Download Sustainable development and green economy in china

European Economic and Social Committee
Brussels, 28 April 2011
9th China-EU Round Table
Xi'an, 9-13 May 2011
Sustainable Development and Green Economy in China
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Rapporteur: Zhu Tan, Member, CESC; Professor, Nankai University
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EN
1. Background of Green Economy
Green economy, a kind of balanced economic pattern, aims to preserve the living environment of
human being and reasonably utilize energy and resources. It’s the manifestation of “green growth” and
“green development” in all relevant economic departments. It’s a significant economic form to coordinate
the problems between environment and development.
The “Green Economy Initiative” (GEI), launched by the United Nations Environment Programme
(UNEP) in Oct. 2008, is aiming to make global leaders and policy makers in relevant departments including
economy, finance, commerce and environment to be aware of the environmental investment’s contributions
to economic growth, employment increase and poverty alleviation , to implant this awareness into
concerning policies for economic reform under the background of global financial crisis and economic
recession, to promote global industrial revolution and green national economy through green investment to
create new green job opportunities so as to recover and upgrade the world economy. The essence of GEI is
that greenization is the driven force for economy growth instead of a burdenGEI has won positive responses
from international community, and green economy has become a new trend for global environment and
development.
2. The Necessity of Green Economy in China
(1) To develop green economy is necessary for economic transformation in China
China has entered an important strategic transformation stage from the perspective of relations between
environment and development. The basic meaning of green economy is in accordance with the basic
situation and strategic goal of environment and development in China, and the general strategy —“to ensure
growth, to expand internal demands and to adjust structure” made to deal with financial crisis in China. It’s
of significant policy enlightenment and reference value for key national strategic goals, such as thoroughly
implementing scientific outlook on development and constructing ecology civilization. Green economic
development is the basic assurance for the implementation of strategic goals of environment and
development in China and the necessary requirements for economic transformation in China.
(2) To develop green economy is an important way to promote the construction of
“Resource-conserving and Environment-friendly society”
The core of “Resource-conserving and Environment-friendly society” construction is to promote
economic transformation, i.e. shift from “high input, high-energy-consumption, high-pollution, low output”
mode in the past to “low input, low-energy-consumption, low-pollution, high output” mode. In order to
develop green economy, firstly, it’s important to readjust the economic structure, reduce the share of
manufacturing industry that depends on heavy and chemical industry, and increase the share of service
industry that mainly in information technology and financial services. Secondly, it’s necessary to readjust
industrial structure, not only to eliminate out-of-date productivity, to realize clean production in traditional
manufacturing industry, to greenize the traditional industry, but also to develop new industry of new energy
and energy-conservation and environmental protection. Thirdly, strenuous exploration of green tech
innovation provides technical support for achieving the readjustment of economic, industrial and product
structure and clean production. Therefore, green economic development is an important means to construct
the “Resource-conserving and Environment-friendly society”.
(3) To develop green economy is a strategic option to optimize economic development through
environmental protection
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Promoting the “historical change” of environmental protection is the key to develop green economy.
The core content of the “historical change” is: environmental protection improving economic development,
implementing environmental protection in every link of production, circulation, distribution and
consumption; making the requirements of environmental protection embodied in all fields like industry,
agriculture, transportation, construction and service; continuously innovating the mode of production,
promoting clean production, developing recycling economy and reducing environmental pollution from
source and the whole process. From the perspective of the content and type of action of green economy, it
has to develop cleaner and new industrial department and economic growth point and also cleaner
technologies and products. At the same time, it’s necessary for economic policies and economic
development plans to incorporate the consciousness of green economic development and to apply it
throughout the whole process of economic reproductions like production, consumption, commerce and
investment. By developing green economy, it can help to solve environmental problems objectively and
from source. It’s safe to say that developing green economy is an inevitable choice to optimize economic
development through environmental protection and realize harmonious development of environment and
economy.
3. Driving factors for green economic development in China
(1) To develop green economy is China's political will and strategic direction
In fact, before the financial crisis in 2008, there is no direct formulation about green economy, but only
policies on developing recycling economy and low carbon economy, in China. Although there isn’t the
“green economy” formulation, the Chinese Government has realized the pressure on resources and
environment, the unsustainability made by the extensive pattern of economic growth several years ago.
Therefore, the Chinese Government puts forward a humanist, all-round, coordinated and sustainable
developing concept, named scientific outlook on development, and establishes the resource-conserving and
environment-friendly social developing targets. Since 2009, the Chinese government has begun to focus on
the green economy and put it at a premium on the agenda. China's state leaders have stressed in many
occasions that the green economic development has become an important trend in the world, which is an
important opportunity and major challenge for China. In 2009, the Central Economic Working Conference
proposed clearly that the keynote of economic work in 2010 is to accelerate the transformation of
development mode and adjust economic structure while keeping relatively fast and steady economic
development. In the "12th Five-Year Plan", it is more highlighted to fasten the pace to establish a
resource-conserving, environment-friendly society, and to improve the level of ecological civilization. At
present, the Chinese Government is stepping up green economic development to promote the adjustment of
economic structure. As we can see, the Chinese Government has put forward these new thinking and new
strategy in recent years to construct development mode, promote green economic development strategic
plan, which embodies the political will and strategic direction on green economic development of the
Chinese Government.
(2) There are social practice foundations for green economic development in China
Although the thought of green economy was put forward after the financial crisis in 2008 jointly by the
international society, China had begun her way of green development since the1970s. In August 1973,
China's first national environmental protection meeting raised a guideline containing sustainable thoughts
suchas overall planning, rational layout, protecting the environment, benefiting the people, etc.
After the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China
(CPC), the environmental protection work started to be listed on the national agenda. In 1979, the
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Government issued the Environmental Protection Law of the People's Republic of China (for trial
implementation) hereinafter referred to as “the Environmental Protection Law (trial)”, and in subsequent
enacted a series of environmental protection laws and regulations, such as the Marine Environmental
Protection Law of the People's Republic of China, the Water Pollution Prevention and Control Law of the
People's Republic of China, the Air Pollution Prevention and Control Law of the People's Republic of China,
the Regulations on Offshore Dumping Management, the Regulations on Nuclear Materials Management,
and etc. These laws and regulations played an important role in the development of environmental
protection work and construction of sustainable development in the future. In 1989, on the basis of the
conclusion after 10 years of trial and practice experience, the Environmental Protection Law of the People's
Republic of China, revised from the Environmental Protection Law (trial)”, was passed and put into effect
on December 26, 1989. During this period of time (1979 ~ 1992), China had defined environmental
protection as a basic state policy , put forward clear major policies and guiding principles of
environmental protection, set up an independent environmental protection administrative organization,
formed the environmental management policy and system with Chinese characteristics, such as the eight
policies of China's environmental management, and speeded up the legislation and enforcement work of
environmental protection.
In 1992, the United Nations Environment and Development Meeting made the sustainable
development as common development strategy for the future, which had won wide agreement from
participant countries. In August, China put forward ten countermeasures on environment and development,
explicitly pointed out that sustainable development is the inevitably choice in contemporary and future. In
1994, the Chinese Government approved and issued the China’s Agenda 21, and came up with total strategy,
countermeasures and action plans for China's sustainable development. In this period, China began to
promote cleaner production. In 1997, China has launched a cleaner production training, cleaner production
demonstration and audit activities, organizational building on cleaner production. After 1997, the
development of China’s cleaner production turned into policy mechanism establishment stage. In 2002,
China promulgated the Cleaner Production Promotion Law. Henceforth, cleaner production entered into a
further development stage. In this stage, cleaner production was mostly applied to mainstream activity on
industry and environmental protection, while management policies and tools on cleaner production have
been established and implemented. Cleaner production gradually developed towards the circular economy.
Since 2004, the view that economic development should be based on circular economy was confirmed,
along with the establishment of scientific outlook on development. In March 2004, President Hu Jintao,
during his speech at the central forum on population, resources and environment, emphasized that
establishing and implementing scientific outlook on development require us to develop a circular economy
actively and achieve virtuous circle both in natural ecosystems and social systems. In 2006, National
People's Congress approved the "11th Five-Year Plan for Economic and Social Development" where there is
a special chapter for circular economy development to set up the contents and policies for circular economy.
In order to promote the development of circular economy in China, two batches (about 178) of experimental
units were selected from enterprises, industrial parks, and key areas at both municipal and provincial levels,
respectively in 2005 and 2007, . Driven by those experimental units, significant accomplishments were
achieved in China’s circular economy, promoting energy saving and emission reduction, increasing
employment opportunities, and facilitating the generation of new technology. In order to accelerate the
development of circular economy by providing guarantee assurance from legal system, the Circular
Economy Promotion Law of the People's Republic of China was passed by the Eleventh National People's
Congress on August 29, 2008, and became effective on January 1, 2009.
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In recent years, a number of specific actions, such as energy conservation and emission reduction, the
development of green transport and sustainable building, the promotion of low-carbon economy, the
enhancement on environmental protection investment, and the establishment of environmental economic
policy system and so on, have been implemented for green economic development. These actions and
practice, containing the basic content of the green economy with consistent and unified objectives, have
made positive progress and results. During the five years of the "11th Five-Year Plan", the national total
energy consumption per unit of GDP fell 19.1%, COD emissions dropped 12.45%, and total emissions
sulfur dioxide decreased 14.29%. Implementation of these actions and practice with green economic
thinking, to a certain extent, corrected and repaired China’s traditional economic growth pattern, eased the
pressure on resources and the environment during the economic prosperity in China and provided valuable
experiences and infrastructure for green economic development in the future.
4. The obstacles and challenges of green economic development in China
(1) The inertia of "high investment, high growth" economic growth pattern
China is in the critical period of industrialization, urbanization and modernization. Economic growth
will remain the goal and task for future development in a long time to come, and high investment and high
growth, the main model to promote development. The transformation of economic growth mode to one that
relies on capital efficiency and technological advancement still needs some time. Therefore, under such
circumstances that the industrial structure adjustment and economic growth transformation has not been
completed, it will need more time for green economic development and green transition, due to the inertia of
the traditional extensive mode of growth.
(2) The immatureness of social systems and conditions
Currently, some government departments still have no clear and complete awareness and thoughts of
the green economy, but only conceptual understanding. They only execute the instruction of the central
authorities concerning restructuring and transformation of economic development passively , without active
and in-depth thoughts on how to develop the green economy, and what social, economic and
environmental policies adjustments are needed in order to achieve green transformation. In addition, from
the environmental governance structure perspective, the mutual interaction of the government, enterprises
and the public in environmental protection have not established. The scope and extent of public
participation in environmental protection and economic integrated decision-making is very limited. The
channels and systems for public participation in environmental protection have not been completely
established.
(3) Lack of green investment and green technology innovation
China promulgated the 4 trillion stimulus plan in response to global financial crisis, in which 5% is
direct investment on environmental protection. If coupled with funding support for independent innovation,
and restructuring and adaptation to climate change, China's green investment in the economic stimulus plan
will reach 14.5%. However, in the area of industrial investment, whether in incubation of strategic industries,
such as information, new energy, new materials, environmental protection industry, or in "green renovation"
of traditional industries, there are no clear national plans or arrangements. Regarding technological
innovation, according to surveys, most technologies were introduced from abroad and there is lack of
independent research and innovation, especially for information, new energy, and new materials industries.
Hence, there is lack of core technological innovation and long-term competitiveness.
5. The future of green economic development in China
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(1) To speed up the transformation of economic development
Through the implementation of environmental and economic policies and incentives, to drive the
innovation and progress of technology, promote the greening of industrial sector, and increase green jobs; to
eliminate backward production capacity, rapidly develop emerging green industry represented by new
energy, new materials, renewable energy, environmental protection industry; to establish a vigorous green
industrial system with various categories and complete range of advanced equipment as soon as possible; to
rapidly develop green technology, increase investment, promote technological progress and innovation,
build technology support system for resources and energy saving, support the recycling and sustainable use
of energy and resources, break the constraints on economic development of energy, resources and
environment.
(2) To optimize the indicators for economic development
China promised to reduce carbon emission per unit GDP by 40~45% compared to that of 2005 by 2020.
This required us to abandon the long held concept to use GDP as the important criteria to measure our
economic development. We should consider some circular economic indicators as a part of the synthetic
indicator system to measure national economic development, for example energy intensity per unit GDP and
pollutant (SO2, COD, NOX, NH3-N) discharge intensity reduction index; product cyclic utilization rate,
energy reusing ratio, and waste recovery utilization ratio; renewable energy ratio and municipal garbage
resource utilization ratio, and in particular, we should use resource output ratio as a important indicator to
promote circular economy development in the progress of production、circulation and consumption,
accelerate the construction of the whole society’s resource recycling system . The improving of the indicator
system is conducive to guide the economic toward “green” direction.
(3) To strengthen the construction of institutional system
Actively studying on green investment policy, promoting "green" production in key industry;
strengthening the financial services for environmental protection industries and guidance for investment
from abroad; perfecting the policies for green loan, green taxes, ecological compensation and green trade;
advancing the environmental pollution liability insurance; organizing the institution of auxiliary
comprehensive directory for environmental policy; establishing and perfecting the exited mechanism for
heavy polluting enterprises and related instruction opinion; coordinating with the relevant departments to
properly raise the charging standards of pollution discharge, sewage and garbage disposal; actively
promoting paid use of emission weight and experimenting units trading job; reforming the collecting
approach of garbage disposal fee; appropriately increasing the standards of garbage disposal fee and the
financial subsidy level; advancing the related work of environmental legislation; establishing and perfecting
the system and mechanism that are favorable to the environmental protection.
(4) To enhance administrative management
Governments at all levels shall play the leading role, pay attention to the building of the green
leadership capacity, and incorporate the green development, environmental protection and ecological
construction into the strategy development level, as well as the long-term planning, annual plan and daily
work of the economic and social development. The central government should strengthen macro control on
cross-region comprehensive environmental affairs. Local government within their jurisdiction shall be
responsible for the green development and the ecological quality. Each department should be responsible for
the green development of local industries and systems. An environmental monitoring system with unified
legislation, standard, and supervision should be built, in which environmental protection department is held
responsible in accordance with the law and cooperates with related departments to improve the
standardization, legalization, and scientific level of environmental supervision.
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(5) To promote green consumption
While developing green economy, the construction of sustainable production system and consumption
system must also be established. As China’s economy continues to grow, people’s living quality has been
improved constantly. Consumption capacity is then under the phase of upgrading and transformation. Hence,
it’s quite important to advocate sustainable consumption and green consumption. We should make
government green purchase the vital impetus, by means of environmental labeling products certification, to
guide public choose green consumption pattern which is cost saving, environmental friendly and low carbon
emission.
(6) To facilitate the mechanisms of public participation
Improve the education system for environmental protection, strengthen environmental education and
training system for different social groups, further strengthen the environmental awareness and
environmental responsibility sense of citizens. Enhance news issue and major environmental information
disclosure system, timely collect, analyze and actively respond to public opinions. Promote urban
environmental quality, focus on pollution sources, drinking water quality in major cities, business
environment and information disclosure, and right-to-know for the public. Promote the implementation of
enterprise environmental supervising system, initiate vocational qualifications management, strengthen
education and training on enterprise social responsibility, increase the awareness of enterprises to fulfill
their environmental responsibilities. Increase the transparency of public participation, and promote the
progress of public participation in environmental protection more durable, stable and healthy.
(7) To deploy international cooperation in the green economy
China, as the largest developing country, in order to achieve green development and find a fundamental
solution to many environmental protection problems in China, must strengthen international exchanges and
cooperation. Firstly, strengthen the foreign exchange for a green economic development, continuing to
explore suitable way for China's green economic development; secondly, establish an advanced green
technology transfer mechanism with the developed country; thirdly, strengthen cooperation with developing
countries, exchanging and sharing China's experience of green economic development with other
developing countries. We hold that the international community should regard promoting trade liberalization
and facilitation as a booster for the development of a green economy, oppose all forms of trade
protectionism, constitute and implement trade policies that encourage the development of green economy,
so as to promote the green economy grow in all countries,
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