OVERVIEW
On November 18-20, 2005 the CCICED Annual General Meeting was held in Beijing. It discussed the theme of Sustainable Urbanization and put forward policy recommendations on the basis of the work of the five Task Forces .
The next 5 years will be critical for China to build a well-off (Xiaokang) society in a comprehensive way. More specifically, the path chosen for China's urban development will determine all aspects of environmental protection and resource use in China, and will also be of global relevance.
Urbanization in China has increased the living standard of urban as well as rural residents. However, serious problems resulting from rapid urbanization have emerged. Natural resources are increasingly in short supply. Problems such as pollution, excessive use of groundwater and waste have worsened the environmental situation and led to shortage of water resources. The tension between the great demand for urban land on the one hand, and the shortage of suitable areas for urban development on the other, is increasingly acute and leads to a widespread increase of urban ecological deficit. Authorities have not done enough to raise efficiency standards. Energy diversification and efficiency is unsatisfactory, yet there is a fast growing demand. Initiatives for sustainable transportation in cities are not keeping up with needs. Rapid growth in private vehicles will further exacerbate this situation. Air and water quality in cities is a major problem, with many negative regional effects. Industrial resource efficiency is still very low by comparison to international standards. While China's cities are making a major contribution to the nation's poverty reduction, they also contribute to the dramatically expanding gap between the rich and the poor. There is increasing evidence of extravagance which is troubling for any society. With the rapid growth in urbanization, and the expanded rural migration to cities, increasing inner city poverty may become a matter of significant concern for the future. These are some of the key problems examined by the Task Forces and the Members of the Council during the 2005 Annual General Meeting.
Policy Recommendations are presented by the Members and Experts of CCICED with the objective to promote urban centers that are viable from an economic, environmental and social point of view. Cities are only attractive living and working spaces if their multifunctionality reflects the needs of all citizens. The following 4 main recommendations are made with this in mind. A summary of individual Task Force recommendations is attached as Annex.
GENERAL RECOMMENDATIONS ON SUSTAINABLE URBANIZATION
1. Plan scientifically for sustainable urbanization through policy setting, implementation and enforcement
• More scientific understanding and measurement on environmental resilience and carrying capacity in urban and surrounding areas are needed. Avoiding urban sprawl, thus preventing cities from expanding in an excessive and uncontrolled manner which has negative environmental and social implications, is of utmost importance.
• Planning for sustainable urbanization requires effective use of new tools such as environmental impact assessment, geographic information systems, and improved recognition and application of environmental protection laws. The purpose is to be able to direct decisions away from exceeding local and regional carrying capacity, to avoid negative impacts on poor people, and to promote a positive environment and development outcomes.
• The impact of climate change in terms of variations of rainfall, temperatures, extreme weather events and sea level rise in coastal areas should be addressed at the planning stage through mitigation and adaptation measures.
• Housing should be kept practical and highly efficient in terms of material consumption, as well as energy and water use. There should be strict controls on the amount of land allocated for luxury homes. After appropriate environmental impact assessment, the use of remediated brownfield sites for housing should be given priority over greenfield sites, to avoid affecting natural and agricultural areas.
• Sustainable urbanization planning should recognize the great variety of landscapes and cultural settings in which Chinese cities and towns will develop. Regional development should be optimized by clear zoning for settlement and urbanization. The risk that in 20 years there will be "1000 cities, all looking the same" needs to be avoided. There is a need to stop the loss of cultural wealth, biodiversity, natural lakes and rivers as well as wetlands and forests, as a consequence of homogeneous urban planning and development.
• Regional planning should ensure a better coordination in the development process of regions; in particular by addressing issues of trans-regional environmental pollution. Integrated regional planning efforts require central government facilitation to set in place a coordinated regional planning institutional framework with particular attention to the functions of the individual towns within the region.
2. Transform China's urban areas into resource-saving cities and towns.
• Saving and recycling of resources should be promoted by establishing a comprehensive pricing system which will lead to major improvements in the efficiency of water and energy use. As a first step, environmentally harmful subsidies should be eliminated. Fuel taxes and water pricing reflecting full cost recovery should be introduced. Water and energy pricing will need to include measures to ensure that poorer and disadvantaged people have adequate access. This system should be incorporated into the 11th Five Year Plan.
• The development and promotion of building standards for saving energy and water should be accelerated. This requires the adoption of mandatory building codes including conserving technologies in building design and construction. Existing buildings should be upgraded, for example through making conservation technologies available to households (low water use toilets and showerheads). Environmentally friendly design and procurement for governmental buildings and infrastructure should be promoted
• As main drivers for achieving a circular economy pollution should be avoided at source wherever possible, and waste discharges per unit of output reduced. Sustainable consumption and production in cities should be promoted. For this purpose campaigns that advocate a lifestyle consistent with Chinese ideals should be carried out, directed towards improved understanding of ecological footprints and the local environmental carrying capacity.
• Closer cooperation with the business community on clean production should be encouraged and the phase-out of old, polluting technologies accelerated. Small and medium-sized enterprises in highly polluting sectors should be supported in their efforts to implement the circular economy. Strengthening of China's environmental technology sector should be continued through mechanisms such as urban green procurement funds, on the part of local and national government, and through sustainable development innovation funds for R&D. Greater access to innovative urban pollution prevention and control technology should be sought, through foreign direct investment and partnerships with international business.
• First priority should be granted to the development and implementation of public urban transport systems in order to meet the mobility demands and needs of the majority of the population, to reduce the oil dependence and minimize emissions. Traffic congestion taxes and other traffic management tools should be adopted to control and discourage the utilization of private cars within cities.
3. Significantly accelerate efforts to control the environmental impacts of cities and towns and continuously improve urban environment.
• Enforcement of environmental laws and regulations should be stepped up and environmental protection departments strengthened through governmental reform. They should be equipped with integral powers and more effective enforcement instruments for comprehensive environmental management. Administrative and technical capacity of the environmental protection department should be enhanced at all three levels (state, regional and local). More deterrent penalties are needed for serious violators of existing environmental laws and regulations. Reasonable but strictly enforceable environmental control systems for air and water pollution should be set in place.
• Municipal authorities and mayors should be provided with targets and performance indicators as tools to assist with their obligation in regard of sustainable resource use and total emission control. Specific indicators and incentives should be developed to motivate local officials to take proper account of environmental and social performance.
4. Public information and participation for sustainable urbanization
• Public participation in policy decision making for urban planning, as well as transportation infrastructures should be promoted.
• The further development of functional local community services should be supported, and access to basic education for all citizens promoted.
• Public consultation, information release and public hearing mechanisms should be established, so that potential social and environmental impacts are discovered and addressed in time. Communication channels on important development strategies should be built.
• Training, education for sustainable development and publicity should be promoted as means to increase general public awareness, understanding and support for the Circular Economy. The valuable roles that non-governmental organizations can play in sustainable urban development should be recognized and enhanced.
Annex
SUMMARY OF INDIVIDUAL TASK FORCE RECOMMENDATIONS
1. Implement a national strategy for sustainable urbanization within China that can properly address key environmental and development needs.
The following elements should be part of this strategy:
• Regional planning law for design and regulation of urban expansion that values local environmental and cultural characteristics, addresses the likely impact of settlement and urban consumption patterns on the surrounding regions, minimizes wasteful use of water, energy and materials, and identifies opportunities to strengthen and protect ecological services.
• Specific targets in the range of at least 3 to 4 % per year for continuously reducing per capita levels of waste, energy, water and land use within cities and towns, differentiated according to location, size and level of development.
• Improved access of all urban residents and migrants to the essentials for Xiaokang, including health and education, reasonable housing and transportation, green space secure environmental conditions, and economic opportunities.
• A broader range of public-private partnerships (PPP) to implement and maintain urban transportation, environmental infrastructure, water, energy and material efficient buildings.
• Central and local government green procurement policies that support purchase of environmentally sustainable technologies and goods during the coming two decades of intensive urban construction and re-development.
• Support and incentives to urban administrators and managers for capacity building on sustainable development.
2. Develop efficient, convenient, and low cost transport systems based on public transport suitable for all citizens. Make sure that private vehicle owners, cover their full environmental and social external costs. Use economic instruments (increased fuel taxation, city centre congestion fees, highway tolls, higher parking fees) to shift transport modes towards a sustainable way.
• Develop an integrated transport system through a high-level transportation management and coordination organization (e.g. a National Transportation Commission) for the formulation and implementation of unified and coordinated transportation policies for passengers and freight.
• Use economic instruments to promote sustainable transport. Provide tax incentives for efficient vehicles e.g. fuel tax. Establish a 'National Transport Fund' to support sustainable transport projects and strategies. Establish a value-added land tax system for public transportation investments to support the development of sustainable urban transport. Move towards the full internalization of all transport externalities according to the principle of 'user/polluter pays'.
• Public transport, walking and cycling should guide urban land development (TOD model). Develop transport systems with interoperability between different transport modes.
• Ensure that transport systems meet the mobility needs of all Chinese citizens, with special attention to the disadvantaged groups, e.g. the old, the young, the poor and the disabled.
• Implement 'mobility management' to balance transportation demand and supply, and alleviate urban traffic congestion by changing behavior and reducing car trips. Raise awareness of sustainable transport and safety. Ensure public involvement in decision making. Encourage the use of transportation modes and vehicles that are characterized by low energy consumption, low pollution, and low energy consumption.
• Develop and use advanced transportation technologies (including new vehicle types, new fuels, and intelligent transport management systems). Implement strict environmental assessment and restoration mechanism during the process of transportation infrastructure construction.
• Establish and enforce strict fuel consumption standards for all new motor vehicles by 2008 and enforce the limits of fuel consumption of passenger cars. Reduce fuel consumption per/kilometer by 40-50% by 2015. Establish strict fuel oil quality standards for motor vehicles and hasten the implementation of the new emission standard (GB/EURO 4) for motor vehicles. Promote low sulfur fuels 150ppm in the whole country by 2007, below 50ppm from 2010 and then super-low sulfur fuels (< 10ppm).
3. Set in place essential laws, policies, knowledge and incentives to promote a continuously improving national Circular Economy within China's cities and towns.
• Formulate and implement a basic law for the Circular Economy that establishes a resource-saving society, with clearly defined rights, responsibilities and obligations of governments, enterprises and citizens, with an appropriate balance in use of market instruments, regulatory tools, and enforcement mechanisms.
• Update other laws and regulations including the basic Law of Environmental Protection and laws pertaining to waste generation and disposal in order to address the new topics associated with the Circular Economy such as waste avoidance at the source and industrial ecology.
• Set specific targets during the 11th Five Year Plan period including: 3 to 4% annual reduction in energy and resource consumption per unit output, reuse of metal resources and 65% of industrial solid waste; closed loop use of water in 90% of industrial uses, sulphur dioxide emission reduced by 55%; urban household waste treatment increased to 70% and household wastewater treatment increased to 47%.
• Formulate policies concerning manufacturer responsibility for reuse and disposal. Consumer fees should be collected and placed in a National Circular Economy Fund.
• Develop a labeling program for Circular Economy products and promote such products via national and local government green procurement.
• Create more ecological industrial parks and clusters, where reuse and recycling can be enhanced and where new environmental technologies can be introduced.
• Accelerate the phase-out of outdated industrial technology.
• Encourage national and regional technology innovation funding financed through the proposed National Circular Economy Fund, to support new environment and sustainable development technology development and commercialization.
4. Mainstream the use of Environmental Fiscal Instruments (EFIs) in public finance to heighten efficiency of natural resource and energy use, and for improved, cost-effective environmental protection and pollution control in both cities and rural areas.
The EFIs include a mix of various components: revenue instruments such as taxes and charges; public expenditure policies including fiscal transfer; resource and environmental pricing policies. The following steps should be taken for a systemic and consistent approach to environmental pricing and tax reform:
• Clearly define Central Government power and authority over environmental affairs and match government environmental expenditure, taxation and pricing to this power. A properly functioning Environmental Fiscal Expenditure Account (EFEA) and a Lead Group on EFIs should be established to guide this process.
• Define high priority areas for intervention and areas where action would be premature. Priority areas for immediate action may include fuel tax reform (e.g. to promote desulphurization), urban wastewater management, water pricing, and subsidies, where market forces work against innovation such as Circular Economy technologies.
• Accelerate fiscal transfer payments to support investments in sewage treatment in upper and middle reaches of river basins rather than concentrating mainly on richer downstream cities; the result would be enhanced benefits both to the upstream settlements and to the coastal cities.
• Urban water supplies should gradually be priced upwards in line with the long run marginal costs of supply. This approach will generate revenues in excess of financial cost that can be invested into guaranteeing long-term supply of water, or subsidies for supply of water to poorer people and communities.
• Develop an EFI package for reducing sulphur emissions, especially in cities. The immediate need is to increase the rate of desulphurization and to ensure that the costs of doing so are eventually passed on through the end price charged to electricity consumers. Tax relief to users of desulphurization byproducts will stimulate their use (e.g. gypsum) and help to achieve the Circular Economy. In the more distant future, damage-based product taxes could be introduced in order to address air pollution externalities and thus reduce health costs.
• Carry out EFI introductions gradually in concert with reduction or removal of other measures, especially changes in command and control regulation or when existing taxes and charges are reformed and when environmentally harmful subsidies are phased out.
• Reform fiscal transfer payments to link them more directly to the solution of environment and poverty problems. Support may be needed for those areas and groups too poor to invest in effective pollution treatment and control.
• Establish the scientific basis of monitoring and verification required to make systems involving economic and fiscal instruments work well.
5. Create a sustainable development measurement system that can be applied to assess performance of officials at the level of cities and provinces. Such measures should be operational at both national and lower administrative systems and eventually be linked to the National System of Accounts.
• On the short term it is not feasible to quickly implement a Green GDP measure that would accurately and fairly gauge adjustment of GDP for environmental degradation and to use this information to routinely assess performance of local officials.
• A feasible approach is to develop a basket of indicators reflecting economic, social and environmental factors of sustainable development, appropriately weighted for various local conditions. This approach was tested in five cities and appears to have promise for use in assessing performance in a more integrated fashion.
• A materials flow satellite accounting system to the National System of Accounts is needed to measure the result of resource efficiency and environmental protection efforts, including performance of EFI and of Circular Economy initiatives.
Environmental data suitable for measures at the level of cities and counties are still very imperfect and not yet suitable for making government performance evaluation scientifically reliable. Therefore improved information systems of environmental data and on resource consumption and management of the Circular Economy are needed.
