore for the business model. For example, funds may not flow through the intermediary, at least initially, but rather, the intermediary would organize the buyers and negotiate with energy efficiency equipment suppliers on the buyers behalf. (See Figure 2). The intermediary would also seek to set up one or more credit lines with financial institutions to

FiGure 2. Structure of UrBan EnerGY EfficiencY Mechanism UsinG an IntermeDiarY C H I N A E N V I R O N M e N T S e R I es 2012 /2013


Equipment Suppliers

An ESCO or a local energy center

Financial institutions

(equipment buyer 1)


(equipment buyer 2)


(equipment buyer 2), etc.

Office building


partially finance the procurements. The buyers would serve as borrowers, at least until the mechanism is well established. The city may need to aid the process in two ways: (1) Provide a municipal guarantee, particularly for municipal buyers; and, (2) Beyond the pilot projects, the city may need to provide a small amount of seed funding to allow the intermediary to organize the procurement of energy efficient equipment for non-municipal government buildings and factories. The intermediary, at least initially, would gain its revenue from providing installation and monitoring services for the buyers. It may also receive a small commission from the equipment suppliers. In the long term, the intermediary can grow strong enough financially to serve as an ESCO, taking on the financial responsibility of the procurement. One advantage to this approach is that it could be used to procure a variety of equipment types, both for clean, efficient energy supply and for end use. In selecting technologies, the intermediary may opt to conduct energy audits for a few large buyers to narrow the potential technology choices and determine the scope of the purchases. Technology choice would also depend on the municipal conditions. Cities experiencing strong growth in power demand might opt for technologies to reduce and substitute for power, such as compact fluorescent lamps and geothermal heat pumps for cooling (offsetting power demand for air conditioning). Cities with strong demand for heat might instead consider attic insulation, enhanced heat substations at the building level, and industrial waste heat or other clean new sources of heat supply. SELEctION OF PILOt cItIES The projects pilot citiesChongqing

and Nanyangare both large and growing cities with burgeoning energy consumption. Nanyang is the largest prefectural city in Henan Province, which is located in central China. In 2005, industrial energy intensity in Nanyang was extremely high, with 1.36 tons of coal equivalent (tce) per 10,000 Yuan GDP. From 2005 to 2007, the energy consumption in Nanyang increased from 14.37 mtce to 17.02 mtce. The biggest driver of this rise was industrial energy consumption, which increased from 7.19 mtce to 11.12 mtce, accounting for 60 percent of the citys total energy consumption. The Nanyang municipal government did not have a clear plan of energy conservation. In addition, the financial environment in Nanyang was immature, with only a few domestic banks operating branches in the city. Moreover, the banks authorized only limited the credit lines, which made it even more difficult for municipal authorities and private companies to acquire loans for energy efficiency programs. Although the Chongqing municipal government has carried out a series of low carbon initiatives, energy consumption in the city continued growing at a rapid pace. The pilot project implementation in Chongqing could have significant demonstration impacts for the following reasons: Chongqing is Chinas newest municipality directly under the jurisdiction of the central government, and it has a flexible policy environment and effective governance structure; The city has emerged as the financial center of west China, and its financial market has been increasingly diversified; and, Chongqing has a capable intermediary to help with energy efficiency equipment and management procurementChongqing Industry Co., Ltd. of the China Energy Conservation Environment Protection Group. This company is extensively

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S



FiGure 3. Business MoDeL ADoPteD BY the CitY of NanYanG

Municipal Fiancial Bureau

Product Supplier

Technology Intermediary

Municipal Development and Reform Commission

Town Government

Town Government

Town Government

Town Government

Commercial Enterprises

Hotel & Office Buildings

Community Resident 1

Community Resident 2

Village Resident 1

Village Resident 2


Cash Flow Information Flow

experienced in capital market and investment operations, and has a wide network in Chongqings energy and service sectors. BUSINESS MODELS IN PILOt CItIES Nanyang Energy Efficiency Lighting Procurement The Pacific Northwest National Laboratory and its Chinese partners proposed a business model tailored to meet each citys energy and infrastructure needs. (See Figures 3 and 4). In Nanyang a cooperative bulk procurement was implemented in an energy efficiency lighting program, given the difficulty of bundling industrial programs with different facility requirements. The government of Nanyang was the project manager and the citys Development and Reform Commission and Bureau of Finance held the bidding and arranged for the citywide promotion and marketing of the energy efficiency procurements. The city

government also provided financial support for energy efficient procurements. After examining and verifying purchase contracts, the citys Bureau of Finance appropriated government subsidies for product suppliers. Product suppliers signed supply contracts with municipal government agencies and other bulk users (e.g., schools, hospitals, and industries), assisted government agencies in marketing, managed product delivery and installation, and processed the replaced lighting products and provided after-sales services to make sure the products were meeting the needs of the various buildings and its managers. The product suppliers also tracked sales statistics. There were two types of buyersresidents and bulk users, such as government agencies, schools, hospitals, industrial and commercial enterprises, and office buildings. Residents did not directly sign and manage energy efficiency lighting contracts with the supplier; instead, communities or villages within the municipal boundary signed purchase contracts on a unified-demand basis.


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

FiGure 4. Business MoDeL ADoPteD in the CitY of ChonGqinG

Energy Efficiency Fund/ Commercial Bank

Equipment Supplier

Municipal Economic and Information Commission

Intermediary Agency

Municipal Facilities

Commercial Building

Industrial Enterprise

Residential Building

Energy Supplier


Cash Flow Information Flow

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Chongqings Comprehensive Energy Efficiency Program On behalf of the municipal government, the Municipal Economic and Information Commissions role was critical in regards to the above mechanism (see Figure 4), serving in four ways: as a large client, a guarantor, an adviser on prevailing policy options, and a source of funding. PNNL and its Chinese team considered domestic and foreign commercial banks and planned energy efficiency funds as potential initial investors in the pilot projects. However, venture capitalists may have little interest in an energy efficiency project because of its generally meager investment returns. Commercial banks, due to their risk-averse investment strategy, are also unlikely to invest in such projects, especially in the early stages of project development. The project team conducted a feasibility study to assess available

financial resources for energy efficiency projects, which found that such projects had limited access to financial resources. The city therefore decided to establish the Chongqing Investment Fund for Energy Efficiency and Environmental Protection, with the amount of one billion yuan; the fund would serve the citys long-term needs for energy efficiency financing on an aggregating basis. Similar to Nanyang, the program divided energy efficiency lighting buyers in Chongqing into five categories: municipal facilities, commercial buildings, industrial enterprises, residential buildings, and utilities. After two years of operation, the project proved successful in the two pilot cities. Both city governments have provided highlevel support to the projects. In addition, this energy efficiency project helped shape the long-term strategy for energy development in Chongqing. The concept of the Chongqing



Photo 1: Pilot Project Workshop in Chongqing that brought together local government and the Chong Qing Investment Fund managers with stakeholders from municipal facilities, commercial and residential buildings, industry, and utilities. Photo credit: Energy Conservation Information Dissemination Center.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Energy Efficiency Fund as an intermediary is being used as a template and starting point for a multi-billion dollar national fund with investment from private and state investors. The projects presence significantly expanded the scale of the energy efficiency lighting program in Nanyang. By the end of July 2010, 450,000 bulbs for three approved lamp models had been distributed, and 200,000 of those bulbs were the result of this project (Photo 2). Moreover, there are more than 20 energy efficiency projects underway in the two pilot cities, which grew, in part, from the project design. LESSONS AND BARRIERS Successful Pilots Based on the experiences in Chongqing and Nanyang, implementing energy efficiency improvements is difficult in Chinese cities, even where there is policy and financial support

from the central government. In addition, the policy and financial environment varies in cities, and approaches for improving energy efficiency need to be tailored and adapted to local circumstances. Some key features of the energy efficiency projects that significantly contributed to the success of the pilot projects include: Active stakeholder participation in the city; High-level support from the city government; Involvement of financial institutions in the early stages of project development; Local intermediary to implement projects and coordinate on a regular basis; Energy audits and selected highly-efficient technologies.


Photo 2: Energy Efficiency Lamps Installed in a High School in Nanyang. Photo credit: Energy Conservation Information Dissemination Center.

BARRIERS FOR ENERGY EFFIcIENcY PROJEctS IN CHINESE CItIES Drawing on interviews with Chinese stakeholders and insights gained from the pilot project implementation, the U.S. and Chinese team identified three main obstacles for energy efficiency projects in China: project financing, measurement and verification, and policies and regulations. Project Funding Challenges. there is a distinct disconnect between capital and projects. At the city level, most energy efficiency projects are small in scale, making it difficult to attract investment. Banks and big companies are very cautious of lending to small clients or investing in small projects, while small firms consider it too risky to invest in energy efficiency improvements. In addition, funds and firms in the private market lack expertise and experience in energy efficiency investment. Unfamiliar risk profiles of energy users prevent financing from being extended, or require high collateral; however, energy efficiency projects, in general, lack collateral value. Measurement and Verification Hurdles. Energy savings are hard to quantify and

evaluate. There are few qualified third-party energy auditing companies in the market to measure and verify energy savings. In general, problems exist in defining the baseline, calculating monthly savings, modeling dynamic changes, estimating savings other than energy, communicating an accounting and contracting system, and evaluating payback period. In addition, the lack of an M&V system generates a more severe problemcredibility of energy efficiency improvements and mutual trust between the ESCO and the client, or sometimes between the ESCO and the financial institution. Since energy savings are not quantified and pre-defined in the contract, disputes often occur when the ESCO collects payback through savings. The Policy Gaps. In China there is no clear policy to guide energy efficiency investment. Profits of energy efficiency projects are different from regular revenues in a balance sheet, as they are not earnings, but savings. For most energy efficiency projects, the applied excise tax and accounting system are not clear to companies. In addition, without policy support, it is difficult to implement projects at the local level. For the private equity


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


that is trying to enter the energy efficiency market, there are even more barriers. Policies that regulate private equity are ambiguous; responsibilities are not clearly defined among the central bank (the Peoples Bank of China), China Banking Regulatory Commission, China Securities Regulatory Commission, and China Insurance Regulatory Commission. And policies to regulate and manage industrial investment funds and/or private equity are also not well established or clearly defined.

energy conservation and climate issues for many years. He can be reached at Jianmin Zhang is the Deputy Director of the Energy Conservation Information Dissemination Center, Chinas National Development and Reform Commission. He has over 20 years of experience in energy policies and energy efficiency projects. He can be reached at

The authors wish to thank the blue moon fund for funding the Market Transformation for Urban Energy Efficiency in China Project, which supports the findings of this article. The authors also wish to thank China Energy Conservation and Environmental Protection Group, and Huayu Private Equity Management Company for their inputs on energy efficiency financing in China.

Sha Yu is a research associate at the Pacific Northwest National Laboratory. Her research focuses on energy efficiency and clean energy policies in developing countries. Her recent work includes developing energy efficiency policies for the building sector and analyzing the long-term impact of policy changes on energy demand and the mitigation of greenhouse gas emissions. She can be reached at Meredydd Evans is an energy policy and finance expert with 17 years of international experience. She is a senior staff scientist at the Pacific Northwest National Laboratory, where she is managing a program on international sustainable energy, including efforts on greenhouse gas mitigation, building energy codes, district heating and clean energy investments. She can be reached at Benchi Guo is a project officer at the Global Environmental Institute. He has been working on

Sarkar, Ashok, & Singh, Jas. (2010). Financing Energy Efficiency in Developing Countries Lessons Learned and Remaining Challenges. Energy Policy, 2010: 5560-5571. Li, J. (2011, March 1). Carbon intensity targets unveiled. China Daily. [Online] Available: Vidal, John, & Adam, David. (2007, June 19). China overtakes US as worlds biggest CO2 emitter. The Guardian. Available: http://www. china.usnews.


C H I N A E N V I R O N M e N T S e R I es 2012 /2013


Sacrificing the Planets Arteries to Save Her Lungs?

by Peter Bosshard

n 2008, China became the worlds biggest emitter of greenhouse gases. Since then, not just the United States and the European Union, but also developing nations such as the Alliance of Small Island States have put the government in Beijing under pressure to adopt legally binding greenhouse gas emission cuts. At the 2009 climate summit in Copenhagen, China committed to reduce its carbon intensity the amount of greenhouse gas emissions per unit of economic output by at least 40 percent by 2020. Achieving this ambitious target has become an overriding political priority for the Communist government since then. Chinas 12th Five-Year-Plan (FYP, 2011-2015) includes measures such as an environmental tax to discourage pollutionparticularly of carbon and a massive expansion of wind power and other renewable energy sources. Building on these new FYP priorities, in December 2012, the National Peoples Congress issued a law to require regional multi-pollutant air quality plans for major cities and also established caps on the total quantities of coal that can be consumed, and set targets to reduce these quantities by 2015 and 2020. The Five-Year Plan also includes the most relentless dam-building effort any nation has ever undertaken. If approved, these plans

would cut off the countrys nose to spite her face. It would irreversibly degrade Chinas rivers and destroy biodiversity hotspots of global importance in an effort to increase electricity generation capacity to meet the countrys growing demand. China already counts more dams and hydropower plants within its borders than any other country and it has paid a huge price for this development. Chinese dams have displaced and often impoverished an estimated 23 million people. Dam breaks in the country with the worlds worst safety record have killed approximately 300,000 people since the 1950s. Evidence suggests that one particular project, the Zipingpu Dam, may have triggered the devastating Sichuan earthquake in 2008.1 Dams also have taken a huge toll on Chinas biodiversity, causing a plummet in the number and quality of fisheries, as well as driving charismatic species such as the Yangtze River Dolphin to extinction. As part of its low-carbon diet, the Chinese government proposes that 60 new hydropower plants with a capacity of 140 GW be approved over the next five years. As a comparison, the United States, Canada, and Brazil have each built between 75 and 85 GW of hydropower capacity in their entire history. Achieving the new plans target would require building

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


C H I N A E N V I R O N M e N T S e R I es 2010 /2011

cascades of dams on several rivers in Yunnan, Sichuan, and on the Tibetan Plateauregions which are populated by ethnic minorities, ecologically fragile, rich in biodiversity, and seismically active. As a harbinger of this new trend, the Chinese government in early February 2011 agreed to shrink the most important fisheries reserve on the Yangtze River in order to allow a new hydropower scheme to go forward. Chinas unprecedented dam building spree is being pushed by provincial governments and the state-owned power companies, which often pursue their own vested interests to increase generation capacity and profits. Following opposition to a cascade of dams in 2005 on one of Chinas last wild riversthe Nujiang (a.k.a. Salaween) by a coalition of environmental activists, journalists and government officials, who often managed to gain the ear of Chinas top leaders. The policy situation has changed since the Copenhagen climate talks. International pressure to limit greenhouse gas emissions is now the single most important factor behind the huge push for hydropower in China, as dams are deemed green. Climate change is the most serious environmental threat currently facing the planet. In addressing climate change mitigation techniques, the international community must act in a holistic way, without losing sight of other challenges to the planets future. The world is losing biodiversity at an alarming rate. Rivers, lakes, and wetlands have suffered more dramatic changes than any other type of ecosystem. Because of dam building, which is often touted as a green solution to power generation, as well as other factors, freshwater species have, on average, lost half of their

populations between 1970 and 2000, and more than a third of all freshwater fish species are at risk of extinction. As the head of the UN Environmental Programme warned last year, it would be arrogant to assume that humanity can survive without biodiversity. We cannot sacrifice the planets arteries to save her lungs. China not only has a moral obligation to participate in the fight against climate change, but it has also committed to protecting its ecosystems integrity under the Convention on Biological Diversity. The country deserves respect for trying to limit greenhouse gas emissions at a per-capita level which is much lower than that of industrialized nations. World leaders should let the government in Beijing know that they do not want China to destroy its rivers and the rich biodiversity they support in order to reach its ambitious carbon goals.

Peter Bosshard is the Policy Director of International Rivers and also directs the organizations China program. He has a Ph.D. from Zurich University, and has worked to strengthen international social and environmental standards since the early 1990s. He can be contacted at peter@

1. Sharon LaFraniere. (2009, February 6). Possible Link Between Dam and China Quake. The New York Times. [Online]. Available: http://www. html?pagewanted=all&_r=0.



Clear Benefits: Quantifying NonEnergy Benefits of a Carbon Reduction Initiative for a Glassware Company

by Sheri Willoughby, Stephan Guo, Maja Dahlgren, Thomas Schaefer & Hongming Jia

ig environmental impacts can come from what appear to be mundane changes in technology at factories. Changes that the consumers never see or know about, for few investigate the environmental footprint of what they consume. This commentary highlights one such technology change, specifically, a glassware company in Yuncheng, China and a supplier to IKEA that upgraded its furnaces, switching its fuel source from coal to natural gas as a participant in an IKEA and WWFled carbon reduction project. In addition to reducing its carbon dioxide (CO2) emissions by 35 percent (~7000 tons CO2) between 2009 and 2010, the company realized numerous non-energy benefits (NEBs) that improved the business case for its investment. While many NEBs can be difficult to quantify, the company calculated that improvements in product quality related to switching from coal to natural gas directly reduced the cost of products by 17 percent. THE PLAYERS IKEA and WWF IKEA is a leading global retailer of home furnishings. Many suppliers from around the world source IKEA products. WWF is a global conservation organization,

which works with many partners to protect biodiversity and reduce humanitys impact on natural habitats. IKEA and WWF formed a global partnership to work together toward a decreased ecological footprint by promoting responsible and sustainable use of resources. In the area of climate and energy, the Climate Positive Opportunities for Suppliers Project aims to reduce the carbon footprint of companies within IKEAs supply chain. Since 2007, IKEA and WWF have worked together to explore energy efficiency improvements and renewable energy opportunities through pilot projects at various supplier sites. As part of its partnership with WWF, IKEA, in 2008, initiated a Supplier Energy Efficiency Project in six energy-intensive material categories, including glass, in order to reduce greenhouse gas (GHG) emissions and increase competitiveness through energy efficiency improvements. Hongwei Glass Company A supplier of IKEAs glassware, Wenxi County Hongwei Glassware Co., Ltd. (Hongwei Company) is located in Shanxi Province, China. Hongwei Company established the plant in 1999, and now has 1,500 employees and sales revenue of approximately 100 million RMB (11.4 million Euros) per year. The company

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


produces drinking glasses, wine glasses, vases, candleholders, and other blown-glass products. Production operates continuously, 24 hours a day throughout the entire year. Hongwei is a private enterprise with control over its fuel consumption sources and onsite emissions. In 2008, the Chinese government began a program to regulate and modernize High Energy Consumption and High Pollution Enterprises. The provincial and local governments were to strictly supervise and control companies listed in the Shanxi Provincial High Energy Consumption Enterprises 2009, which is a list of companies with annual energy consumption above 5,000 metric tons coal equivalent. Additionally, the provincial government enacted other regulations to reinforce environment protection, including forbidding coal-fired units to release smoke or excess emissions. This regulation forced many enterprises to shut down. Therefore, the Chinese program motivated Hongwei Company to participate in the IKEA-WWF Climate Positive Opportunities for Suppliers Project. NON-ENERGY BENEFItS (NEBS) A significant barrier to suppliers adopting new technologies to reduce energy demand and GHG emissions is their reluctance to take a risk on an investment that may have only a small payback in the form of energy cost savings. Suppliers see other potential benefits as less tangible and, therefore, often do not significantly factor into investment decisions. However, research indicates that these non-quantifiable, NEBs can generate additional value beyond just the energy savings themselves. For example, a 2003 study of commercial and industrial energy efficiency programs in the state of Wisconsin valued NEBs at approximately 2.5 times the projected energy savings of the installed technologies (Hall & Roth, 2003). NEBs examined in that
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

study included: increased sales, productivity, equipment life, and employee morale or satisfaction; and decreased maintenance costs, waste generation, personnel needs, injuries or illnesses, and defect or error rates. Through their joint project, IKEA, WWF, and Hongwei Company identified significant energy savings and NEBs that make a compelling business case for implementing energy efficiency projects. The paper begins with a description of the project and then provides detailed information regarding energy consumption and savings, investment and expenses, and NEBs for Hongwei Company. THE PROJEctS FLOw Before Hongwei adopted the energy efficiency project, it produced solid color glass products in a coal-heated pot furnace. Under the new company regulations, Hongwei was to phase out the coal-heated pot furnaces. The low-carbon mandates from new government regulation paired with the opportunity offered by WWF and IKEA to support the company in a supply chain energy initiative, led Hongwei Companys General Manager Jiande Chai to enthusiastically initiate an energy-saving project. According to Stephan Guo, glass trade expert at IKEA, [t]he supplier was just thinking of transitioning (fuel sources) and then we stepped in with a project and set a goal both for GHG reduction and energy efficiency. They made a decision very soon and made it happen. Hongwei formed an energy efficiency management team, which included the general manager (as team leader), deputy general manager, production manager, technical manager, furnace supervisor, and several engineers. After investigating several options, the Hongwei team decided to replace the coalheated pot furnaces with natural gas-heated pot furnaces. After a month of test runs, the first furnace came online June 5, 2009. Based


on good performance figures from the first furnace, Hongwei changed the other two coal pot furnaces and other coal-consuming equipment (e.g., boilers) during late 2009 and early 2010. As of mid-2011, all of the production facilities and all of the other equipment in the plant are using electricity and natural gas. This transition has increased the companys energy efficiency and decreased the emission of GHG and other noxious gas emissions, compared to using coal. SIGNIFIcANt IMPROVEMENtS IN ENERGY EFFIcIENcY In 2008, the total consumption of energy by the plant was equivalent to 8,867 tons of standard coal; three coal-fired pot furnaces used 53 percent of this energy consumption. Meanwhile, the output of these three pot furnaces was only 22 percent of the total glass produced, demonstrating the low efficiency of the coal furnaces. As natural gas pot furnaces replaced the coal-heated pot furnaces in 2009 and 2010, the total energy consumption in the Hongwei plant declined. The total energy usage in 2010 was equivalent to 4,836 tons of standard coal, 45 percent less than the previous year. The new energy efficiency was higher than the government requirement, while emissions were much lower than government requirements. The energy efficiency of the pot furnaces improved 65 percent by upgrading the furnaces and using natural gas.

REtURN ON INVEStMENt Comparing the average yearly investment between the coal pot furnace and the natural gas pot furnace (taking into account different lifetimes of the two types of furnaces, 1.5 and 2 years, respectively), the natural gas pot furnaces investment cost is 10,226 RMB (1,165 Euros) per year more than the investment cost for the coal pot furnace. Comparing the operating cost between the natural gas pot furnace and the coal pot furnace, the natural gas furnace costs 86,353 RMB (9,835 Euros) per year less than the coal pot furnace. This includes the costs of electricity, fuel (natural gas or coal), pot, maintenance, and labor. The gross output, net output, and utilization of molten glass are different between the natural gas pot furnace and coal pot furnace. More detailed productivity and cost data for molten glass are shown in Table 2. The yearly net output of the natural gas pot furnace is 584 tons and the cost of one ton of net molten glass is 10 RMB less than the glass from the coal pot furnace (0.4 percent savings). Therefore, the cost of the natural gas pot is essentially the same as that of the coal pot. NON-ENERGY BENEFItS (NEBS) The non-energy benefits from the initiative were significant, ranging from productivity improvements to greater employee safety and satisfaction and reduced waste. Other

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

TaBLe 1. YearLY EnerGY ConsumPtion of Pot Furnace (NaturaL Gas Versus CoaL)

Energy Type Electricity Natural Gas Coal Total

Unit KWH Nm

Coal pot furnace Consumption 6,570 0 1,277,500 Convert to KWH 6,570 0 9,482,371 9,488,941

Natural gas pot furnace Consumption 58,400 346,750 0 Convert to KWH 58,400 3,238,922 0 3,297,322




TaBLe 2. Pot Furnace ProDuctivitY anD cost of moLten GLass, naturaL Gas vs. coaL

Coal pot furnace Yearly investment (RMB) Yearly operating cost (RMB) Total annual cost (RMB) Gross molten glass (ton/year) Net molten glass (ton/year) Cost of gross molten glass (RMB/ton) Cost of net molten glass (RMB/ton) 130,908 1,229,724 1,360,632 821 616 1,657 2,209

Natural gas pot furnace 141,134 1,143,370 1,184,504 730 584 1,760 2,199

meaningful NEBs that this study did not quantify include increased customer satisfaction and increased sales. Productivity and Quality Improvements. The productivity of the natural gas pot furnaces is higher than that of the coal pot furnaces. The improvements in product quality related to switching the pot furnaces from coal to natural gas resulted in an average 17 percent reduction in the cost of the products. This cost reduction was realized primarily from two NEBs: 1. Yield of available material: Because the temperature inside the coal pot furnace is not very uniform, the glass blowers cannot use the molten glass on the upper and lower parts of the furnace because of its poor quality. In comparison, the temperature inside the natural gas pot furnace is more uniform and the manufacturers can more easily control the temperature, which increases the yield of useful molten glass from the natural gas pot by about 14 percent. For one typical product, improved temperature conditions in the natural gas furnace increased the output rate from 1,200 to 1,350 pieces; thereby reducing each products cost by 12.5 percent. 2. Improvement of qualified rate (nonrejects): Increased temperature stability in the natural gas furnace makes the melted

color and the material quality of products more uniform. This improves the qualified rate, which is the percentage of pieces that the manufactures do not reject. For another typical product the qualified rate increased from 75 to 80 percent by switching from a coal to a natural gas furnace, which is equivalent to a cost reduction of more than 5 percent. Significant Drop in Waste Generation and Emissions. Table 3 shows the types and estimated quantities of solid wastes; as well as CO2 (a major GHG) emissions and SO2 (a significant toxic gas) emissions, which each furnace produces annually. The total CO2 emission for the entire plant was about 19,815 tons in 2009 and 12,843 tons in 2010, a reduction of 35 percent. The emission reduction contribution from the first two natural gas furnaces was 47 percent of the total reduction. Lower Labor Requirements. When comparing a natural gas furnace with a coal furnace, the amount of labor to support the heating operation decreased due to the following: Each coal pot furnace requires 3.5 tons of coal per day, a labor force must transport that coal to the furnace; a natural gas furnace does not need transport. When using the coal furnace, the workers need to load coal into the coal charger,


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

TaBLe 3. AnnuaL Waste Generation anD Emissions From Each Pot Furnace
(Natural gas vs. coal)

Pollutant Slag Waste cullet Waste pot CO2 SO2

Wastes & Emission (tons) Coal Pot Furnaces 450 205 9 2,013 32 Natural Gas Pot Furnaces 0 146 5 392 0

Percent reduction 100 29 44 81 100

which is 2 meters high; with the gas furnace this effort is not needed. The workers need to remove 1 ton of coal cinder from the two-meter high coal charger; there is no cinder residue associated with the gas furnace.

Improved Worker Health and Safety. Regarding workers health, the natural gas furnace offers the following advantages: There is no coal ash, so the workers do not need to wear personal protection equipment. There is no need for occupational health checks every year. The natural gas furnace has a very good insulation layer, so the surface temperature of the furnace is between 70-80 degrees Celsius, which is much safer for the workers than the coal furnace, which has a surface temperature in the range of 180220 degrees Celsius. There is no coal cinder or coal ash, translating to a better quality working environment. Greater Employee Satisfaction. After converting the fuel source from coal to natural gas for the pot furnaces, workers satisfaction levels appear to have improved. While it is not easy to quantify, operators reported receiving positive feedback in response to the changes.

One worker named Wang Lamei, who is in charge of gob-gathering, said: The situation before (when using the coal pot furnace) is that I was very hot, dirty and tired after work every day. The water was very dark after I washed my face, and I could not wear light colour clothes. The situation now is much better. LESSONS LEARNED
W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Hongwei and IKEA considered the natural gas furnace project the most successful project in 2009. The following are some lessons that could be useful for other companies: The company gave this project a very high priority due to the regulatory situation. The management ensured that details of the project were well-communicated to the labor force to secure cooperation and positive results. Hongwei promoted involvement of multistakeholders and technical supporters. The local government and other enterprises provided significant support during this project. For example, the local natural gas company undertook safety and pipeline construction tasks. During the test run period, it also offered on-site professional support several times. The local environmental protection bureau (EPB) offered their support and reacted quickly to Hongweis questions and helped with



the relevant environmental permits. When the project team visited other companies, they were warmly welcomed and received helpful technical cooperation. To fully measure the projects benefits, it would be useful to collect data to better quantify the NEBs related to employee productivity and satisfaction, including units produced per employee per day, number of employee sick-days, and employee turn-over rate. Other NEBs related to improved sales and new business development from sustainability-minded and/or cost-conscious customers would also be valuable.

cost benefits when making decisions about whether or not to invest in energy efficiency and clean energy technologies.

Sheri Willoughby is a Senior Program Officer at the World Wildlife Fund Sweden office where she leads projects with major corporations to reduce their environmental impact and further WWFs conservation mission. Sheri earned an MBA from the University of North Carolina and an MS in chemistry from University of California San Diego. She can be reached at: Stephan Guo, Manufacturing specialist at IKEA Trading Qingdao Office, leads projects with key glass suppliers to improve their manufacturing performance which mainly includes productivity, energy efficiency, labor efficiency and industrialization. Stephan earned a bachelors degree from the University of Jinan. He can be reached at: Maja Dahlgren ( and Thomas Schaefer ( are colleagues of Stephan Guo in Qingdao. Hongming Jia, Assistant of General Manager at Hongwei Glass Co., assists the overall operation of the company and also leads the companys social and environmental responsibility efforts. Hongming graduated from Electronic and Industry School of Shanxi Province. Hongming Jia can be reached at:

FINAL THOUGHtS By switching from coal to natural gasheated pot furnaces for glass production, Hongwei reduced its energy use by 45 percent between 2008 and 2010. Due to the relatively high price of natural gas as compared to coal, the energy cost savings per ton of molten glass were negligible. However, the improved material utilization and qualified rate reduced the cost of products by 17 percent. Other benefits included improved working conditions and reduced risk of fines. While the investment has not yet paid back in terms of energy cost savings in the first year, the management had a very favourable view on this project because of the NEBs listed above. Due to these factors, Hongwei is currently building another natural gas pot furnace to increase its capacity and profit margin. The NEBs for Hongweis shift from coal to natural gas furnaces are significant, even when compared to the energy savings, a finding which is consistent with other research on NEBs. In conclusion, managers should consider NEBs in addition to energy use and

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Hall, N. and Roth, J. (2003). Non-energy benefits from commercial and industrial energy efficiency programs: Energy efficiency may not be the best story. Paper presented at Energy Program Evaluation Conference, Seattle, WA, USA.



The New Potential for Reigning in Chinas Corporate Environmental Polluters

by Adina Matisoff

n July 3, 2010, toxic sludge from the Zijinshan mine tailings pond gushed into Fujian Provinces Ting River, polluting the food supply of more than 60,000 people and decimating the fishing industry downstream. This toxic flood was one of the worst incidences of water pollution in Chinas recent history. Strikingly, the mines owners the Zijin Mining Group, a mainland gold and copper mining company listed on the Hong Kong and Shanghai Stock Exchangestook painstaking efforts to conceal the catastrophe; attempting to bribe journalists and waiting an unfathomable nine days before publicly reporting the damage to the authorities, local citizens, and shareholders. Tragically, chemical spills and other forms of pollution are becoming a byproduct of minimally checked economic growth in China. Indeed, Chinas Ministry of Environmental Protection (MEP) painted a bleak picture when it released data showing that environmental accidents increased by 97 percent in 2010 over 2009 levels. MEP also reported that in 2011 alone the country experienced 542 major pollution accidents, which is slightly more than half the amount that occurred between 2006 and 2010. Chinas Ministry of Supervision put forth a higher number, reporting that in 2011 China experienced 1,700 water pollution

accidents.1 Despite the differences in data, the trend in pollution accidents appears to be on the rise. As more Chinese companies list shares on stock exchanges, both government regulators and nongovernmental organizations (NGOs) are turning to stock exchange related rules to clean up the countrys worst corporate polluters. NEw RULES FOR CORPORAtE POLLUtER

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

As the Zijinshan scandal came to light, authorities began to address the companys lack of information disclosurea step it might not have had to do if Zijin had been a private or totally state-owned enterprise. The companys ill-fated attempt to cover-up the toxic spill triggered the China Securities Regulatory Commission (CSRC) to launch an investigation of Zijin for violating rules for listed companies on public disclosure of major incidences. With its strong ties to the local government in FujianZijin used to be a county-level state-owned company and employs former government officialsindependent journalists and bloggers in China and Hong Kong questioned if the company got off easy. Zijin was also subject to the disclosure rules of the Hong Kong Stock Exchange (HKEx), which require companies to file notices with the Exchange within 24 hours of major



incidences that have a material impact on their business and shareholder profits. In the case of Zijin, once the companys gross misconduct and poor corporate governance was exposed, it had to issue statements about government fines it incurred, loss of its privileged tax status in China, and lawsuits brought by impacted parties. Eleven Chinese NGOs appealed to the Hong Kong and Shanghai Stock Exchanges following the Zijinshan disaster to enforce information disclosure rules on Zijin and other corporate polluters that were ravaging Chinas environment. Their letter also pointed to a March 2010 report, released by Beijingbased Institute of Environmental and Public Affairs (IPE) and Hong Kong-based Civic Exchange, which found that 16 percent of HKEx-listed companies had at some point violated environmental laws in ChinaZijin was specifically called out as one of the worst repeat offenders. Peruvian NGOs and Friends of the Earth-US followed suit with another complaint, this time raising concern to the HKEx that Zijin was not adequately disclosing environmental and social risks related to its overseas investments. For example, Peru Zijins Rio Blanco Mine project has failed to obtain community authorization before the start of

mining activities, as required by Peruvian law, and there are reports it does not comply with Peruvian environmental regulations. In July 2011, Peru Zijins Rio Blanco paid compensation to 33 Peruvians who claimed they were tortured in 2005 for opposing a proposed copper mine project.2 Despite these controversies, Chinese media reported in 2010 that Zijin hoped to secure financing to expand the Rio Blanco Mine over the next couple of years. Together, the Chinese and international NGO concerns point to pervasive environmental mismanagement throughout the company within China. Although the HKEx has not formally censured the company for its lack of disclosure, such reporting standards may offer a promising avenue for NGOs seeking to hold companies accountable for pollution. According to Ma Jun, Director of Beijing-based Institute of Environmental and Public Affairs, Information transparency itself wont be able to solve environmental problems, but it is a prerequisite for public participationWe believe without fully involving the public, the campaign to reverse the countrys environmental pollution can hardly make much progress.3


C H I N A E N V I R O N M e N T S e R I es 2010 /2011

PUBLIc PARtIcIPAtION: A LYNcHPIN FOR TURNING INFORMAtION DIScLOSURE INtO IMPROVED CORPORAtE PERFORMANcE Strikingly, China has some of the most progressive environmental listing and stock exchange requirements in the world. Its Green IPO policy, which was issued by MEP and the CSRC in June 2008, requires highly polluting or energy intensive companies to undergo an environmental assessment by MEP before initiating an IPO (initial public offering). During a 10-day pre-IPO evaluation period, MEP conducts its own assessment and calls for the publics opinion through a national hotline. With this policy, citizens can challenge corporate polluters on their environmental performance and prompt the government to demand reforms within the company. No other country goes to such lengths to involve the public in IPOs. In one case, brought before MEP in August 2008, several NGOs led by Greenpeace-China provided comments on the environmental record of Gold East Paper, a pulp and paper company, using information gathered from more than five years of monitoring its projects. MEP reviewed the companys IPO for more than a year, during which time Gold Easts serious water pollution and deforestation issues were brought to the attention of investors and the public. The environmental authority eventually gave the go ahead to the companys IPO, however only after it met with NGOs and paid previous fines. Although money alone will not mitigate the companys issues, further public scrutiny could prompt more meaningful reforms as Gold East looked to hold its IPO in the future. Another example of Chinas leading environmental stock exchange requirements is the HKExs rules that apply specifically to the IPOs of mining companies. These rules, which came into force in 2010, require mining companies that are seeking to sell shares for

the first time to the public must provide robust disclosure about environmental and social risks. For example, they must describe risks arising from environmental, social, health and safety issues; their history of complying with laws and dealing with community concerns in the areas in which they operate, and criticism they may receive from NGOs that could impact the sustainability of company projects. Such detailed IPO disclosure guidelines about environmental and social risks are unprecedented. As more Chinese companies seek to become publicly owned, they will not be able to keep secret their accidents and mismanagement that wreak havoc on the environment. Using rules requiring information disclosure for listed companies, the Chinese government and the public are in a better position to hold corporate polluters accountable. With great effort to improve transparency, disasters like that at Zijinshan can be prevented.
W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Adina Matisoff is the China Sustainable Finance Analyst at Friends of the Earth. Her work focuses on improving the social and environmental standards of Chinese banks and multinational companies that are investing in global natural resource projects, and mitigating the negative impacts of those projects on communities. She can be reached at amatisoff@foe. org.

1. Liu Meng. (2012, February 2). Cities nationwide look to increase water contamination readiness. Global Times. [Online]. Available: http://www. 2. Wade, Terry. (2011, July 20). Zijin unit settles case over Peru torture claims. Reuters. [Online]. Available: 3. Shi Jiangtao. (2010, December 29). Cities stay tightlipped over pollution data. South China Morning Post, [Online]. Available: http://topics.


by Tucker Van Aken

Making the Grade: Performance Targets and Industrial Energy Policy

e all face job anxiety, especially when it is time for a performance review that might determine whether we get promotedor fired. This anxiety is particularly acute in the Chinese bureaucratic system, where success or failure in meeting performance targets (kaohe zhibiao) determines whether individual cadres receive promotions, honorary titles or cash bonuses, or face fines and termination. Similarly, industrial enterprises that perform well can receive favorable policy and tax incentives, while those that perform poorly face public condemnation and possible closure. Moreover, local governments that fail to meet goals may receive lower transfer payments from upper level governments and become ineligible for commendations, which reflects on leading cadres. The 11th and 12th Five-Year Plans (FYPs) prioritized energy efficiency and low carbon growth, which raised the importance of industrial energy policy in the cadre evaluation process and performance targets, although it has been challenging to establish incentive structures for both the regulators and regulated, due to tension between immediate economic growth and long-term energy efficiency goals.

THE ABCS OF PERFORMANcE TARGEtS In general, the scoring tables, or target responsibility evaluation and scoring standard tables (mubiao zeren pingjia kaohe zhibiao yiji pingfen biaozhun), distributed to cadres and enterprises determine how performance targets are calculated. A policy or policy area is scored out of 100 and different targets are assigned varying point values, either as a continuous value based on percentage completion or a binary target, with no points for partial completion. Depending on target values, there can exist multiple possible paths to a passing grade. Based on a specific targets point value and scoring mechanism (continuous or binary) cadres and managers can determine that targets relative importance. Thus, performance targets serve as an agenda-setting mechanism and guide local government and enterprise behavior, both in implementing energy policies and government policy in general. Different targets are also rated by importance: Priority Targets with Veto Power (yipiao foujue or foujuexing zhibiao) must be met and the consequences for failure being possible termination for cadres and financial punishment for local


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

governments and enterprises. Hard Targets (ying zhibiao) and Ordinary Targets (yiban zhibiao). Lynette Ong has shown that scoring high on hard targets as opposed to ordinary targets is what really makes or breaks local cadres careers. Cadres that perform well on quantifiable, hard targets get promoted faster and receive higher year-end bonuses.1

TARGEtING INDUStRIAL ENERGY EFFIcIENcY Performance targets and cadre evaluation are an important component of industrial efficiency programs, specifically programs covering main energy-using units (zhongdian yongneng danwei), such as the Top-10,000 Energy-Using Enterprises Program and its

predecessor, the Top-1,000 Program. To draw one major city-province as a model, according to the current draft of Chongqings energy reduction performance target system, which is based on national rules, the evaluation process serves as a baton (zhihuibang) to ensure the completion of the 12th FYP energy reduction goals and a corresponding shift in Chinas economic growth model. Additionally, the rules state that by setting clear objectives, rewards and punishments, performance targets help ensure completion of central regulatory goals. QUANtItAtIVE ENERGY-SAVING TARGEtS: MEASURING OUtcOMES As seen in Figure 1, there are two main performance target categories for energy saving. First, there are quantitative energy

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

FiGure 1: SummarY of the ToP-10,000 TarGet ResPonsiBiLitY EvaLuation anD ScorinG TaBLes

Performance Serial Target # EnergySaving Goal (40 pts) 1

Content 12th FYP Quantitative Energy-Saving Target Organize Leadership

Point Value

Grading Standard Lists the task to be completed. 1 Task

Grading Details

Points Scored


6 6 25 15 8 100

3 Tasks 3 Tasks 11 Tasks, 2 more for bonus points 4 Task, 1 more for bonus point 3 Tasks

EnergySaving Measures (60 pts)

Job Responsibility 2-6 Supervision Technology Laws and Regulations

Details the distribution and calculation of points and the verification procedures for each tasks completion. Often breaks down a category to 0.5 or 1 point distributions.


Source: National Development and Reform Commission. (2012, July 3). Notification on Implementing the Top-10,000 Enterprises Program Energy-Saving Target Responsibility System.



consumption reduction targets. The National Development and Reform Commission (NDRC) and local governments created a list of high energy-consuming enterprises and set specific energy reduction goals for each. In the current 12th FYP, any enterprise that consumes over 10,000 tons standard coal equivalent (SCE) per year has a specific target for reducing energy consumption. During the 11th FYP the minimum was 180,000 tons SCE. Local governments can choose to regulate other, lower-consumption enterprises as well. Both the individual enterprises and local governments have responsibility for the completion of the reduction goals. The quantitative targets measure outcomes, the overall energy-use reduction, and are unique for each enterprise and region.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

ENERGY-SAVING MEASURES: MEASURING PROcESS The second performance target category is composed of energy-saving measures (jieneng cuoshi) for completing energy reduction goals. The measures include subcategories for leadership, establishing an energy reduction responsibility system, energy management, technology deployment, legal and legislative progress, measurement and verification of energy consumption, among other specific goals. These targets measure process, or the specific steps needed to ensure completion of quantitative goals and an overall reduction of energy use. These measures are consistent across enterprises and regions.

Scoring Procedures The NDRC then distributes specific performance target responsibilities from each category to both regulators and affected enterprises. Enterprises report their progress on each category to the local regulatory authority by February 1st of each year. The responsible local governmental department then conducts an audit of the evidence, which may or may not include a spot check and reports to the provincial government, which then reports to the NDRC by April 30th. National rules instruct local governments and enterprises to break up responsibilities levelby-level, unit-by-unit and job-by-job. Thus, each level is responsible for regulating the level right below (yiji zhua yiji), whether that be a provincial government regulating a local government, a local government regulating an enterprise, or a shop manager tracking employee energy use. This reflects the line (tiao) system generally used in Chinese bureaucracy. Each year scores from both categories are totaled. Currently, a score of 95 or above is complete above quota (chaoe wancheng) 80 to 95 is complete (wancheng), 60 to 80 is fundamentally complete (jiben wancheng) and below 60 is incomplete (weiwancheng). Until at least 2011, a score of 75 to 95 was considered complete. Enterprises that are complete above quota for energy performance targets are eligible for public commendations and additional favorable tax and policy incentives, while those that are incomplete are subject to media announcements aimed at shaming them and are not eligible for awards, licensing approvals and fiscal support. Generally, enterprises are given two months to take corrective action before punishments are imposed, though


this grace period can be extended. Leading cadres at state-owned enterprises are also docked points on their individual performance reviews. Leading cadres in local governments that are complete above quota are eligible for commendations on their records. However, in regions that are incomplete, the provincial government is able to implement a veto (yipiao foujue) and cut off cadres and the local Peoples Governments from all annual honors and awards. Cadres can potentially lose their jobs and almost definitely will receive lower year-end bonuses. Additionally, upper levels of government can reduce the next years transfer payment and suspend all approvals for high energy-consuming projects. Punishments remain in place until failures are corrected. Changes in the 12th Five-Year Plan Though the basic performance target format, rewards and punishments remain in place, recent changes in the specific content and relative values of targets show how Beijing has modified performance targets to ensure implementation of industrial energy reduction goals. There have been three major changes since the first energy performance targets were put in place in 2007. More points have been allocated to energy reduction measures, rather than specific, quantitative energy reduction targets. In other words, more points are allocated for process completion, the steps needed to achieve the required quantitative outcome, rather than those quantitative outcomes. In the earliest versions of the performance target tables, when there was wider local variation, some areas allocated 70 points for energy reduction goals and 30 for measures, while others had a 50-50 split. Starting in 2009, there has been a consistent, national split of 40 points for specific energy reduction goals and 60 points for various measures.

The number and specificity of energy reduction measures has increased dramatically from 2007. This change complements the first in that in 2007, there were 31 specific measures for enterprises and 24 for local governments, now there are 50 for enterprises and 45 for government. Additionally, many of the new measures are more complicated to calculate, as some are continuous rather than binary. This creates incentives to begin some measures because points can be earned for varying levels of completion and additional bonus points are added for certain best practices and innovations. The 40 performance points are binary. This third and most important major change occurred in the summer of 2012. Until July 11, 2012, when the NDRC announced the Top-10,000 Enterprises Energy Reduction Performance Target Responsibility Plan, the specific, quantitative energy reduction targets were a continuous goal, i.e., 100 percent completion netted 40 of 40 points, 90 percent netted 35 points, down to 50 percent, which netted 15 points. This meant that an enterprise could meet every target in the energy-saving measures category while only completing 50 percent of the energy reduction target and still get a 75, which until late 2011 was a complete and would count as fundamentally complete now. That means no rewards, but also no punishments. Now those 40 points are binary, either an enterprise completes its yearly reduction quota or the absolute best it can score is 60 points for a fundamentally complete, though more likely it will be incomplete and face the related consequences. For local governments, 30 points will be calculated this way, which still adds considerable pressure for completion.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


The first two changes reflect the challenges China has faced in actually implementing industrial energy use reduction. Quantitative targets are well and good, but without support for technical upgrading, an expert energy management staff and instruments for supervision and verification of energy use, they are difficult to meet. Thus, performance targets have shifted to emphasize energy-saving measures that should result in greater success in achieving quantitative goals. For example, in 2007 a company could hypothetically receive up to five points for organizing leadership (zuzhi lingdao) one each for organizing a leading group, establishing a department for energy management, creating a full-time position in that department, deciding the duties of that office and starting to do actual work. A company could potentially get four points for writing all of this down. Moreover, there were no set procedures for verifying any of these actionsnot even to examine documentation. In the new evaluations, there are six points in the same category, three of which come from hiring an actual person for the position, that person being qualified for the position, and completion of the work. We can imagine that, previously, many companies received four points for nothing, since the requirements to create a position and decide the scope of that position never actually specified hiring someone to fill the position. Now enterprises can only get three points for establishing a position without hiring anyone to fill it and those points have less importance relative to everything else, as the targets contain many more specific measures to complete. And the guidelines now specify steps to verify that they have, in fact, created the position. It is not a perfect system, but it is an adaptation on the part of the central government to counteract enterprises that previously sought to game the system. Taken together, these three changes

strengthen the performance target system and are a major step in improving both enterprise and local government behavior. While more points have been devoted to specific steps, ensuring there is a basis for success, the quantitative targets have not been weakened. By simply changing the way in which points for the quantitative targets are awarded, they have increased in importance. This is a smart and sensitive approach to addressing the challenge of local intransigence in implementation of industrial energy policy. CHALLENGES However, the performance target system is not a panacea. Though it is effective on an enterprise-by-enterprise basis, as various goals are aggregated at higher and higher levels of government and balanced against all the other energy targets, not to mention economic goals, industrial energy efficiency loses importance. So long as a local government scores higher than an incomplete, it and its leading cadres are still eligible for awards and commendations in other areas. Depending on the emphasis a higher-level provincial government puts on energy-related hard targets, local cadres have varying incentives to pursue industrial energy regulation. Typically, economic indicators still account for 60-65 points out of 100 on the aggregate cadre evaluations.2 In other words, by performing well on their economic targets, and so long as they are not failing in other areas, cadres can get promotions and higher bonuses. Additionally, though local verification regimes have improved over the last several years, energy monitoring is still not conducted in real time or even consistently. Local governments rely on spot checks of enterprises to verify they have implemented energy reduction measures and met quantitative targets. Enterprises have to provide evidence, but falsified records could easily go unnoticed. Moreover, though there is a separation of


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

third-party energy auditors and local officials, officials do have incentives to cover up, obfuscate or underreport bad performance at enterprises under their jurisdiction. It would be nave to assume that energy auditors and local officials are immune to such behavior, though it is difficult to say how often it happens. Overall, performance targets and cadre evaluations are an effective tool in reducing industrial energy consumption and have changed to meet new challenges, a credit to both the local and central governments. By adjusting incentives, performance targets serve an important agenda-setting function and keep enterprises and cadres on task. However, more changes in the wider policy environment are needed to ensure that performance targets can be fully effective.

Tucker Van Aken was a 2012-13 Fulbright Fellow based in Chongqing, China. His research interests focus on the political economy of policy implementation, firm-state relations, institutional change and industrial regulation with a focus on energy efficiency. He currently is working as a consultant at Exeter Group in Boston, MA. He can be reached at

1. Lynette H. Ong. (2012). Fiscal Federalism and Soft Budget Constraints: The Case of China. International Political Science Review. 25-9. 2. Barry Naughton. (2010). Economic Growth: From High-Speed to High-Quality, in China Today, China Tomorrow: Domestic Politics, Economy, and Society, ed. Joseph Fewsmith (Lanham: Rowman & Littlefield Publishers, Inc.): 76; Kenneth G. Lieberthal. (2011). Managing the China Challenge: How to Achieve Corporate Success in the Peoples Republic (Washington DC: Brookings Institution Press): 19. W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


by Susana Moreira

Chinas Trials in its Overseas Oil Investments

hirsty for oil and other raw materials, China is funneling money and manpower into an expanding number of countries to secure access to natural resources. This effort has successfully boosted Chinese oil assets overseas, but it has also exposed Beijing and Chinese national oil companies (NOCs) to increased amounts of political risk, particularly those linked to protests against their investments. In 1993, with limited funds and little overseas experience, Chinese NOCs took their first steps abroad, acquiring minor stakes in Canada and Peru. Small projects followed in many other countries, including Ecuador, Kazakhstan, Malaysia, Mongolia, Russia, Sudan, Thailand and Venezuela. During this first phase of acquisition (1993-2002), Chinese NOCs were ill-prepared to manage the political risks that accompanied foreign oil investments. Having little prior experience operating overseas, Chinese NOCs applied a one size fits all approach to foreign politics, emphasizing good relations with well-connected individuals. Gradually, this approach to political engagement started to falter under the weight of events, including indigenous protests against the China National Petroleum Corporations labor and environmental practices in Peru

and violent attacks against Chinese workers in Sudan. In March 2001, the Chinese leadership made its support for the international expansion of the NOCs known, when it wrote the going-out strategy into Chinas Tenth Five-Year Plan. It reiterated that commitment at the 16th National Party Congress in 2002. Beijings 2002 announcement of the going out strategy was a turning point for Chinese NOCs internationalization. This phase marked an important shift in Chinese NOCs investment patterns. They moved away from small and often challenging low-profit projects and focused on medium- and large-sized projects. At the core of the shift was Beijings decision to support Chinese NOCs overseas activities through plentiful and relatively cheap financing. Chinese NOCs benefited from the networks centered around governmentowned Chinese financial institutions (China Development Bank and China Eximbank) that connect resource-rich countries that lacked adequate financial resources with Chinese NOCs and construction firms. These developments, combined with modest investments in political insurance, social accommodation and intelligence gathering, expanded Chinese NOCs political risk management toolkit. Despite these


C h i n a E n v i r o n m e n t S e r i es 20 1 2/2013

improvements, unfortunately, NOCs risk management capacity remained weak. As a result, some of them experienced serious setbacks: CNOOCs failed attempt to acquire UNOCAL (2005), the failed Orimulsion deal in Venezuela (2006) and the Block 32 debacle in Angola (2008/2009). These unsuccessful deals provided valuable lessons and informed NOCs later investment decisions. Currently, Chinese NOCs delegate political risk management to international oil companies through mergers and acquisitions. In 2010, backed by national banks, Chinese NOCs invested $26 billion in foreign oil companies and projects in the form of long-term supply contracts. Although IOCs enjoy better risk management expertise than most of their Chinese counterparts, Chinese national banks, like Chinese NOCs, have little experience overseas. By delegating political

risk, Chinese NOCs potentially exchange one form of evil for another. Chinese NOCs will only become true masters of their fate when they develop their own political risk management capabilities. Succeeding will not be an easy task since it will require NOCs to adopt a dynamic worldview, one that considers different information sources and at the same time remains able to question assumptions. It also requires them to be flexible and resilient.

Susana Moreira is a PhD candidate at the School of Advanced International Studies, Johns Hopkins University. She can be reached at: smoreir2@jhu. edu. This is a summary of a longer paper available at the Journal of Current Chinese Affairs, Vol. 42, No. 1, 2013, p. 131-165.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

by Warren Karlenzig & Daniel Zhu

How Chinas Cities Can Chart the Course for the Planets Low Carbon Future

ities are a key driver of worldwide energy consumption and global carbon emissions. Chinas status as the worlds fastest urbanizing country will not end anytime soon, for the Chinese government plans to move 70-75 percent of the nations population to cities by 2030 (up from 47 percent in 2008). China is already the worlds leading emitter of greenhouse gases; the emissions will most likely to raise with 400 million more urbanites by 2030.1 To meet the challenge brought by booming megacities, Chinas National Development Reform Commission announced in 2010 the creation of five low carbon pilot provinces and eight pilot cities. These pilots represent a major turning point in the governments response to climate change and are a necessary predecessor to national low carbon programs and any relevant international treaties. Subnational level low carbon initiatives hold promise in that they are based on regional economic, industrial, and land use characteristics, allowing for more innovation and flexibility than one-size-fits-all national programs. Chinas low carbon pilot program thus possesses the potential to support a new international carbon credit framework, perhaps one that could partially succeed or supplement

the United Nations Framework Convention on Climate Change. Ideally, this subnational carbon pilot program should implement a system that accounts for all energy consumption and greenhouse gas emissions in each of Chinas provinces and major cities. Such a system, we refer to as a Low Carbon Accounting, Management and Credit System, should consist of three main elements: 1. A holistic carbon accounting system within Chinas five pilot provinces and eight pilot cities based on land use planning as well as operational and embodied (life cycle) energy use. 2. A strategic management system, including performance measures for local, regional and national governments (in addition to the carbon intensity reduction goals in the 12th Five-Year Plan), designed to monitor carbon emissions reduction efforts in not only industries, but also urban development and civil society. 3. An international carbon credit system based on life cycle energy/commodity flows. 2


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

4. No nation has ever embarked upon transforming its regions or cities on such a massive scale as China is currently undertaking. Chinas widespread and rapid rate of urbanization combined with these ambitious pilot programs provides the opportunity for the nation to become a global leader in low carbon urban modeling and development. For clean energy and low carbon performance, densely populated regions and urban areas can serve as a key source of scalable economic, management, and technological solutions. CHINAS LOw CARBON PROVINcE AND CItY PILOt PROGRAM The National Development and Reform Commission administers Chinas provincial and city low carbon pilot program.3 The five provinces participating in the pilot project are Guangdong, Liaoning, Hubei, Shaanxi, and
Yunnan; the eight cities are Tianjin, Chongqing, Xiamen, Nanchang, Guiyang, Baoding, Hangzhou and Shenzhen. Together they comprise 36 percent

infrastructure development and energy use in both commercial and residential sectors now contribute an ever increasing share of carbon emissions, the country will need to focus on the three main sources of carbon production in cities: embodied energy, operational energy, and land use. Understanding the trends in these Big Three is crucial for designing effective low carbon programs and better urban planning. Embodied energy includes life-cycle energy consumption in mining, transportation and production of materials, and construction and maintenance of buildings and transportation systems. The number of new urban residents relocating into Chinas metropolitan areas are greatly increasing energy use and carbon emissions due to the change of land useparticularly in the construction of roads that have encouraged more personal automobile ownership. Growing populations also increase carbon emissions through direct consumption of operational energy, specifically for heating, electricity, lighting and air conditioning. Chinas growing middle class urbanites will generate an ever-increasing demand for consumer products, including automobiles, appliances, furniture, and packaged food, some of which will be imported and all of which will have life-cycle energy and carbon emission implications in these expanding megacities.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

of Chinas gross domestic product, 31 percent of its energy consumption, 27 percent of its energy-related carbon emissions, and 27 percent of its population. In its 12th Five-Year Plan (2011-2015), the Chinese central government targeted a 40 to 45 percent carbon intensity reduction from 2005 levels by 2020, as well as a 15 percent non-fossil energy (hydroelectric, nuclear, and renewables) in the nations energy mix by 2020. The low carbon pilot program marks the first time that China has supported a comprehensive provincial, regional, and local governmental approach to low carbon development. URBAN CHINAS CARBON FOOtPRINtS During the 11th Five-Year Plan, Chinese policymakers emphasized the reductions of carbon emissions in industries. As

MOVING FORwARD tO ADDRESS tHE BIG THREE Among the Big Three areas of urban carbon only operational energy use has been systemically addressed in China. Land use and embodied energy impacts, in contrast, have been largely overlooked in city planning. However, with potentially volatile energy prices and supply risks in mind, it is crucial to align



transportation and land use planning with development to avoid unnecessary and costly carbon lock-in, whereby consumer lifestyles and markets become locked into fossil-fuel based systems, hindering alternative energy sources from taking off as viable options. [See Figure 1, Oil Demand in Reference Scenario (2007-2030)] Cities such as Guangzhou have been particularly adept in avoiding carbon lock-in by preparing for future transportation and land use needs with increased density and practical low carbon mobility choices besides cars. With ten million inhabitants, Guangzhou is Chinas third largest city. It has created strategies for effective public transport, pedestrian, and nonmotorized choices (including bicycles), which help lower the carbon footprint of land use in the city. The second and largely unmanaged consumer of energy in Chinas cities is embodied energy: life cycle energy used in producing consumer goods, roads, infrastructure, and appliances, as well as growing, transporting and processing food. Life-cycle assessment models are emerging and newly available data on embodied energy in cities, combined
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

with information and communications technologies, will enable better analysis and management. The following section on Suzhou provides an example of a city-scale embodied energy assessment. The third and most familiar area of concern for low carbon cities is their operational energy needs, which includes energy used in homes, offices, industry, and transportation. Operational energy use has been subject to industry performance goals in China, and is well documented with case studies, data, and performance-enhancing tools and approaches. Shenzhen, in particular, is exemplary in this category. It was the first city in China to release citywide building energy efficiency regulations and was one of the first cities to systemically plan for renewables and alternative forms of energy.4 EMBODIED AND OPERAtIONAL ENERGY ASSESSMENt At tHE CItY LEVEL IN SUZHOU A more holistic energy analysis for Chinas cities would include the complete built environment, as well as the purchasing and

FiGure 1. OiL DemanD in Reference Scenario (2007-2030)

China India Middle East Other Asia Latin America Africa E. Europe/Eurasia OECD Europe OECD Pacic OECD North America -200 -100 0 100 200 300 400 500 Mtoe

Transport Non-energy use Industry Power generation Other*

Source: IEA, 2009b.


consumption habits of those reside in, work in, or visit the cities. Such impacts could provide valuable insights into the true nature of urban energy and resource use. A 2010 study of Suzhou conducted by Lawrence Berkeley National Laboratory (LBNL) analyzed energy impacts from embodied energy in materials, buildings, infrastructure, food, and other products and services consumed by Suzhous six million residents, and the operational energy consumed by the citys industries and businesses.5 According to the LBNL China Energy Team, a typical urban resident consumes three times as much energy as a rural resident, and this increased energy consumption has not been assimilated into most of Chinas development models. Also missing from current measurements is the amount of embodied energy in the built environment, including buildings, pavement, tunnels, bridges, roads, and utilities. Additionally, current standard measures of energy consumption in China do not take into account the total energy needed to manufacture, transport, and sell the products and appliances (such as furniture, fixtures, paper, electronics, food, and packaging) in office buildings, homes, schools, or retail establishments. With supply chains now using information and communications technologies, such data should be obtained and tracked. PLANNING AND DEVELOPING LOw CARBON SOcIEtY Provinces and cities are centers for economic activities that can be systematically managed to reduce carbon emissions. Given the right incentives, businesses and residents can change consumption patterns to achieve large-scale greenhouse gas reductions. Populations in provinces, metropolitan areas, and cities make numerous choices directly and indirectly impacting their locales overall low

carbon performance. Some examples of the choices are: Where people live. The location of residences, jobs, shopping, and entertainment choices has substantial impacts on the carbon footprint of a province or a city. Types of homes. The quantity and type of materials used in residential building construction have significantly embodied energy implications, as does the construction of single family versus multifamily buildings. Types of food and household products people buy. Food has a major embodied energy impact on greenhouse gases. The global production of meat, for instance, produces 14 to 22 percent of global greenhouse gases each year, with beef accounting for 13 times more climate changing impacts than chicken. Therefore, if Chinas citizens shift diets to heavier meat, and particularly a beef-based diet, global greenhouse gases will increase accordingly.6

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

LOw CARBON AccOUNtING, MANAGEMENt, AND CREDIt SYStEMS FOR CHINAS PILOt PROVINcES AND CItIES In implementing the subnational low carbon pilot projects, Chinese policymakers and local officials should take a more strategic approach by better assessing carbon emissions based on land use, operational, and embodied energy use. If local officials map out trade and energy flows between provinces and cities, they could then provide an accounting of actual net provincial and city carbon emissions. If successfully piloted on a provincial or city level, a Low Carbon Accounting, Management and Credit System could ultimately serve as a template for provincial and urban policies



throughout China. By comprehensively modeling Chinas operational and embodied energy use and its energy flows within and among provinces, China would be fully prepared to participate in an international carbon accounting system whereby China and other nations can receive carbon reduction credit for products exported to other nations (especially renewable energy products). These credits can then be subtracted from national emissions. Conversely, China and other nations that import products, including renewable energy products and raw materials, would need to add to their own carbon emissions to account for the life cycle energy used to both manufacture and transport these products to China. Faced with 20 to 40 years of unprecedented urbanization, China has a window of opportunity to use cities as a primary means to better control carbon emissions. If China can implement a system that addresses energy and carbon impacts from all aspects of urbanizationincluding land use planning, transportation, life cycle energy use, and industrial operational energy usethe world will be on a faster path toward low-carbon development.
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

1000 corporations. He can be reached at: warren@ Daniel Zhu, partner with Tsing Capital, the leading environmental fund in China, has provided investment consulting to Chinese and foreign cleantech companies in renewable energy, recycling, ecological and green building technologies. Zhu has advised funds invested in by the Gates Foundation, Rockefeller Foundation and IFC. He received his BA in Economics from Zhejiang University where he was on faculty. Zhu earned his MA at Indiana University. He can be reached at:

1. Wang Xing. (2011, April 7). Urbanization expected to exceed 70% by 2030, says CASS. Peoples Daily. [Online]. Available: epaper/2011-04/07/content_12285282.htm. 2. Also see Steven J. Davis & Ken Caldeira. (2010, January 29). Consumption-based accounting of CO2 emissions. Department of Global Ecology, Carnegie Institution. [Online]. Available: http://www.pnas. org/content/early/2010/02/23/0906974107.full. pdf+html. 3. Peoples Daily. (2010, August 19). China Launches Low Carbon Pilot Program in Select Provinces, Cities, [Online]. Available: http://english. html. 4. Organisation for Economic Development and Cooperation. (2010, December 7). OECD Territorial Review 2010, Guangdong, China 2010. [Online]. Available: http:// w w w. o e c d b o o k s h o p . o r g / o e c d / d i s p l a y. asp?lang=EN&sf1=identifiers&st1=9789264090071. 5. David Fridley. (2010, August 12). Embodied Energy: An Alternative Approach to Understanding Urban Energy Use, The Oil Drum. [Online]. Available: 6. Nathan Fiala. (2010, February, 9). How Meat Contributes to Global Warming. Scientific American. [Online]. Available: http://www.scientificamerican. com/article.cfm?id=the-greenhouse-hamburger.

Warren Karlenzig is president of Common Current (, which specializes in metrics-driven urban sustainability development and management. Karlenzigs client work on economic models, policy implementation, enabling technologies and planning has included the United Nations, the US Department of State, the White House, the State of California, megacities (Shanghai, Guangzhou, Los Angeles) and Global



The Environmental Cost of Clean Energy: Chinas Renewable Energy Goals Contribute to Lead Pollution
by Perry Gottesfeld

hina is the worlds leader on clean energy investment. Under the 2009 United Nations climate change negotiations, Chinese leaders set an ambitious goal to obtain 15 percent of the countrys power from renewable sources by 2020. To reach this target, the Chinese government will have to significantly expand its adoption of photovoltaic (PV) solar and wind power generation. Such clean energy power generation can however still be polluting. For example, approximately 75 percent of PV solar systems in China are reliant on lead batteries, whose production and disposal is a growing source of pollution, posing a significant environmental health threat. The hugely popular electric bikes that are filling the roads are promoted as zeroemission vehicles, yet the manufacturing and recycling of their lead batteries also greatly contributes to lead emissions in China. ENVIRONMENtAL AND HUMAN HEALtH IMPActS OF LEAD POLLUtION Since 2009, more than 30 serious lead poisoning incidents have been reported in China in the areas surrounding lead battery manufacturing and recycling facilities. An estimated 70 to 80 percent of such facilities

have been opened illegally. High levels of lead pollution are particularly common from such facilities as their activity is often unregulated and they ignore safe processing practices. In a 2010 incident near a lead battery manufacturing plant in Anhui Province, over one hundred children were found to have elevated blood lead levels (BLLs). In response to this news, hundreds of local residents participated in a sit-in protest outside the factory gates. Chinese press reports indicated that some of the cases of elevated BLL in the children stemmed from workers taking home lead on clothes and shoes. Lead poisoning is among the most serious environmental health threats to children and one of the most significant contributors to occupational disease. High levels of led can damage the brain, kidney, liver, nerves and stomach and in extreme cases, cause death. In children, lead is absorbed from the environment at a much higher rate. Moderate lead exposure in children is responsible for a significant decrease in school performance, lower IQ scores, anemia, DNA damage, and behavior problems. A Chinese health review paper found that 24 percent of children in China have blood lead levels exceeding the World Health Organization level of concern (10 micrograms per deciliter).

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


In China, most batteries from electric waste, also known as e-waste, are recycled by melting down the material in open vessels or crude furnaces, causing up to 50 percent lead loss from the battery in the form of environmental emissions and waste slag. Oftentimes e-waste is recycled in small-scale backyard workshops that do not have the technology to prevent the release of harmful heavy-metals and chemicals into the land and waterways. Moreover, these often family-owned recycling units are left unregulated and therefore emit higher levels of lead pollution into the environment. Strikingly, the recovered lead from these sources is often of very poor quality and unusable for making new high-quality lead batteries without additional processing. Lead consumption in China doubled from 2004 to 2010 and is expected to rise with the growing demand for lead batteries. Approximately 80 percent of total lead production in China is used to make batteries for solar PVs and electric bikes. The central governments plans to add 1.6 GW of PV solar

capacity by 2020 will no doubt fuel this future growth. The electronic bike industry, which has grown to over 20 million units, already consumes approximately 37 percent of Chinas total battery output. Besides the heavy lead content of emissions from recycling and battery production facilities, coal-burning, lead paint, and the use of leaded gasoline, also contributes to Chinas lead pollution footprint. EFFORtS tO IMPROVE tHE ENVIRONMENtAL PERFORMANcE OF tHE LEAD BAttERY INDUStRY Given the substantial benefits of low-carbon renewable energy, Occupational Knowledge International (OK International)a Berkeleybased nongovernmental organization that focuses on environmental health threats in developing countriesis working with partners in China to improve the environmental performance of the lead battery manufacturing and recycling industries. Investments in environmental controls in lead

C H I N A E N V I R O N M e N T S e R I es 2010 /2011

With the implementation of occupational control measures, lead battery manufacturers can reduce exposures in their facilities. Photo credit: OK International.


battery manufacturing and recycling are much needed to reduce overall lead emissions and decrease the need to mine lead. Recovering lead from used batteries is much less energy intensive than producing lead from mined oreusing approximately 65 percent less energy, with similar reductions in greenhouse gas emissions. To further improve environmental performance in this industry, OK International promotes the use of voluntary third-party certification and eco-labeling, to recognize lead battery manufacturers that meet minimum emission standards, and agree to take back used batteries for environmentally sound recycling. OK International developed the Better Environmental Sustainability Targets (BEST) Standard to offer a comprehensive environmental certification program for lead battery plants. The BEST Standard covers lead emissions, occupational exposures, product stewardship, and other environmental performance criteria. Participating facilities in China and other countries are subject to annual audits against this performance standard. Auditors, that are trained and accredited, conduct these independent evaluations to provide on-site inspections on an annual basis. Companies that demonstrate compliance with the BEST Standard are eligible to place an ecolabel on their products. Simultaneously, OK International is working to encourage improvements in battery take-back policies and collection systems to

complement deployment of alternative energy systems Although China has regulations requiring battery companies to take back used batteries, there are no specific requirements for how this mandate should be implemented or enforced. Recent policy developments in Beijing, including a new plan by the Ministry of Environmental Protection to cut pollution in the lead-acid battery manufacturing and recycling industries by 15 percent by 2015, are a helpful step. These actions will surely help bolster OK Internationals efforts to engage in dialogue with the industry and government to seek improvements by promoting better enforcement. It is our goal to see that a lack of environmental controls in the production and recycling of lead batteries do not compromise Chinas renewable energy goals.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Perry Gottesfeld is the Executive Director of Occupational Knowledge International and he has been actively involved in the environmental health field since 1984. He obtained his Masters of Public Health in Biomedical and Environmental Health Sciences from UC Berkeley and in 1999 he founded Occupational Knowledge International. The organization works in partnership with other NGOs, businesses and governments to build capacity to address environmental health threats in developing countries. He can be reached at pgottesfeld@


by Jingjing Liu

In the Public Interest: New Litigation Tool for Cleaning Up Chinas Polluted Waterways


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

hinas rapid economic growth and industrialization since the late 1970s has exerted a heavy toll on the countrys environment and natural resources. Of Chinas array of environmental challenges, water pollution is often seen as one of the countrys most pressing issues. The Ministry of Environmental Protections 2010 Official Report on Chinas Environment1 paints a sobering picture of Chinas stressed water ecosystem: All seven major rivers in China suffer from moderate pollution;2 and, Ten out of the twenty-six lakes and reservoirs under the central governments direct supervision have a water quality grade higher than five,3 which is the lowest national water quality standard and signifies the water is essentially unusable.

In China today, agricultural pollution has become the top source of water pollution. Sewage and industrial accidents also pose major threats to water quality. In 2011, over 100 million people living rural areas did not have access to clean drinking water.4

Furthermore in 2012, Chinas Ministry of Water Resources reported that in the previous year 40 percent of Chinas rivers were severely polluted from 75 billion tons of sewage and wastewater discharges.5 Water pollution accidents are occurring more frequently in China. According to statistics of the Ministry of Supervision, there have been more than 1,700 water pollution accidents annually over the past several years across Chinafrom the Songhua River benzene spill in 2005 to the 2010 the Zijin Mining Groups Zijinshan Copper Mine leak, where 9,100 cubic meters of acid from wet sewage facilities were dumped into the Ting River in Fujian Province. This toxic leak contaminated drinking water and killed nearly 2,000 tons of fish. Weak enforcement of existing environmental protection laws is a major cause of the growing water pollution problems plaguing China. Poor enforcement of environmental laws stems from the enormous size of the country and the small staff and funding dedicated to the Chinas Ministry of Environmental Protection. A significant governance gap in water pollution law enforcement is local officials whose promotions depend largely on economic performance. They thus tend to prioritize economic development over environmental protection.


FOUNDAtIONAL LAwS tO PROtEct CHINAS WAtER In order to address Chinas environmental challenges, the Standing Committee of the National Peoples Congress adopted the Environmental Protection Law of the Peoples Republic of China (for Trial Implementation) in1979.6 This law gave individuals the right to sue an individual or enterprise for damages caused by pollution, but failed to acknowledge public interest cases. The mid-1980s witnessed the early development of Chinas environmental legislation, including the enactment of the Water Pollution Prevention and Control Law (the WPPCL) in 1984. Beginning in the early 1990s, Chinas environmental regulatory framework expanded at an unprecedented pace, and since then numerous environmental laws, regulations, rules, and standards have been enacted or amended every 7 year. In particular, the WPPCL was amended twice, in 1996 and 2008, to strengthen environmental protection responsibilities of local governments, increase opportunities for public participation in environmental decisionmaking, and to impose more severe fines and innovative penalties.8 The most recent amendment did include some language that indicated the possibility of public interest cases. Despite its good intentions, the WPPCL has failed to significantly improve Chinas water quality. Like many efforts to strengthen Chinas environmental legislative apparatus, the countrys environment continues to deteriorate due to a weak bureaucratic structure and severe disconnect between the central government and local officials.

Since the mid-2000s, Chinas judiciary has been playing an increasingly active role in addressing domestic environmental challenges by allowing environmental public interest litigation to be brought before courts.9 The Supreme Peoples Court created ten specialized maritime courts in coastal port cities (Beihai, Dalian, Guangzhou, Haikou, Ningbo, Qingdao, Shanghai, Tianjin, Wuhan, and Xiamen) to have to have jurisdiction over maritime torts and maritime contract disputes. In 2006, maritime courts were also given relatively clear jurisdiction over cases involving land-originated pollutants contaminating the ocean as well as navigable watersheds. Maritime courts are ideal for public interest cases in that they have accrued significant experience in resolving complex and cross-jurisdictional disputes involving water pollution cases. Chinese law stipulates that the plaintiff in

a civil lawsuit must be a citizen, legal person, or an organization that has a direct interest with the case.10 Because of this, no specific procedural or constitutional basis for public interest litigation currently exists in Chinese law. Nonetheless, experts claim that current revisions of Chinese environmental laws have created space for potential exploration of public interest litigation. ANALYSIS OF THREE WAtER POLLUtION PUBLIc INtERESt CASES Despite the governments refusal to formally recognize an expansion of public


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


interest rights, several provinces and cities across China have implemented a series of local regulations, court rules, and provisions, to allow for environmental public interest litigation. Below are three water pollution public interest lawsuits brought by the procuratorate, NGOs, and the environmental protection agencies to environmental courts or one of Chinas maritime courts. Each case offers examples of important innovations and limitations to the public interest law cases in China today. Groundbreaking Case in 2008: The Peoples Procuratorate of Haizhu District of Guangzhou Municipality v. Zhongming Chen The defendant Zhongming Chen opened a laundry facility (Xin Zhong Xing) in the Haizhu District of Guangzhou Municipality (Guangdong) in September 2007, without obtaining either a valid business license from the local industrial and commercial bureau or a pollution discharge permit from the local environmental protection bureau (EPB). The facility used laundry soap powder, fermenting power, and oxalic acid and dumped the waste water directly into the Shi Liu Gang River, severely contaminating the water. Local residents went to the laundry facility to complain about the pollution but the owner took no action. After learning about Xin Zhong Xings illegal discharge by from local residents, the Peoples Procuratorate of Haizhu District, Guangzhou Municipality (the Haizhu Procuratorate) decided to bring a civil lawsuit on behalf of the public interest in July 2008 against the facility owner. The Haizhu Procuratorate requested an injunction requiring the defendant stop illegal discharge of waste water immediately; compensate 117,289 RMB11 ($18,000) for the environmental impacts and economic losses caused by the facilitys illegal discharge; and

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

cover the case acceptance fee. The Guangzhou Maritime Court heard this case in November 2008, and ordered the defendant to stop discharging pollution immediately, pay a fee of 2,646 RMB ($407),12 and 117,289 RMB to the national treasury.13 The laundry facility was later closed by the defendant. This is the first civil environmental public interest case brought forward by the procuratorate in Guangdong Province. During the litigation process, the Haizhu Procuratorate received help from the local EPB in collecting relevant technical data and assessment materials for the lawsuit. Procuratorates and EPBs have succeeded in getting cases heard when they collaborate and promulgate specific rules to help facilitate case transfer, joint investigation, and evidence collection to promote environmental public interest litigation against polluters. In this case, Guangzhou Maritime Court firmly supported the procuratorates standing despite failing to meet the direct interest requirement under existing Chinese law. After this groundbreaking case, Guangzhou Maritime Court accepted another public interest case brought by the Panyu District Peoples Procuratorate of Guangzhou Municipality and ruled in favor of the plaintiff. It is particularly encouraging to have regular courts, in addition to maritime courts, settle environmental lawsuits. Given the scale and scope of water pollution in China, all courts are supposed to handle environment-related cases to better serve the public interest. The First NGO Public Interest Case in 2010: All-China Environment Federation & Guiyang Public Environmental Education Center v. Dingpa Paper Mill of Wudang District, Guiyang Municipality In October 2010, the All-China Environment Federation (ACEF) received complaints from residents living around the Nanming River in Guizhou Province


that Dingpa Paper Mill was discharging considerable amounts of industrial waste water into the river. ACEF sent staff to investigate immediately after receiving the complaints According to the pollution discharge permit issued by the EPB to the defendant in March 2010, the pollutants allowed for discharge only included sulfur dioxide and dust. In November 2010, ACEF collaborated with Guiyang Public Environmental Education Center, requesting that the defendant stop illegal discharge of waste water immediately, and cover both ACEFs attorney fees and other relevant litigation expenses. On December 10th 2010, the plaintiffs requested the court issue a preliminary injunction requiring the defendant to stop illegal discharge of waste water prior to the final judgment of the case. The court granted the preliminary injunction on December 15th, 2010. Fifteen days later, the court ruled in favor of the plaintiffs and ordered the defendant to stop discharging waste water into the Nanming River, pay ACEF 10,000 RMB for attorney fees, pay the water sample examination fee of 1,500 RMB ($231), and cover the case acceptance fee of 60 RMB ($9).14 This case has received significant attention from the environmental legal community in China, because it is the first successful environmental public interest case brought forward by an environmental NGO.15 The following points are important to consider when examining this case: The court granted the plaintiffs request to gather evidence related to the defendants illegal discharge activities, and sent court staff to the pollution site. .16 In environmental litigation it is crucial and often difficult to gather relevant evidence. The courts efforts to collect and preserve evidence helped facilitate the development of environmental public interest litigation.

The court took the lead in issuing a preliminary injunction in an Without a environmental case.17 preliminary injunction, the defendant could have continued to discharge waste water until the verdict was issued, further contaminating the Nanming River. By forcing the defendant to immediately stop illegal discharge helped to minimize environmental damage. Support from the Two Lakes, One Reservoir Foundation helped reduce the financial burden on the plaintiffs.18 Due to the complexity and technicality of environmental litigation, upfront costs related to environmental quality sampling and assessment of environmental harm are significant and can sometimes hinder public interest litigation efforts. The Two Lakes, One Reservoir Foundation set aside funding to promote environmental public interest litigation, in particular to cover the relevant assessment, evaluation, and sampling expenses. In this case, the Two Lakes, One Reservoir Foundation prepaid 1,500 RMB for water sample examination fee. This was the first time a public interest case received financial support from a foundation to cover litigation expenses. The court ruled that the losing party, the defendant, cover the attorney fee prepaid by ACEF. Unlike in the United States, the standard practice in China is for each party in a civil lawsuit to cover its own attorney fee. In this case the court ordered the losing party to bear the attorney fee, helping ACEF reduce its financial burden.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Notwithstanding the successes, there are a number of unresolved issues associated with this case. The defendant not only discharged waste water without a valid permit, but also discharged waste water containing contaminants greatly exceeding the national pollution standard. The plaintiffs only



requested compensation for the attorney fee, sample examination fee, and case acceptance fee, without requiring the defendant to pay for environmental damages19 or cover costs to help restore the Nanming Rivers biodiversity. The total for the attorney fee, sample examination fee, and case acceptance fee was 11,560 RMB ($1,778). Ultimately the fine was not high enough to deter the defendant from committing future violations.20 First Public Interest Law Case in a Yunnan Environmental Court in 2010: Kunming Municipal EPB v. Kunming Sannong Agriculture and Animal Husbandry Company and Kunming Yangpu United Animal Husbandry Company In June 2008, the two defendants subcontracted their farmland to more than 200 pig farmers even though the pollution treatment facilities for the contracted lands did not meet existing wastewater treatment standards. Once farming activities commenced, the waste water from the pig farming seeped into the groundwater and contaminated the drinking water source of a local village. The local EPB ordered the Sannong Company to stop pig farming and imposed a penalty of 500,0000 RMB ($76,923). The Sannong Company paid the fine, but the waste water seeped into the underground water system again in early 2010. In June 2010, the Kunming Municipal EPB, with the support from Kunming Municipal Peoples Procuratorate, brought a civil lawsuit to the environmental tribunal of Kunming Intermediate Peoples Court (the Kunming Court) against the two defendants, and requested them to: Stop damaging the environment; Pay all water pollution treatment expenses source, estimated to be around 4.17 million RMB ($641,538); Pay 155,294 RMB ($23,891) for an emergency environmental monitoring

fee and an assessment fee for remediation costs; and, Cover litigation expenses of this case.

In December 2010, the Kunming Court ruled in favor of the plaintiff, and ordered the two defendants to stop damaging the environment immediately, pay 4.17 million RMB to Kunming Environmental Public Interest Litigation Specialized Fund for pollution remediation, pay them an additional 132,520 RMB ($20,388 for pollution remediation costs, and cover the case acceptance fee of 40,177 RMB ($6,181).21 The two defendants appealed the decision to Yunnan Provincial Peoples High Court, who in May 2011 affirmed the judgment. This is the first environmental public interest case in Yunnan Province, almost two years after several environmental courts were established in Yunnan with the purpose of promoting public interest litigation. There are many reasons for the lack of public interest cases: Most environmental courts were established in response to serious environmental disasters, not because of an influx of environmental cases; Environmental cases are inherently complicated, technical, and expensive, which discourages potential plaintiffs from bringing cases forward; At this point China does not have a specialized body for assessing environmental harm; China also falls short of a trained environmental bar to put these environmental courts into good use.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Harder Cases to Bring to Court This case was actually one of two public interest law cases that the court picked. One month before the Kunming EPB brought this lawsuit forward in May 2010, the Chongqing Green Volunteers Union, a grassroots


environmental NGO, brought a public interest lawsuit against Yang Zong Hai Power Plant to the Kunming Court. Yang Zong Hai Power Plant is the largest sulfur dioxide emitter in Kunming and one of the most serious polluters in Yunnan Province.22 In the opinion of Chongqing Green Volunteers Union, if it could win the case against a major stateowned enterprise as the first environmental public interest case in Yunnan, it would set a precedent and help elevate the profile of the Kunming Court. However, the lawsuit against Yang Zong Hai Power Plant did not happen, and the Kunming EPB, instead of an environmental NGO, became the plaintiff of the first environmental public interest case in Yunnan Province. The Kunming Court clearly conducted selective judicial enforcement by picking a relatively easier case against two private animal farming companies over a powerful, large state-owned enterprise. The Sannong case awarded the largest amount of civil compensation ever in a single environmental public interest case, setting a precedent. Large monetary awards from such public interest cases no doubt play key roles in helping deter other polluters from committing similar environmental violations.23 INNOVAtION AND CHALLENGES GOING FORwARD These three cases show some enforcement efforts made by the judiciary to address Chinas pervasive water pollution problems. In all three cases, the polluters were given administrative penalties by local EPBs, but the administrative actions did not curb their pollution activities. This illustrates the urgent need to involve the Chinese judiciary in the enforcement efforts to make sure environmental laws do not stay only on paper. Despite the constraints on the standing issue under existing Chinese law, many maritime and environmental courts are

experimenting with allowing for public interest litigation. Some courts in China have built experience in environmental public interest cases and have become increasingly sophisticated at crafting innovative solutions. Although some environmental courts have displayed a greater willingness to take on more difficult cases and a greater degree of innovation in exploring solutions to environmental problems,24 most of the civil environmental public interest cases brought forward so far are relatively easy cases that involve small or medium-sized enterprises or individuals as defendants, and have relatively straightforward facts and solid evidence in favor of the plaintiffs. The courts have not yet taken on landscape-changing or precedentsetting cases involving powerful defendants who are major state-owned enterprises or multi-national corporations that either have sway over the local governments or deep pockets. The Kunming Court, an intermediatelevel court, is statutorily in a good position to take on a public interest case involving a powerful, high-profile defendant, so it is thus somewhat disappointing that it chose to turn away the Yang Zong Hai case. Hopefully as the Kunming and other courts accrue experience and become more comfortable in adjudicating environmental public interest cases, they will be able to avoid selective enforcement and start taking on much more difficult and controversial cases that will ultimately shape a stronger environmental governance landscape in China.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

A longer version of the discussion of the first case first appeared in the article Chinas Procuratorate in Environmental Civil Enforcement: Practice, Challenges, & Implications for Chinas Environmental Governance, published with Vermont Journal of Environmental Law (20112012, Volume 13, Issue 1). A longer version of


agencies, the lawsuits are called civil environmental public interest litigation. The latter litigation refers to civil lawsuits brought by environmental NGOs, environmental agencies as well as the procuratorates against polluters on behalf of the interests of the public as compared to for the private interests in an environmental tort lawsuit. It includes lawsuits similar to the citizen suit and civil enforcement actions taken by federal and state prosecutors in the United States, albeit with some important differences. 10. 1Civil Procedure Law (2007), art.108. 11. 1Including monitoring fee of 7,806 RMB, defaulted water resources fee of 312 RMB and compensation of 109,171.20 RMB for causing environmental harm and economic losses. 12. 1It is a standard practice in China that the losing party shoulders the case acceptance fee. 13. No. 382 Verdict of Guangzhou Maritime Court for First Instance Trial (2008). 14. No.4 Verdict of Civil Environmental Cases of Qingzhen Peoples Court of First Instance Trial (2010). 15. In 2009, ACEF brought a lawsuit against a container company in Jiangyin Port, Jiangsu Province, for air and water pollution. This was the first environmental public interest case brought by an environmental NGO, and both parties in this case reached an agreement mediated by the court. 16. Zhijiang Yan. (2011, January 4). New Measures Taken by the Environmental Courts to Resolve Difficult Issues in Adjudication. Legal Daily. [Online]. Available: cn/bm/content/2011-01/04/content_2425760. htm?node=20733. 17. Ibid. 18. Ibid. 19. ACEF did express that it reserved the right to pursue compensation of the economic losses caused by pollution to the Nanming River. 20. In addition, unlike the United States, there is no civil penalty under existing Chinese environmental laws to deter polluters. 21. No.1 Verdict of Civil Environmental Cases of Kunming Intermediate Peoples Court of First Instance Trial (2010). 22. Dengke Meng. (2010, October 1). Inside Stories of the First Environmental Public Interest Case in Yunnan Province. Southern Weekend. [Online]. Available: 23. Yunnan Provincial High Peoples Court Explains the First Environmental Public Interest Case in the Province, June 1, 2011, available on Kunming EPBs website at newsview.aspx?id=1724311. 24. Alex Wang. (2011, July 18). Green litigation in China today. chinadialogue. [Online]. Available: en/4413.

the discussion of the other two cases and the analysis of innovations and challenges in hearing environmental public interest lawsuits in China first appeared in the article Environmental Justice with Chinese Characteristics: Recent Developments in Using Environmental Public Interest Litigation to Strengthen Access to Environmental Justice, published with Florida A & M University Law Review (Spring 2012, Volume 7, Issue 2). Jingjing Liu was the Associate Director of the U.S.-China Partnership for Environmental Law at Vermont Law School for the past 5 years and is now pursuing a J.S.D. degree at Columbia Law School. She can be reached at:

1. Issued by Minister Shenxian Zhou of the Ministry of Environmental Protection on May 29, 2011. The report is available at cn/ pv_obj_cache/ pv_obj_id_34FA1910C975 D394AD2AED8 FA02D5DA09D7C1200 /filename/ P0201106033 90794821945. pdf. 2. Ibid., p. 5. 3. Ibid., p.14. 4. Yang Jian. (2012, February 17). Chinas river pollution a threat to peoples lives. China Daily. [Online]. Available: cn/90882/7732438.html. 5. Ibid. 6. In December 1989, the Environmental Protection Law was passed by the Standing Committee of the National Peoples Congress. 7. Jingjing Liu & Adam Moser. (2011). Environmental law-China. In Klaus Bosselmann, Daniel Fogel, and J.B. Ruhl (Eds.), The Encyclopedia of Sustainability, Vol.3: The Law and Politics of Sustainability, pp. 220223. Great Barrington, MA: Berkshire Publishing. 8. Jingyun Li & Jingjing Liu (2009, January). Quest for clean water: Chinas newly amended water pollution control law. China Environment Forum Research Brief. [Online]. Available: http://www.wilsoncenter. org/sites/default/files/water_pollution_law_jan09. pdf. 9. In China the widely used terminology for describing non-criminal litigations brought against polluters or environmental agencies that do not perform their statutorily mandated obligations is environmental public interest litigation. Conversely, if the defendants are government agencies, the lawsuits are called administrative environmental public interest litigation. If the defendants are not government


C H I N A E N V I R O N M e N T S e R I es 2012 /2013


Training the Next Generation of Environmental Advocates in China: The U.S.-China Partnership for Environmental Law
by Jingjing Liu

en years ago, the idea that a Chinese citizen could demand emissions data from an industry was unthinkable. Today, thanks to Chinas 2008 Open Government Information Regulationslegislation similar to the U.S. Freedom of Information Actstateowned enterprises are required to provide emissions data to the public upon request. That was exactly what Xie Yong did when he found out that his child was sick due to dioxin emissions from a nearby incinerator. While Xie was initially denied access to these recordsreaffirming the sad truth that Chinas regulations are often stronger on paper than in practicepublic interest environmental law, which requires open disclosure of company information, came to the rescue. The Beijingbased nongovernmental organization (NGO) Center for Legal Assistance to Pollution Victims (CLAPV) took the Xies case to court in 2010 and the fact it was accepted reflects the increasing momentum behind progressive environmental law in China. ENVIRONMENtAL GOVERNANcE IS NEcESSARY tO CHINAS SUStAINABLE DEVELOPMENt The recent expansion of environmental

courts in China has carved out a legal sanctuary for environmental cases to be heard and pollution victims to seek redress. These tribunals were designed to handle cases that other legal professionals may be less capable of managing. Having the legal infrastructure in place, however, is only half of the battle. Environmental expertise is essential if these tribunals are to have any effect. Another challenge to environmental law in China is that it is not above political pressure: environmental redress often hinges on the sympathies and allegiances of local government, government connections or guanxi, and the influence of industries. International collaboration is a valuable tool to help build the capacity of Chinese environmental enforcement agencies, lawyers, and courts to overcome these challenges. Chinas rapid economic development has caused enormous environmental degradation. As a result, there is desperate need in the central government, as well as among Chinese citizens, to address environmental problems. Yet, poor understanding and knowledge of environmental legal principles and institutional weaknesses remain key obstacles to improving environmental quality and the rule of law in China. One of the most critical challenges is the lack of expert environmental law professors

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


Unveiling the plaque for Chinas first public interest law firm (Professor Wang Canfa of CUPL (right) and Deputy Director General Wang Suli of the Policy and Law Department of the Ministry of Environmental Protection). Photo credit: Adam Moser.

capable of training the next generation environmental advocates. Developing welltrained legal professionals and professors that specialize in environmental law and pushing effective environmental regulatory policies, are essential components to Chinas pursuit of sustainable development. THE U.S.-CHINA PARtNERSHIP FOR ENVIRONMENtAL LAw At VERMONt LAw ScHOOL Vermont Law School (VLS), in collaboration with partners in both China and the U.S., launched the Partnership for Environmental Law (the Partnership) in 2006. With the support of the United States Agency for International Development (USAID), the Partnership works to increase knowledge, skills, and academic infrastructure needed to address environmental, energy, and climate change challenges in China. The Partnership carries out training workshops and institutional capacity building activities with Chinas legal and environmental professionals. Below is a summary of its work.

Legal Training Through training programs, VLS shares its expertise on environmental law and practice while imparting knowledge of successful models from the United States and other countries. This exchange seeks to achieve a mutual understanding of how international lessons in environmental law and management might be adapted in China. Those programs, together with other conferences and workshops, are open for scholars, students, lawyers, judges, government officials, and NGO leaders. Academic residencies are available for law professors. Dr. Jingyun Li, who recently completed her residency at VLS, came to the program after teaching environmental law as an associate professor at Jiangxi Normal University Law School. Dr. Li is now the Deputy Director of the Law Division in the Policy and Law Department of the Ministry of Environmental Protection. Dr. Li found that, the comprehensive study at Vermont Law School on American environmental law and policy, as well as the internship at the U.S. Environmental Protection Agency, gave me a fundamental understanding of the environmental management mechanism in


C H I N A E N V I R O N M e N T S e R I es 2010 /2011

SYSU Environmental and Worker Health and Safety Advocacy Center launch event.

the U.S. Moreover, she noted that he hopes to apply the valuable experience to the enhancement of Chinas environmental law enforcement and environmental protection management efficiency in the future. Institution Building The Partnership works with a series of organizations and universities to advance environmental law in China, including the China Society for Environmental Sciences, the Guangdong Province Environmental Law Scholars Network, CLAPV, and environmental law programs at Sun Yat-sen University, China University of Political Science and Law, Tsinghua University Law School and Renmin University of China School of Law. These cooperative initiatives have expanded the role of the Partnership, offering more opportunities for lawyers, scholars, and students across China to participate in the program. Research and Policy Development The Partnership supports a variety of research and policy development projects, specifically: mechanisms for enhancing enforcement and compliance of environmental law in China; environmental impact assessment requirements related to natural

resource extraction and exploration by Chinese corporations operating in Africa, Southeast Asia, and elsewhere; policy options for reducing Chinas environmental impact and footprint globally; Chinas energy governance challenges; and climate change.
W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

REcENt PROJEctS Environmental Advocacy Initiatives With funding from the Department of State and USAID, VLS launched its Environmental Advocacy Initiative in 2009. The initiative established Environmental Justice Young Fellows Exchange Program, and founded Huanzhu Law Firm in Beijing and Environmental and Worker Health and Safety Advocacy Center in Guangzhou. Environmental Justice Young Fellows Exchange Program The Partnership, in collaboration with the China Environment Forum at the Woodrow Wilson Center, successfully completed a fellowship exchange program designed to strengthen the professional development of environmental justice advocates in the U.S. and China. The program provided 9 Chinese and 9 American fellows with unique leadership training opportunities in a six-week exchange



to examine the impact of environmental degradation and climate change on ethnic minorities and other marginalized communities in both countries. The exchange significantly enriched the fellows understanding of the tools available for citizens to effectively participate in environmental decision-making and influence local environmental policies. Environmental Aid Law Firm VLS and the Beijing-based NGO CLAPV jointly launched the Huanzhu (Environmental Aid) Law Firm in March 2011. This is Chinas first environmental public interest law firm. It provides legal services to pollution victims, educates the public about legal tools available to secure their rights, and examines similar cases around the world to advise the Chinese government on environmental legislation. The firm opened at a time when Chinas legal system increasingly encourages public participation through litigation, as a means of enforcing environmental laws. Recent years have witnessed the importance of civil engagement as a means to promote environmental policy and enforce law at the provincial and local level. Environmental and Worker Health and Safety Advocacy Center VLS and Sun Yat-sen University School of Law launched Environmental and Worker Health and Safety Advocacy Center in Guangdong (the Center) in January 2011.Guangdongs Pearl River Delta, home of many industrial factories, suffers from severe environmental pollution. Migrant workers often face poor working conditions in those factories. Looking to become a regional leader in environmental health advocacy and safety, the Center expands the expertise and resources of the existing environmental law clinic at SYSU and provides experience-oriented training to students, equipping them with the resources needed to advocate on behalf
C hina E nvironment S eries 2010 /2011

of communities and workers in pollution and environmental health and safety cases. The Center also educates citizens about their rights and legal tools available to protect those rights. ENHANcED ENVIRONMENtAL ENFORcEMENt IN CHINA Over the past five years, the Partnership has strengthened the environmental legal system through enhancing the capacity of judges to adjudicate environmental cases, at the same time advancing the role of prosecutors in criminal and civil environmental enforcement. The center has facilitated numerous workshops that bring together Chinese judges, prosecutors, and their counterparts from the U.S. and other countries, to share practices in environmental prosecution and adjudication. Those discussions offered a comparative view for Chinese courts to enhance national and local environmental policy enforcement. The robust development of environmental courts across China is evident in recent years; local courts are also starting to handle more civil enforcement cases. The Partnership anticipates more progress in the coming years. The Partnership is also currently working in collaboration with the U.S. EPA, CUPL, and judicial training institutes in China to design an environmental law curriculum to train judges across China on adjudicating environmental cases. For more information please visit www.

Jingjing Liu was the Associate Director of the U.S.-China Partnership for Environmental Law at Vermont Law School for the past 5 years and is now pursuing a J.S.D. degree at Columbia Law School. She can be reached at:



Burning With Anger: A Chinese NGO and Citizen Opposition to Incinerators in Beijing
by Chang Cheng

hinas unfettered economic growth has come at a significant cost to the environment. Air and water degradation dominate headlines both within and outside China, but a less-acknowledged form of pollution from incinerators is becoming a major concern in many Chinese cities. China generates 250 million tons of municipal solid waste (MSW). Fifty percent of that waste is disposed of in landfills, putting significant pressure on and endangering already scarce land. To deal with the landfill challenge, the Chinese government has been avidly promoting incineration.1 However, because organic matters make up around 50 percent of Chinas MSW, incinerators in Chinese cities need to add coal or gas into the feedstock in order for it to burn efficiently.2 Thus, incinerators become a new source of air pollution and CO2 emissions. Many incinerators have sparked protests throughout the country but few are closed. In an effort to stop the construction of a new incinerator in Beijing, Friends of Nature Chinas first environmental NGO sent a letter on May 27, 2012 to Chinas Meteorological Academy of Sciences (CMAS), which was responsible for overseeing environmental impact assessment (EIA) of the Su Jia Tuo Waste to Energy Incineration Project in

Beijing.3 The EIA invited public comments on the project, which sparked FON to write this letter highlighting concerns about the projects feasibility and environmental impacts on neighboring communities, as well as the legality in the siting procedures for the facility. These doubts originated from a panel of citizens, academics, and environmental lawyers.4 The letter, which explained the dangers of this proposed plant, was also shared with the local environmental protection bureaus and community members. Over the course of two weeks, many residents from local communities visited government agencies and expressed their concerns about the project. These concerns triggered a number of environmental NGOs to demand further investigation into a series of questionable certification processes that were required under the EIA. Despite protests, Chinas Meteorological Academy of Sciences still accepted the EIA. The NGO coalition is now calling for a revocation of its EIA certification. Three days earlier, on May 24, my colleague Zhou Yuelin, a volunteer from Peking Universitys Law School, and I visited the CMAS office on behalf of concerned citizens in the community near the planned incinerator to acquire the EIA report for the Su Jia Tuo project. We were shocked to discover

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


that prior to this visit only one official from a local environmental protection bureau had visited to examine the EIA report. For a project so controversial and potentially damaging to thousands of residents health, it was unsettling that not one citizen had inquired about this report after the EIA notice was made available

for over a week. It was not until FON invited experts to analyze the potential health and social issues of the project, and journalists published these concerns, that citizens began to act. Upon being asked to provide an EIA report, CMAS officials were cautious; they first invited Mr. Zhou and me into a room with a camera recording us as we answered questions about our names, contact and job information before gaining access to the report. Another official was taking photos of us. It was not what we expected in exercising our right to access information. Public participation, which is a guaranteed right for citizens in Chinas EIA public hearing regulations, is a process in which all stakeholders should have access to the decision-making process. Evidence shows, however, that not only are government agencies not eager to involve stakeholders, but citizens themselves often do not actively participate. Public participation in the EIA process was instituted in 2002, when the Law on Environmental Impact Assessment was passed. However, it was not until 2005 that the first public hearing of an EIA was held, in response to pressures from both the news media and NGOs like Friends of Nature. In this first hearing, the project called for laying plastic

isolation film in the lakes of the Summer Place in Beijing, in order to save water for the State Administration of Cultural Heritage. Since this case, FON has gradually integrated issues of public participation into its mission. Our goal is to influence environmental decision-making through enforcing policy processes, tools of public participation, and information disclosure. We have been involved in cases such as reporting the misconduct of Asia Pulp and Paper and Sinopec to the Ministry of Environment Protection (MEP) when their stock market financing proposals were open for public comments. In another important case, FON demanded government information disclosure in order to challenge the decision to change the boundaries of the Yangtze River National Protected Area (YRNPA) for Endangered and Rare Fish Species. These boundary changes were likely being considered to make room for the Xiaonanhai Dam Project, a death sentence for endangered species found in this area. In the beginning of 2011, MEP published a notice on planned changes to the boundaries of National Protected Areas. Not surprisingly, an area that was excluded from YRNPA was the exact location of the planned Xiaonanhai Dam Project. Later that year, the International Union for Conservation of Nature and Natural Resources (IUCN) issued a letter to Chinese Premier Wen Jiabao expressing concern over this change. IUCN pointed out that this is a protected area of international importance, and home to 69 fish species, including the critical endangered Yangtze Sturgeon and Chinese PaddlefishThe proposed dam seriously threatens one of the last known areas suitable for these [two fish] species. In order to make public that this planned boundaries change is specifically for the


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

construction of the Xiaonanhai Dam, and to question these deceptive procedures, FON demanded government information from the Ministry of Agriculture based on the 2008 Regulations on Open Government Information. The information FON requested included the boundary-change declaration of YRNPA (which contains the reason for the planned change and the potential environmental impact of this boundary change), and the on-site investigation report of the planned changing area. However, creating publicity around a sensitive project was not easy. In March of 2011, the government declined our demand based on a policy issued by the General Office of the State Council in 2010, which states that all procedural information is not subjected to Regulations on Open Government Information. This provision is a catch-22 for members of the public who wish to participate in government decision-making. The procedural information exception is a wall that conceals that a decision has been made and prevents the public from getting detailed information. Any further public participation is meaningless. In light of this past experience, FON has been cooperating with Public Policy Center at the Chinese University of Political Science and Law to issue an administrative review request to Meteorological Academy of Sciences and to the Office of Legislative Affairs of State Council. Not only for information disclosure for this specific incinerator case, we are also challenging the legality of the procedural information catch-22 policy issued by General Office of the State Council that has limited transparency over the nature reserve re-

zoning. Despite our and other parties effort, in December 12, 2011, the State Council approved YRNPAs boundary change.5 The approval, however, will not stop FON to keep using every legal tool possible to protect the environment around Yangtze and beyond.

Chang Cheng heads the Public Participation Program at Friends of Nature. He can be reached at:

1. Tara Sun Vanacore. (November 2012). Refusing to Waste Away: Chinas Tale of Trash Cities and the Incinerator Boom. China Environment Forum Research Brief. [Online]. Available: http://www. 2. Ibid. 3. The Sujiatuo Waste to Energy Incineration Project Plan was officially made public in November 12, 2010. This is actually the replacement option for the Liulitun Incineration Project, which was supposed to be completed during the 11th Five-Year Plan. The previously planned Liulitun project had been the subject of protests for 6 years and was finally called off by the Beijing Municipal Solid Waste Bureau. No one in the community knew the new Sujiatuo plan until it was made public on November 12, 2010. 4. The lawyers had studied the simplified version of the EIA report, which by according to the EIA Public Participation Regulations must be made available to the public. 5. The Central Peoples Government of China. (December 12, 2011). Guowuyuan bangongting guanyu tiaozheng hebei dahaituo deng 3 chu guojiaji ziran baohuqu de tongzhi (State Council General Offices notice on changing 3 national protected zones). [Online]. Available: zwgk/2011-12/14/content_2020321.htm.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

by Leah Larson-Rabin


Compensation in the Shadow of the Law at Yangzonghai: Legal Reform, Interested Actors, and Pollution in Yunnans Lakes

ang Qians house sits back against the hill that shelters Qingshui Village.1 In his front yard, a flower garden slopes down towards his fields, which lie along the shore of Yangzong Lake. Yangzong is one of Yunnans nine plateau freshwater lakes that sits high above sea level. All of these skyhigh lakes are fed by the network of rivers and springs at the headwaters of three the major river systems in Asia. High upstream one would assume they are crystal clear waters, but according to 2010 data, seven of the nine lakes are actually too polluted to be used as a source of drinking water. Five of those are classified as 5+, the worst pollution level in the governments water quality rating system, which means the water is unsuitable even for industrial use (MEP, 2010). Yangzongs water is strikingly clear especially compared to Lake Dian, the Pearl of the Plateau, whose waters are bright green with algae. But the clarity is deceptive. In Wang Qians main living room sits an indicator of Yangzongs crisis: a large bottled-water dispenser, labeled with the name of a reputable spring-water company. Wang Qian is one of about 26,000 people who previously depended

on Yangzong Lake for fishing, irrigation, and drinking water, but no longer (Yangzonhais Contamination, 2008). In June 2008, the provincial Environmental Protection Bureau (EPB) detected dangerously high arsenic levels, up to 25 times the level safe for consumption, during an unscheduled inspection (Wang et al., 2010). In the months following this discovery, the government instituted the Three Nos Mandateno drinking, no swimming, and no aquatic productsand drinking water was trucked in for the surrounding villages (Yanzonghais Severe Arsenic Contamination, 2008). Bureaucrats from Kunming and Yuxi argued over whose responsibility it should have been to prevent the contamination in the first place, and who should have noticed the rising levels of arsenic once prevention had failed. The provincial party secretary, Bai Enpei, declared an environmental emergency and demanded accountability from the local officials who had failed to prevent the problem and from the heads of the polluting firms, who scapegoated their workers to avoid responsibility (Wu & Wu, 2008). In October 2010, the government announced and identified Yunnan Chengjiang Jinye Corporation, which had already been


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

The Yanzonghai Power Plant on the shores of the lake, early in the morning.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

fined the maximum fine of 100,000 RMB six times previously between 2002 and 2008 for pollution violations, the culprit responsible for the arsenic contamination of Yangzong Lake. Three Jinye executives were found guilty of committing a major environmental pollution accident crime;2 two government officials were found guilty of dereliction of duty in failing to prevent the incident and were given prison time;3 and 26 cadre members were dismissed from their posts. Given the high-profile legal response to the pollution, one could safely assume that the villagers around Yangzong Lake would be aware of the legal system and its potential use in confronting environmental harm. In particular, one might expect the villagers to be well-acquainted with the dangers of arsenic contamination and the role of the legal system in addressing pollution concerns. Instead, when I spoke to Wang Qian and his neighbors, I found ignorance and skepticism. Not only were they unaware of the details of the court case, they insisted that the arsenic had been

exaggerated to provide an excuse to force them off their land for a cheap price. One villager I interviewed emotionally explained: In 2009, and then again last year, we have had bureaucrats and companies come and offer us money to move. They use the water as an excuse, telling us that it is no longer safe to live here, water our crops, eat the fish. They offered us 30,000 to 40,000 RMB, but how can they promise us we will have food if we move, or that we will have work? This is where I was born, and I am healthy!4 Zhang Zhulin, Wang Qians neighbor, acknowledges that he would move, but only if they would offer 200,000 RMB. He expects them to offer more the next time.5 COMPENSAtION OR COMMAND? THE SHADOw OF tHE LAw AcROSS ENVIRONMENtAL DISPUtES This story of compensation under conditions of environmental harm is not unusual. Increasingly, research has revealed


A villager from Hubian Village, turning the soil in her fields, which end two feet from the waters of Yangzong.

that many communities in China are seeking or being offered compensation as a way to diffuse or delay the discontent that arises from harm to livelihoods and health caused by pollution (Van Rooij, 2011; Interview data, 2011). Whether that compensation is sufficient depends on the costs and benefits calculated by communities, local firms, and local officials during the negotiations. The bargaining for this compensation involves different actors in each conflict, and the calculations vary based on a range of factors. These factors include immediate estimates of the environmental damages costto health, agriculture, and property valuesbut also estimates of the potential political and economic costs that could arise should the parties fail to come to a mutually acceptable solution. A big challenge in these negotiations is that individuals are assessing their costs and are bargaining for compensation from local government and businesses that are calculating their costs and vulnerability to new legal and political pressures. If local factory owners believe, for example, that individuals and

communities might seek a political or legal resolution, or that such a choice is likely to draw undesirable media and/or higher-level political attention, they then have greater motivation to pre-empt this process with generous compensation.6 Therefore, legal reform that improves access to legal resolution for these communities, or at least, makes legal action a perceived option, shapes the compensation bargaining process, although bargaining information is asymmetrical and imperfect. As a result, the actual leverage provided to pollution victims by this shadow of legal reform remains subject to both the participants understanding of the legal options and the political environment, as well as to the conditions of the pollution itself. Scholars have increasingly focused on the breadth of awareness or consciousness of a formal legal system among Chinese citizens (see, e.g., Gallagher, 2006; Landry, 2008; Diamant, Lubman and OBrien, 2005), which accompanies a rapid expansion of the system. The central government and, to some extent, the provincial governments have


C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Piles of discarded flowers, one hundred meters from Xingyun Lake, and a sign of the growing presence of the flower industry.


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

demonstrated a commitment to expanding the legal system, particularly in the environmental sphere. Over the past decade the Chinese government has promulgated a plethora of increasingly progressive environmental laws and regulations and expanded the green court system. Some of the first environmental courts were established in Yunnan Province precisely to deal with water issues and help resolve environmental problems that cross jurisdictions. In the case of water pollution, for example, in 1996 there were only 11 new or revised laws and regulations promulgated, compared to 87 in the 2008. At the local level, this expansion has been even more rapid. (See Figure. 1). Furthermore, 11 new environmental courts have been established over three provinces in the last four years; seven of them are in Yunnan (Gao & Wang, 2011). Despite this rapid and large-scale expansion of laws and courts, however, capacity remains low, and legal consciousness has not yet been shown to significantly increase engagement with the formal system. Somewhat ironically, statistics show that more and more Chinese

individuals are turning to the legal system to seek remedy (Stern 2009), but discussions with activists in Yunnan reveal their skepticism and confusion over the complex role for legal reform and the environmental courts.7 Seeking evidence that the shadow of new laws reaches further to influence behavior and exploring the manner in which it does so, therefore, improves our understanding of how law can be used to govern environmental challenges. THE ROLE OF LAw AND tHE FUtURE OF YUNNANS LAKES The multicolored and unusable water in many of Yunnans lakes demonstrate that new laws and courts have not had an appreciable effect to date on the water pollution mitigation. (See Figure. 2). The water pollution laws and regulations are currently institutions in waiting that overtime through more successful legal cases could help improve enforcement. Some hopeful cases support this optimism. One case where legal action did lead to a significant improvement in pollution


levels was Yangzong Lake.8 Important factors contributing to the successful presentation of the legal case and agreement on a remedy include the rapidity with which Yangzongs water quality changed, the discovery of the pollution by the government (because the pollution was not visible), and the ease of assigning blame for the pollution to the lakeside factory. In the shadow cast by the legal action, however, these dynamics play out differently for Wang Qian and his neighbors, and illustrate the tensions and inconsistencies in gaining access to Chinas judicial system, and using the law to address lake water pollution in particular. Because Wang Qian could not see the pollution and because no damage to agricultural irrigation or human health appeared in Qingshui, he and his neighbors could only trust the governments word that a pollution problem existed. Certainly, the fishing catch declined, but it had been decreasing in recent years due to overfishing and the introduction of invasive species.9 As a result, the court cases, the shutting down of the local Jinye factory, and even the imprisonment or dismissal of local officials, do not make the Qingshui villagers feel more confident that the legal system is a helpful forum in which to pursue environmental disputes. From their perspective, the process simply informed them that a problem exists and that their land is now worthless. Formal legal action can, therefore, have a highly variable influence on compensation bargaining. Although further research is necessary, the emerging pattern indicates that since the new legal regulations are vague, inconsistent, and poorly enforced, and direct political action is unpredictable, the outcomes of bargaining compensation vary wildly and may, in some cases, undermine pollution remediation efforts. While the shadow of environmental legal reform shapes behavior beyond the reach of the formal legal system, it does not

necessarily result in resolutions that follow the pertinent regulations, nor is compensation a sufficient incentive to prevent further damage. Furthermore, much of the pollution in Yunnans lakes comes from agricultural run-off (non-point source pollution), which is surely challenging to resolve through the legal system. Yunnans lakes and lake communities are under threat, and although the legal systems role is expanded by the bargaining in its shadows, the law cannot solve the environmental challenges by itself and may render future prospects even bleaker.

Leah Larson-Rabin is a Ph.D. candidate in the Department of Political Science at the University of Wisconsin-Madison and also holds a J.D. and M.I.P.A. She lives in Yunnan, China, where she is conducting fieldwork, focusing on how individuals who live along polluted lakes address environmental challenges. She can be reached at

I would like to thank the villagers of Yunnans lake communities for being so welcoming, the editors of the China Environment Series for their feedback, and Zachary, Sagan and Asha LarsonRabin for their patience and insights. This material is based upon work supported by the National Science Foundation under Grant No. DGE-0549369 IGERT: Training Program on Biodiversity Conservation and Sustainable Development in Southwest China at the University of Wisconsin-Madison.

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Bai, Licheng (2009, October 10). 3 , , Spring City Evening News. [Online]. Available: http:// htm.



W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

Gallagher, Mary E. (2006). Mobilizing the Law in China: Informed Disenchantment and the Development of Legal Consciousness. Law & Society Review, 40(4), 783-816. Michelson, Ethan. (2008). Justice from Above or Below? Popular Strategies for Resolving Grievances in Rural China.The China Quarterly193: 43-64. Gao, Jie and Alex Wang (2011, March 16). Environmental Courts and the Development of Environmental Public Interest Litigation in China. Journal of Court Innovation. National Bureau of Statistics. (2009; 2000). China Environmental Yearbook. Beijing, P.R. China. Landry, Pierre. (2008). The Institutional Diffusion of Courts in China: Evidence from Survey Data. In Tom Ginsburg and Tamir Moustafa (Eds.), Rule By Law: The Politics of Courts in Authoritarian Regimes. (pp. 207-34). Cambridge and New York: Cambridge University Press. Ministry of Environmental Protection (1999-2010). State of the Environment Report. [Online]. Available at Stern, Rachel E. (2009). Navigating the Boundaries of Political Tolerance: Environmental Litigation in China. Unpublished doctoral dissertation, University of California, Berkeley. Van Rooij, Benjamin. (2011). The Compensation Trap: Chinese Lessons about the Limits of CommunityBased Regulation. Unpublished draft on file with author. Wang Zhenhua, He, Bin, Pan, Xuejun, Zhang, Kegang, Wang, Chang, Sun, Jing, Yun, Zhaojun and Jiang, Guibin. (2010). Levels, trends and risk assessment of arsenic pollution in Yangzonghai Lake, Yunnan Province, China. Science China.Vol.53 No.8: 1809 1817. Wu, Hao & Wu, Xiaoyang. (2008, October 22) Bai Enpei: The boss to make money and the workers bear responsibility phenomenon. Xinhua Yunnan Channel. [Online]. Available: content_114996.htm.

Yangzonghaisseverearsenic contamination: prohibition against drinking, swimming. (2009, September 18) Chinese Dragon. [Online]. Available: http://www. Yunnan Provincial Office of Environmental Protection (1999-2010). State of the Environment Report. [Online]. Available: DisplayPages/ContentList_390.aspx.

1. Names have been changed to protect respondents. 2. The three executives were also sentenced to imprisonment and additional fines, but are appealing the judgment. 3. The three charged were Gao Maolin, Chen Yuliang and Yang Xuemei., Yang Xuemei was found guilty but not imprisoned ,because was ill at the time of the trial. (Bai, 2009) 4. Subject 31, villager in Village 6, interviewed May 16, 2011. Interview on file with author. 5. Subject 32, villager in Village 6, interviewed May 16, 2011. Interview on file with author. 6. Chinas increasing investment in the legal system and the CCPs ongoing efforts to maintain perceived legitimacy produce a political interest in making the legal system look like it works and is, in fact, a viable course for seeking remedy. Furthermore, political costs can result from the centers efforts to provide a culprit for environmental crisesagain, to maintain the Partys legitimacy and stability. 7. In one interview, an activist was quite angry at the mention of the new environmental courts, shouting, They are false! They are all false! Subject 24, Kunming activist, interviewed on April 15, 2011. 8. Recent reports from the local level EPBs show the water quality to be between levels 4 and 5. (Yunnan 9. Subjects 34 and 35, villagers in Village 6, interviewed May 16, 2011. Interview on file with author.

by Kristen McDonald


Permanent River Protection: an Option for China?

ll environmental wins are temporary, all losses are permanent is an accepted fact among advocates for protection of natural resources. But designations that set aside areas of land and water for protection are seemingly a permanent win. These include World Heritage Sites, national parks and monuments, and other designated areas. Many countries have designation systems for rivers which prohibit major development, such as dams; these include the U.S. Wild and Scenic Rivers System, the Canadian River Heritage System, Norways river protection scheme, and the European Union Water Framework Directive. China has at least 3,700 protected areas, including some 137 protected freshwater areas (largely wetlands), however threats abound. For example, recently, the Ministry of Agriculture attempted to revise the boundaries of the Yangtze River National Protected Area, ostensibly to make room for the construction of the Xiaonanhai Dam. This case is still pending, but it demonstrates that there are no clear guidelines for whether or not dams can be built within protected area boundaries. It may be time for a new system for permanent river protection in China, and here is why: Chinas 12th Five-Year Plan calls for building even more dams at an even faster

rate. The 60-odd planned medium and large dams are justified as necessary to coping with the triple challenge of increasing energy demand, emissions reductions targets, and the unacceptable risks of alternatives such as nuclear power. At the same time, there has never been more widespread recognition in China that freshwater resources are vital, and that the country needs better solutions for managing the declining health of its rivers and streams. Freshwater scientists around the world now recognize that maintaining natural flow regimes are critical to many aspects of healthy freshwater ecosystems and the benefits they provide. Yet time and time again, efforts to stop even the worst dam projects in China fail, and it is in part because the importance of natural flow regime is not well understood within China. There are two other key barriers to protecting free flowing rivers: first, the benefits of hydropower are highly valued by government decision-makers, while other value associated with free-flowing rivers (such as ecological integrity, fisheries, local water quality, and scenery) are undervalued. Secondly, underlying government structures and development directives, such as the 12th Five-Year Plan, support the construction of new hydropower projects, while there are no parallel policies or institutions that support


C hina E nvironment S eries 2012 /2013

long-term protection of free flowing rivers. LESSONS IN PROtEctING FREE FLOwING RIVERS In 2009, China Rivers Project launched a research project focused on developing a set of recommendations for a new policy of long-term river protection in China. The first phase of the project (2009-2010) involved a team of masters students at the University of California at Santa Barbaras Bren School of the Environment. The team developed case studies on the four free-flowing river protection policy frameworks listed above, and preliminary thoughts on developing such a system in China. The second phase of the project (20102012) involved distilling lessons learned and tractable policy recommendations for China. In this second phase, China Rivers Project is working with Beijing Universitys Center for Nature and Society to shape final outcomes and ensure their political relevance through dialogue with relevant government officials. Some of the initial lessons learned from the case studies comparison are outlined below: 1. Impetus for Protection System and Need for Value Statement. Each of the four policy frameworks specifically states that there is a national interest in either improving water quality, or protecting freeflowing rivers, or both. 2. Flexibility to Protect a Variety of Rivers. All systems include a degree of flexibility in the designation of rivers; both whole rivers and river segments, wild rivers and those with some development, are recognized as having natural values and are eligible for protection. 3. Comprehensive Management Plan. All systems require comprehensive management plans for rivers to ensure the

The Upper Yellow River in Gansu Province. Photo credit: Travis Winnn.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

values for which the river was designated can be protected into the future. 4. Intra-Agency Cooperation. All systems require coordination among relevant government agencies, and establish venues for such coordination and sharing arrangements for river management. 5. Public Consultation. Though some of the systems studied are more top-down while others are bottom-up, all systems require broad public participation and stakeholder consultation. In addition to these common elements, the research revealed differences between the four systems which may be of interest in the Chinese context. The U.S. Wild and Scenic Rivers system



is the strongest tool for permanent river protection, and has very clear and compelling enabling legislation language which may be useful in the drafting of a Chinese policy. The Canadian Heritage Rivers System is a good alternate example of how a voluntary river protection system can still been effective in protecting rivers, and the systems emphasis on cultural heritage protection may be of interest in China where cultural sites and associations are often present along waterways. The Norway River Protection Scheme comprehensively identifies which rivers will be developed for hydropower and which will remain free-flowing, demonstrating that planning for hydropower can be accomplished alongside planning for river protection. The EU Water Framework Directive is a useful example in that its stated goal is protection of rivers for human uses such as drinking water and recreation, but its method of protection is maintaining or restoring river ecological health, thus institutionalizing the link between these two objectives.

A national policy for China that seeks to protect non-hydropower values of rivers would send a strong message to dam developers, and the public at large, that some rivers in China are more valuable for their ecology, scenery, culture, or water quality, than for their hydropower potential. Whether or not China can create a comprehensive system of free-flowing river protection spanning the entirety of its river heritage is far from certain. But even if only a few rivers were permanently set aside from dam building, it would be an improvement over the status quo state where all rivers are open for hydropower development regardless of the harm to other river values.

Kristen McDonald is the co-founder of China Rivers Project,, an organization whose mission is to develop river recreation and river conservation in China. She currently serves as an advisor to China Rivers Project and is the China Program Director at Pacific Environment. She can be reached at: kmcdonald@


C H I N A E N V I R O N M e N T S e R I es 2012 /2013


Guizhous First Public Interest Environmental Litigation: Guiyang Lake and Dam Administrative Bureau VS. Guizhou Tianfeng Chemical Co., Ltd
by Cai Ming

Editors Introduction

Water pollution is perhaps Chinas biggest environmental challenge, for weak regulatory enforcement has led to a cocktail of agricultural runoff, untreated municipal and industrial waste that is contaminating most of the countrys rivers and lakes. Even relatively poor provinces that are heavily dependent on agriculture like Guizhou are facing growing water quality problems. In southern China there has been a proliferation of environmental courts that were created to handle and basin-wide water pollution and natural resource destruction cases. The China Environment Forum was honored to feature Judge Cai Mingthe head judge at the Environmental Court in Qingzhen, Guizhouas a speaker at a forum in Washington, DC on June 8, 2011. Judge Cai was introduced to the China Environment Forum through a two-way law exchange for environmental law professionals in China and the United States in June 2011. This exchange was sponsored by the National Committee on United States-China Relations (NCUSCR), in partnership with the Center for Legal Assistance for Pollution Victims at China University of Political Science and Law. The program, supported by funding from the U.S. State Departments Bureau of Educational and Cultural Affairs, involved a two-week study visit and month-long fellowships for Chinese and American participants. A webcast of Judge Cais June 8, 2011 presentation is available on the CEF Events webpage under the title: Environmental Legal Advocates Pushing the Public Interest. Judge Cai graciously agreed to write up a description of one of the first environmental public interest cases to be tried by a Chinese court. We are grateful to NCUSCRs Daniel Murphy for introducing Judge Cai and his colleagues to us.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

he defendant, Guizhou Tianfeng Chemical Co., Ltd. (hereafter Tianfeng), located in Gaofeng in Guizhou Province,

is a manufacturer of the chemical fertilizer ammonium phosphate. Since the 1990s, Tianfeng owned land near Henhouse Slope in the nearby village of Baitou and used it as



a waste dumping site for large amounts of phosphogypsum, a byproduct of ammonium phosphate manufacturing. Both the manufacturing plant and the phosphogypsum tailing storage facility are located in Hongfeng Lake, which supplies drinking water for the provincial capital Guiyang. On December 10, 2007, the Guiyang Lake and Dam Administrative Bureau (GLDAB), a special agency dedicated to protecting Hongfeng Lake from pollution, filed a public interest law case to the Qingzhen environmental court, requesting the defendant to: (1) stop damaging the Hongfeng Lake area and its upstream Yangchang River, (2) prevent any future damage, and (3) pay for the cost of the lawsuit. The environmental court made its first judgment on December 27, 2007, requesting Tianfeng to stop polluting and close its phosphogypsum tailing storage facility. The defendant was also ordered to eliminate other environmental threats by March 31, 2008. Tianfeng accepted the decision and did not appeal.

GAtHERING FActS AND TAKING ActION Prior to filing the case, local government officials had inspected and detected environmental abuses by the Tianfeng Chemical Company. On May 17, 2007, the Peoples Government of Guizhou Province issued a notice requiring Tianfeng to complete an overhaul of the waste storage and install leachate recycling facilities by July 2008. On December 10, 2007, the GLDAB released test results of water samples from both the seepage spot and the Yangchang River near Tianfeng. The results revealed that the leachate had: A pH level of 2.25 (very acidic); A total phosphorus (TP) concentration of 50,060 mg/L; and, A fluoride concentration of 536 mg/L.

Ten meters below the seepage spot, the waters TP concentration reached 2.15 mg/L and had a fluoride concentration of 1.14 mg/L, both of which exceeded Class III ground water quality standards as determined by Chinas

FiGure 1: PromuLGation of NationaL anD LocaL Water C H I N A E N V I R O N M e N T S e R I es 2012 /2013 PoLLution LaWs anD ReGuLations (1980-2009)

Source:, 2010. Notes: The absolute numbers represent the amount of newly written and/or revised laws and regulations for that year.


Ministry of Environmental Protection (MEP) (the TP level was 9.8 times higher than the standard; and the fluoride level 0.14 times). The areas upstream of the Yangchang River were also significantly higher than the Class III standard. ENFORcEMENt OF LAw

shall construct special facilities or sites for its storage. Article 34: Construction of the facilities and sites for the storage and disposal of industrial solid waste shall be in accordance with the environmental protection standards that have been stipulated by the administrative department in charge of environmental protection under the State Council. General Principles of the Civil Law of the Peoples Republic of China: Article 124: Any person who pollutes the environment and causes damage to others in violation of state provisions for environmental protection and the prevention of pollution shall bear civil liability in accordance with the law. Clause 1, 2, 3 of Article 134: The main methods of bearing civil liability shall be: (1) cessation of infringements; (2) removal of obstacles; (3) elimination of dangers; (4) return of property; (5) restoration of original condition; (6) repair, reworking or replacement; (7) compensation for losses; (8) payment of breach of contract damages; (9) elimination of ill effects and rehabilitation of reputation; and (10) extension of apology.

Law of the Peoples Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste: Article 29: Those units that produce industrial solid waste shall establish and amplify a responsibility system for the prevention of environmental pollution and take measures for preventing environmental pollution caused by industrial solid waste. Article 33: Those who store smelting residue, chemical residue, coal ash residue, discarded ore, tail ore, or other industrial solid waste out of doors


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

In the ruling process, the court confirmed the eligibility of the GLDAB to file the public interest litigation based on article six of the Environmental Protection Law of the Peoples Republic of China, which dictates that, all organizations and individuals are held responsible to environmental protection and are entitled to impeach and prosecute those who harm or pollute the environment. Article five, clause two of the Law on the Prevention and Treatment of Water Pollution also stipulates that, organizations and individuals who bear the brunt of water pollution have the rights to demand those who caused damage to eliminate harm caused and redeem losses. Other relevant laws that helped support the case include:


The court lists the following reasons for the ruling: The waste seepage from the defendants phosphogypsum tailing storage severely polluted both the Yanchang River and the upstream area of Hongfeng Lake. Moreover, the pollution contributed to high levels of total phosphorus (TP) in Hongfeng Lake and severely impacted the water quality of Guiyang. Indeed high TP levels often lead to eutrophication and growth of blue-green algae, which further deteriorates water quality, damages the ecosystem and threatens the health of surrounding residents. The defendant deposited phosphogypsum waste in a facility without taking adequate environmental protection measures, jeopardizing the interests and livelihoods of local residents CREAtIVE PRActIcES The environmental court associated with this dispute, was the first in Guiyang Province to engage in a public interest litigation case. Therefore, since no real precedent had been set, the court had to adopt innovative approaches

and creatively apply new ruling methods. Launching public interest litigation. Following Guiyangs policy in protecting Hongfeng Lake and the drinking water source of Guiyang residents, Guiyang Intermediate Peoples Court established an environmental protection adjudication division, and Qingzhen City Peoples Court was established as an environmental protection court. The Guiyang Lake and Dam Administrative Bureau (GLDAB) was also set up at around the same time. According to Civil Procedure Law of China, only those who are directly affected by the environmental hazard being protested have the right to sue. In environmental pollution cases, it is often difficult to identify specific victims of pollution, and therefore hard to successfully sue polluting companies. In this case, however, GLDAB filed public interest litigation against Tianfeng. To address environmental pollution through legal means, a number of Chinese scholars and lawyers have advocated for the allowance of an environment public interest litigation system. Without specific legal rules

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

FiGure 2. ComParative LeveLs of PoLLution in SiX Yunnan PLateau LaKes

Source: Ministry of Environmental Protection, 2010. Notes: Levels of pollution are determined by an unavailable formula; however, generally, levels 1 and 2 are safe to drink, 3 and 4 can be used for agriculture, 5 can only be used for industry (cooling, etc.), and >5 is considered unusable even for industry.


The environmental court also repeatedly visited the tailing storage and checked the facilities. The court acknowledged the companys positive attitude, but required further actions in halting additional waste emissions, cleaning up tailings, and consulting with experts on pollution prevention. Upon finding that the pollution-generating production line had not been terminated, the GLDAB applied for a further executing order from the environmental court. The


W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

and a clear structure, however, public interest litigation is often unsuccessful. Only a few environmental courts have accepted public interest litigation cases. Crossing multiple administrative areas. The lake contaminated by Tianfengs storage facility, Hongfeng Lake, is located in Anshun, a city beyond Guiyangs jurisdiction, meaning Guiyang could not impose administrative penalties on Tianfeng or its facility. Fulfilling cleanup by the deadline. Given the scope of the pollution and the limited capacity of the defendant, the environmental court did not require the defendant to immediately stop polluting, but gave Tianfeng a specific timeline (3 months) in which polluting practices had to stop. Creating a system for supervision. After the ruling, the environmental court paid consistent attention to Tianfengs execution of the order. It communicated multiple times with the plaintiff and the defendant, ensuring the defendants full compliance with the law. This regular and effective communication and oversight by the court catalyzed Tianfeng to actively gather funds for renovations.

court immediately issued a time-bound executive notice to Tianfeng. After hearing the difficulties Tianfeng faced in stopping the generation of new pollutants, the court organized a consultation between the GLDAB and Tianfeng. The consultation confirmed that Tianfeng would shoulder responsibility for further pollution. Through consultation, the two parties reached preliminary consensus on the effective execution of the court order. The defendant stated that the waste-generating production line belongs to a Chinese-foreign joint venture only partly owned by the defendant. After the consultation, the environmental court issued another notice to the joint venture, requiring it to understand and cooperate with the court and voluntarily halt the production line. Eventually, the defendant invited the environmental court and the GLDAB to supervise the termination and dismantling of the production line. One major polluting sourceTianfengs tailing storagewill no longer threaten the water quality of Hongfeng Lake. Setting up a cross-regional ecological compensation system. The environmental court, through establishing communication between the plaintiff and the Guiyang Municipal Government, innovatively obtained cross-regional ecological compensation. The Peoples Municipal Government of Guiyang set aside a special fund of 1.7 million Yuan from the budget to assist Tianfeng in the overhaul of the tailing storage. In the meantime, the court encouraged the plaintiff to reach relevant administrative offices in the provincial government. The provincial government successfully received another 5 million Yuan from Guizhou


Environment Bureau and National Ministry of Environmental Protection for pollution control. Combined with funding from the defendant, the clean-up was carried out smoothly. THE ENVIRONMENtAL AND JUDIcIAL SUccESSES This is the very first case accepted by the newly-created environmental court, and also the first environment public interest litigation case in Guizhou Province, marking extraordinary progress in the judicial practice in Guizhou as well as in nationwide environmental public interest litigation. This new environmental court helped bridge the geographical constraint and successfully resolve a cross-regional pollution case. During the execution of the order, the environmental court visited the tailing facility repeatedly to enforce execution; the court also created cross-regional ecological compensate system to facilitate order execution. The vice president of the Supreme Peoples Court, Wan Exiang, acknowledged the importance of the supervision visits by the environmental court in this case.
C H I N A E N V I R O N M e N T S e R I es 2012 /2013

This groundbreaking public interest case importantly led to significant improvement in the water quality in Hongfeng Lake. According to the GLDAB, the total phosphorus level of Hongfeng Lake in 2010 was 57.3 percent lower compared levels in 2007. Chinese environmentalists and lawyers have notably spoken highly of the results generated by the case, for it is seen as opening the door for similar cases in the future.

Cai Ming, head judge at the Environmental Law Court in Qingzhen Guizhou, successfully adjudicated Guizhous first case of public interest environmental litigation, which resulted in improvement to the water quality in Hongfeng Lake. Two CEF research assistants, Luan Dong and Joyce Wenfang Wang, translated this article from Chinese into English.

Guizhou Province Qingzhen City Peoples Court. (2007). Civil Judgement, Qing Huanbao Minchu Zi No.1.



Life Above 4,000 Meters: Sowing Green Seeds of Mount Everest

by Liu Rongkun

hen I first met Tsering Yodon, she was working as a typist at the Management Bureau of the Qomolangma (Mount Everest) National Nature Preserve (QNNP) in Shigatse, Tibet. Now, after a three-month Nature Guide English Training Program with The Pendeba Society, she was then recommended for further language studies at the Eastern Tibetan Training Institute in Shangri-La, Yunnan Province. Ive always wanted to be an Englishspeaking guide, and Id even like to open a travel agency of my own in the future! she enthused. The Pendeba Society, founded in 2009, is the first nongovernmental organization in the Tibet Autonomous Region of China. Named after volunteer community-service workers in Tibetan, the organization is an outgrowth from a program begun in 1994 by Future Generations, an international NGO focusing on conservation and community development. The earlier Pendeba Program was developed in response to the growing need for local participation in the protection of the Qomolangma Preserve. It was a new approach to protected area management that trained local inhabitants of a newly created protection zone to be preserve wardens, or pendebas.

Initially, the programs focus was on public health for local inhabitants and the results were impressive. Between 1994 and 2005, the program trained over 270 pendebas, who successfully helped reduce infant mortality by 50 percent and increase immunization rates to 90 percent in the program area. In 1998, The United Nations deemed this training model one of the 50 Most Effective Development Programs for Poor People in the World. The executive director of The Pendeba Society, Tsering Norbu, is a local from Nyalam County in QNNP who was a forest ranger in the region for many years before joining the Pendeba Program. He took over the leadership in 2009, and he localized and streamlined The Pendeba Society operations, putting more efforts into livelihood programs that ensure both community development and environmental conservation in the Mt. Everest region. Tsering Yodon is one of the beneficiaries of the new Pendeba Society. Joining the tourism industry has been her long-time wish and the Pendeba Societys eco-tourism training program was able to help make her wish come true. RESORtING tO PHYSIcAL COMPEtItION The first Pendeba Societys nature guide

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S


English training attracted more than 40 applicants, but only 24 could be selected. Most of the participants were from Qudang Town in southern Tingri County, which houses the world famous Karma Valley. The initial selection was not easy. Given limited spaces for the training program, many of our trainees had to go through a rigorous selection process. I even resorted to physical competition just for the recommendation from my village, said Tajie of Qudang. He turned out to be one of our best students and joined our local study trip to Lhasa after the English training. In addition to classroom studies, our students also had chances to participate in many outdoor activities such as hiking, collecting fossils, and study tours to Yunnan and other parts of Tibet. These dynamic activities helped them learn by doing, and equipped them with the skills and mentality needed to become an ecotourism guide. During the program we tried

our best to educate our trainees with practical knowledge of environmental conservation; by promoting eco-tourism, Pendeba Society can effectively promote sustainable development at the community and individual levels. With booming tourism in the preserve, we also conduct vocational training in related hospitality and service industries. To scale up our impacts, we also work closely with partners like local government departments, the private sector and other NGOs. For example, we are now developing volunteer and service programs with travel agencies, organizing tours in our program area with a focus on local community engagement. The main economic activities in the region are animal husbandry and agriculture, we are therefore thinking of adding animal husbandry or agricultural trainingssuch as collecting yak dung for fuel and sale, grazing goats and sheepinto the itinerary, enriching travelers understanding

C H I N A E N V I R O N M e N T S e R I es 2012 /2013

Participants study English outdoors. Photo credit: The Pendeba Society.


Students from the Ecotourism English Training hold the sign: We are the green seeds of Qomolangma National Nature Preserve. Our name is Pendeba. Photo credit: The Pendeba Society.

W O O D R O w W I L S O N I N T E R N AT I O N A L C E N T E R F O R Sc H O L A R S

of local economy. Moreover, since some of our trainees are craftsmen of Tibetan traditional handicrafts, carpenters or painters of Tibetanstyle cabinetsand otherdecorations, we plan to set up a Pendeba Collaborative for interested travelers to learn how to make and paint small Tibetan wood items. Through this Pendeba Collaborative, travelers have the opportunity to observe how local Tibetans sustain their livelihoods; in return, locals can increase their household income. tEAcH A MAN tO FISH As an old Chinese adage says, give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime, we

think the best way to forge lasting development for local communities is to improve their livelihood knowledge and skills. This is why we are delivering a series of vocational trainings in eco-tourism and hospitality to help local Tibetans reach broader employment opportunities in the thriving tourism industry ofthe Mount Everest region. More importantly, participants will be new pendebas with the ability to teach even more locals and further benefiting their communities. The Pendeba Society firmly believes that people are the vehicles of change. We will continue training more pendebas, cultivating these precious green seeds of Mount Everest that will one day grow into big trees to protect the majestic beauty of their homelandQomolangma,



which appropriately enough in Tibetan means Mother Goddess of the Land. For more information about The Pendeba Society and its work in Tibet, please visit www.

Liu Rongkun worked as a research assistant with China Environment Forum in 2009. He is now based in Tingri, Tibet working as Program Manager at The Pendeba Society. He can be reached at or


C H I N A E N V I R O N M e N T S e R I es 2012 /2013




The Woodrow Wilson International Center for Scholars, established by Congress in 1968 and headquartered in Washington, D.C., is a living national memorial to President Wilson. The Centers m ission is to commemorate the ideals and concerns of Woodrow Wilson by providing a link between the worlds of ideas and policy, while fostering research, study, discussion, and collaboration among a broad spectrum of individuals concerned with policy and scholarship in national and international affairs. Supported by public and private funds, the Center is a nonpartisan institution engaged in the study of national and world affairs. It establishes and maintains a neutral forum for free, open, and informed dialogue. Conclusions or opinions expressed in Center publications and programs are those of the authors and speakers and do not necessarily reflect the views of the Center staff, fellows, trustees, advisory groups, or any individuals or organizations that provide financial support to the Center. Jane Harman, President, Director and CEO Board of Trustees: Thomas Nides, Chair Sander R. Gerber, Vice Chair Public Citizen Members: James H. Billington, Librarian of Congress; John F. Kerry, Secretary, U.S. Department of State; G. Wayne Clough, Secretary, Smithsonian Institution; Arne Duncan, Secretary, U.S. Department of Education; David Ferriero, Archivist of the United States; Fred P. Hochberg, Chairman and President, Export-Import Bank; Carole Watson, Acting Chairman, NEH; Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services Private Citizen Members: Timothy Broas, John T. Casteen III, Charles Cobb, Jr., Thelma Duggin, Carlos M. Gutierrez, Susan Hutchison, Barry S. Jackson Wilson National Cabinet: Eddie & Sylvia Brown, Melva Bucksbaum & Raymond Learsy, Ambassadors Sue & Chuck Cobb, Lester Crown, Thelma Duggin, Judi Flom, Sander R. Gerber, Ambassador Joseph B. Gildenhorn & Alma Gildenhorn, Harman Family Foundation, Susan Hutchison, Frank F. Islam, Willem Kooyker, Linda B. & Tobia G. Mercuro, Dr. Alexander V. Mirtchev, Wayne Rogers, Leo Zickler

One Woodrow Wilson Plaza 1300 Pennsylvania Avenue, N.W. Washington, DC 20004-3027 China Environment Forum @wilsonCEF


The views of the authors expressed in this publication do not necessarily reflect the views of the funders.

ISBn: 978-1-938027-30-7