I. INTRODUCTION

1. The China Council for International Cooperation on Environment and Development ("the Council" or CCICED) was established by the State Council of the Government of China (GOC) in 1992 to support cooperation in the areas of environment and development between China and the international community.

2. The Council is a high-level advisory body that puts forth recommendations on environment and sustainable development for the Chinese Government’s consideration. It has so far held five annual meetings in each of the First, Second and Third Phases, and convened two meetings in the Fourth Phase. 

3. The Council supports the development of an integrated and coherent approach to sustainable development and environment, while promoting closer cooperation between China and other countries. While being non-governmental, the Council has strong government involvement. At present the Council is composed of 24 Chinese Members and 22 International Members, all chosen for their experience and their expertise.

4.  The Council is chaired by Mr. Li Keqiang, Vice Premier of China’s State Council and a member of the Political Bureau’s Standing Committee. It was at his invitation that the Members of the Council attended the Second Meeting of the Fourth Phase.

5. The host institution is the Ministry of Environmental Protection (MEP). Previously known as the State Environmental Protection Agency (SEPA), MEP has been made responsible for the Council and for ensuring inter-ministerial coordination. It has established a Secretariat (SERI) to maintain and develop international and domestic contacts. The Secretariat ensures follow-up in China to CCICED recommendations, and deals with routine matters when the Council is not in session. The Secretariat is assisted by the Secretariat International Support Office (SISO), directed by Mr. Christopher Dagg. The CCICED Secretariat International Support Office is located at Simon Fraser University in Burnaby, Canada, and is funded by the Canadian International Development Agency (CIDA).

6. This Summary Record of the CCICED 2008 Annual General Meeting was prepared by Ms Lucie McNeill for SISO. It was compiled on the basis of more detailed notes recorded during the Annual General Meeting (AGM). The Summary Record represents SISO’s interpretation of the discussions and not necessarily the views of all participants. To encourage frank and direct exchanges it has been agreed that the Summary Record of the Meeting should present an overview of the discussions without attribution to individual speakers.

 

II.  AGENDA ITEMS

ITEM 1. ADOPTION OF THE AGENDA

7. The 2008 Annual General Meeting was called to order by Executive Vice-Chair Zhou Shengxian who presided over this first session of the AGM. He remarked on the presence of Council Chair, Vice Premier Li Keqiang. He introduced the International Executive Vice-Chair and CIDA President Margaret Biggs; Vice-Chairs Børge Brende, Klaus Töpfer, and Xie Zhenhua; and the CCICED Secretary General Zhu Guangyao. He welcomed guests, Council members, and observers to the 2008 AGM. 

 

　　The 2008 AGM’s theme is Institutional Innovation and Harmonious Development. The agenda was presented and adopted as circulated to the Council. 

 

8. Vice-Chair Zhou Shengxian invited CIDA President and Council Executive Vice-Chair Margaret Biggs to address the assembly. During the course of her remarks, Ms Biggs made the following points. 

　　1) The Council, founded in 1992, has a successful history of bringing the best Chinese and international expertise to bear on China’s pressing problems. It is a unique forum for collaboration between policy makers, scientists, academics, practitioners and experts, demonstrating not only international commitment to cooperation, but also China’s determination to meet these challenges. The work of the Council is as relevant as it has ever been. The Council will endeavour to produce sound recommendations to the Government of China.

　　2) The current global recession will require renewed strategies for economic growth. The world’s economy and its ecology are interlinked but the present crisis threatens to derail current efforts on the environmental front. Council recommendations will need careful crafting to avoid this pitfall and embrace environmental investment as a key component of the new economic growth paradigm.

　　3) The Task Force report on Innovation for an Environmentally Friendly Society calls for an Environmental Innovation Action Plan and Program that can quickly move innovative technologies from the laboratory to the market, thereby curtailing pollution and environmental degradation, and boosting competitiveness. The development of markets is key to innovation, and recommendations will deal with market development and the role of international cooperation in this area.

　　4) The Task Force on Environment and Health indicates there is more research needed in China on the full extent of the damage to human health from environmental sources. The announcement by China’s MEP and the Ministry of Health on an Action Plan to address these issues is noted. The AGM will discuss recommendations to provide a much stronger and publicly available information base on toxic substances, as well as mechanisms required to make the Action Plan effective. The experience of other countries in the area of compensation for environmental damage to health will be presented.

　　5) Early consideration will be given to progress made by Task Forces addressing environment and energy – a vitally important issue for China and the world. The Council has been exploring the Low Carbon Economy for the past two years and preliminary Task Force recommendations will be presented, with suggestions that these be taken into account as China prepares its 12th Five Year Plan (FYP).

　　6) The Council, by helping China safeguard its own sustainability achievements including reaching many of the Millennium Development Goals (MDG), restoring forests and grasslands, and improving environmental sanitation, is also helping the rest of the world move closer to the concept expressed by China as Ecological Civilization. China’s continued seriousness and determination in facing its environment and development challenges are impressive. One of the measures taken was the creation in 2007 of the Ministry of Environmental Protection (MEP) and the Council offers its continued cooperation and support to Minister Zhou Shengxian and his colleagues. 

　　

9. Vice-Chair Zhou Shengxian invited China’s Vice Premier and CCICED Chair Li Keqiang to address the Council. On behalf of the GOC, Vice Premier Li thanked those who contribute to the work of the Council and welcomed CCICED members to China. He highlighted these issues during the course of his remarks.

　　1) The world economy is going through dramatic changes, with the current global financial crisis starting to affect physical markets, almost certainly bringing about a slowdown of development. Countries around the world must work in concert to maintain stable growth. China is also affected by the global downturn, and has had to deal with disasters last year, such as the Sichuan earthquake. 

　　2) While China’s economy is expected to continue to grow, it is taking proactive measures to maintain stability such as its flexible monetary policy and the recently announced rescue package which will provide significant funds for infrastructure and ecological construction. Although it is increasing investment in order to spur consumption, the GOC is taking into account the protection of the environment. The economic crisis presents an opportunity to transform China’s development model and adjust its industrial structure while improving livelihoods. It is also an opportunity to strengthen weak links between the economy and the environment, nurturing promising new ventures such as green technologies, products and processes. China is hoping to enter a new development paradigm.

　　3) As China celebrates the 30^th anniversary of the Reform and Opening Policy, the GOC is emphasizing sustainable development and ecological protection, while not neglecting economic growth. Its efforts are paying off in the form of reduced Chemical Oxygen Demand (COD) and sulphur dioxide (SO₂) in 2007. The Sichuan earthquake triggered additional environmental problems such as unsafe drinking water. The Beijing Olympics galvanized government action at all levels, with resulting improvements in air quality during the Games. 

　　4) China is still a less developed country (LDC), going through rapid processes of industrialization, urbanization and growth, and experiencing regional gaps in terms of economic and social development. The GOC realizes how central environmental protection is to its own people’s and the world’s wellbeing. China is committed to a scientific approach to development, and to putting people first; it will intensify the coordination between the environment, economic development and social considerations, promoting ecological civilization, realizing energy conservation and supporting an environmentally-friendly industrial structure. This will require institutional innovation and mobilizing the population. 

　　5) The GOC believes market mechanisms can be powerful levers. It has decided to adopt energy pricing that reflects supply and demand, as well as the scarcity of the resource and environmental costs. Enterprises and households will thus be encouraged to reduce consumption and emissions. Gradually, ecological compensation mechanisms will be strengthened in order to improve our capacity to protect the environment. This will require the development of emerging energy efficient industries. Expect the government to support innovation, to develop environmental technologies, to disseminate them and to speed up the development of energy conservation facilities and services. We hope these measures will also grow the economy.

　　6) The GOC intends to conduct more campaigns focusing on energy conservation and environmental protection in order to inform people and enterprises; it is felt environmental awareness will help China become an energy conserving and environmentally friendly society. The government believes the Reform and Opening Policy has proven effective in promoting environmental protection through international cooperation and the introduction of advanced technologies. 

　　7) Climate change is an issue facing the whole globe. Even with a slowing economy, no country can relent in the struggle. China will continue to shoulder its common but differentiated responsibility in this matter. 

　　8) The CCICED started in 1992 and has been an important window to showcase China’s achievement in the area of environmental protection. It has been a vital platform for cooperation and exchange. It is hoped the Council will continue to provide the GOC with targeted recommendations that can be implemented and benefit the whole planet, humanity’s common home.

 

ITEM 3. SPECIAL SPEECHES AND GENERAL DEBATE

a) CCICED Vice-Chairs’ Opening Statements

10. With CCICED Executive Vice-Chair Margaret Biggs presiding, Council Vice-Chairs Xie Zhenhua, Klaus Töpfer and Børge Brende addressed the AGM.

11. In his remarks Mr Xie Zhenhua, National Development and Reform Commission (NDRC) Vice-Chair, underlined the following points:

　　1) The GOC has continued its efforts to reduce emissions and increase energy efficiency since the last AGM and in preparation for the Copenhagen conference. China had to overcome serious challenges and hardships over the past year due to natural disasters. The Beijing Olympics saw improved performance on emissions and energy conservation. Many laws and regulations related to the environment were improved; work is now starting on major revisions of the country’s main Environmental Law. 

　　2) Resource conservation must be a basic principle of China’s development; a responsibility system will be set up to deal with emissions reduction and energy conservation. Next January, a new law will be enacted to implement the circular economy; it includes rules on energy consumption in public buildings. These and other measures, such as incentives to adopt more energy efficient technologies and hard targets for emissions, present a systematic approach to reducing energy consumption and encouraging conservation. Twelve major emissions reduction, conservation and energy efficiency projects have been initiated. By the end of 2008, 80% of China’s new buildings must comply with energy efficiency criteria; similarly, 113 priority cities have been mandated to reach set standards for surface water collection, as well as improve their performance in waste reduction and energy efficiency. 

　　3) In 2006 and 2007 despite a rapidly growing economy, cumulative energy savings reached the equivalent of 147 million tonnes of coal. By the end of last year, China had desulphurization equipment installed on some 120 million kilowatt of thermal power generation across the country; new urban waste water treatment capacity had reached 13 million tonnes per day; COD emissions were down 3.2% from 2006, to 13.82 million tonnes; total SO₂ emissions were 4.7% less than last year, falling to 24.68 million tonnes. In the first half of 2008, COD and SO₂ have both decreased by 3.96% and 2.48% respectively, compared with the same period in 2007.

　　4) There has been tighter management of energy-intensive enterprises. China has decommissioned a significant capacity of its highly polluting and energy consuming enterprises, promoting instead more benign investments such as the service sector. The GOC is also implementing significant reforms in resource pricing, as well as its tariff and subsidy structure. Generally, it is adopting incentives for energy efficient and environmentally friendly products and industries, while providing disincentives targeting heavy polluters, energy users and producers of resource-inefficient products. For example, tariffs have been cut on highly efficient vehicles. Financial measures have also been taken, ensuring credit markets favour energy-efficient and environmentally friendly enterprises; China now approves of bond issues to finance environmental infrastructure such as water treatment plants.

　　5) Despite progress made, China’s current development model has yet to be transformed. Energy and resource consumption are high and will continue to grow due to the rising population, continuing urbanization and industrialization. Efforts will have to intensify if China is to achieve the mandatory intensity-based emissions and energy targets set out in the 11^th FYP. In order to deal with the current global economic crisis, the GOC has put forth a 4 trillion RMB stimulus package, comprising 10 major measures to boost domestic demand and improve quality of life; some of the measures deal with post-earthquake reconstruction, and some target environmental infrastructure projects. The GOC sees this stimulus package as an opportunity to tackle climate change and other environmental challenges. 

　　6) Currently, 8.3% of China’s total energy is supplied by renewable sources; the target for 2010 is 10% and for 2020, 15%. In order to achieve the targets, China is investing in wind farms, hydropower generating stations and nuclear stations. China has become more efficient in its use of coal, reducing CO₂ emissions by 835 million tons. And it is playing an active role in rallying international consensus and momentum around the Paris Roadmap and the Copenhagen Conference. The GOC has released a working paper on climate change, detailing China’s relevant policies and measures. The CCICED is well positioned to contribute to the GOC’s thinking in this area at this critical time.

　　

12. Council Vice-Chair and the former Executive Director of the United Nations Environment Programme (UNEP) Mr Klaus Töpfer made the following points as he addressed the Council:

　　1) The past year has been fruitful on the environmental world stage for China. President Hu Jintao articulated clearly at the Communist Party of China (CPC) Congress the paradigm shift that is sought as China moves to implement its goals of a harmonious society and ecological civilization. Legislation is now in place to support the circular economy, renewable energy and urban planning. International members of Council should contribute to the greater dissemination of information about China’s commitments.

　　2) The current global economic recession will cause job losses, stagnation and social dislocation. This will be felt especially deeply in developing countries and among the poorest of the poor. With its recent stimulus package, China is demonstrating it is a responsible global citizen. This crisis must spur us to realize a green economic structure; otherwise this cycle is doomed to repeat itself. China could be one of the countries taking the lead in developing this new structure and integrating the principle of fairness. The implementation of China’s US $500 million stimulus package is a good opportunity to implement Premier Wen’s Three Transformations. 

　　3) China’s White Paper on Climate Change shows China will not be a victim, rather it intends to use the crisis as an opportunity to improve energy efficiency, build new infrastructure and conserve resources. China’s actions are bound to make a significant contribution to the Copenhagen Conference. 

　　4) China is to be commended for hosting the Green Olympics in Beijing. The next major event with be the 2010 “Better Cities, Better Life” World Exhibition in Shanghai. Sustainable development as a concept can only succeed if it is applied in cities. It is expected that 30% of China’s population will live in cities by 2030. China is exploring actively many sustainable processes and solutions. Thanks to a Clean Development Mechanism (CDM) project, methane collected in a Shanghai landfill is burned, contributing to the regional power grid. China is also researching using the sludge that is a bi-product of sewage treatment plants.

　　5) The most visible sign of China’s commitment to the environment is the creation of the Ministry of Environmental Protection. It is hoped MEP will be granted the necessary staff and budget.

 

13.  Vice-Chair Børge Brende, who is also Deputy Chair of the Standing Committee on Energy and Environment of the Parliament of Norway, addressed the AGM and stressed these ideas:

　　1) Premier Wen Jiabao has announced a brave and timely stimulus package that also includes important environmental measures. Past downturns saw a corresponding destruction of the environment but the world can no longer afford to rescue the economy at the expense of forests, land and other resources. 

　　2) China has shown it is an economic innovator; it will prove to be so as well in environment and development. The path taken by 1.3 billion people cannot but have an impact on the rest of the world. The global financial crisis is the right time for China to move to a low carbon growth path, with investment in renewable and low carbon technologies. Two lessons were learned during the recent World Economic Forum in Dubai: first, the longer the delay in mitigating risk, the greater the crisis. Secondly, the growth engine the world needs now could be investment in low carbon infrastructure and energy efficiency. 

　　3) Enormous markets will develop for environmentally friendly technologies and products. China, with its large domestic market, its manufacturing strength and in some cases with international cooperation in the area of research and development, could support the development, testing and large-scale production of climate friendly products. This collaboration between LDCs and developed countries (DCs) could complement the negotiations that will take place in the context of the Copenhagen Conference, allowing for greater trust between LDCs and DCs. 

　　4) A low carbon economy will put greater emphasis on efficiency, conservation and recycling of materials – reducing resource shortages. A growing number of countries are taking action to reduce greenhouse gas (GHG) emissions. Consumers in many countries have a rising awareness of the carbon footprint of their consumption. The new US administration is already signalling it will support the transformation of blue collar work into green collar opportunities. UNEP is to be commended for having launched the concept of a New Green Deal to get the markets back to work – a very timely initiative.

 

b) Special Remarks by the Minister of Environmental Protection

14. On behalf of the CCICED, Vice-Chair Margaret Biggs congratulated Council Executive Vice-Chair Zhou Shengxian on the promotion of SEPA to a full ministry. She invited him to address Council and during his special remarks, Minister Zhou made the following points.

 

15. During the first three quarters of 2008, COD and SO₂ emissions decreased by 2.7% and 4.2% respectively as a result of concerted efforts and despite the ice storm, the earthquake that hit Sichuan province and the current economic crisis. Coordinated development is at the core of China’s promotion of a scientific approach to development; this concept encompasses the economy, the environment and population. Pollution is essentially the result of an imbalance between the environment and a human activity; the history of environmental protection is the history of seeking to balance these forces. Humans cannot live without air and their health depends on clean air

 

16. When Premier Wen Jiabao met Council members last year, he mentioned aspiring to be a Green Premier, a guarantor of China’s clear skies and white clouds. The GOC had promised that the air would be clean for the 2008 Olympics. Beijing is surrounded by mountains, making it difficult to flush out air pollution and there were concerns that the GOC would not deliver on that promise. Success was achieved however, thanks to the efforts of the central and local governments, to the stringent measures adopted and the 1 trillion RMB that was spent. Major polluters, such as Capital Steel, were forced to move away or shut down. The rivers within the city’s sixth ring road were cleaned up. Citizens were highly aware of these efforts and have become better defenders of the environment as a result of the Green Olympics. In 2006, the 6 provinces surrounding Beijing Municipality established the Air Quality Control Leading Group to support the effort. Research was conducted involving China’s foremost experts; measures taken included the installation of desulphurization facilities in power plants, to clean up air pollution. The results have been remarkable, with decreased emissions of NO_x and SO₂, and with an increasing number of days with high air quality standards. 

 

17. The achievement of the Green Olympics is a case study in sustainable development. In recent years, quality of life for urban and rural residents has improved continuously thanks to rapid economic and environmental improvements. The Green Olympics demonstrates how people and nature can coexist in harmony. Coordinated development is the way to generate a benign cycle where an energy efficient and environmentally friendly society is established.

 

18. However, efforts must be strengthened and accelerated on environmental protection at all levels of China’s society. Clean production, improved incentives and better results are sought. Enterprises must be encouraged to conserve energy, cut emissions and grow in sustainability and competitiveness. China must adopt advanced technologies, improve efficiency and productivity, ensure laws and regulations are obeyed, retire redundant technologies and transform the industrial structure. This will facilitate accelerated adoption of technologies that are resource efficient and clean. 

 

19. As the world faces a global financial tsunami, China has launched a 1 trillion RMB, three-year stimulus package which will also benefit the environment. China will not allow low efficiency, high emissions enterprises to start production; rather, it will use the crisis as an opportunity to increase domestic consumption and promote structural change. It will focus on environmental products, new technologies, renewable energy, and generating greener engines of economic growth. China also plans to develop the service sector and create a level playing field for burgeoning small and medium enterprises (SME). The Green Olympics will be used as a springboard, increasing consumer awareness of, and demand for green products. Regional efforts for environmental protection will be encouraged; for instance, a new management system for areas like the Pearl River Delta will be proposed, supporting regional planning and supervision, and encouraging more benign industries and sectors. 

 

20. China also needs to pay as much attention to the rural environment as it does the urban environment since both are interdependent. Safe drinking water, pollution control and environmental protection are critical in the countryside. China plans to mobilize its entire population to build an ecological civilization. People can make wise choices as consumers and protect the environment; limiting certain behaviours and ensuring greater awareness will also bring about ecological civilization. 

 

21. The environment must come first if China is to achieve its goals of resource conservation, efficiency and sustainable development; sustainable consumption at the household level is essential to reaching this goal. Compensation measures, new regulations and setting up a responsibility system will contribute to the restoration of China’s rivers and lakes. President Hu Jintao emphasized, in the case of the Huai River, the need to let nature rest so regeneration can occur.

 

22. Humanity has focused on development, but now we face severe environmental challenges. All countries need to take a long-term perspective, and realize that cooperation amongst nations is essential. Greater common efforts are needed to ensure a better future, especially as the issues to manage are complex and the global economy is slowing down. Barriers preventing technology transfer must be abolished in order to ensure efficient flows of knowledge and funding. This CCICED AGM is occurring at a critical time and its input is needed as never before.

 

c) Presentation of the CCICED Issues Paper

23. Vice-Chair Margaret Biggs presided over the presentation of the Issues Paper by CCICED Chief Advisors Shen Guofang and Arthur Hanson. During their remarks, they highlighted the following:

 

24. The theme of the 2008 Issues Paper is Environment and Development for a Harmonious Society. China is experiencing rapid urbanization, industrialization and strong economic growth. Environmental degradation is severe in some areas, exposing glaring imbalances between environment and development. In October 2007, the CPC Congress was held; a theory of openness and scientific development was put forth, within the context of building socialism with Chinese characteristics, and with added emphasis on ecological civilization. Transformation and innovation will allow China to resolve the long-standing conflict between environment and development.

 

25. Many in the international community hope that China can be a “leader”, while some Chinese specialists prefer the less emphatic “take the lead”. Leadership needs to be understood in the context of Premier Wen’s statement, that China’s development will continue to be prosperous, harmonious and democratic, and that China will continue to champion world peace and progress. 

 

26. 2008 has been an unusual year for China. It marks the 30^th anniversary of the Reform and Opening Policy, the 30^th year since the promulgation of China’s Environmental Law and the creation of the Ministry of Environmental Protection. This year numerous natural disasters occurred, the successful Beijing Olympics were held, and more recently we were hit by a global financial crisis. The Council must bear these in mind in its work. 

 

27. Shortly after the finalization of the Issues Paper, the State Council announced its 1 trillion RMB stimulus package to encourage domestic consumption, putting the accent on environmental protection. China is trying to learn from past mistakes, using the concept of ecological civilization in resolving the conflict between development and environment. The Issues Paper considered the notion of justice in tackling rural issues and recommending compensation schemes. Similarly, the policy of Putting People First is relevant to public health and environmental challenges. 

 

28. The term Harmonious Society is not used in the international community and Chinese understanding of these words is difficult to explain and operationalize. China is both rich and poor; it is in need of ecological restoration, but also in need of an educated and healthy population. The past 30 years have heralded amazing changes for China since Deng Xiaoping’s Reform and Opening. The past year’s earthquake demonstrated China’s new capacity for emergency response.

 

29. This year also marks the 20^th anniversary of the Brundtland Report, which coined the phrase sustainable development. This concept is not yet a reality globally, and a new paradigm is needed. Harmonious development could prove to be this paradigm. Harmony is an ancient concept in China; China’s decision-makers are integrating in it the notion of democracy, which in China embodies both public participation and stability.　 Harmonious development includes the notion of a steady course, of an ecology in balance, but also of dynamism and ecological innovation. The concept also integrates the notion of putting people first, which includes the rule of law, environmental statutes and regulations, fairness and justice through schemes such as ecological compensation. 

 

30. Harmonious society takes into account five major elements: harmony between urban and rural development, generating more equality for rural people in terms of wealth, health and opportunity; harmonious regional development with emphasis on assistance to less developed regions; harmony between economic and social development; harmony between economic development and the environment; and a harmonious interaction between the domestic economy and international trade. There are interactions among all of these elements.

 

31.It remains a challenge to determine whether the harmonious society concept is simply aspirational, or whether it can be operational and its progress can be measured. Possible indicators are the MDGs, which China already reports to the UN; the mandatory environmental targets included in the 11^th FYP; and Green GDP. Monitoring remains a serious challenge.

 

32. Ecological civilization is a grand vision signifying in China the harmony between people and nature. But China has credibility challenges in advancing this notion internationally because of recent scandals such as melamine in milk products and lead found in paint and toys. There is a global perception that China is not making progress on environment and development. This could be reflected in consumer resistance to “Made in China” products. 

 

33. The international challenge posed by the financial crisis can be related to harmonious society in that the global recession could lead to a rethinking about the need for further regulations correcting the imbalances of globalization. This could bring effective action on international trade agreements, including the World Trade Organization (WTO). This could pose challenges for China.

 

34. China’s future economic growth model will include difficult adjustments such as new approaches for sustainable domestic consumption, rural reforms and correction of income inequalities. The baseline created by the Beijing Olympics in August has generated expectations in China and the world; supervision and enforcement of environmental measures require a given level of deterrence which in turn produces compliance. Adequate information and monitoring, with coordination and cooperation from relevant authorities and levels of government, are key to enforcement. 

 

35. The GOC announced important rural environmental reforms in October. By 2020, rural incomes are to be raised, with food security a central preoccupation and planned investments in public utilities. Rural reform is key to the achievement of a harmonious society in China. 

 

36. The ongoing environmental challenges including climate change can create opportunities. Stability will depend on ensuring the public is kept well informed and participates, and on sustained efforts to reduce environmental degradation suffered by the poor, providing mechanisms such as ecological compensation.

 

37. What if world trade rules were based on ecological civilization principles? China is a world leader in achieving the MDGs, but it still has trouble meeting environmental goals. Examples such as Hebei Province’s city of Baoding that has become a centre of innovation for alternative energy could be useful. 

 

38. The Issues Paper lays out eight essential breakthroughs: the radical adjustment of the relationship between the environment and the economy; making trade, investment and financial sector reform consistent with sustainable development; long-term transition to a Low Carbon Economy (LCE); environment and health actions that reflect the alarming range and level of toxic impacts, potential for pandemic diseases and other environmental risks; new ecosystem protection approaches yielding substantial and lasting economic, environmental and social benefits for rural people; accelerating the pace of development and commercialization of technological innovation for environment and sustainable development; re-orienting and strengthening the existing environmental management system to integrate public participation and respect for public environmental rights; shifting international environmental cooperation towards integrated sustainable development solutions.

 

39. China’s frequent use of words such as friendship, peace, cooperation and development can be dismissed as rhetoric, but the international community stands to gain by trying to understand what these mean in China and how they could be useful to all countries. The Council is in a position to understand how environment and development contribute to these broad concepts guiding the future of China.

 

d) Special Remarks by the Director General of IUCN

40. Vice-Chair Margaret Biggs invited Council Member and Director General of the International Union for the Conservation of Nature (IUCN), Ms Julia Marton-Lefèvre, to address the AGM. The following issues were presented to members by the speaker.

 

41. IUCN’s World Conservation Congress, held every four years, concluded last month in Barcelona. Despite the current financial crisis, the Congress attracted 8,000 participants representing a wide range of stakeholders. It was the largest ever, which demonstrates there is now a mass movement eager to build what China calls a harmonious society. The vision of the Congress is to support a diverse and sustainable world; biodiversity is essential to the health of human beings and their societies. IUCN put its principles in action by staging a green meeting in a sustainable convention centre, pushing hotels to provide environmentally-friendly services, going paperless, and offsetting the carbon footprint of delegates.　 

 

42. The Congress encompassed a Forum and an Assembly. The Forum included events such as workshops, knowledge cafés, exhibition pavilions showcasing IUCN and its partners’ work, a women entrepreneurs’ fair and firm commitments by donors. Discussions focused on the challenges to establish a sustainable economy; how to address climate change; how to stage local actions for biodiversity; philanthropy for sustainable development; green buildings; and sustainable living. A global Platform of Action was agreed upon. 

 

43. The Assembly was held for the members of IUCN; the organization’s high level decision-making body approved the 2009 – 2012 Programme, financial plans and resolutions. In its new Programme, IUCN remains committed to the conservation of biodiversity and is focusing on promoting the greening of the world economy. Attention was paid to the economics of ecosystems and biodiversity because humans depend on nature to provide resources but pricing remains problematic.

 

44. IUCN’s Assembly agreed to pay attention to the ethics of conservation, calling on governments to take into consideration the rights of vulnerable and indigenous communities, poverty reduction, land tenure rights, and the “Do No Harm” principle. The link between conservation and climate was underlined, since healthy ecosystems are powerful agents to combat climate change. IUCN is demanding more specific goals from the next UN Climate Change Summit to take place in December. It endorsed the need to proceed with climate change mitigation actions such as reducing emissions from deforestation and degradation. The Assembly recognized the private sector is interested in reducing impacts on biodiversity. 

 

45. The most publicized result of the Congress was the publication of the Red List of Threatened Species. The news is not good, with almost one in four of the world’s mammals on the brink of extinction. However, some species that were on the threatened list in years past are now showing signs of recovery. IUCN also considered energy options and concluded that not all bio-fuels are alike. It called on governments to regulate them in order to limit their impacts on people and nature.

 

46. A study on the transition to sustainability was launched in Barcelona. The premise is that ecosystems are life support systems. We are in what some writers have called the Anthropocene, the Age of Man. Humanity’s use of resources since 1750 shows dramatic trends, with available data revealing that humanity’s ecological footprint is huge. We are called upon to “decarbonize” the world economy, de-linking economic growth from carbon, while at the same time addressing poverty and protecting our biosphere. The crucible of evolution is biodiversity, and this needs to be better communicated. IUCN’s knowledge and influence will be brought to bear on decision-makers in order to ensure biodiversity considerations are integrated in the measures taken to fight climate change, increase security, stabilize markets and promote trade.

 

e) General Debate and Comments

47. With Vice-Chair Margaret Biggs presiding, Council members took part in a brief general debate on the AGM’s theme, the Issues Paper and other points raised by the speakers. Members had this to say:

 

48. In the context of the current global financial crisis and the rescue packages that have been announced by various countries, what China decides to do will have an impact. There is a debate in Europe with sceptics questioning the push for a green economy, despite the consensus among leading specialists that this crisis is a golden opportunity. China’s actions could help tip the debate currently raging in Europe.

 

49. China’s policy articulates not only the need to clean up the environment but also to drive future economic growth towards a sustainable paradigm – the green economy. China is not hampered as western democracies are; other countries will try to stabilize their steel and car industries. These measures will not help the poor. We should consider how the trillions of dollars mobilized can serve us better than merely stabilizing the economy. China is leading the thinking in this area, more than any of the Organization for Economic Cooperation and Development (OECD) countries, yet the world knows little about this.

 

50. Substantial research funds are going to carbon sequestration technologies, while little money is spent on the planet’s natural potential as a carbon sink in forests, peat lands, grasslands and marine areas. Roughly 15% of the carbon is already sequestered in some 100,000 protected areas around the world covering 11% of the earth’s surface. The present crisis shows us that economic resources can be marshalled; these resources could be re-directed towards conservation, or to technology transfer to LDCs in order to support GHG emissions reductions and adaptation to climate change. The current debate around climate change needs to shift from the lose-lose perspective to offering the kind of win-win view that China is now taking. The rise in carbon emissions, faster than was predicted, lends urgency to this.

 

51. The term resilience should be added to those already mentioned in the Issues Paper. It embodies elements of stability; but it also describes how systems withstand and recover from stress and shock. It is also crucial to understand there are non-linear causes to catastrophes; there are tipping points beyond which the rate of change accelerates. A lot of these have been identified in climate change research. This is something that the Council could study under the heading of ecological civilization.

 

52. The need to move towards a LCE has been discussed. But the price of crude oil is an important aspect that should not be overlooked. A few months ago when the price of a barrel of crude oil stood at US$ $150, there was a significant change in consumption patterns and some owners were selling their more inefficient vehicles. The price of crude oil is now at $ 60 per barrel and consumption is again on the rise. The price of crude oil is one of the key elements determining how fast and how far we can go in shifting to a LCE.

 

a. Task Force on Innovation and Environmentally-Friendly Society

53. Vice-Chair Xie Zhenhua presided over the presentation of the Task Force on Innovation and Environmentally-Friendly Society. Co-chairs David Strangway and Professor Feng Zhijun provided Council members with a summary of their work.

 

54. Three main themes were explored in the Task Force (TF) report: technology innovation for environment and sustainable development; regulations, standards and enforcement; and public participation.

 

55. A key finding is that China has the capacity and the need to become a global leader in innovation technology. China has mandatory intensity targets for emissions reduction, based on per unit of Gross Domestic Product (GDP); while this is good, it is time to look at absolute pollutant reduction, not just intensity reductions since the rate of growth of China’s economy ensures that total emissions continue to rise.

 

56. The TF visited three cities: Baoding, Ningbo and Wuhai. It noted that the intensity of pollution is inversely correlated with public participation and sustainability in these cities. For instance, Baoding where pollution is the lowest is also where public participation and sustainability are greatest.

 

57. The central conclusion of the report is that regulations are key to innovation; clear, stable and uniformly enforced regulations are necessary to the creation of markets. Without regulations, there is no market – hence no incentive for innovation in the first place. The elements creating innovation are not in a linear progression – rather they are interrelated in a network and encompass institutions such as government research institutions, universities, private research facilities and firms. The process follows a series of steps: basic research, applied research, pre-commercial research and in some cases creation of a new company, demonstration with niche deployment, and widespread deployment and diffusion. 

 

58. The environmental innovation system in China is comprised of: government and public involvement; universities and research institutes; and regulations and standards. In the universities, a gap has been identified between basic research and the delivery of marketable research products. The TF recommends MEP create industry sector R&D institutes focusing on problem solving; they have existed in the past but now are inadequate to handle the sector related to environmental technologies. There are also problems associated with SMEs and the TF proposes the creation of innovation support networks.

 

59. There has been substantial growth in the provision of capital to SMEs through venture capital markets and private equity. Many of China’s new regulations and standards are moving towards international levels. There is inadequate enforcement which has hindered the development of markets. Full, open reporting to independent third parties is essential in order to foster environmental innovation. The TF recommends that MEP be authorized to create a National Environmental Information System which would allow for free access to information on pertinent regulations. An open and transparent process would help drive innovation.

 

60. The TF emphasizes in several passages the importance of effective enforcement, and calls on China to give further thought to the enforcement of Intellectual Property Rights (IPR) protection measures. Green procurement policies can also stimulate innovation.

 

61. These various elements are proposed by the TF as forming a National Innovation Action Plan. Public involvement is necessary as China continues to develop. Civic groups and Non-Governmental Organizations (NGOs) are not yet fully empowered in China; the TF believes that wider access to information would empower local groups.

 

62. China is playing an important role in the bio-science and technology area; it is playing a lead role in the information and communications technologies, as well as in nanoscience and materials’ technologies. Revolutions have taken place in these fields, driven by scientific research. China is also well positioned to play a lead role in the new clean technologies sector. The fields that will be essential to establish this include: clean transport technologies such as electrical vehicles; enhanced geothermal systems; photovoltaic cells; wind energy; new nuclear power systems; carbon capture and sequestration; clean coal; desalination of sea water; biofuels and bio-products. If China were to leapfrog in any of these areas, it stands to gain from significant export potential. Other interesting areas are the circular economy, clean building technology and recycling.

 

63. One area of opportunity is the research to improve cellulosic biofuel production. This is driven by innovations in genomics, with knowledge now passing from basic science to commercial applications. The time cycle for the development of biofuels has been very short. The Inter-Academy Council has demonstrated that there is a close relationship between basic research and commercialization.

 

64. The TF recommends there be strengthening of the basic research platform; China has a Science and Technology (S&T) Medium to Long Term Plan, and rapid improvements are taking place in this context. Incentives to meet standards can be powerful levers for innovation, as is international cooperation. China is now in a position to lead this cooperation process, bringing other parties to the table. The Academy-Industry linkage needs to be strengthened, but this is not unique to China. The creation of internationally-recognized prizes could stimulate breakthroughs. The TF is uncertain whether or not the CDM per se has led to innovation; another platform may be needed in order to produce this result.

 

65. An Enterprise Forum sponsored by the CCICED was held this past year. The TF believes it may be time to convene another session in 2009, bringing together enterprises and investors to discuss the barriers to innovation and commercialization. China must create the environment for an innovation culture; unless people are allowed to fail, they will not truly innovate. China’s education system needs to focus more on creativity than on rote learning.

 

66. Looking at innovation as being created by the public, government and industry, the TF finds that the public involvement side of the equation needs to be strengthened considerably. With proper information and channels of participation, the public can help protect the environment. This transition time presents China with a good opportunity to push for innovation in environmental technologies.

 

67. China is already starting to work on reducing total pollutant loads. It is formulating an evaluation and performance system that would provide incentives for this; public participation should be a key part of this mechanism. Innovation must also be people-centred, not simply focus on the economy or high technologies. The goal of a harmonious society also guides this development. Before China can take the lead internationally, it will have to ensure improved management of innovation domestically.

 

b) Task Force on Environment and Health

68. Vice-Chair Xie Zhenhua called upon the Co-Chairs of the Environment and Health Task Force, Professor Seiji Ikatai and Guo Xinbiao, to present their report to Council. In the course of their comments, the TF Co-Chairs underlined the following issues.

 

69. The TF held a number of meetings where significant understanding gaps among all participants, international and Chinese, were bridged. The TF determined to limit the scope of its work to health damage caused by human-induced pollution. 

 

70. International experience and lessons from the US, the EU and Japan were reviewed. The TF concludes that cost-effectiveness dictates that prevention be the first priority in environment and health management. Secondly, proper intervention is necessary to deal with inevitable pollution threats. There should be government intervention in the case of priority pollutants to which serious health effects are linked; health impact assessments should be conducted as a matter of course. Thirdly, government coordination mechanisms are important, given the number of stakeholders involved. Fourth, adequate legislation is necessary to support health and environment management. Fifth, financial and human resources need to be adequate to the task. In addition, information disclosure and public access are essential. Regarding compensation and relief mechanisms, all three countries studied have different schemes. A compensation mechanism, as well as a dispute resolution mechanism, is needed. Good research and data gathering systems are the foundations of this management system. A performance measurement system to monitor the behaviour of main actors is found in all studied countries and is valuable. 

 

71. If members conclude that in order to avoid tragedies such as Japan’s Minamata disease, concrete action must be taken to prevent health effects; if there are such effects, pollution victims must be quickly treated and compensated; and the establishment of an effective health management system is recommended.

 

72. Health effects from pollution are serious in China, with numerous areas where air, water and soil pollution is serious. Some research has been conducted, but the surface has barely been scratched. Preliminary findings suggest the situation may differ between rural and urban areas.

 

73. China faces a challenge in tackling these issues because there is no clear division of responsibility among relevant government departments, not enough staff have been tasked to deal with these issues, nor is there a solid environmental health management system. Moreover, there is a severe lack of reliable data on environment and health. Various authorities are jealous of the data they possess and do not share information. There is no tradition of public disclosure of sensitive information on environment and health in China. 

 

74. The recommendations to the GOC comprise six main areas: strengthen the responsibility of the government and set up an environment and health management system, in which the government plays the lead role and the public participates extensively; improve environment and health legislation, policies and regulations, and form an effective management system; focus on prevention and take effective measures to avert environment and health risks; increase relevant budgets and build the capacity of staff to manage the environment and health system; ensure information disclosure and support public participation; finally, focus on environment and health work and take targeted intervention measures.

 

75. China is still an LDC and measures imposed must be gradual. Work could start in cities by focusing on air pollution, and in rural areas with drinking water as well as indoor air quality. In addition, immediate action should be taken to halt the spread of known pollutants with known serious health effects. Research must be conducted on emerging pollution problems that have potential health effects. Prevention must be the GOC’s prime directive.

 

c) General Debate and Comments

76. Vice-Chair Xie Zhenhua presiding, members of Council engaged in the following discussion.

 

77. The recommendations from the Innovations TF relevant to regulations, standards and enforcement are most welcome from the perspective of the business community. Business is often thought antagonistic to regulation, but in fact this is essential to the creation of markets. This point could be further emphasized in the recommendations. Good regulations specify the performance that is required; they encourage innovation and stimulate markets to deliver results in the most efficient way. Poor regulations are overly prescriptive and destroy innovation. It would also be good to pay attention to the steps needed to improve compliance; energy efficient building regulations have been said to receive only 25% compliance; China would like this to increase to 80% in a few years.

 

78. Regulations, standards and enforcement must be performance-based, providing the incentives and generating the demand for pushing industry beyond present standards. Within enterprises, a culture of continuous environmental innovation must be created; they must be allowed to reap from the marketplace the rewards of reduced costs and the gains from the deployment of new technologies. A good example is the US government’s SO₂ control measures; the regulations stipulated certain flue gas desulphurization technologies and as a result, there were no innovations generated. In 1995 when the Acid Rain Program was implemented, along with an emissions trading system, there were substantial improvements in the removal of SO₂ from flue gas emissions because companies were rewarded for innovation.

 

79. It is also true for Europe that sound standards and regulations generated innovation. This is linked with the report on economic instruments that will be submitted to Council during this AGM. The proper economic instruments are also key to creating the enabling environment for innovation. International cooperation has an important role to play in supporting pilot and demonstration projects. Task Forces need to coordinate their recommendations where they overlap.

 

80. It is right to design environmental policies that focus on human health considerations; greater knowledge on environment and health interactions is necessary to ensure such policies get widespread support. However, a step by step approach is recommended; the first steps should focus on policy and enforcement, because building extensive administrative systems in the environment and health field is much more demanding and complex.

 

81. The Innovations TF identifies three types of innovations. The first is incremental, the second is transformational, and the third is radical innovations that are spurred by the climate change threat. The TF should consider whether or not there is a need for specific instruments, institutions and strategies to generate radical innovations.

 

82. In the case of biofuels innovation, the lag time between the basic scientific idea and commercialization is getting increasingly shorter. But all three categories of innovation are happening at the same time – it would be difficult to isolate the conditions that favour one over the others. All options should be kept open.

 

83. The Innovations TF report questions whether the CDM has led to significant innovations; this is a correct assessment. China uses 60% of the CDM credit to implement projects. The CDM should continue as a project-based mechanism, but other complementary, and easier to implement mechanisms could be put in place. Such mechanisms could be based on energy intensity in given sectors or on specific technology. China could play a role in championing this view as we move towards a new global climate agreement.

 

84. The Enterprise Forum is an excellent innovation of the CCICED. The first Forum was held this spring, with strong participation from business, government, industry and experts. The Council should consider holding another one in 2009.

 

85. One of the central recommendations of the Innovations TF is the launch of a National Environment Innovation Action Plan. Environmental technologies have the potential to reduce the pressure on natural resources and stimulate competition. However, barriers are hindering their development and uptake. In 2004, the EU adopted its own Environmental Technologies Action Plan to overcome such challenges. It includes measures to get innovations to market more rapidly, and to improve the chances of successful commercialization. In this regard, China should not neglect the role that green public procurement can play in creating attractive markets for innovators. In 2006, the EU decided to achieve a 50% quota of green public procurement by 2010. 

 

86. Two EU initiatives that could be of interest to China deal with SMEs and should perhaps be integrated in the report. In both China and the EU, over 90% of enterprises are SMEs. Creative financial instruments are essential to increase the chances that SMEs will get a foothold in the market for their environmental innovations. The EU has a 400 million Euro fund earmarked to support eco-innovative SMEs. The monies flow through two channels: the Growth Initiative Facility, which allows for participation in venture capital funds during start-up or expansion phases; and the Pilot and Market Replication Instrument which provides grants to SMEs ready to commercialize eco-innovations. For 2008 and 2009, the funds target SMEs involved in materials recycling, sustainable building, and food and beverage; other sectors will be added in future.

 

87. The environment and health nexus is of paramount importance. China asked the government of Japan to support this TF because of the worrisome rise in pollution-related health problems. The thorough work of the TF yielded agreement on key principles and measures, such as the precautionary principle, preventive measures, “polluter pay”, government coordination, information disclosure, public participation, environment and health monitoring, compensation mechanisms, financing and accountability. In order to realize the recommendations put forth by the TF, Japan is considering a bilateral project that would support the adoption of these measures.

 

88. Regulations are certainly necessary to enhance the market for innovations, but an education system that encourages creativity is also essential. Hong Kong’s Innovation Committee set up a centre where individual innovators can process IPR registrations – a one-stop-shop. The process can be daunting for SMEs, tempting them to forego IPR protection and jeopardizing the full rewards of innovation.

 

89. The report on Environmental Health was comprehensive. Although this issue is sensitive in China, an epidemiological baseline for rural and for urban environmental health indicators needs to be established in order to assess the challenges that are faced and the targets that could be set. Catastrophic, one-time events need to be distinguished from endemic issues. Academia would gladly take up such data gathering and research challenges.

 

90. China's new energy standards for buildings represent a 50% improvement in efficiency over previous years; but while building design has improved, construction does not yield energy-efficient buildings. There is much potential to be realized from the ongoing research into improved materials.

 

91. Regarding innovation and the CDM in the context of the Kyoto Protocol, there are currently over 1,600 CDM projects in China; only one-fourth are internationally registered. These projects have reduced GHG emissions, but certainly China would benefit from increased emphasis on innovation. Were the transfers of technologies be made easier, emissions could be further reduced.

 

92. The Innovations TF proposes an Action Plan and market-based instruments to stimulate innovation. China has long been conscious of the need to install desulphurization equipment, but until new technologies were introduced, costs were prohibitive. The introduction of new technologies led to broader adoption of desulphurization by thermal power plants; government incentives also played a role. Similar incentives can be used to improve sewage treatment and other pollution issues.

 

93. China has been attempting to coordinate its investment and its development strategies; good results have been achieved for sewage treatment plants. Similar instruments have been developed to encourage the decommission of highly polluting enterprises, antiquated machinery and equipment. 

 

94. At present, the GOC provides a 50% subsidy on compact fluorescent light bulbs, making them more affordable and increasing their market penetration. The GOC has found that market instruments and incentives are more powerful than propaganda and slogans. China has adopted a green procurement policy. China’s policy is to ensure that the land used for biofuels should not encroach on the land needed to produce food; rather, China is encouraging the conversion of waste straw and rotted grain into biofuels.

 

ITEM 5 TASK FORCE REPORTS – SECOND SESSION

a) Task Force on Economic Instruments for Energy Efficiency and Environment

95. Vice-Chair Klaus Töpfer presided over the presentation of the TF report, inviting Co-Chairs Ernst Ulrich von Weizsacker and Ye Ruqiu to address the Council. During their remarks, the Co-Chairs emphasized the following issues.

 

96. This is an interim report resulting from the initial work of the international and Chinese TF members on issues that are related to climate change. The CCICED is already familiar with the challenges this will pose: the rise of sea levels leading to dramatic changes in coastlines; ice melting faster than predicted in Greenland; increased fresh water coverage. In a matter of a few decades, it is now predicted that the sea level will rise by seven meters.

 

97. In order to stabilize GHG concentrations, emissions need to be cut by 50% - but even if this was achieved, GHG concentrations would continue to grow in absolute numbers for 150 years. The world stands a better chance if we learn how to extract more energy and wealth from the fossil fuels, the water and other resources. Bold thinking is urgently needed. A four-fold increase in energy productivity is possible if we are more efficient. We are already seeing this progress in vehicles, passively heated houses and LED lights. China is now the leader in the adoption of compact fluorescent light bulbs, which improve energy efficiency by a factor of four. Business travel can also be replaced with video-conferencing.

 

98. The TF is suggesting a change in the technological paradigm, from seeking labour productivity gains only to adding the dimension of resource productivity. Labour productivity has increased 20-fold in DCs and China is rapidly catching up; labour productivity has increased in tandem with labour costs because there is a mutual causality between the two. 

 

99. Resource productivity could increase 10-fold in 100 years; rising resource prices can be expected to be a key factor in this. But resource prices have actually been dropping, and falling prices cannot generate efficiency gains. In order to increase energy productivity, governments will have to increase energy prices. If prices and productivity rise together, there would be no economic hardship. Wildly fluctuating energy prices over the past months have had much more severe impacts. Predictability and smoothness are valuable to business and individuals, allowing for planning and adjustments. High energy prices should not be feared. Studies show countries with the highest prices performed best, while those with the lowest prices had poor economic performance.

 

100. The TF’s preliminary recommendations are that China should adopt as a national goal the strategic increase of energy productivity. China made a start in its 11^th FYP, but this is only a short term commitment. Energy prices should rise gradually, in concert with productivity gains; the TF refers to this as the long-term price escalator. This measure should be initiated in the 12^th FYP. The predictability would attract investors interested in energy innovations.

 

101. Free energy markets are not harmonious. The short-term elasticity of energy prices is virtually zero, while long-term elasticity is much greater. The proposed escalator makes use of this difference and is based on the positive experience OECD countries have had with energy taxation. Perverse energy subsidies should be eliminated first; channelling energy tax revenues into reducing the Value Added Tax (VAT) could avoid inflationary effects, a concern in China. Were China to become a pioneer in energy efficiency, it would become a technology pioneer. Similar price escalators are conceivable for water extraction, raw minerals and other resources, and their adoption could bring about the circular economy.

 

102. The TF is still making progress on its remaining study program and a full report will be submitted to Council in 2009.

 

b) Task Force on Energy Efficiency and Urban Development

103.  With Vice-Chair Klaus Töpfer presiding, the Energy Efficiency and Urban Development TF Co-Chair Ms Laurence Tubiana and TF member Professor Mao Qizhi briefed Council on their preliminary findings.

104. The Factor Four concept discussed in the previous presentation is an inspiring one; optimizing systems is the thought that guides much of this TF’s work; there are also parallels with the work of the TF on the Low Carbon Economy. Collaboration among the three groups will be useful. 

105. Cities are at the core of the transformation of the economy. Cities are where lifestyles take shape, changes occur and new ideas for the future are defined. Choices made in cities today will influence tomorrow’s production and consumption levels. The TF is focusing mostly on the building and transport sectors; in DCs over the past 40 years, cities’ share of energy has been growing steadily, in tandem with per capita GDP. In OECD and EU countries, the energy used in buildings and transport represents two thirds of total energy consumption and of GHG emissions. This is largely due to consumption patterns and urban sprawl.

106. Today’s pattern of urban development and infrastructure choices will determine energy demand trends in the future. China has the opportunity to make wise choices based on high energy prices and thus avoid being locked into inefficient urbanization and transport patterns; DCs have less flexibility. In France, urban planning is no longer a policy tool, whereas China can still innovate in urban design.

107. The TF will endeavour to incorporate urbanization, climate change and energy considerations in its work. It will conduct surveys and case studies in several cities, comparing different urban models. Strategies, frameworks, policies and urban design that decrease the energy demand of the building and transport sectors will be proposed.

108. Total floor space in China has doubled in five years. As China’s per capita floor space approaches that of OECD countries, energy used in this sector is rapidly rising and taking a greater proportion of total energy consumption.

109.  Cities that have greater density of population support different lifestyles and energy consumption patterns. The link between urban density, transportation and energy consumption is well established. Studies conducted in Paris show that in the inner city where most residents do not use private vehicles, energy used for transport is 80% less than in the surrounding zone between the first and the second ring roads. The TF identified three different pathways of energy use in terms of buildings and transportation, exhibited by typical North American, European and Asian cities; Tokyo, Amsterdam and Hong Kong have been built along the most sustainable pathway and can be models. Urban design and policy decisions rather than income are the main determinants. These high-density urban design choices are open to China.

110. The TF will examine three main dimensions of urban design, planning and energy efficiency: economic, that is optimizing the energy bill of China; environmental, that is improving conditions in cities by minimizing energy demand; and social, that is optimal lifestyles to minimize energy consumption and reduce inequalities in such a way as to foster inclusion and optimize social harmony. The TF will look at two levels that governments should address: the micro level of the urban citizen; and the macro level of the city as a whole. The TF will consider transport and building issues from the perspective of service provision.

111. When considering examples from DCs, technology is not the only response to energy challenges. While technology has brought significant energy efficiencies, these have been negated by the overall growth in energy consumption per capita. Rather, responsible lifestyles are key to energy efficient cities, as well as systemic approach to key elements of urban design and transport options. Responsible lifestyles have to encompass issues such as floor space per inhabitant, desired indoor temperatures, indoor management of energy requirements in various parts of a dwelling, the wise use of cars and indeed the development of alternatives to private car ownership. European cities are experimenting with fleets of vehicles that can be accessed as a service. 

112. Chinese surveys have shown that there are significant differences in energy consumption depending on housing types. The TF also notes vastly different energy consumption patterns depending on citizen’s choices in terms of living, working or leisure.

113. This coming year, the TF will focus on an analysis of policies at various levels, and in a set of major Chinese cities, in order to determine the main drivers of energy efficiency in building and transport. It will pay particular attention to urban design and management. It will analyze the effectiveness of existing policies, assess the financial stimuli of energy efficiency, examine institutional and organizational frameworks, and will develop a set of policy recommendations.

 

c) Task Force on Pathways Towards a Low Carbon Economy

114. Co-Chair Klaus Töpfer presided over the presentation of a progress report from TF Co-Chairs Liu Shijin, Gordon Conway and Björn Stigson. During their remarks, they highlighted the following.

115. The TF initiated its work in June, held several meetings and developed preliminary findings; however, more debate is needed to further elucidate key questions.

116. Initial work focused on defining terms; the word “low” is relative and implies the need to agree on a certain baseline, for example a set amount per unit of GDP that could be equated with reaching the LCE standard. It was argued that the TF focus on a more qualitative definition, with due consideration to the stage of China’s overall development that is characterized by high levels of industrialization and urbanization. It might be difficult for China to adhere to the LCE goal while its economy is still in full expansion. It has been suggested that a more general concept integrating high energy efficiency and low GHG emissions could be more workable. There is as yet no consensus on these issues among TF members.

117. The TF will take into account three core elements that need to be balanced if LCE is to be a workable concept in China: the country’s development targets, the reduction of CO₂ emissions and cost considerations. Having agreed on a balanced view of the three core elements, the TF could consider the optimal mix of technologies, production modes, incentives and policies to support a gradual lowering of emissions. Therefore, an acceptable definition of LCE from the Chinese perspective would be that LCE promotes sustainable development, reduces emissions and lowers costs. 

118. Other scenarios have to be considered: what if there is a decrease in GHG emissions and the economy is “low carbon”, but development targets are not reached? Or if emissions are indeed reduced but at too great a cost, this pathway would be hard to sustain. If China is to achieve LCE, it will need to gain access to specific technologies, techniques, incentives, government policies – ensuring costs remain reasonable. And this transition needs to be gradual – with progress measured in relative rather than absolute terms. It could perhaps best be understood as a paradigm that leads to systemic, transformative choices.

119. Areas that will need to be addressed by the TF in the specific Chinese context are industrial production, energy efficiency, power from renewable sources, energy conservation measures throughout the economy, low energy transport options and others. The TF will also need to consider that China is at present at the lower end of the industrial chain; this explains to a great extent why energy efficiency remains low. China has taken on the burden of high GHG emissions because of its current comparative advantage; insufficient levels of technical innovation and existing barriers to technological transfer are hampering the progress China could make in energy efficiency. China’s choice of administrative rather than market mechanisms to cut emissions has limited the scope of the reductions; State-set oil prices have discouraged energy efficiency.

120. China’s GHG emissions are therefore very high and the country faces heavy pressure to take action.  The international community will, next year, work on a new emissions reduction agreement. According to international figures, China and the US were close in terms of total GHG emissions in 2007; however, if cumulative energy consumption is considered, China has only emitted 8.5% while the US is responsible for 27.2% of total global emissions; when considered on a per capita basis, China’s historic emission rate still ranks very low. China believes it must share part of the burden of global emissions reduction, but the GOC also believes that history, per capital emissions, and the fact that it has a very large export sector must all be taken into account.

121. It is inevitable that China embarks upon a LCE pathway. The TF has some preliminary recommendations for the GOC. The country should develop technologies, policies and mechanisms to support the LCE. China should consider exploring the concept of a Developing Country LCE; specific sectors or industries could be selected to pilot new approaches, testing them for sustainability, economic and operational factors. Special features of the LCE model need to be better understood, including the needs for technological and institutional innovation and policies; this is where international cooperation and communication have important roles to play.

122. Three initial chapters have been completed; three more will be written in the coming year. Various scenarios and pathways will be explored and policy recommendations will be finalized. The LCE is an evolutionary process, a continuation and expansion of approaches and policies already in place. Components of the LCE, such as low carbon intensity per unit of energy or GDP, make for a challenging list because of cost constraints and because of considerations for human well-being and welfare.

123. The TF hopes the report will be of use in the preparation of the 12^th FYP, and that some of the stimulus package just announced could be spent on the infrastructure needed to realize a LCE. The TF is thinking of the LCE as an end and as a means; China has the capacity to be a world leader in clean technologies, and is indeed at the forefront of some technologies – as the TF on Innovations emphasized. This and other TFs provide opportunities for good cooperation. 

124. No one knows what a LCE should look like; it is not only about technology or design, but also about social change involving lifestyles and behaviours, of individuals and organizations. The LCE could be seen as the cornerstone of a new harmonious society for China.

125. The move towards the LCE will be important to the global business community; it sees the LCE as a new driver for economic growth, for innovation and for investment. The timeline for action is critical; how quickly the existing asset base – energy generation, transport, production, buildings – can be turned around and at what cost are key questions. At present, China is rapidly building an asset base which does not conform to any definition of LCE. It will become increasingly urgent to harmonize present investments with LCE requirements in order to limit costs.

126. Lifestyle and consumption patterns will be critical to realizing LCE objectives. Low carbon countries occupy one tenth the footprint of big consumers; comparing the footprint of a rural Chinese family with that of a suburban American family reveals dramatic differences. The ability of China and other countries to achieve LCE will depend on their ability to influence consumption patterns and lifestyles. Human habits and behaviours have proven very hard to change.

　　　　　　　 

127. With Vice-Chair Klaus Töpfer presiding, the Chief Advisors Shen Guofang and Arthur Hanson highlighted key points of the draft Recommendations circulated to Council members. During their comments, they made the following points.

128. The Recommendations follow the thinking outlined in the Issues Paper. They meet the principles of the scientific approach to development and adopt as main theme that of the Harmonious Society. China is at a critical point, on the cusp of key transformations. In this context, four main groups of recommendations are put forward: one deals with the challenges brought forth by this unusual year of 2008; one addresses technological innovation; the third comprises environment and health issues; and the fourth focuses on energy efficiency and the LCE.

129. Regarding new challenges in environment and development in the specific context of 2008 – its successes and problems – recommendations emphasize the need to adhere to the scientific approach to development and to take a long-term strategic perspective. Seven specific recommendations are made under this heading: economic growth should not be achieved at the expense of the environment; efforts to restructure the economy should be accelerated; there should be greater investments in environmental infrastructure; key investments in rural and urban areas should focus on new environmental industries. A balance between regulation, enforcement and market mechanisms should be sought. Greater efforts need to be made to protect the rural environment. The Green Olympics’ example of strong environmental management and systems should be emulated, with greater public information, disclosure and participation. The newly established MEP and other ministries need to better coordinate and distinguish their responsibilities, capacities and efficiencies.

130. The second set of recommendations deals with innovation. It includes sub-recommendations for a National Action Plan for Environmental Innovations 2010 - 2020 covering 9 aspects: strengthening indigenous innovation capacity, setting up a program for clean technology innovation, a national centre for innovation management, sectoral innovation research institutes, inter-disciplinary innovation institutions and laboratories, and systematic approaches to management, institutions and capacity building. Stronger incentives, standards and regulations are needed to create more ideal market conditions for innovation. Financial support needs to be strengthened.  Stronger international linkages are also recommended.

131. The third set of recommendations deals with environment and health. International experience illustrates that mishandling this area could lead to serious political and social consequences for China. Protecting citizens’ health from environmental threats is critical to realizing a harmonious society. The CCICED proposes a National Action Plan on Environment and Health 2007 – 2015; a national management system for environment and health should be adopted; prevention needs to be the guiding principle, and priority must be given to reducing existing serious environmental health risks; government must take the lead in this work; public information and participation needs to be encouraged; legislation, increased budgets and capacity building are required; compensation should be investigated and established; government needs to take targeted action against the most grievous environmental threats to human health.

132. Recommendations on energy efficiency encompass the preliminary work of five TFs. More comprehensive recommendations will be issued in 2009, and it is hoped this work can be integrated into the 12^th FYP which is currently being drafted. Two main sub-recommendations are proposed in order to enable China to embark on the LCE path: strategies, approaches and policies need to be further studied; LCE targets need to be developed for inclusion in the 12^th FYP. Three issues need to be considered in putting forth energy efficiency suggestions: a long term strategy on energy efficiency is essential; both theory and experience have proven that price is the most powerful lever for reducing energy demand, driving technological innovation and raising productivity. Caution must be exercised in energy price increases however; the steady, predictable escalator approach is recommended.

 

Discussion

133. A holistic approach to environment management is called for, especially when it comes to legislation and regulations – including the selection of economic instruments. Legislation needs to be powerful enough to generate results; it should be backed with supervision, monitoring and reporting. Government has to increase its capacity for inspection and control. 

134. In reporting to the GOC, there are overarching themes emerging from the work of the TFs that should be underlined. One is the need for China to take the lead in environmentally-friendly technologies; it has demonstrated its capacity this year by dealing with emergency situations at home and by hosting the Olympics. The second is the importance of an informed public that participates actively and that has access to the information it needs. The third is the critical nature of our chosen lifestyles where responsible, sustainable choices and shifts in our perceptions of comfort and necessities are urgently needed.

135. In considering the LCE in the context of China, with its current stage of development and the needs of its people, it might perhaps be more useful to talk about Low Carbon Prosperity, a concept that captures the human element. There is a tension in the recommendations between the gradualist approach and the need for transformative change. The world is now changing at a dramatic pace and we are called upon to push ourselves towards the transformative end of the scale. There is also a tension between policy and performance – a complex issue in the context of a country as large as China. Building the capacity for delivery will be key to policy effectiveness at the local levels.

136. A number of reports emphasize the difficulty with monitoring, enforcement and compliance. In countries around the world, compliance is directly correlated with the degree of public awareness and interest in environmental protection. In China, the right level of public education and awareness could contribute a great deal to enforcing the rules. This needs to be more clearly emphasized in the final recommendations, although it is highlighted in TF reports. The CCICED should consider proposing a massive public education campaign to protect the environment; in countries such as South Africa where efforts were made in this regard, pressure is brought to bear on decision makers from their own family members. 

137. The section of the recommendations dealing with China’s contribution to global sustainable development needs strengthening. The paradigm for environmental protection and sustainable development has been developed in DCs; LDCs are reacting to something they have not contributed to creating. China now has the ability and the responsibility to set the global agenda. Just as in the recent global financial crisis, the world has turned to China. This changed context should be more strongly reflected in the Council’s suggestions. Further, greater dialogue needs to be encouraged between China and LDCs in these areas.

138. In considering the LCE, it is key to ensure integration and coordination among TFs and their recommendations. High level planning would allow China to leapfrog into the LCE. For example, the Council recommends the integration of urban and transport planning; a dimension that is not mentioned is the energy infrastructure planning – which allows for zone heating or cooling in cities. If global energy prices were directly reflected in China, better signals would be sent; while China’s coal prices have gone up significantly, market signals cannot be effective if thermal power plants get access to coal at subsidized prices.

139. Regarding the recommendations dealing with regulations, the plans proposed are ambitious and costly. Money has become more expensive and scarce over the past few months; we should ensure that what we propose is pragmatic and operational. It is therefore important to consider what attracts private equity. No markets were created 30 years ago when the US brought in measures to protect wetlands and clean air; now, there is a booming market for wetland mitigation and wildlife protection in a country that has not endorsed the Kyoto Protocol. Private equity players should be included in TF discussions in order to provide greater insights into what makes regulations effective. It is important to talk about policies to the people who will end up financing them.

140. The Draft Recommendations would benefit from the integration of key lessons found in the TF reports, such as the importance of solid, accurate, reliable data on key environmental indicators. China is one of the world’s great savers and has exported its savings; now is perhaps the time to fund some of its own investment. Leapfrogging is in China’s strategic long term interest. 

141. Regarding the recommendation on environmental management in the context of the creation of the MEP, it would be useful to be clear about the need for the MEP to be adequately funded, staffed and trained in order to fulfill its new responsibilities.

142. The GOC’s 1 trillion RMB stimulus package should be guided by an enhanced green procurement policy. The overall environmental footprint of the stimulus package should be minimized in terms of the investments made and the inputs used. Regarding the eco-compensation process the Council recommends that there is a need to go beyond water-borne pollution to air pollution, addressing climate change, the impact of pollution on agriculture production and rural livelihoods. The key lesson from the Beijing Olympics is regional environment cooperation; the five provinces surrounding Beijing contributed to the quality of the air. Regional mechanisms are a priority for the management of China’s environmental challenges and should be emphasized through items such as regional carbon trading and other instruments. 

143. The LCE is both evolutionary and transformative. While no country is clear on the shape it might take in the future, a common vision should be developed. Recommendations should stress that this common vision could be accomplished by taking different pathways.

144. Consistency among TF reports is important. The challenge this represents is illustrated when we talk about LCE – or low carbon prosperity as has been suggested. The costs of reducing CO₂ have been studied; options that represent win-win situations at the macro level need to be favoured even if they are not yet cost effective. This can be accomplished by adopting fiscal measures that reduce costs and allow for their widespread adoption by enterprises or households. Emphasis must be put on transformational change that is pursued through incremental yet predictable measures.

 

 ITEM 7. PARALLEL GROUP DISCUSSION

a)　 Chinese Language Group

145. MEP Vice-Minister Li Ganjie chaired the session and called on CCICED Secretary General Zhu Guangyao to address participants. A report on Premier Wen’s remarks during his meeting with the Council’s foreign members was outlined.

146. Lead Speaker Ms Wang Jirong, National People’s Congress (NPC) Environment Protection and Resources Conservation Committee Vice-Chair briefed participants on the NPC’s recent efforts to remedy the lack of enforcement of laws and regulations. This enforcement gap has three basic reasons:

147. Twenty-nine environment-related laws have already been enacted. Drafted by line ministries in accordance with their respective mandate and without coordination with other concerned agencies, these laws lack specific enforcement regulations and have proven hard to implement. Legislation has not been amended to take into account the sweeping changes of the last thirty years. And enforcement agencies lack institutional capacity.

148. Participants of the Chinese Language Parallel Group made the following comments on the TF reports, as well as on the draft Recommendations.

149. There was consensus on the relevance and appropriateness of the research topics with regard to the pressing needs and challenges facing China’s environment and development. The treatment of the topics was concrete, factual and more focused than last year. The reports were deemed to be of high quality.

150. In order to make the maximum impact on China’s busy decision-makers, participants suggested policy recommendations be further condensed. The introduction and background information should be minimized, while the focus of specific recommendations should be sharpened. The content of some sub-sections could also be minimized.　

151. More research is needed on agricultural issues. There are good data on agricultural pollution, but impacts have yet to be fully understood. Standards for agricultural technologies and inputs are still inexistent. In the countryside, there is little environmental awareness. Rural infrastructure is still insufficient. There are no regulations covering rural waste, which is largely organic and could be reused if transportation problems were solved.

152. In dealing with emergencies and natural disasters such as this year’s major snowstorm and earthquake, the GOC should focus on resource use as well as on risk mitigation and management. There is a need for environmental assessments of possible disasters on drinking water, sewage treatment, nuclear plants and other possibly toxic industries. Further research and policy work are needed in this respect.

153. More research is needed on environment and health, a major concern of the general population. There is a serious gap between legislation and enforcement in this area. The GOC should establish effective platforms for public participation in environment and public health management.

154. People are not aware of the dangers of indoor air pollution in rural households. Numerous surveys indicate that, despite wide-scale government intervention, traditional open-hearth fires are still used widely in Southern China and they cause serious health problems.

155. Birth defects are on the rise, accounting for 4 - 6% of live births; annually, roughly 100,000 infants are born with defects; China now has 80 million disabled persons – due to both genetic and environmental factors. This needs to be underlined in the Council report. 

156. The milk contamination incident should be characterized as an enterprise social responsibility issue, not as an environment and human health issue. Convincing examples are needed to better document and illustrate environment and health issues. But it illustrates the fact that, in the absence of high moral standards, even the best legislative framework will prove to be ineffective.　

157. In China, environmental problems are also triggered by poverty. Resource conservation and improving citizens’ livelihoods need to be addressed in order to solve environmental problems. The first priority of the UN MDGs is poverty eradication. In a country such as China, it is necessary to focus on environmental and social livelihood issues in tandem.

158. The main difference between China’s and DCs’ environmental problems is that China has to satisfy the basic needs of a rising population, increase living standards, and at the same time protect the environment. This enormous challenge has not been sufficiently explored by TFs. This should be one of the Council’s main tasks in the coming years.

159. While energy issues need to be studied in the larger international context of climate change, there is a need to focus more closely on environment protection in China. The Council could help resolve differences over key indicators. For instance, CO₂ is used internationally, while China’s 11^th five-year plan focused on S0₂. China also has other major pollutants related to energy use, such as NO_X. But China does not want to select indicators that make its performance look worse.

160. In order to engage China’s leadership on the LCE, the TF report should describe the various pathways towards this goal, and outline the concrete strategies and measures to realize this goal. Research on the development and deployment of new and clean energy technologies should also, at an early stage, take into account the environmental efficiency and impact of hydro-power, solar, wind and other types of clean and new energies. For example, during the planning stage of the Three-Gorges dam project, environmental impacts should have been researched and identified.

161. There is a need for research and recommendations on green design for both public and residential buildings, the present regulatory environment impeding the full deployment of green design building technology. Wealthy people are investing massively in real estate; no limits have been imposed as yet. The TF should research the management and control of commercial housing, including the taxation of secondary domiciles and possible limits on housing purchases; recommendations should take into account the need to provide housing solutions for all urban residents.

162. Further research and policy recommendations are needed on public transportation using clean energy technologies. Rail transportation, including light rail, is only possible in larger cities; other solutions need to be put forward. Further policy support is needed for the use of clean energy in public and private transportation. At present, there are no limits imposed on the number of vehicles an individual may own. The TF should consider researching vehicle ownership management, as is practiced in some Chinese cities, while taking into account employment and growth repercussions.

163. Beijing’s Green Olympics have left a positive environmental legacy, albeit at heavy cost. This legacy should be promoted in other cities and Shanghai’s 2010 World Expo provides an excellent opportunity to do so. Still, more research is required on the economic costs of environmental protection. 

164. While some TFs have completed their study program, the Council needs to ensure there is proper follow-up, including linkages to new research areas. There is a need for better coordination and collaboration among TFs. A mechanism should be established to allow for more engagement of Council members in the TFs. The Secretariat could provide members with information and financial support.

165. MEP will face the challenge of promoting interdepartmental, inter-provincial and trans-boundary collaboration. For instance, cleaning up the Huaihe River was on the agenda in the 1950’s; this cannot happen without a concerted effort of the provinces in that watershed. Internationally, the success of the Columbia River management is due to the establishment of a supra-national treaty body between Canada and the US. 

166. MEP’s website should be updated to facilitate better communication with the international community and create a better enabling environment for China’s environmental work. Perhaps changing the MEP’s name to Ministry of the Environment would reflect the broader, more pro-active approach that is needed.

167. Before borrowing models from the West, China first needs to look at its present economic, social and environmental situation, matching this to the corresponding phase Western countries experienced. Today’s China resembles the North America and Europe of the 1960s and 1970s. This comparison is necessary in order not to underestimate the difficulties facing environmental work in China.

168. The international community has high expectations regarding environmental protection in China because of its present economic performance. Some members argue that China is in no position to take the lead, be it in terms of economic, social or environmental development.

 

b) English Language Group

169. With Vice-Chair Børge Brende presiding, English-speaking members convened to hear Leading Speaker Mr Hans van der Vlist, the Netherlands’ Vice Minister of Housing, Spatial Planning and Environment. These initial comments were then followed by a general debate on the CCICED recommendations and comments on the Task Force reports. During the Parallel English Language Group Discussion, the following points were made.

170. We are not only facing a financial crisis but also a food crisis, a climate crisis, an environmental crisis. They have a common cause: economic activities that are not sufficiently regulated and failure of the markets to solve the emergent problems. The climate and the financial crises are daunting because of their global nature; only global governance and institutions have the necessary means to address the challenges. Unfortunately, these institutions have yet to be created and countries have to turn to existing international agreements. 

171. Premier Wen Jiabao, in meeting with Council members, stated that the GOC’s stimulus package would target consumer demand – yet with long term consumer confidence low in all countries, this lever may not be effective. 

172. The necessary reform of the international financial system offers opportunities to finally promote sustainable development. Four changes need to be supported: the global governance of the financial systems is likely to become more transparent; secondly, governments, by acting together, can demonstrate their capacity to cooperate, thereby injecting much needed confidence; thirdly, long term thinking in the decision-making process will take precedence over the current short-term focus on profits, leading to the adoption of sustainable solutions and corporate social responsibility; fourthly, governments will start to look more critically at market operations and intervene earlier to prevent the occurrence of perverse incentives and ecological damage. Better regulated and more stable markets are likely to result from these changes.

173. Governments and the private sector should start putting together these new governance structures, invest in the LCE and in stable markets. The GOC’s own stimulus package is an opportunity to take steps in this direction, investing for instance in low emissions technology. China’s experience with state involvement in the financial sector could become valuable to other countries, unaccustomed to such interventions.

174. Four of the TF reports submitted to Council deal with one of the essential elements of transformation, energy efficiency. It will be useful for this discussion to ensure a consistent and coherent message is offered to the GOC on this issue. For instance, is the long-term, stable escalator principle for energy prices that have been put forward by one TF consistent with the need to spur innovation? Are price mechanisms sufficient, or are emissions caps and standards also necessary? Recommendations from the four TFs dealing with energy issues should be grouped together.　  Environment and Health is the other great theme of this AGM. The proposed recommendations were clear and can be presented separately from the LCE issues.

175. The current contraction of the global economy, not seen since the 1970s, should be taken into account in our recommendations. The GOC’s stimulus package is to ensure continued growth in China, but the Council needs to stress the kind of opportunity this could be for the realization of sustainable development. The projects that are most likely to be launched immediately have no doubt been planned for some time and therefore are not necessarily ecologically sound. The Council can provide sound advice beyond suggesting Environmental Impact Assessments (EIA) be conducted. This is tricky, because EIAs will delay the necessary public works.

176. These projects, as described by China’s Premier to Council members, include environmental infrastructure. However if a large impact is desired, this kind of investment is not always helpful because there can be long lags for employment and consumption effects. The GOC has no doubt already considered what will give a rapid boost to consumer demand and job creation. The Council could provide advice on two areas of public spending that would also build natural capital: environmental infrastructure works, such as watershed management or sewage treatment plants; and the investment in or expansion of ecological restoration work, such as aforestation, rehabilitation of wetlands and grasslands. Much of China’s focus has been on cleaning up after the damage is done; the need is now to see the environment as a driver for economic growth, jobs and shoring up natural capital.

177. The current financial crisis presents risks and opportunities that have not been seen in over 60 years; this is not business as usual and it must be reflected in our recommendations. There seems to be a paradigm shift regarding the LCE and climate-oriented business models around the world. We are confronted with a huge power shift in terms of economics and innovation – China is leading the way in translating the new thinking modes into practice. Yet climate change indicators are more worrisome than ever, most specifically GHG emissions which continue to accelerate, a rising GHG intensity per unit of GDP globally, and a decreasing absorptive capacity of ecosystems. The Council’s most important advice to the GOC should be on the actions to be prioritized, and the time frame required. This kind of consideration is lacking from the current TF reports and recommendations.

178. Previous economic downturns in various countries have corresponded with environmental degradation. It is critical to propose options that would allow China to avoid this during the current crisis. 

179. It is expected that China’s stimulus package will mostly be spent on cement and steel – this is the easiest option to stimulate domestic demand and job creation. But focusing instead on a green recovery and on an investment in human capital, namely health and education, could be very productive. There are also opportunities for infrastructure investment in climate-friendly transport such as public transit and rail. China’s banking system does not have sound mechanisms to finance such long-term projects; international cooperation could prove valuable in this area. 

180. The present crisis will require long-term public intervention in order to be effective; this is also the case for the LCE – a sensitive topic in China. Perhaps the Council could be the platform to convene a roundtable on “green recovery” and the need for a coordinated global LCE response. This would support future discussions on climate change in Copenhagen and elsewhere. Further, China needs help in developing the vision of what the LCE could look like in 2050 – beyond the short-term perspective of the FYPs; the CCICED could assist China in this regard.

181. The CCICED has to focus on assisting China integrate its recommendations into the next FYP. The previous FYP was also focused on the domestic market, seeking a transformation from manufacturer of cheap export goods, to domestic higher quality goods. The key will be to transform China’s manufacturing forces into sustainable ones. China’s investment into its transport network is to connect poor areas to markets; this will continue, but integration with rail infrastructure could be optimized. Investments will also continue into power generation and urbanization. Council recommendations need to target areas that are the focus of China’s FYPs. The Premier is keen on market incentives and AGM recommendations can provide counsel in this area.

182. How Council amends recommendations remains a hazy process; open debate in Council tends to be monopolized by international members and the present discussions are being held in parallel sessions. It is felt that a joint discussion among international and Chinese members on TF reports and policy recommendations would have been more valuable.

183. This year’s experiment with parallel discussions was instituted precisely to encourage a greater number of Chinese interveners to express their views while allowing for greater discussion time among international members. The experiment may need to be revisited next year.

184. The present stimulus package may be a transition between the 11^th and the 12^th FYPs; its objectives are to restore confidence despite a slowdown in growth, to increase domestic demand, and to reduce unemployment which is bound to rise. Much of this package will no doubt be composed in part of old commitments or ongoing projects. The key will be to push for energy efficient, low carbon infrastructure projects which at the same time can generate employment; environment projects such as sewage plants and river clean-ups can be both labour intensive and yield environmental benefits. The Council’s advice could be useful to the GOC in optimizing the use of the stimulus funds.

185. Any talk of LCE must be anchored in solid knowledge of the energy system; recommendations must take into account the blockages to energy efficiency and low emissions. The energy system comprises six elements: power generation, from renewable and non-renewable sources; industry and manufacturing; transport, where energy efficiencies will only be achieved through regulations and standards; buildings; land use; and finally consumption. Energy policies must focus specifically on each area in order to have impact. Discussions so far seem to imply one set of LCE policies will be sufficient. 

186. Some 26% of China’s carbon emissions are embedded in its export products; much of these exports are produced in plants which are partly or wholly owned by foreign investors; some reports indicate 70% of inputs used in Germany are produced in German factories in China. We need to consider whose carbon we are talking about, understand China’s position and share the responsibility accordingly.

187. China is undergoing massive urbanization. Moving rural families to cities implies a 12-fold increase in carbon footprint due simply to a change in lifestyle. Hundreds of millions of rural people are relocating to cities with serious consequences for GHG emissions. This effect will be difficult to offset. Some studies indicate that carbon emissions by 2030 will be greater than had been projected a year ago in spite of slower economic growth and higher energy prices. Council recommendations do not take these forces into account and need to be more sophisticated.

188. Perhaps starting with a simple idea could be productive. Premier Wen Jiabao mentioned the mandatory target he must meet – a 4% reduction each year in energy intensity during this FYP. This is in itself a LCE concept and the Council should follow this lead. This would indicate China is already focusing on the demand side of the energy equation. Sustainable coal use will be one of the main topics of the LCE TF over the coming year.

189. It is unclear whether or not the stimulus package includes mostly “old” projects. Infrastructure investment implies greater use of power, steel and cement. Stimulating domestic demand means industries and manufacturing will proceed apace. The energy intensity targets during this FYP are to total 20% - but China is also committed to a minimum 8% GDP growth, which implies GHG emissions, will peak sometime between 2020 and 2030. Council recommendations should be more explicit on emphasizing the need for an efficient environmental management system; legislation, regulations, standards, monitoring, inspection and control are all still lacking, and increased resources and capacity building are urgently needed. These are concrete suggestions for making the use of funds in the stimulus package more environmentally-friendly.

190. Sustainable development does not happen quickly and requires careful consideration; it is not easily handled in crisis-driven spending plans. Spending on watershed management, reforestation and ecological construction can be both labour intensive and be rapidly planned. Such interventions would have desired impacts on environment and biodiversity conservation, if not on the achievement of a LCE. China, which has been visionary in so many areas throughout its history, needs to accept the mantle of leadership and innovate boldly in the area of sustainable development.

191. A key sector targeted in the stimulus package is agriculture and the rural economy; Premier Wen mentioned immediate spending on methane digesters for rural energy generation; it can represent significant spending in poor areas, reduce GHG emissions and create employment. While not as glamorous as large power plants, such small projects can have a significant cumulative impact. Members should also remember that China’s Environmental Law is to be revised this year, with a focus on the penalty structure. At present, penalties are too low to be an effective deterrent.　 Environment officials need to be given powerful tools to enforce the laws.

192. Most of this parallel session has focused on energy issues; vast areas of the recommendations have yet to be discussed. Moreover, energy-related recommendations need to be better coordinated. Perhaps the 11^th FYP mandatory energy efficiency targets could be the unifying principle for Council’s suggestions in this area. China should stop investing in energy intensive industries and plants – today’s dinosaurs – during the 12^th FYP. Further, recommendations need to be consistent about the short term stimulus package versus the long-term vision that is the LCE; financing projects to stimulate domestic demand should not harm longer term environmental considerations.

193. The Council recommendations should aim to influence China beyond the immediate financial crisis. The stimulus package announced is to rebuild consumer confidence, stimulate demand and create jobs; it would be extremely fortunate if these funds were to serve environmental goals as well. In any event, none of the funds will be targeted at such a strategic goal as the LCE. Were Council recommendations to be too closely tied to the current crisis, they risk contamination. China has indicated a willingness to explore greater public information and participation – an important, systemic improvement; the Council needs to emphasize this as a pre-requisite for any success in environmental protection.

194. The Council needs to be realistic about its expectations of the stimulus package – the GOC is actually ahead of the curve, indicating the environment will be integrated in the public projects funded. Premier Wen was silent on the Council’s health recommendations – in this area, Council is ahead of China and its contribution could be significant. Another area where Council can impact decision-making is the LCE which offers China the opportunity to leapfrog, and where international cooperation could be fruitful. The window of opportunity is the 12^th FYP; the Council’s next AGM could focus on this since the current FYP ends in 2010.

195. The areas where the Council provides value-added to China are immediate technical assistance for emergent issues, and collaborative thinking about longer term problems. During the parallel Chinese discussion, mention was made that international members focus too much on longer-term considerations, forgetting about China’s immediate, practical needs. The Council’s report on Environment and Health addresses short term priorities; while the LCE report deals with the future and could be the focus of more collaborative thinking between international and Chinese participants. China is starting to shift its thinking into a new paradigm, but programs and implementation remain stuck in the past – this has been referred to as “green thinking but brown reality.” The Council is well placed to help China draft the roadmap from the brown present to the green future.

196.  Members expressed some concern over the insufficient distribution of Recommendations drafts, and the lack of explicit connection between the Issues Paper and the Recommendations.

197. Council needs to take care not to focus uniquely on climate issues; livelihoods and quality of life, including health, are highly relevant to China. Focusing solely on climate change could lead to accusations that international members only care about issues that affect their countries directly.

198. China uses language for its broad concepts that is visionary: Harmonious Society and Ecological Civilization – expressions that are inconceivable in western societies. However, China needs to move from broad vision to operational issues and actions. The temptation of segmenting the response according to traditional sectors of the economy should be resisted. A systems approach is needed. It should also be remembered that the LCE is not only about emissions reduction, but also about carbon sequestration, something that natural ecosystems do very well.

199. Language is key and members need to be aware that much is often lost in translation.

200. An umbrella statement is needed at the beginning of the Recommendations, linking clearly the Issues Paper with the theme of the AGM and the recommendations that emerged from TF reports.

201. Council should be explicit in stating that the global leadership in sustainable development (SD) and real solutions will be coming from emerging economies such as China’s.

202. Much has to happen domestically in order for the GOC and the people to address the country’s own problems. This, rather than currying favour with the international community, is China’s motivation. In recommending public participation, China’s specific context, its need to maintain social stability, have to be respected and a gradual approach needs to be stressed. However, Council must be clear that although public participation may create ripples which on the surface appear negative, in the long run the genuine involvement of the public is the only hope for effective implementation of environmental laws and regulations.

203. The structure of the Recommendations paper and some of its language need to be tweaked. Members are reminded that the drafting group avoids repeating points that have been made to the GOC in previous Recommendations.

204. Members would profit from a report on the successful implementation of the 11^th FYP, since much of this will provide subtext for the preparation of the 12^th.

205. It is suggested the AGM be structured differently, providing thematic discussion groups where relevant officials and ministers of the GOC could dialogue freely with members.

206. It should be stressed that the AGM is an opportunity for international members to learn more about China and report back to their organizations, providing much needed context. Discussions should not be held separately for international and for Chinese members. Perhaps smaller discussion groups could be staged; assigned seating dinners would also facilitate greater exchange among Chinese and international participants.

 

ITEM 8.  DISCUSSION AND ADOPTION OF AGM POLICY RECOMMENDATIONS

a) Briefing on the Parallel Group Discussions

207. Co-Chair Børge Brende presided over the presentation of discussion summaries from the Parallel Groups. The Rapporteur from the Chinese Language Parallel Group summarized the main points made during the discussion.

208. China is inseparable from the rest of the world – it shares both opportunities and challenges when it comes to protecting the earth. China’s determination and capacity to solve problems of environmental protection and economic development were reaffirmed. It is recognized that much of the legislative framework related to the environment is normative rather than actionable, hence is not effectively implemented; clear improvements are needed in this area and public participation should be integrated in new statutes.

209. The Chinese Language Parallel Group found that TF reports were detailed and contained specific recommendations; they are pertinent to China’s current stage of development and in line with its goals of fostering a harmonious society. Specific suggestions for improvement were made. 

210. A greater number of recommendations should focus on resource use, as well as on disaster mitigation, prevention and relief. In recommendations related to clean energy, the environmental effects of large-scale hydro dams and wind farms should be examined. The LCE sections need to be more specific and operational. One of China’s main goals remains poverty reduction; it seems most recommendations do not take this factor into account. The recommendations do not reflect China’s focus on environmental challenges in rural areas; any discussion of energy for instance should also address rural energy issues. 

211. While it is important to address climate change in a global context, Chinese members would like to see the issues of atmospheric pollution control addressed more directly, especially at the regional and local levels. Urban planning is a powerful tool; it would be best to integrate in relevant recommendations issues such as energy efficiency in buildings and vehicles. Law enforcement will require more coordinated action on the part of governments at all levels, as well as the cooperation of enterprises. TF reports should be more explicit in linking with previous and future TFs that deal with similar issues; there should also be improved coordination among all TFs. The Secretariat could play a role in involving members in TF activities. 

212. While the Olympics were successful from an environmental perspective, the costs were quite high; cost effectiveness must also be taken into account when recommending models of environmental protection. The MEP website needs to be improved, with greater data availability and transparency. Finally, participants proposed text changes to the draft recommendations. 

213. The Rapporteur of the English Language Parallel Group listed the following points made during the discussions.

214. International members reiterated the importance they attach to the meeting held with Premier Wen Jiabao. Members also acknowledge that the AGM is taking place in challenging times for the global community; recommendations need to reflect on the financial crisis and address the opportunities it presents in two ways. First, the crisis will impact on international and national governance; secondly, there are risks and opportunities associated with the stimulus packages being announced. Regarding governance, the participants believe the G20 and other meetings to be held on the crisis could generate greater confidence and spur concerted action; China’s own stimulus package is contributing to this. It is hoped this good will can spill over into upcoming climate change negotiations. 

215. Regarding stimulus packages, participants recognize many of the plans funded are pre-existent; but it is of utmost importance to ensure these short term interventions be guided by medium and long-term considerations of the environment and climate change. The principles to follow in selecting projects for funding should be: “Do no Harm” as efforts are made to stimulate consumer demand and jump-start economic growth; where possible, a systems approach should be taken to determining the contents of a stimulus package; consideration should be given to labour intensive projects that also support investments in natural capital, projects such as reforestation, or projects that support sustainable rural economies such as small scale public works to supply safe drinking water, produce methane from organic waste, or provide solar-heated hot water.

216. Implementation of environmental protection statutes remains a problem in China. A stimulus package can provide short term training and employment opportunities for people – recruiting them and building their capacity to do monitoring and surveillance. International members also see the stimulus package as a bridge between the 11^th and the 12^th FYPs. The next FYP could see China using its considerable savings and building on its comparative advantage to develop, test, scale up and market new environmental technologies. 

217. Sustainable development is a long-term effort and a vision for 2050 is needed; leadership in this area is shifting from Europe to emerging economies such as China. They will be called upon to find the right balance between economic, environmental and social development considerations. Leadership is not to be confused with the power to dictate, but rather should be understood as the capacity to develop a model for others to emulate.

218. Participants commended the TFs for their reports, but noted that greater linkages need to be drawn among their findings and recommendations. They are cognizant of the challenges posed by natural disasters, but believe that a focus on long-term issues will provide China with solid prevention strategies, and better serve the goals of the Council. They also noted the common theme in TF reports of the importance of reliable data, public information, strong regulations, effective enforcement and penalties, citizens’ participation, and coordination – both horizontal and vertical – among government agencies.

 

b) Presentation of the Revised CCICED Recommendations

219. Vice-Chair Børge Brende asked the Chief Advisors Shen Guofang and Arthur Hanson to brief Council on the final draft document. During their remarks, they emphasized the following:

220. The drafting group incorporated several crucial elements, such as Vice Premier Li’s speech and statements by Premier Wen Jiabao, in addition to the existing recommendations, summaries of the parallel group discussions, TF reports and members’ suggested amendments. Members need to keep in mind that the AGM is an annual event focusing on a specific theme; AGM recommendations must avoid repetition of items covered in previous years. 

221. Sections on energy and the LCE have been integrated in the first portion of the document for coherence’s sake. Since next year’s AGM recommendations will focus on energy issues, the more detailed recommendations is this area have not been included. The recommendations are more specific on environmental considerations that should prevail in projects funded through the newly announced stimulus package, including a recommendation on green procurement. Other changes in the text include an emphasis on the 12^th FYP, energy pricing reform, LCE and climate change.

222. Members left detailed changes to the draft of the Recommendations tabled on 14 November to the drafting group.

 

ITEM 9.  CLOSING SESSION

a) Secretary General’s Report

223. Vice-Chair Margaret Biggs chaired the Closing Session of the CCICED 2008 AGM. Secretary General Zhu Guangyao was asked to brief Council on the accomplishments of 2008 and the workplan for 2009. During the course of his remarks, the Secretary General made the following key points.

224. The CCICED got solid support from the GOC in 2008; policy recommendations submitted were well received by relevant ministries and agencies. CCICED partnerships are expanding, with a greater number of domestic and international donors, laying a good foundation for future work. The organization of the CCICED is proving quite flexible; members and TF partners are able to maintain good communication. The first roundtable was organized during the past year and helped to disseminate the Council’s work and recommendations.

225. In order for members to assess the impact of the Council’s work, the Secretariat tasked the Chief Advisors to compile a report on the results of past recommendations; this report will soon be published and distributed.

226. 2009 will be a busy year for the CCICED. The Bureau has authorized a number of TFs that will focus on energy issues, including the TFs on LCE, on economic instruments, on rural development, on sustainable use of coal and on urban development. A number of these have already submitted interim reports; all of these TFs will be reporting to Council at the 2009 AGM.

227. The Bureau has also approved two new TFs which are starting work in 2009 and are to submit their report in 2010: the TF on Ecosystem Service and Management Strategy, and the TF on Sustainable Development Strategy for Oceans. In addition, research cooperation will commence with India and a China Environment and Development Outlook project will be launched. The Secretariat this coming year will also prepare another Roundtable and the AGM; members will be kept informed on these events. In addition, the Secretariat will continue to strengthen relationships with other ministries of the GOC, as well as the private sector, universities and research institutes.

228. The Secretariat is working on a long term development plan for the Council. Members and partners are invited to put forward suggestions and recommendations.

 

b) General Discussion

229. At the invitation of Vice-Chair Margaret Biggs, members commented on the AGM and on the Secretary General’s report. They made the following points.

230. IUCN would be interested in helping develop the work of the two new TFs on ecosystem services and on the oceans.

231.  Working with the Council is a learning experience for members. It will be key to outline what the vision for the LCE is and future work will help better define this. Premier Wen mentioned that China could be the ideal place where new technologies can be tested and marketed; perhaps a roundtable on this issue could be organized.

232. It is most productive for all Chinese and international TF Co-Chairs to meet in a timely fashion in order to better coordinate their work. This meeting should be held early enough in the year to influence the course of each TF’s work.

233. The launch of roundtables as a Council event should be lauded. This year’s roundtable also included an Enterprise Forum where it was possible to engage the Chinese business community. It would be good to have Chinese business representation on Council as well.

234. The concept of Low Carbon Prosperity provides Council with the means as well as the ends – the end being prosperity, and the means being the successful implementation of the LCE. The two ideas could be explored over the coming year.

 

c) Closing Remarks by Council Executive Vice-Chair Zhou Shengxian

235. With Vice-Chair Margaret Biggs presiding, Executive Vice-Chair and MEP Minister Zhou Shengxian addressed Council. During his closing remarks, Minister Zhou emphasized these points.

236. The 2008 AGM was fruitful thanks to the contribution of members, experts and staff. When meeting with the Council, Premier Wen raised a central issue: in this time of crisis, it is more pressing than ever to protect the environment and ensure sustainable development. The current slowdown presents China with the opportunity to transform production and restructure industries in order to protect the environment.

237. The presence of Vice-Premier Li Keqiang and the meeting with Premier Wen demonstrate the importance given to the Council by the GOC. The agenda of the 2008 AGM was completed successfully and the Secretariat will work to ensure its recommendations get broad distribution. A report on the implementation of the 2008 recommendations will be presented to Council in 2009; equally important will be an analysis of the reasons why some recommendations are not adopted by the GOC.

238. China has not, nor will it ever stop protecting the environment and supporting sustainable development through progress on production and energy efficiency and resource conservation.

239. China’s successful handling of the current financial crisis can turn these difficulties into opportunities. The MEP will shoulder its responsibilities. It is believed that environmental protection can stimulate further economic growth; there is significant potential demand for environmental technologies and products. China will support the development of a Green Economy, a LCE. Innovation, including in our institutional frameworks, is key to this process. International cooperation can be key to face the current global crisis.　 The CCICED is an ideal platform for China to learn from international experience, both its successes and failures.

240. The 2008 AGM of the CCICED was adjourned by Vice-Chair Margaret Biggs.

III RECOMMENDATIONS OF THE COUNCIL TO THE CHINESE GOVERNMENT (Final Version, 4 December 2008)

 

241. The 2008 Annual General Meeting of the China Council for International Cooperation on Environment and Development was held in Beijing from 12-14 November 2008 with the theme of “Harmonious Development through Innovation”. This meeting occurred at a time of great turmoil in the world’s financial markets, with the threat of severe global recession, but also a call for “re-regulation.” This year is also a time of celebration of tremendous achievement in China—30 years after the Reform and Opening Up, and after the very successful Beijing Olympics.

　　These events, and also China’s remarkable efforts during the snowstorm and earthquake disasters, and in response to the melamine contamination and other public health incidents have focused our discussions on how environment and development can play a stronger role in China’s future harmonious relationships.

　　The 17^th Party Congress of the CPC specified that scientific development, Harmonious Society, and promoting an Ecological Civilization should guide China’s social values and progress. Now, a year after this historic meeting, there is growing evidence that transformative action is taking place towards building a resource conserving and environment friendly society in China.

　　It is particularly significant that progress is being made on the 11^th Five Year Plan program for energy conservation and pollution reduction, that China leads the world on achieving many of the Millennium Development Goals, and that many of China’s science and technology innovation goals are for sustainable development. Also, that necessary institutional strengthening including the formation of the Ministry of Environmental Protection (MEP) is taking place. CCICED applauds this evidence of domestic progress and also China’s expanding role on international environment and development.

　　Despite these praiseworthy efforts and achievements, China’s domestic program for environment and development still faces many challenges, and much corrective action before its full contribution to a Harmonious Society can be realized. The action taken at the 3^rd Plenary Session (October 2008) of the 17^th CPC Party Congress to reduce the imbalances between urban and rural development is an important opportunity where increased environmental efforts will lead a more harmonious society. The CCICED members are aware that public health problems induced directly or indirectly by pollution remain a serious factor for social advancement in China. This has been a priority area for CCICED research on harmonious development.

　　CCICED believes that an appropriate mix of incremental and transformative changes is needed to build a new relationship of environment and development in China and globally. It is fortunate that China is well positioned for carrying out these changes. Environmental progress should intensify over time, first through incremental improvements, and later by leaps and bounds, as the investments now being made in sustainable development innovation produce better technical solutions. CCICED has examined how environment and sustainable development innovations could be fast tracked, since it is unlikely that incremental change alone will satisfy China’s ambitious environmental targets and longer term needs.

　　Nowhere is this need for innovation greater than in addressing environment and energy relationships and the global need to address reductions in greenhouse gases. CCICED has started several task forces and other activities on these topics. While the main results will not be reported until the 2009 AGM, a few preliminary recommendations are provided in this document.

　　The global environmental situation continues to decline, with direct effects on China through trade, climate change and in other ways. The Beijing Olympics has created a level of awareness around the world of China’s environmental problems and its capacity to address them. How China chooses to go about its efforts to promote an Ecological Civilization at a global level is therefore a significant matter, with implications for trade, market supply chains, and action on pressing concerns such as climate change. But China’s domestic and international environment and development efforts could be threatened if the credit and financial crisis turns into a worse situation of recession.

　　The worsening global economic situation threatens social, economic and environmental progress of all nations, including China. This topic received special attention from both Chinese and international members. The CCICED AGM occurred just as China announced its substantial economic recovery package. Therefore there was a substantive basis for considering how China can turn the economic crisis into an opportunity for strengthening economic growth.

　　

　　In the period of global crisis ahead there will be many opportunities where China and a few other major developing countries have advantages not found in more established industrial economies. This is particularly the case for sunrise industries and for green products, which will become of increasing significance in the second decade of this new century. In fact there may be a historic shift in leadership on environment and sustainable development from Europe and North America towards Asia. Trade and investment will be drivers for this to happen. Real solutions for global sustainable development are now as likely to arise from action in China as they are from other parts of the world.

　　

　　Council members appreciated the Chinese position that the global economic slowdown therefore must not be allowed to stand in the way of environmental progress. And that the economic stimulus package developed by China has incorporated environmental aspects. During this time of rebuilding the world’s financial system and new economic growth paths, China could benefit by positioning its investments towards activities that will allow it to shape the nature of future world growth, for example as a supplier of renewable energy products and services. These are examples of what CCICED’s Chairman, Vice Premier Li Keqiang, noted are actions that “promote development of the economy while taking good care of the earth that we share.”

　　At the 2008 AGM CCICED reviewed final recommendations from Task Forces on Innovation and an Environmentally Friendly Society, and on Environment and Health. In addition, the Council received interim reports with some recommendations from three energy and environment Task Forces that will submit final recommendations in 2009 (Pathway toward Low Carbon Economy, Economic Instruments for Energy Efficiency and Environment, Energy Efficiency and Urban Development). In addition, the CCICED Issues Paper prepared for the 2008 AGM identified a number of urgent challenges facing China, in part the result of the international economic and environmental situation. Our three key recommendation topics draw upon these reports as well as on the views of Council members.

　　The Council’s reports and discussions again underscore the need for effective implementation and enforcement of strong environmental legislation, greater use of credible economic instruments, and a more scientific approach to the development and dissemination of reliable environment and development information as means to build confidence and public trust in China’s environmental decision making. Of these points, the first and last deserve particular attention. Enforcement of regulations at a level that will change behaviour is absolutely essential in order to foster innovative technologies and to improve environmental health conditions. But it is also vital to stress the need for public data that can be trusted by citizens and can become benchmarks for positive change via good standards.　　　　

 

RECOMMENDATION TOPICS

1. Transform Challenges into Opportunities for Further Implementation of a Scientific Development Approach.

　　2008 will surely be viewed as an exceptional year for China because of the devastating natural disasters, international financial turbulence, food safety incidents, successful Olympic and Paralympics Games as well as the 30^th anniversary of the introduction of Reform and Opening Up. The year on the one hand gave rise to a number of new problems and challenges for China in the field of the environment and development, on the other hand, the great success and joy of the year left a precious legacy for China as well. As the year of 2008 draws to its end, it is now important for the Chinese government to face up to the problems and challenges, identify opportunities and potentials, review experiences and lessons, take positive actions and look into the future.

　

Therefore we recommend that China:

(1) Seek Opportunities in the Wake of the Financial Crisis, and Advance “Sound and Rapid” Environment and Development Initiatives.

 

　　To find a remedy for the financial market and achieve stable economic growth are undoubtedly the top priorities for the world right now. However, we must remain alert to prevent the environment from becoming the next victim of the financial crisis, as may occur in some parts of the world. Once it becomes a trend to neglect environmental factors, the world’s sustainable development will take a significant step backward. Thus, China must work with unwavering determination to reduce emissions, improve energy efficiency and fight climate change. The Chinese government has recognized the risk from the current crisis and has integrated environmental protection in the domestic stimulus package. It must now transform the challenges to opportunities for sound and rapid sustainable development.

　　The stimulus package should follow four principles with respect to environment and development. First, do no harm to the environment in the implementation of the package. Second, take a systems perspective that will identify positive relationships for environment and economy. Third, highlight labour-intensive activities operating at an appropriate scale to help poor people while protecting local environmental conditions, especially in the countryside. And, fourth, seek co-benefits, especially for improving health and ecological restoration, as a consequence of energy improvements, disaster relief and reconstruction, and pollution reduction. It is recommended that the Chinese government should be fully aware of risks and opportunities, and take the following actions:

1) Strengthen supervision and environmental management in the execution of the domestic stimulus plan, so as to prevent regions from boosting economic growth at the expense of environment in their response to the financial crisis.

2) Consider not only environmental protection as one of the investment priorities of the stimulus package, but also carry out examination of supply chain environmental consequences and strengthen green procurement policies. These steps will boost the development of environmental protection industries and convey the strong determination of the government that environmental protection can be maintained even in the wake of the financial crisis

3) Take advantage of the opportunities arising from the financial crisis in order to advance transformation of the development mode for the domestic economy. This can be done by boosting the development of clean energy and technical innovation, low carbon economy and by strengthening capacities in the area of environmental protection and climate change in the remaining years of the 11^th Five Year Plan, and particularly during the 12th Five Year development period.

4) Advance energy price reform and further internalize environmental externalities with the plunge of oil and commodities prices. It is advisable for China to adopt a long term “escalator” approach to gradually raise energy prices. It means small, but periodic and predictable rises of prices or introduction of additional environment or energy taxes, with information transparency to fully prepare the general public and reduce possible resistance.

5) And for the longer-term, develop Low Carbon Economy. The Chinese government should attach great importance to the development of Low Carbon Economy (LCE) and get prepared for action, particularly in terms of technology options and feasibility analysis. The development of a low carbon economy will benefit China both internally, in terms of addressing resources and environmental problems, and externally by contributing to the fight against climate change and raising international competitiveness. China should consider specifying low carbon economy related targets in the 12^th Five Year Plan for economic and social development, and incorporate low carbon economy in current strategies and actions.

 

(2) Create a Better Mix of Government Regulation and Market-Based Mechanisms, and between Factors Favouring Innovation and Those Favouring Stability.

 

　　The world financial crisis and the infant formula incident have shown that excessive reliance on market forces without effective regulation will create huge risks. In fact, market failures such as environmental externalities are often hard to control. The government thus should strengthen its supervision while adopting market-based instruments. China is at the initial stage of a socialist market economy where both market function and government regulation await improvement. Therefore the government should step up its supervision while giving full play to market-based instruments suitable for environmental protection.

　　Some of the most important market based approaches will require significant levels of capacity building for adequate management and supervision, including improved emissions monitoring, consolidation and standardizing of emissions data, designating a legal registry for emissions reductions, and enforcing non-compliance with much stiffer penalties.

　　It is important for the Chinese government to maintain the balance between innovation and stability. Stability is a prerequisite for a harmonious society while innovation often entails reform to avoid unreasonable benefit distribution. Imbalance between the two will give rise to conflicts. But if innovation helps encourage public engagement, promotes fairer benefit distribution and betterment of social welfare, it will help promote the development of a harmonious society. For instance, environmental innovation could help to optimize the relations between the environment and economy, resolve problems in the field of the environment and health, encourage wider public involvement, and give full play to the role of women in building a harmonious society.

 

(3) Step up Infrastructure Construction and Quality for Optimized Development and Harmonious Society.

 

　　In the face of such natural disasters as the snow storm and earthquake in 2008, the foundation for optimized development and harmonious society has proved fairly weak. Such weakness can be found in the relevant mechanisms, urban development patterns, the layout and quality of infrastructure, social security and emergency response. The weaknesses demonstrate that it is urgent for China to shift its growth pattern from quantitative expansion to quality development, and to achieve harmony between people and nature. The infant formula incident served notice that corporate social responsibility should be further stressed. A massive and systematic program is needed to achieve a more balanced development among various social and economic aspects. The foundations for harmonious society should be strengthened, including the moral and cultural basis for scientific development. If environmental factors are built into this more advanced approach to development, the chances for sustainability will be enhanced.

 

(4) Strengthen Rural Environmental Management and Help Improves Overall Environmental Protection of China.

 

　　The rural areas of China not only lag behind the cities in terms of economic and social development but also bear the brunt of environmental pollution and ecological damage. The countryside is thus a weak point in environmental protection and the building of a harmonious society. The central government of China is committed to the integrated development of urban and rural areas. In addition to the strategic goal of building a new socialist countryside, a comprehensive rural reform scheme was passed during the 3^rd Plenary Session of the 17^th Party Congress. Against this backdrop, China should create a bigger role for environmental protection as part of the overall strategic goal of building a new socialist countryside. The environmental priorities of rural areas should include greater attention to rural environmental management system and capacity building, environmental infrastructure, drinking water safety, soil contamination, indoor air quality management, and exploration of an integrated urban-rural environmental management mechanism and eco-compensation. The eco-compensation policies should be expanded to include climate change mitigation and adaptation needs, and damages cost by air pollution. Efforts on these priorities will improve overall environmental protection throughout China.

 

(5) Develop Innovative Environmental Management Systems and Mechanisms Based on the Successful Experiences of Green Olympic Games.

　　The successful Green Olympic Games has left China with valuable environmental legacies, including hardware such as demonstration projects, and infrastructure that help to improve the environment and serve the public, as well as software such as the concept of ecological civilization, improved environmental management, environmental information disclosure and wider public participation. All these may help to bring about deep changes in economic and social development patterns.

　　In its effort to host a Green Olympic Games, the Chinese government adopted successful measures to promote pollution prevention and control planning, environment friendly buildings and infrastructure, environmental information disclosure, public participation, commercialization of the innovation technologies employed in the Green Olympics, control of trans-boundary emissions through the establishment of a regional environmental management system, tail gas pollution control, the phase out of heavily polluting enterprises, etc. China should review these successful experiences and develop standardized and long-term mechanisms of environmental management to improve the environmental quality of Beijing and other parts of the country on a continuing basis.

　　The 2010 Shanghai Expo offers a new opportunity for the implementation of the “Green Olympics” experience, The Government of China should integrate more green measures in the planning and implementation of a “Better city; Better Life” Expo.

　　Also, China urgently needs to control trans-boundary emissions via regional environmental management systems operating on total emissions control, emissions trading and with appropriate institutions, such as coordinating groups comprised of the relevant provincial governors. The experience of the Olympics in reducing inflow of pollutants from provinces surrounding Beijing sets a remarkable precedent of cooperation that deserves to be emulated.

 

(6) Review the Experiences of the Past Three Decades and Continuously Improve the Environmental Management System.

 

　　Over the past 30 years, China has tried to keep pace with the international community when dealing with the field of environment and development. In light of its realities, and drawing upon international experiences and expertise, China has developed its own approach with Chinese characteristics to address environmental problems and has made significant progress in creating its environmental management system and, in some locations, for improving environmental quality.

　　Three decades on, China is now in an important period for strategic transformation of its environment and development relationship. It is now necessary to systematically review the strategic ideas, theories, policies and managerial practices in the field of environmental protection over the past 30 years. Such a review will not only help to consolidate successes achieved so far and further improve the environmental management system of China, but also contribute to the international community by sharing the Chinese experience.

　　The establishment of the Ministry of Environmental Protection in 2008 was a major step forward for the Chinese environmental management system, and reflects the commitment of the Chinese government to historical transformation in the environmental field. However, we note that environmental management system reform, perhaps leading to a super environment ministry, likely will be a gradualist process. The next step should be further integration of environmental responsibilities of different ministries, which optimizes the central government organization and helps raise capacity and efficiency. For the new environmental ministry, current attention should be focused on capacity building and financial resources. Responsibility, power, capacity and efficiency should be integrated in this super ministry, which can put people first and better serve the general public.

 

(7) Make New Contributions to Global Sustainable Development and the Building of a Harmonious World.

 

　　China and the world are mutually dependent. Given the large population and economic output as well as the important role of China in the global environment, the international community has higher expectations for China on issues like climate change and the financial crisis. China has made tremendous progress in development and now proposes concepts such as ecological civilization and harmonious society. These efforts should make the world more interested in China’s ideas and experiences.

　　Therefore, it is the right time for China to make a more substantive contribution towards global sustainable development and a harmonious world. Stabilizing the financial system, sustaining rapid economic growth and resolving environmental problems in China are in themselves great contributions to the world. Meanwhile, based upon the principle of common but differentiated responsibility, China should make new contributions to the global fight against climate change and sustainable development; and expand its existing environmental international cooperation into cooperation for sustainable development, with strengthened cooperation between China and other developing countries.

 

2. Introduce a National Action Plan or Program for Environmental Innovation, 2010-2020.

　　China’s complicated and unprecedented challenges as it works towards becoming an environmentally friendly society open the door to unprecedented innovation opportunities. Yet environmental innovation in China remains at a low level and lags behind innovations in other fields, and falls well short of the needs. There are several reasons for this situation:

Pollution clean-up rather than pollution prevention still dominates, and the institutions and mechanisms under which environmental protection and economic growth reinforce each other are yet to be established.

　　Incentives and enforcement action are still too weak and the command and control approaches still predominate. There is not a mechanism or policy system in place that encourages enterprises to invest spontaneously in environmental innovation.

　　A disconnect exists between research on environmental science and technology and the commercialization of research achievements due to the absence of technological application research institutes and supporting coordinating mechanisms.

Poorly developed technology and a limited system for collecting and publicizing environmental information accounts for low participation by the general public in environmental innovation and decision making. 

　　China identified innovation as a core national strategy and mapped out the National Innovation Strategy and the Mid-to-long-term Plan for Development of Science and Technology in China 2006-2020. While this strategy and plan can produce some of the necessary indigenous research and technological applications for key environmental problems, there is a need for a specific environmental innovation approach that can ensure the sustained and integrative effort necessary to fully capture benefits and opportunities.

 

 

Therefore we recommend that China:

　　Introduce a National Action Plan/Program for Environmental Innovation 2010-2020 for China. The action plan should define the strategic goals, targets, and measures of environmental innovation of China, and address technological, institutional, social and organizational aspects of innovation. The Action Plan/Program should be supported by key projects and increased investment, and consideration should be given to the following two points.

 

(1) Strengthen Indigenous Innovation Capacity by Setting Up a Special Program for Clean Technology Innovation, National Research Centres for Environmental Innovation, Sectoral Industrial Environment Research Institutes, and a System of Cross-disciplinary Sustainability Innovation Laboratories.

 

　　A Special Program for Clean Technology Innovation needs to be introduced, and this Program could cover technologies relating to vehicle pollution treatment, clean coal, solar power, wind power, nuclear power, carbon sequestration, energy efficient building, ecological restoration, and clean production. This Special Program would introduce Clean Technology as a major research platform in the same way as other fields such as nanotechnology have been fostered. It should be developed at a level equivalent to China’s space program, with expectations that it will become an important part of China’s future economic growth and exports as well as a key component of better environmental protection.

　　The Government of China should collaborate with relevant parties and jointly establish a number of high-level National Research Centres for Environmental Innovation in universities and research institutes. These Centres will bridge the gap between basic research institutes and market needs, and help introduce, absorb and utilize foreign technology. They should link research-intensive industries and China’s most renowned research bodies to establish China as a major player for environmental innovation.

　　Common environmental problems within specific industrial sectors necessitate the establishment of research institutes for specific energy intensive and heavily polluting industries on a cooperative basis among the government, the industries and the industry associations.

　　Considering the ecological and environmental features of different regions in China, the State should collaborate with local governments, business and civil society to establish cross-disciplinary Sustainability Innovation Laboratories designed to demonstrate how to live at a high standard with

 

　　minimum waste in rural and in urban settings. Their focus should be on practical demonstration of what can be done within the context of local social and economic circumstances and environmental conditions.

 

(2) Adopt an Integrated Approach to Address Mechanisms, Institutions and Capacity Development Required for Full Application of Environmental Innovation.

 

　　The following needs must be met. First, in the field of environmental innovation, the environmental protection authorities should lead the coordination among relevant parties and give full play to the bridging role of industry associations connecting government and the industry. Stronger regulatory rules and standards, incentives and supportive policies should be introduced to help build up innovation capacities of the enterprises, especially small and medium sized enterprises.

　　Second, to foster a market for environmental products, several measures could be taken: tighten environmental enforcement in order to create a potential demand market; and, where appropriate and for a limited time, subsidize environmental products used by enterprises and consumers so as to foster dissemination and application of environmental technology. Also needed are more effective Green Public Procurement Regulations which require government agencies to procure a certain percentage of environment friendly products will be particularly helpful in creating a sizable market for environmental products; also, action should be taken to raise resource and energy prices to expand the demand for environmental products that increase use efficiency.

　　Third, to considerably increase financial support for environmental innovation activities, Environmental Innovation Funds should be established with a focus on a Special Program for Clean Technology, and other components important for enhancing indigenous environmental and sustainable development technology innovation. The State should devise a financial supporting plan for environmental innovation and adopt financial measures including venture capital investment, preferential listing policies, green credit, and preferential loans etc., to support environmental innovation activities.

　　Fourth, China needs to strengthen IPR protection and international environmental cooperation and establish an International Study Network on Environmental Technology to facilitate learning from abroad and through joint efforts.

Fifth, drawing upon the experiences of OECD countries, China should establish an evaluation system for environmental innovation, covering the whole process from R&D to commercialization as well as such aspects as environmental, safety, health and life cycle impacts.

 

(3) Set Up an Improved National Information System for Environmental Quality, Environmental Pollution and Environmental Science and Technology Knowledge, with an Expanded Scope for Information Disclosure in order to Encourage Wider Public Involvement in Environmental Innovation Activities.　

 　　　　 

　　While China has made progress in environmental monitoring and public information disclosure, much work remains to be done before a full national environmental information system is in place and functioning well. This is a vital component for decision making of government, business, communities and the general public. The system must operate in a very transparent fashion, with regular reporting on key environmental problems and environmental performance. Knowledge access should be as direct as possible and at low cost so that people and institutions throughout China can access the information. Information needs to be packaged in ways that permit comparisons and easy understanding.

　　Improved information access will promote innovation in several ways: knowledge about environmental options will improve sustainable consumption, better public acceptance of new environmental technologies and environmental measures, place pressure on firms and local governments to improve environmental performance, and provide information helpful to environmental innovators, including SMEs.

 　　　　　　　　　　　　　　　　　　　　　　　　　　 　　　

3. Expedite the Establishment of a National Management System for Environment and Health.

　　China is faced with enormous challenges in the field of the environment and human health. First, a large number of its people are exposed to seriously polluted air, water and soil environment, which poses huge health risks. Second, because of the absence of systematic research, monitoring and statistics, there is not yet a clear picture of the full magnitude and range of public health risks posed by pollution. Hence it is extremely difficult to identify targeted measures to address the problem. Third, whether or not the economic growth pattern of China changes fundamentally within the near future, environmental pollution will remain a serious problem for a relatively long period of time, and this may give rise to more substantial health risks. Fourth, as the living standard increases, the general public will have higher expectations for a good and safe environment. Fifth, China has recently issued the National Action Plan for the Environment and Health 2007-2015, but concrete work under the action plan is yet to be carried out.

International experience illustrates that mishandling of environmental and health issues could generate complicated social and political problems that result in harm to public health, impaired government credibility, and heavy social and economic costs. China is currently in a critical period of building a harmonious society and consequently the issue of the environment and health should be given highest attention.

 

Therefore, we suggest:

　　On the basis of the National Action Plan for the Environment and Health 2007-2015, that the Government of China should accelerate the development of a national management system for the environment and health as well as an environmental management system based on “putting people first”. In order to achieve this goal, efforts should be made in the following six areas:

 

(1) Stick to Prevention as the Main Approach and Take Effective Measures to Reduce Environmental and Health Risks.

 

　　A risk prevention system can be established by improving the environmental standards system, introducing a list of priority pollutants and enforcing stricter control of environmental access by harmful substances. The monitoring network for the environment and health should be strengthened, especially in the field of health impact monitoring relevant to human exposure. The government also should gradually set up an early warning system for environment and health, which will help to predict potential environmental and health risks, and will eradicate or reduce health damage by pollution.

 

(2) The Government Must Bear the Main Responsibility of Environmental and Health Issues. The Government Therefore Should Strengthen its Leadership in the Management System while Encouraging Extensive Public Participation.

 　　　　 

　　Coordination mechanism between the relevant ministries should be strengthened. This could be realized through establishment of a national environment and health administrative coordination mechanism that is under the leadership of the State Council with participation by different ministries. It is also necessary to assess government performance to ensure laws and regulations are properly implemented. Based on their respective responsibilities, the environmental and health authorities should allocate sufficient staff and resources to establish specialized administrative system for managing environmental and health issues.

 

(3) Establish and Strengthen Legislation for Environment and Health based on the Polluter Pays Principle.

 

　　Legislation should address prevention, enforcement, and environmental rights of the Chinese public. A dispute settlement mechanism should be set up to help concerned parties to reach reconciliation over environmental and health disputes through mediation, administrative settlement, arbitration and litigation. The government also should gradually introduce a compensation system for human health damage by pollution so as to protect the environmental rights of the general public.

　　Improved coordination is needed between central and local authorities so that environmental health issues can be reported and assessed in a timely manner, with more effective action taken.

 

 

(4) Increase Financial Investment in Capacity Building for Environmental and Health Management, Research, and Compensation.

 

　　The central and local governments should increase their financial support for capacity building and basic research in the field of the environment and health. An Environment and Health Fund could be established to help compensate victims of historical environmental problems, or when the responsible party has no civil compensation capability and when it is hard to identify who should be responsible. The Fund could help victims during their recovery and support education and communications activities. Multi-sourced funding should be sought.

 

(5) Improve Disclosure and Access to Environmental and Health Information and Encourage Public Participation.

 

　　The government should make public environmental and health information available through accessible and comprehensible tools, such as government websites and the mass media. Prevention requires information on risks to be effective. The Government of China should launch a public access data base on pollutants and health risks. The government also should improve the public complaint mechanism and public announcement system, and create smooth channels for the public to participate in environmental and health management. Supervision by the general public, social organizations and the mass media should be strengthened and the reporting of environmental and health violations should be encouraged. Various kinds of hearings and consultation meetings should be held to hear the voices of the public and relevant stakeholders on environmental and health issues.

 

(6) Undertake Targeted Intervention Measures to Address Prominent Problems in the Field of the Environment and Health

 

　　Where pollution has already caused harm to human health or induced diseases, action to reduce harm and risk needs to occur quickly, and health intervention or medical care should routinely be provided to the victims. For the pollutants proved potentially dangerous to human health, the government should issue a catalogue of such pollutants as well as relevant risk evaluation system, environmental access standards and identification criteria. Such pre-intervention measures and health impact monitoring will help eradicate or reduce health risks caused by pollution. For other environmental factors with unclear health impact, China should step up research and adopt preventative measures.

 

IV.　  MEETING WITH PREMIER WEN JIABAO

242. Premier Wen Jiabao:　 The CCICED is 17 years old and I have taken part in 12 of your meetings. But this year’s AGM is different because it is taking place in an unusual year, with as a backdrop the international financial crisis. All economies of the world are affected – yet we must not flag in our efforts to protect the environment. What is the relationship between this financial crisis, our rescue package and China’s long term development? We have different questions facing us than in previous years. The fact that you have come from many countries around the world to Beijing this year shows your commitment to China’s environmental protection and sustainable development. I’m confident that because we take care of environmental protection, including technical development and extension, energy conservation and emissions reduction, we will maintain our steady economic growth. I am interested now in hearing your views.

 

CCICED Vice-Chair – Margaret Biggs: On behalf of the Council Members we congratulate you on your return to a second term as Premier. And we want to take the opportunity to recall your personal commitment in our meeting last year to be a Green Premier, with a Green Cabinet. And the hope you expressed for CCICED to continue for a long time.

 

WJB: Yes I said this. I hope that when I step down, the China Council will be able to positively assess my tenure as Premier.

 

MB: It is a privilege for me to join CCICED, and to meet with you at this very significant point in China’s development—30 years after the start of Reform and Opening Up. By any measure it has been a remarkable year for China. And now, as you said, we all face this threat of worldwide recession. This is not only a threat to economic progress, but it could seriously impact progress on climate change action, add to the world’s growing ecological deficit, and make the poor more vulnerable. How can China seize this moment to build a new and productive relationship between the environment and economy? We see three key opportunities. First, CCICED members congratulate you for highlighting that within China economic slowdown will not be at the expense of environmental progress.

 

WJB: In fact, I reiterated those two firm commitments at a recent meeting we hosted jointly with the UN in Beijing on Climate Change. I said China would take action on climate change and that the

 

Government of China would still meet the targets it had set regarding energy conservation and emissions reduction.

 

MB: In the economic stimulus package, the emphasis on green infrastructure such as sewage treatment and watershed conservation is a good start.

 

WJB: Yes, in this 4 trillion RMB package just announced to protect the continued growth of our economy, a good proportion of this will go to environmental projects – and not just to sewage treatment infrastructure. It will also include construction projects related to pipelines and networks, as well as our commitment to accelerate construction on ten major environment projects related to energy conservation. We will also take active measures to manage and treat our three major rivers and three major lakes.

 

MB: To extract maximum environment and development value from the entire package it will be helpful to specify green procurement procedures and identify potential environmental risks. This action will stimulate further growth of China’s environmental industries. It will signal to many sectors that China values environmental protection even during difficult economic times.

 

WJB: You’re right. Even during this economic slowdown and while we are experiencing a slowdown in the external demand for Chinese goods, we find opportunities in high technologies and new technologies in the environment-related industries that are emerging. Our wind and solar industries continue to develop – this is a sector with great growth potential in China.

 

MB: The second key opportunity is structural changes through pricing. Some of the high commodity prices, including oil have dropped. It is a good opportunity for China to undertake price reform that takes into account environmental damage. This can be done in an escalating fashion, providing greater predictability for business, and reducing consumer resistance.

 

WJB: This is correct and we are already preparing relevant plans and policies to this effect. In 20 days, you will be able to see this when China announces plans to reform our pricing of oil.

 

MB: Mr. Premier, the third opportunity is fundamental to China’s future economy, and for the emergence of sustainable economic growth in the world. It is the right time for China to accelerate Clean Technology innovation.

 

WJB: Yes. This time as part of our economic stimulus package, and in the context of our program to improve rural people’s lives, we will encourage farmers to produce and use biogas for rural energy – the government will be subsidizing this.

 

MB: CCICED is recommending that a major Program for Environmental Innovation be created. The outcome would be to elevate Clean Technology action to become a key engine of growth within China and in restructured world economic markets. This initiative could function in the same way as your Space Program, built around achieving specific objectives, and with firm timetables. 

　　China’s great advantage of huge domestic market potential, international competitiveness, and scientific development, and this can open the opportunity for China to set the direction, domestically and internationally for economic growth driven by Clean Technology. It will support new trends for sustainable rural and urban development, climate change mitigation, and industry based on green design and pollution prevention.

　　For the Program to be a success, markets for new technologies must be created. This will require: Strong, clear, uniformly enforced regulation and standards. Better and faster public access to credible information. And more public-private sector investment and incentives.

　　Mr. Premier, we know and admire your front-line approach taken in the recent crises. Environmental health threatens to become one of these issues requiring front-line attention. China has a serious, perhaps grim set of problems related to environment and health. We have studied the current situation carefully in close cooperation with your officials in the Ministry of Environment and the Ministry of Health. The full extent of problems in rural and urban communities does not appear to be known, so more monitoring is urgently required.

　　We are recommending that a National Management System for Environment and Health be established as soon as possible. This is needed if China is to benefit fully and quickly from its recently announced Environment and Health Action Plan. It is a way for central government to signal that it bears the main responsibility for reducing environment and health risks. Legislation needs to address prevention, enforcement and environmental rights of the Chinese public. Better alignment is needed between levels of government since it is apparent that local governments do not always see environment and health in the same way as the central government. And a well-funded, more focused

research effort is required to find good solutions for a greater number of environment and health problems.

　　The primary focus should be prevention, but a strong case also can be made for setting in place a fair and just compensation scheme for victims of severe environmental damage. One way of doing this would be to set up an Environment and Health Foundation designed to assist victims in their recovery and to support education that would reduce risk.　 Action on environment and health within China also will demonstrate to consumers abroad that China is building the standards, monitoring and other regulatory measures that can give assurance of safety in the products from this country. A significant conclusion from our work on environment and health is that China’s goals in these areas will be difficult to meet without the full participation of the Chinese people. The public needs to be more fully informed and become participants in environment and health solutions.

Finally, Premier Wen, we were delighted to see the establishment of the Ministry of Environmental Protection. To ensure its success in fulfilling its broad mandate, this Ministry will have to build its capacity and influence. We look forward to seeing further progress next year on environment and development. We are certain that such progress will benefit China’s effort to build a Harmonious Society, and will highlight to the world concrete ways and means towards an Ecological Civilization. We are eager to hear your views and response to our suggestions. And I hope there may be an opportunity for our other two international vice-chairs to provide a few additional observations on Council work currently underway—on Low Carbon Economy, and on sustainable urban development.

 

WJB: I’ll respond briefly to some of the recommendations you have been putting forward. Your three major recommendations impressed me with their depth and usefulness. We are actually studying or implementing actions in these areas. First, the GOC is clear that China’s economic growth cannot come at the expense of the environment, and China’s development has to be sustainable development. China will continue to pursue a people-centred development, not only meeting people’s material or cultural needs but also their health and the environment. There is no change in the basic views of the Chinese government here.

Now that we are in the midst of this international financial crisis, we are taking measures to expand domestic demand and invest in our economy. We see this as a golden opportunity to transform our economic growth pattern and to restructure our industries. We have announced 10 specific measures to promote economic development and they fall in 4 broad categories. Many of them are related to the environment. The first is a group of projects that will contribute to the wellbeing of our people – housing, health and education. 

　　Secondly, we are funding infrastructure projects covering the management and control of our major rivers and lakes as well as other main environmental projects. Thirdly, we are spending on projects dealing with post-earthquake reconstruction following the disaster earlier this year. A major part of this will focus on ecological rehabilitation and on forests. The fourth category deals with the environment directly, in terms of ecological and technological improvements, energy conservation and emissions reduction. 

We will never allow the launch of new projects that pollute heavily or use energy intensively. On the contrary, we will phase out outdated capacity in our industries. Perhaps during your meeting, my officials have already told you that last year we have closed down small coal fired power plants totalling a capacity of 14 million kilowatt, and we have closed down well over 1,000 small coal mines, and we phased out some 46 million tons of capacity of iron smelters, and 37 million tons of capacity in our steel smelters.

At the same time, we are also developing heavily our clean energy sources – hydro, wind, solar and nuclear. So in this time of economic crisis, we consider this our opportunity for economic development and for cleaning up our environment. I appreciate the views you have put forward. In times of crisis, we need innovation and China has a huge potential in terms of its domestic market and that for the environment. 

　　We have this large domestic market potential because of the two basic imbalances we have in China, that between our regions, and that between our rural and urban areas. Because of these lags, and by seizing these two opportunities, China’s economic performance will not be affected and in fact will contribute to greater growth.　 We must adopt strategies and plans based on your good ideas.

　　When I met with you last year, I told you that we would change the administration of environmental matters and create a ministry. I have kept my word. But the key is not the title, the important point is the capacity built and the authority this confers them. We now need to improve our legislation in the environmental field.

 

CCICED Vice-Chair Mr Klaus Töpfer : We discussed the huge success of the Green Olympics and the expectation this has raised in and out of China for environmental progress as a result. We are impressed today that there are blue skies over us. China will soon have another great opportunity, the 2010 World Expo in Shanghai, with the theme Better Cities, Better Life. This will allow for strong signals to be sent for environmental protection, waste management and water conservation in our big cities. This is a big challenge for China. We would like to ask for your support, putting as much effort with this as you have with the Olympics.

 

WJB: In fact, since the Olympics, Beijing’s air has improved a lot. We took out about 40% of the cars off the road during the Olympics and to build on this success, we are now keeping every day some 800,000 cars off the road. To achieve this, we need the understanding and support of our citizens. We need to develop our buses, subways and inter-city rail systems in major ways. You have a good

suggestion, that we use the 2010 Expo in Shanghai as an opportunity to clean the air there – but we should go beyond those two cities and expand this to cities all around China.

 

CCICED Vice-Chair Mr Børge Brende: Next year we will be examining energy, environment and climate change. We will be making a full report on how China could benefit from a long term commitment to a low carbon economy and to low carbon prosperity. China’s enormous manufacturing power represents the only way to drive down the price of renewable and new technologies. For now, the CCICED suggests that you look at the possibility of making the low carbon economy a part of the 12^th Five Year Plan you are now preparing.

 

WJB: China is part of the UN Framework Convention on Climate Change and we are part of the Kyoto Protocol. Next year, we will also show a constructive attitude at the Copenhagen Conference. We believe that all countries in the world share a responsibility to achieve the low carbon economy and to fight climate change. But because of historical factors and because of our different levels of development, we believe that we have common but differentiated responsibilities. 

　　Still, China as a major nation will never shy away from its responsibilities. This is why we have put in place our own climate change program. We have also set objectives to reduce the energy intensity per unit of GDP by 4% each year. These targets are mandatory and each year I must report on them to the National People’s Congress. I agree that China’s manufacturing prowess can play a role in the drive for the low carbon technologies. We are now world leaders in the production of photovoltaic cells – although we export most of them to Europe. 

 

CCICED Member Mr Achim Steiner: I add my voice to the chorus of admiration and the prospect of further emulation of the green Olympics. At UNEP, we are working with the Ministry of Environment Protection and the Beijing Environment Protection Bureau, on a study of the impacts and lessons of these Olympics so this can be replicated elsewhere. This touches upon what we have talked about at the Council regarding the green economy. The stimulus package includes investment in the economy. The meeting in Washington over the coming days will be key in determining how the trillions of dollars will be spent on, and whether it can be used on the environment and building a green economy. China’s example is useful here. China can play a role in promoting a Green New Deal. This would provide a building block to the agreement in Copenhagen, from which we are at present very far away.

 

WJB: Thank you for coming to Beijing and taking part in the CCICED while the attention of the world is focused on Wall Street and the next big meeting (G20) in Washington DC. You show your commitment to the future of humanity, to the environment and to sustainable development. As the world grapples with the international financial crisis, we cannot lose sight of two objectives: environmental protection and climate change on the one hand, and the achievement of the Millennium Development Goals on the other. Yet both of these objectives will affect heavily the majority of people and will affect the future of humanity.

　　I hope the Council will continue to operate in the future and that China’s efforts to protect the environment will go on and expand. So that when you come back next year, you can see fresh progress on the environmental front. I hope you will not only witness progress in China’s development but also witness China’s efforts on the environmental front. Thank you.