China is choking; thick smog has engulfed major cities on the country's eastern coast including Beijing since 11 January 2013 and it looks unlikely to clear up soon. The US Embassy in Beijing operates an Air Quality Index (AQI) based on the US Environmental Protection Agency (EPA) standards in major Chinese cities. On 12 January, Beijing's reading on the AQI was above 700 for the particle PM 2.5 during the major part of the day. PM 2.5 is the smallest but most dangerous particle for respiratory health. The city authorities have issued an advisory for people to stay indoors as a precaution. Beijing's smog, while recurrent, has been at its worst this winter and is an example of what is wrong with China's political economy. China's unending pursuit of the mythical comprehensive national power is fraught with many inherent contradictions. While environmental challenges like the unprecedented smog are the most dramatic as well as serious manifestations of these contradictions, there are other issues such as a floating population, suppressed wages and land monopoly that are equally pertinent but less visible to an outsider. While it is difficult to narrow down the causes of China's environmental challenges, a few significant ones can be identified.
Unequal Natural Distribution
China has always faced major resources challenges. Its national water distribution pattern denotes that. Its densely populated and industrialized provinces are water stressed. To solve this problem, China has undertaken a massive south-north water transfer scheme that is costly, technologically challenging and also involves a massive relocation of people. However, this is underway despite these challenges.
China's dependence on coal as the primary source of energy will continue for a substantial period of time. Majority of the coal found in China is inefficient and much of the coal fired power plants run on dated technologies that let out a major share of pollution into atmosphere. Transition to cleaner methods is neither easy nor cost efficient; increasing the price of coal, aimed at improving the cost efficiency of production, without increasing power tariffs makes the operations of these plants unviable. On the other hand, increasing tariff will have an adverse impact on inflation, which in turn will directly impact on the day to day lives of ordinary citizens.
While renewable energy's share in China's overall energy basket is growing, it remains relatively insignificant in the overall scenario. It is observed that the energy efficiency and peak capacity estimates of China's hydro-power projects are overestimated. And despite heavy investments, China's big ticket hydro-power plants like the famous Three Gorges Project continue to under-perform. In addition, other costs like landslides, sedimentation and deforestation caused by reservoirs continue to pose questions over their long term viability. China's 12th Five Year Plan envisions doubling the share of renewable energy in the overall energy basket. However, where it is going to come from and who would bear its costs are not clear as yet.
Environmental Laws versus Economic Incentives
While China has created an impressive structure of environmental laws, there is little incentive to follow them. There is also a remarkable protocol on the environmental impact assessment of major infrastructure projects. However, such an assessment is not carried out independently and the project stakeholders, local officials and business interests that benefit from the project tend to be associated with these assessments.
China's environmental bureaucracy is limited and is mostly dependent on the local politburo for funding. For its part, the politburo is tasked with local economic development and officials depend on growth numbers for promotions. Thus, the environmental bureaucracy can do little that harms the career interests of party officials. Many a times, surprise checks by environmental officials are leaked by the local official to the industrial production units and a momentary clean up act is undertaken before the visit. Thus, it is difficult to find evidence and mete out punishment to polluting units. At the same time, fines are meagre compared to profits. As a result, polluting industries get away by paying fines and adopting a business as usual approach.
Environmental mass incidents, despite their increasing numbers, are also limited in their overall impact; such mass incidents only question the situating of the polluting plants in the vicinity of the affected neighbourhoods and at most the corrupt confluence of local officials and business for profit without largely questioning the political economy of such developments. Such localized protests do not hurt the national obsession with economic targets. Only during the current Beijing smog have some commentators begun to publicly question the obsession with growth.
Pollution of Poverty and Pollution of the riches
While China hides behind its developing country status, a significant percentage of its pollution is the outcome of its rich, mighty and growing consumer middle and upper middle class. Once known for its bicycle culture, China is the largest producer of automobiles in the world today. In fact, the automobile industry is the flagship of China's contemporary growth story and it is driven to a large extent by domestic demand. At the same time, it puts pressure on oil for consumption, on land for roads and parking spaces and on the efficiency of the public transport system. China's infamous ‘9 day, 100 km' traffic jam of 2010 was largely an outcome of the country's growing riches and shrinking spaces. At the same time, other items of consumption such as washing machines, dishwashers, and the energy demands of the growing number of skyscrapers have pushed up energy demand at an average of eight percent per year over the last decade and this is unlikely to slow down.
In September 2011, citizens in Zhejiang's Haining city protested against a polluting solar panel plant which was discharging untreated water into the river and also polluting the city's air through uncontrolled smoke emissions. 3 A polluting solar panel plant is the epitome of China's uncertain and directionless environmental protection efforts. China's hosting of the Summer Olympics in Beijing in 2008 had brought into focus the major woes faced by the country's ecological environment. The national and city governments had undertaken extensive clean-up efforts in the period before the event. However, all of it has been undone by now and in fact the situation has only worsened. A deeper analysis makes it amply clear that China's ecological environment is a victim of its political economy and there are no easy solutions.