Introduction – China’s Environmental Nemesis

There can be no doubt that the environment in China is under serious and sustained threat. The skies over major urban areas are typically a sickly shade of grey, and the World Bank notes that twenty out of thirty of the world’s most polluted cities are in China. Using 40% of the world’s coal, China is set to become the world’s largest emitter of greenhouse gases by 2015.

There is also a growing water crisis in the north of the country; the west is desertifying due to depletion of the forests; species are under threat in the delicate ecosystems of China’s south-western provinces. None of this is helped by some lackadaisical attitudes to safety. Residents of Harbin were forced to use bottled water after a benzene leak from a PetroChina plant polluted the Songhua River in November 2005, also threatening the water supply to north-east Russia. Exactly a year later, a leak from a heating station near Lanzhou had the eerily symbolic effect of turning the Yellow River red. A mind-boggling 45% of China’s chemical plants are said to pose an environmental risk.

Beijing’s attitude towards protecting nature and upholding environmental standards is therefore in question. It can be at best ambivalent, as can be seen in Jiang Zemin’s 1992 declaration at the Fourth National Environmental Protection Conference where he acknowledged the need for environmental co-operation, but placed the emphasis on seeking financial aid while avoiding interference in Chinese internal affairs. Some authors even argue that the Chinese attitude is partly inspired by Marxist-Leninist ideas of man’s domination over nature that was taken up by Mao Zedong in his drive for industrialisation, though there is evidence of some awareness of environmental issues even in the 1950s.

Rather than protecting the environment for its own sake, it seems to come down to economics and politics. Even Pan Yue, deputy head of the State Environmental Protection Administration (SEPA), the country's environmental watchdog ministry, calls the environment “the bottleneck constraining economic growth in China”. Of course, the potential economic effects are staggering: SEPA estimates that China loses 10% of its annual GDP, about €155billion, to environmental causes. But when the argument is framed in these abstract financial terms rather than acknowledging the long-term dangers of ecological disaster, there is something wrong. And it’s not just a Chinese problem. China’s huge population, the speed and nature of its development and its lack of resources mean that its environmental woes are severe enough to be globally relevant.

The problem in China is not just one of adopting rules and standards: SEPA and its predecessors have introduced many, and the environment is certainly on the political agenda. In July 2006, plans to spend a staggering €140billion on a five-year grand clean-up were announced, though where the money will go is open to question. By SEPA’s own admission, the problem is in actually implementing the green agenda. Grandiose government promises aside, environmental protection costs companies money, and with cutthroat competition in the business field it is often the first item to disappear from the list of expenses.

Furthermore, though environmental plans are made under umbrella programmes, it is up to individual agencies, ministries and local government bodies – which often fail to communicate and coordinate – to fulfil them. And, though progress is being made, local-level Environment Protection Bureaus are rarely of top quality anyway. When state-owned companies have a hand in local government, no-one wants to impose costly environmental measures that could affect profits; indeed local governments tend to protect businesses, even those that break regulations. The predicament is compounded by the Chinese system’s endemic corruption. If you fail to meet the pollution targets that do exist, why not call in some guanxi with the provincial party headquarters?

Thus the situation is bleak. In early 2007, Beijing admitted that it was already failing to meet its environmental and energy efficiency targets under the 2006-2010 Five Year Plan. If outsiders are to have any effect on this nightmarish state of affairs, even more important than introducing standards and technology will be changing attitudes and practices. However, with the US refusing to abide by international treaties such as the Kyoto Protocol, as the world’s second economic power it clearly falls to Europe to set the agenda. Can Europe help green China’s smoking dragon?

Noble Intentions – The EU’s Normative Policy

Having helped to engineer the spread of security, democracy and development in its own back yard, via the Common Foreign and Security Policy the EU aims to do the same in the wider world. The 2003 paper ‘A Secure Europe in a Better World’, explicitly states the Brussels doctrine of spreading good governance and democracy.

On China specifically, the 2006 policy document ‘Closer Partners, Growing Responsibilities’ makes the normative framework very clear:

The EU plays a central role in finding sustainable solutions to today's challenges, on the environment, on energy, on globalisation. It has proved capable of exerting a progressive influence well beyond its borders and is the world’s largest provider of development aid.

Europe needs to respond effectively to China’s renewed strength. To tackle the key challenges facing Europe today – including climate change, employment, migration, security – we need to leverage the potential of a dynamic relationship with China based on our values. (Emphasis added)

The document continues in this vein, lauding China’s achievements in the reform process, while encouraging it to do better and noting “divergences in values”.

Likewise, the official Chinese policy paper on the EU recognises the importance of Europe as an actor in the international arena. Whether European efforts to promote “democracy, human rights and common values” fall upon receptive ears is anyone’s guess. Behind closed doors there may well be constructive dialogue, but the Chinese Communist Party (CCP) is likely to publicly label proclamations on European values as interference in its internal affairs and a threat to its sovereignty.

However, when it comes to matters of global concern such as the environment, might Brussels have more of a ‘diffusing’ voice? Europe is well known for its stringent environmental standards and its sponsorship and use of green technologies. If anything, in Europe, ecological considerations have been institutionalised; this is something it takes very seriously, as the stern November 2006 ruling on member states’ carbon emissions illustrates, while in January 2007 plans emerged for an ambitious common clean energy policy.

There is certainly no shortage of noble intentions from the EU and recognition of the environmental angle is abundant in its October 2006 China policy document. The main points are: the “sharing of regulatory expertise”; “improving transparency and the enforcement of environmental legislation”; and working under both a bilateral and international framework on compliance with the Climate Change Convention and Kyoto Protocol.

But in order to have a real impact, Europe needs to go beyond just this and instigate real change. Undoubtedly there are social obstacles to the spreading of ideas in the PRC. But the ‘Greening of China’ is not a debate about ‘Asian values’ versus ‘Western values’ as such, since it is clearly in China’s own interests to clean up its act. China’s EU policy paper states that it welcomes development aid and cooperation in environmental protection, but how much influence over not only environmental practices but Chinese attitudes can Europe really have?

Arthur Mol describes three elements in the institutionalisation of environmental norms in Europe: political modernisation, economic agents and civil society. If China is to follow a theoretically analogous path in the institutionalisation of green ideology, it is to these three factors that we can look.

Speaking Softly – The Political Level

Part of the problem in China is institutional. The route to the top for local-level officials is mainly through meeting economic goals rather than adhering to rules imposed by invisible Mandarins in far-away Beijing. It stands to reason that more often than not, in the breakneck quest for economic growth environmental protection falls by the wayside.

Furthermore, the very structure of the PRC’s political institutions is not conducive to environmental protection. The Ministries of Water, Construction, Agriculture and SEPA all have parts to play in water management issues, for example, but each has self-interests. Each department is something of a ‘fiefdom’ in itself, a situation created by Deng Xiaoping as part of his reform agenda, and therefore cross-coordination and cooperation on water management does not necessarily follow. These ministries are not just regulatory but income-generating too, and therefore also suffer from the ‘goal-orientated’ mentality mentioned above. There can even be conflicts of interest.

But help is at hand. Comprising political, trade and cooperation units, according to the Project Manager of the Environmental Sector at the EU-China Delegation in Beijing, Richard Hardiman, the EU “operates at all levels, effectively partnering the PRC government”. It conducts workshops, dialogues, exchanges and training, “always looking from a policy perspective”. It initiates pilot activities and suggests possible policy reforms at a central level via direct links with central government.

Less obviously, the CCP finds guidance from the institutional experience of the EU. Keeping with the water management example, Hardiman notes that the Danube and its tributaries flow through ten of the EU’s member states. The problems of coordinating policy among all of these interested parties is not dissimilar to the problems of coordinating Chinese government departments, but nevertheless the EU has created water framework directives and targets agreed by all twenty-seven member states. “We can do it in Europe,” says Hardiman, “the objective is to introduce it in China”.

As well as promoting institutional solutions, the EU also seems to be putting some money where its mouth is. It is a large financial donor, and unlike the IMF and World Bank it offers grants rather than conditional loans. Several programmes under the EU-China delegation’s jurisdiction are ongoing at present, such as: the Natural Forest Management Project (2003-2008 – €16.9m grant); the EU – China Biodiversity Programme (2005-2010 – €30m); and the River Basin Management Programme (2006-2011 – €25m).

There is evidence that these close contacts between the EU and the PRC do pay dividends. The EU cites some examples of short term successes, such as China’s adoption of European vehicle emissions standards: China has already adopted standard level 2, claims Hardiman, and is aiming for level 4 by the Beijing Olympics in 2008.

“We have no doubt that as a result of close contact,” he continues, “they are influenced by the models we show them. But of the various models presented, it is up to the Government of China to decide how to adapt them to the Chinese system.” While Beijing tends to reject European ideas in the beginning, he says, after a couple of years they are often “digested” and the CCP “takes ownership” of them, passing them off as its own initiatives. Though this may be slightly frustrating for Hardiman and his colleagues, when it comes to environmental issues, it doesn’t matter if the cat is black or white, so long as it catches mice.

Energy, Emissions and the Kyoto Protocol

Greenhouse emissions from Asia as a whole are set to treble over the next twenty-five years and with the US refusing to sign up to Kyoto, the EU is challenged with leading the continent out of this growing malaise. But while one of the biggest offenders, China, may be willing to cooperate with bodies to which it itself belongs, such as the UN and WTO, and happy to accept conditional loans from institutions such as the World Bank, an actor such as the EU making unwanted recommendations is likely to be seen as an intruder.

However, the EU’s influence over the running of the Kyoto Protocol’s international carbon trading regime is key to solving the global warming problem. For example, the value of Certified Emission Reductions (CERs) depends upon the EU Emission Trading Scheme (EU-ETS). Also critical is the Clean Development Mechanism (CDM). This scheme is designed to allow industrialised economies to meet some of their own targets by investment in emission-reducing projects in developing countries. According to the World Bank, the idea that the CDM was a ‘win-win’ proposition and that carbon markets would expand in the future, coupled with the EU’s plan to implement a community-wide emission trading system from 2005, provided sufficient foundation for China to join in with it. And the PRC was expected to be the largest CDM credit supplier (55% of all CERs).

But, while carbon trading does offer Europe a way of reducing its large trade deficit with China (€47bn in 2002) it neither an answer to reducing pollution, nor does it represent a change in Chinese views. It remains a complex and ultimately flawed process.

Above and beyond the occasional meeting with SEPA officials, Europe also makes its presence felt more directly via the EU-China Delegation’s projects. The total budget of the EU-China Energy Environment Programme is €42.9 million, of which the European Commission contributes €20 million. The intent is “to promote sustainable energy use by securing supply at improved economic, social and environmental conditions, thus contributing to improved environmental quality and health conditions in China.” It aims to influence policy by: supporting dialogue between the European Commission and the Chinese Government; “implementing actions within the components on Energy Efficiency, Renewable Energy and Natural Gas”; and by financing studies on emerging issues in the energy sector.

China’s smoking dragon, the volatile combination of excessive energy consumption and greenhouse gas production, is undoubtedly one of the greatest problems the world faces in the foreseeable future. Via emissions trading, funding and political dialogue, the EU aims to help tame it – though any success it has will not be immediately visible in the short to medium term.

Firm Standards – Market Dynamics and Regulating Industry

Beyond the political level, European influence is most obvious in its economic activity. This is something of a double-edged sword. For example, European companies such as BASF, BP and Royal Dutch Shell are building huge ethylene plants in China, and 40% of the cars in China are European brands, for example via the German operation Shanghai-Volkswagen. Thus Europe has a moral obligation that European-owned or subcontracted factories and their products do no contribute further to China’s environmental woes.

But European-based corporations with an international presence tend to impose internal policies on environmental standards across the board, including their operations in China. In Europe, such companies are not only pressured to meet with regulations both by the EU and lobby groups, but more importantly by their own customers who may take their business to more ‘environmentally-aware’ rivals. Thus European environmental standards spread to overseas operations, joint ventures and subcontractors in China alike, hopefully bringing standards up to a ‘highest common denominator’.

International companies can also make a direct impact on safeguarding China’s environment. For example, Onyx, owned by French utility Veolia, is active in helping solve Guangzhou’s waste management issues. In 2004, the company dealt with 7,000 tonnes of rubbish per day. Promoted by central government as a role model of technology, the landfill site in Taihe, Guangdong province, is lined with hi-tech German fabrics to prevent toxins from leaching into the soil and groundwater supply. Onyx also plans a methane plant to recycle gases produced from the waste into electricity.

Opportunities abound for European firms to bring in their expertise and technology, not only for waste management but pollution control, clean energy, environmental monitoring and consulting (via joint ventures). There has even been a trend towards foreign PR companies helping to build awareness of environmental issues. But European firms do encounter problems with issues such as intellectual property rights and import duties, which dissuade many from entering China’s environmental protection market.

When it comes to Chinese exports to the EU, the pressures of meeting European trade standards have a major diffusing effect in themselves. EU legislation on the Restriction of Hazardous Substances (RoHS) that came into force in July 2006 affects Chinese manufacturers as much as European ones since, quite simply, products that do not make the grade don’t get past Europe’s borders. Anything containing more than the allowed amounts of lead, cadmium and mercury is impounded. Similar guidelines include the Waste Electrical and Electronic Equipment (WEEE) directive and the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) directive. The Chinese Ministry of Information Industry has no choice but to impose the same regulations upon Chinese component suppliers, lest they find themselves blocked from the European market.

Arguably, it is globalisation that created China’s unprecedented industrialisation and all its attendant environmental problems. But, ironically, globalisation is also part of the solution. Taking all of the above factors into account, Europe’s most direct weapon in taming the smoking dragon is via the convergence of commercial environmental standards that globalisation brings.

Crouching Tigers? – The Influence of NGOs

It is worth remembering that without the inception of the environmental movement by NGOs, it is unlikely that bodies such as the EU or CCP would even have the policies described above.

According to the All China Environmental Federation (zhonghua huanbao lianhehui), in April 2006 there were 2,768 known environmental organisations in China. The bulk of them were government-initiated groups or student clubs, leaving just 9.8% as civil-initiated or international – and thus independent – NGOs, rather than government-organised ‘GONGOs’. But despite its fears of losing its political monopoly, the CCP acknowledges a need to collaborate with ‘healthy’ social forces such as NGOs that are not a direct challenge to the state. SEPA Deputy Director Zhu Guangyao has even called directly for more NGO assistance, though he also admits that "local environmental NGOs do not dare criticise local governments for their unscientific decisions".

Yet the legal status of NGOs in China remains awkward. Each NGO needs a sponsoring institution to be responsible for its activities, and few Chinese bodies will dare fulfil this role. Though many more operate ‘under the radar’, registration is required by the Chinese Ministry of Civil Affairs. Furthermore, due to the very nature of NGOs as neutral entities, they need a ‘critical voice’. This is not easy in a PRC where state censorship of the media is commonplace. But if China is to solve its dire environmental problems, then it will need input from NGOs as much as from more accommodating bodies such as the EU.

And activists and environmentalists have scored the occasional success, for example the halting of a construction project at the Old Summer Palace (yuanmingyuan) in 2005 and the suspension of the Nu River dam project in 2004. On the other hand, they did not have much effect in preventing the enormously destructive Three Gorges Dam project, which is currently still full steam ahead. Activists also have to tread with extreme caution: environmental NGOs decided to avoid engaging the government on the Songhua river project in November 2005 for fear of a backlash against them.

Despite their low profile, environmental NGOs do seem to be gaining some ‘civilising power’. As well as just voicing their concerns for nature, they help introduce new issues into the discourse. For example, NGOs raised the subject of villagers potentially displaced by the Nu River Dam, arguing that the project would have exacerbated rather than allayed poverty and underdevelopment.

Thus, perhaps due to – rather than despite – their remit, environmental NGOs in China are making small inroads into improving human rights and democracy where other organisations fail. Reminding EU officials of their “moral duty” to spread their values, Friends of the Earth Europe says: “NGOs trying to raise politically sensitive subjects such as human rights, labour or religion remain few and risk abrupt closure. But NGOs operating in areas of lesser political sensitivity like environmental education… can usually carry out their activities with relatively few restrictions and little interference.”

If Brussels is serious about its ambition of spreading good governance and democracy to Beijing’s halls of power, then it could do worse than to pay more attention to these grassroots organisations. Peter Ho suggests that, due to their highly localised nature, they pose little threat to the central government or the CCP, and thus do not carry the stigma of threatening Chinese sovereignty (as might a larger organisation such as the Falun Gong). Indeed, if anything Beijing may even tacitly approve of their actions as a means of beating ‘local protectionism’.

Aside from lending moral support, European bodies can assist the development of NGOs in China via funding. Royal Dutch Shell, for example, sponsors two of China’s best known, ‘Friends of Nature’ and ‘Global Village’. One suspects, however, that this is in the name of corporate PR more than a genuine attempt to bring European environmental norms to China.

Brussels itself is also throwing its money around. ‘Global Village’ also receives money from the EU-China Environmental Management Co-operation Programme (EMCP), one of two major European projects that concluded in 2005 (the other being the EU-China Liaoning Integrated Environmental Programme ). According to its own literature, the EMCP aimed to integrate environmental considerations into “sector policies and investment decisions”, and was funded by a €13million grant (plus €6million from the PRC’s funds for the UN Agenda 21 sustainable development programme). Europe’s influence over civil society thus makes itself felt via the cashbox as well through dialogue.

Conclusion – An All-Or-Nothing Situation?

The institutionalisation of environmental norms in China is half-complete at best. For every story of hope there seems to be another setback. Success: it has been reported that a group of Zhejiang fish farmers have successfully brought the provincial authorities to book for allowing Wenzhou factories to pollute their ponds. Failure: as recently as December 2006, Chen Tao, a protestor against the Pubugou Dam project in Sichuan was executed (though arguably the civil disobedience involved was as much about population displacement as environmental issues).

This aside, in economic terms the onus for repairing the damage to China’s environment may have to be shared between China and its biggest trading partner. Greener practices cost more money, and if rich consumers in the EU want to see China’s environment improve, they have to be prepared to accept higher prices. The EU must also live up to its responsibilities to share scientific and technical knowledge with China as a less-developed country, and continue to provide and subsidise the necessary dialogue, expertise and technology.

On the other hand, one of the normative matters under dispute might be who shoulders the heaviest burden for environmental protection – the producer (the PRC) or the consumer (the EU)? While recognising its right to develop, China should not expect Europe and the West to absorb all the costs: the principle of ‘the polluter pays’ still holds. It is impossible to separate this from politics, however: in an extreme realist analysis, China could even wield its polluting potential as a weapon to attract finance in return for good behaviour.

Ultimately, political issues aside, there has to be some give and take. More or less dependent on Chinese exports, Europe must invest in ways of solving China’s impending environmental crisis, but it should expect China to play its part too. And the stakes are high. Though China itself will be the first victim of its own excesses, not only the fragile global environment but the interdependent globalised economy means the rest of us will soon follow.