The Fourth Meeting of the Second Phase of the China Council for International Cooperation on Environment and Development took place in Beijing from 31 October to 2 November. This was the eighth time that the Council had met, and, as on previous occasions, it ventures to make recommendations to the Chinese government.

　　Over the years, the Council has expanded the scope of its activities, with eight Working Groups and two Task Forces, and has increasingly shifted its work from the general to the specific. This is partly because the linkage between environment and development has been widely accepted in China as elsewhere. A healthy environment is a fundamental resource for all human society, and the principles of sustainable development enter into all fields, from social and economic policy to the educational system and regional planning.

　　On this occasion, the Council was invited to give particular focus to plans for the development of western China. In doing so it did not attempt to work out a specific regional policy for western China, but rather to adopt a regional approach within the framework of environment and development policy as a whole. It took account of the fragility of the western Chinese environment, and relative lack of knowledge about it.

　　The Council stands by the previous recommendations it has made, particularly on the central importance of policies which reconcile protection of the environment with social and economic development, and confirms the need for effective coordination of such policies at all levels, whether national, regional or local.

　　Attached to these recommendations is a detailed annex by the Secretariat on the problems of western China, and a strategy for dealing with them. Also attached are the reports of the various Working Groups. The Council's broad recommendations now follow.

　　1. Environmental economics should be applied in all parts of the planning process.

　　The place of environmental economics in a socialist market economy is critical. Although it is easier said than done, governments must determine true costs, covering such issues as environmental damage and depletion of natural resources, and ensure that prices take due account of them. Market forces are indispensable but they must be brought within the framework of the public interest. Within this framework there are many possibilities for partnerships between the public and private sectors, including small and medium sized enterprises. For their part governments should use economic instruments, including tax incentives and disincentives, across the field, and so far as possible, avoid perverse subsidies.

　　In the case of western China, the Council recommends that such policies should take account of local circumstances, in particular the fragile environment, climatic extremes, low population density and the relative poverty of the region. The poorest members of society may need at least temporary protection from the impact of reforms.

　　2. Economic planning and environmental protection should be more closely integrated.

　　With a growing population and rising living standards, pressure on the environment is likely to increase. A high priority is the rehabilitation as well as the protection of the environment, and this needs better recognition in the planning process. So does the growth of environmental industries, which are a major source of wealth and employment in other countries.

　　The Council recommends fresh efforts to coordinate the work of institutions, in particular Ministries in central and provincial governments, so that all aspects of policy can be brought together and seen in terms of each other. Over the next ten years, the Chinese economy may well double in size, and its success requires far reaching coordination of energy, transport, industrial and agricultural policy, with overriding respect for the environment and comprehensive legislation to give it full effect. Nowhere is this more necessary than in western China.

　　3. Energy policy should have high priority.

　　Demand for energy is constantly increasing, and supply has difficulty in responding. So far coal, which is abundant and easily available, has been the primary source, and this will continue. But there are heavy environmental penalties. In both the short and long term the introduction of new and cleaner techniques for extracting energy from coal &endash; in particular coal gasification &endash; is essential. In the meantime measures are already in train to cope with air pollution and acid rain caused by combustion of coal with high sulphur content. There are good prospects for poly-generation whereby low cost chemicals, clean liquid, gaseous fluids, heat and electricity are obtained from coal and natural gas. Of increasing concern is the problem of increasing atmospheric carbon, which must be seen in the context of climate change. Here the possibilities of carbon sequestration are already opening up, and it is in China's interest to join with other countries in promoting what has been called the low carbon economy.

　　The development of other energy sources and technologies is an equal priority. Among them are natural gas, hydrogen and photovoltaics for industrial as well as transport purposes. Worldwide there is increasing interest in small scale electricity generation, and over a quarter of new annual investment in generation capacity comes from units of ten megawatts or less. Of particular importance in rural areas such as western China is biomass technology, where more research is needed to improve energy transformation. Local generating systems from photovoltaics would give greater local self-sufficiency, and reduce costs arising from dependence on extension of the grid.

　　For western China, wind energy resources (accounting for half the national total) should help to meet energy demand not only in the west but elsewhere in China. Ambitious Renewable Portfolio Standard (RPS) policies should be put forward at the national level to ensure that power supply departments include a percentage of green electricity (ie generated from renewable resources) in their supplies, either self generated or purchased.

　　4. Sustainable agriculture is another priority.

　　There are four broad issues. The first is over use of pesticides and the need for a national strategy for integrated pest management. There is clear evidence that farmers use more pesticides than they need, and that reduction in pesticide use can be lowered without damaging rice, cotton or other crop yields. It can also be of direct benefit to crops. In this area government departments seem to play conflicting roles in the regulation, production and sale of pesticides. Excessive pesticide use can lead to health problems, waste farm resources, and damage water quality with effects on meeting drinking water standards and fish production.

　　The Council believes that existing national food security policy needs reconsideration. The effect of current regulations is to limit the internal grain trade to no good purpose, and to cause grain to be produced on land not suitable for the purpose. Now that food can be distributed without difficulty throughout China, the main constraint is not lack of grain but of low farmers' income in different parts of China.

　　Although there has been some progress in agricultural management, some unsustainable practices continue, for example soil erosion, burning of crop residues and waste in use of water, fertilizers and pesticides. The Council recommends a new look at the whole subject.

　　Last there is concern over the introduction of genetically modified organisms. Biotechnology has many positive aspects, and its applications have great potentialities. But although no ill effects have so far been detected on human health, they raise serious environmental issues, which have yet to be resolved. The Council recommends caution in the use of genetically modified materials until greater understanding of them is achieved. It is proposing to set up a Task Force to enquire further into how the rich resources of China can be converted into economic wealth through the application of biotechnology.

　　5. Biodiversity should be cherished.

　　China has unique biological resources which still seem to be undervalued. While destruction of topsoils and forests, and soil erosion are visible to the naked eye, the impoverishment of the natural resource base, and the organisms within it, fail to attract the public and political attention they deserve. Diversity of crop species and the micro-organisms which support them are of fundamental importance. Conservation in gene banks, arboretums and botanical gardens as well as farm conservation methods adopted by farming families need strengthening.

　　The good management of land, water, fauna and flora, and forests is essential for sustainable agriculture. The increasing demand for grain for livestock production as population and living standards rise underlines the importance of healthy agriculture in China.

　　Conservation or restoration of grasslands and forests is already under way. But expert advice is always needed on the appropriate treatment to be used. Indeed environmental impact assessments are as necessary for conservation and restoration as they are for new urban and industrial development, particularly in such vulnerable areas as western China.

　　The Council draws particular attention to the following points:

　　--On the international side, China has responsibilities under the Convention on Biological Diversity, and the Cartagena Protocol on Biosafety. The enormous wealth of Chinese plant species calls for particular attention in their exploitation for human purposes. China should enter into biopartnerships with national and international companies. It should also develop guidelines for such partnerships based on prior informed consent and sharing of the benefits.

　　--There is an opportunity for classifying land into conservation, restoration and sustainable and intensified use areas. Genetic gardens might be created in certain areas where both native and introduced food and medicinal plants could be grown and evaluated.

　　--Efforts to enhance in-situ conservation of biodiversity through effective management of existing and new protected areas should be undertaken.

　　--In all environmental impact assessments, the biodiversity dimension should be included and fully respected.

　　--There are particular dangers arising from invasive species which might do harm to native ecosystems. There is also a potential danger arising from incautious use of genetically modified organisms.

　　--There is widespread ignorance of the importance of biodiversity, and the need for better public understanding of the issues. In promoting such understanding, it is important to use local knowledge and engage the interest and support of local communities.

　　6. Cleaner industrial production and control of pollution need further encouragement.

　　The Council makes three main points.

　　--Cleaner production and pollution control go hand in hand with environmental benefits. They give many opportunities for more efficient and profitable production as has been well shown elsewhere. Failure to adopt them can carry heavy penalties, which in future could become heavier, with implications for human health and impacts on ecosystems generally. Different pollutants can combine to have serious consequences.

　　--We need to know more about water pollution in river basins, and how best to protect aquifers.

　　Demonstration projects bringing together public and private enterprise might be made to show what can be done in specific areas, perhaps in a Chinese province or region. Western China might provide the opportunity for showing what might be done under careful management.

　　--In the future work of the Council, more weight should be given to industry, and greater business representation on the Council would be welcome. There is already a proposal by the China Enterprises Confederation for a Working Group on Sustainable Industrial Development which would have wider scope than the existing Working Groups on Cleaner Production and Pollution Control.

　　7. Integrated transport policy is another priority.

　　China is no different from any other country in needing an integrated transport policy in which the advantages and disadvantages of different modes can be weighed and judged against each other. As the number of private cars increases, so does the need for better and more reliable public transport. Prices for such transport, whether of people or freight, should reflect the real social, economic and environmental cost. Throughout strict environmental standards need to be applied. Particular attention needs to be given to planning of urban transport systems to respect local circumstances.

　　This has direct application to western China. In some cases, railways may be of more value both for freight and passengers than roads. In others, roads may be required, but in this case upgrading of existing roads, and building of feeder roads rather than expensive new expressways may be the more desirable option. To minimize the impact of new transport systems, rail and roads can often be laid in parallel.

　　Energy planning for cities needs to take account of pollution control and development of transport. Pilot studies are necessary to cover public and private transport systems, and eventually limitations on the use of private cars.

　　Again, public understanding is essential. Pedestrian areas and use of bicycles in relatively small communities may be the best mode of personal transport, and no social stigma should be attached to them.

　　The costs of aviation also need environmental assessment. At present, worldwide, aviation has a hidden subsidy in that aviation fuel is not taxed in the same way as fuels for surface use. China may wish to consider joining in an international effort to correct this anomaly.

　　8. More work is needed on the implication of Chinese membership of the World Trade Organization.

　　Chinese entry into the World Trade Organization will carry additional obligations for an improved environmental management system, and China will have to adjust some of its investment and trade policies accordingly. This may serve to attract new investment to western China and elsewhere. Chinese experience in eastern coastal development zones could be of value in shaping better investment policies in designated state-level zones in western China. Trade, investment and sustainable development need to be more tightly linked. China could profit from the experience of other countries in this respect.

　　At the same time the Council recognizes that the role of environment within the World Trade Organization is far from clear. There are risks of conflict between the World Trade Organization and the multilateral environmental agreements, and a choice may need to be made between bringing the environment into a more central place in the World Trade Organization or creating some new organization of equal standing to manage the issues.

　　So far as western China is concerned, the Clean Development Mechanism under the Kyoto Protocol may offer significant opportunities for bringing in foreign capital and accelerating technology transfer, particularly in the field of energy.

　　The Council commends the papers and recommendations made by the individual Working Groups and Task Forces. It also draws attention to certain broad strategic considerations, first with regard to western China:

　　--In the development of western China, careful urban planning, covering all aspects of urban life, will be essential if mistakes made elsewhere permitting urban sprawl and loss of community are to be avoided. So far as possible, new towns and cities should have a personal dimension and be of manageable size.

　　--Environmental impact assessments will be essential. They should be followed by careful monitoring of the outcome of development.

　　--The importance of education and training facilities in what are still relatively poor communities cannot be exaggerated. Better public understanding of change together with respect for cultural diversity (and use of local knowledge in such fields as medicine) are likewise vital. Local communities must feel themselves to be associated with the development process, and in some sense to exercise ownership over it.

　　More generally:

　　--China needs to play a full part in international negotiations on such issues as climate change, and to ensure that environmental considerations are taken properly into account. China also needs to work out the regional impacts of possible changes in weather systems and rises in sea level. In tackling the greenhouse issue, it is important to take account of emissions of methane as well as carbon dioxide.

　　China enjoys good governance but it needs to review some of its environmental legislation and to do more to enforce it.

　　--Full consultation at all levels, including that of ordinary citizens, is essential. In this respect information about environmental conditions can be a powerful force for reform. The Council urges the Chinese government to expand the amount of publicly available information about environmental conditions and trends.

　　--As before the Council underlines the need for the Chinese government to leapfrog over the mistakes of other countries, protect its unique environment and culture, and increasingly make its own distinctive contribution to sustainable development.