McKinsey Quarterly

China’s environmental future: The power of the people

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China faces a deep and enduring environmental crisis. Less than 1 percent of the country’s 500 largest cities meet World Health Organization clean-air criteria. More than one-quarter of China’s land is either desert or facing desertification. At least ten provinces are below the World Bank’s water poverty level, and up to 40 percent of China’s rivers are reported to be seriously polluted (20 percent are so polluted that the water is too toxic for human contact). In conjunction with ongoing crises—Beijing being enveloped in smog; more than 16,000 dead, diseased pigs floating down Shanghai’s Huangpu River; reports of toxic cadmium-laced rice being sold in Guangdong Province—it’s no wonder there are serious questions about the effectiveness of the Chinese government’s efforts to balance economic growth and environmental protection.

China’s leaders say they recognize the challenge at hand. In a 2011 editorial, Environment Minister Zhou Shengxian said the “depletion, deterioration, and exhaustion of resources and the worsening ecological environment have become bottlenecks and grave impediments to the nation’s economic and social development.” And former Premier Wen Jiabao acknowledged in March 2012 that the government had failed to meet most of the environmental targets in China’s 11th five-year plan, including reductions in energy intensity, nitrogen and sulfur dioxide, and water-pollution measures. Leaders are well aware that the state of the environment is a leading cause of social unrest, as well as one of the most important contributors to a range of public-health issues ranging from respiratory disease to cancer and developmental delays and deficiencies. And it hurts the economy: a study by the Chinese Academy for Environmental Planning (CAEP) estimated the cost of pollution spills, deteriorating soil, vanishing wetlands, and other environmental issues at 3.9 percent of Chinese GDP in 2008.

Yet Beijing’s response to these challenges is far from sufficient. Investment in environmental protection continues to hover around 1.3 percent of GDP, but according to a 2007 CAEP report, roughly half of this money is lost through local corruption or the allocation of environmental funds to nonenvironment-related projects.1 And despite official policy, one recent academic study found that local officials are rewarded more for investing in infrastructure than for making environmental protection an explicit priority. Year after year, the government sets impressive targets for pollution reduction, launches massive campaigns to divert or clean up rivers and reforest degraded land, invests in renewable energy and technologies, and undertakes experiments with eco-cities. And year after year, there is the same poor outcome: the environment deteriorates.

Fortunately, the Chinese people are pushing the government to do more. They have recognized that these environmental problems are systemic and, through their activism, are laying the foundation to transform China’s environmental protection. As a first step, the Chinese people appear to recognize that good environmental policy depends upon open and accurate environmental data. Nongovernmental organizations such as the Institute for Public and Environmental Affairs are pressing Chinese cities to adhere to regulations requiring them to publish pollution statistics. One Chinese lawyer is pushing for the Ministry of Environmental Protection to release the results of its soil pollution survey, which it has deemed a “state secret.” The media is producing eye-opening, in-depth investigative reports on environmental problems such as water pollution. And in 2012, Beijing and other cities were forced to reveal levels of hazardous particulate material air pollution after the United States embassy and consulates tweeted data and ignited an Internet firestorm among the Chinese public, which demanded that the government provide the statistics.

At the same time, grassroots pressure is mounting for the environment to serve as a general model for the rule of law and official accountability. Already, Chinese environmental lawyers have established around 100 specialized environmental courts. Their next step is to make it easier for environmental cases to be brought by more than a limited number of officially sanctioned organizations. And when Chinese officials fail to protect the environment, the Chinese people take to the Web and to the streets to hold them accountable. From July to October 2012, for example, large-scale protests broke out in three provinces—Sichuan, Jiangsu, and Zhejiang—when local officials approved factories and other projects the public believed would be harmful to their health. Through social media and microblogs, Chinese citizens gained access to information critical to effective demonstrations. And in each case, the local government halted its plans. While political participation through protest may not be ideal, Institute of Public and Environmental Affairs founder Ma Jun said the fear of public demonstrations is forcing some local governments to think twice about how they govern.

Of course, public activism alone won’t transform China’s environment—Beijing needs to step up. So what could indicate that the Chinese government is making real progress toward environmental protection? First, if Beijing invests more in financial and human capital: Chinese scientists say government investment in the environment should be at least 2.2 percent of GDP just to prevent further deterioration. Second, if the National People’s Congress develops environmental laws and regulations that are sufficiently detailed to ensure proper enforcement. Third, if government develops a system of political and economic incentives and disincentives (as they are discussing with regard to a new carbon tax) that encourage local officials and businesspeople to do the right thing. And fourth, if Beijing views nongovernmental organizations, the media, and the public as partners rather than adversaries, improving access to information and enlisting public participation.

If current trends hold, an additional 300 million Chinese will become urban residents by 2030, consuming as much as four times more energy and two and a half times more water per capita than rural Chinese. That makes it all the more critical that Chinese officials become more like the Chinese people: more informed, more engaged, and less patient. In this respect, China seems destined to evolve very much like every other country that has developed before it: with environmental progress driven from the bottom-up.

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