European Economic and Social Committee
Brussels, 28 April 2011
9th China-EU Round TableXi'an, 9-13 May 2011
Sustainable Development and Green Economy in China
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Rapporteur: Zhu Tan, Member, CESC; Professor, Nankai University
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1. Background of Green Economy
Green economy, a kind of balanced economic pattern, aims to preserve the living environment of human being and reasonably utilize energy and resources. It’s the manifestation of “green growth” and “green development” in all relevant economic departments. It’s a significant economic form to coordinate the problems between environment and development.
The “Green Economy Initiative” (GEI), launched by the United Nations Environment Programme (UNEP) in Oct. 2008, is aiming to make global leaders and policy makers in relevant departments including economy, finance, commerce and environment to be aware of the environmental investment’s contributions to economic growth, employment increase and poverty alleviation , to implant this awareness into concerning policies for economic reform under the background of global financial crisis and economic recession, to promote global industrial revolution and green national economy through green investment to create new green job opportunities so as to recover and upgrade the world economy. The essence of GEI is that greenization is the driven force for economy growth instead of a burdenGEI has won positive responses from international community, and green economy has become a new trend for global environment and development.
2. The Necessity of Green Economy in China
(1) To develop green economy is necessary for economic transformation in China
China has entered an important strategic transformation stage from the perspective of relations between environment and development. The basic meaning of green economy is in accordance with the basic situation and strategic goal of environment and development in China, and the general strategy —“to ensure growth, to expand internal demands and to adjust structure” made to deal with financial crisis in China. It’s of significant policy enlightenment and reference value for key national strategic goals, such as thoroughly implementing scientific outlook on development and constructing ecology civilization. Green economic development is the basic assurance for the implementation of strategic goals of environment and development in China and the necessary requirements for economic transformation in China.
(2) To develop green economy is an important way to promote the construction of “Resource-conserving and Environment-friendly society”
The core of “Resource-conserving and Environment-friendly society” construction is to promote economic transformation, i.e. shift from “high input, high-energy-consumption, high-pollution, low output” mode in the past to “low input, low-energy-consumption, low-pollution, high output” mode. In order to develop green economy, firstly, it’s important to readjust the economic structure, reduce the share of manufacturing industry that depends on heavy and chemical industry, and increase the share of service industry that mainly in information technology and financial services. Secondly, it’s necessary to readjust industrial structure, not only to eliminate out-of-date productivity, to realize clean production in traditional manufacturing industry, to greenize the traditional industry, but also to develop new industry of new energy and energy-conservation and environmental protection. Thirdly, strenuous exploration of green tech innovation provides technical support for achieving the readjustment of economic, industrial and product structure and clean production. Therefore, green economic development is an important means to construct the “Resource-conserving and Environment-friendly society”.
(3) To develop green economy is a strategic option to optimize economic development through environmental protection
Promoting the “historical change” of environmental protection is the key to develop green economy. The core content of the “historical change” is: environmental protection improving economic development, implementing environmental protection in every link of production, circulation, distribution and consumption; making the requirements of environmental protection embodied in all fields like industry, agriculture, transportation, construction and service; continuously innovating the mode of production, promoting clean production, developing recycling economy and reducing environmental pollution from source and the whole process. From the perspective of the content and type of action of green economy, it has to develop cleaner and new industrial department and economic growth point and also cleaner technologies and products. At the same time, it’s necessary for economic policies and economic development plans to incorporate the consciousness of green economic development and to apply it throughout the whole process of economic reproductions like production, consumption, commerce and investment. By developing green economy, it can help to solve environmental problems objectively and from source. It’s safe to say that developing green economy is an inevitable choice to optimize economic development through environmental protection and realize harmonious development of environment and economy.
3. Driving factors for green economic development in China
(1) To develop green economy is China's political will and strategic direction
In fact, before the financial crisis in 2008, there is no direct formulation about green economy, but only policies on developing recycling economy and low carbon economy, in China. Although there isn’t the “green economy” formulation, the Chinese Government has realized the pressure on resources and environment, the unsustainability made by the extensive pattern of economic growth several years ago. Therefore, the Chinese Government puts forward a humanist, all-round, coordinated and sustainable developing concept, named scientific outlook on development, and establishes the resource-conserving and environment-friendly social developing targets. Since 2009, the Chinese government has begun to focus on the green economy and put it at a premium on the agenda. China's state leaders have stressed in many occasions that the green economic development has become an important trend in the world, which is an important opportunity and major challenge for China. In 2009, the Central Economic Working Conference proposed clearly that the keynote of economic work in 2010 is to accelerate the transformation of development mode and adjust economic structure while keeping relatively fast and steady economic development. In the "12th Five-Year Plan", it is more highlighted to fasten the pace to establish a resource-conserving, environment-friendly society, and to improve the level of ecological civilization. At present, the Chinese Government is stepping up green economic development to promote the adjustment of economic structure. As we can see, the Chinese Government has put forward these new thinking and new strategy in recent years to construct development mode, promote green economic development strategic plan, which embodies the political will and strategic direction on green economic development of the Chinese Government.
(2) There are social practice foundations for green economic development in China
Although the thought of green economy was put forward after the financial crisis in 2008 jointly by the international society, China had begun her way of green development since the1970s. In August 1973, China's first national environmental protection meeting raised a guideline containing sustainable thoughts suchas overall planning, rational layout, protecting the environment, benefiting the people, etc.
After the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China (CPC), the environmental protection work started to be listed on the national agenda. In 1979, the Government issued the Environmental Protection Law of the People's Republic of China (for trial implementation) hereinafter referred to as “the Environmental Protection Law (trial)”, and in subsequent enacted a series of environmental protection laws and regulations, such as the Marine Environmental Protection Law of the People's Republic of China, the Water Pollution Prevention and Control Law of the People's Republic of China, the Air Pollution Prevention and Control Law of the People's Republic of China, the Regulations on Offshore Dumping Management, the Regulations on Nuclear Materials Management, and etc. These laws and regulations played an important role in the development of environmental protection work and construction of sustainable development in the future. In 1989, on the basis of the conclusion after 10 years of trial and practice experience, the Environmental Protection Law of the People's Republic of China, revised from the Environmental Protection Law (trial)”, was passed and put into effect on December 26, 1989. During this period of time (1979 ~ 1992), China had defined environmental protection as a basic state policy , put forward clear major policies and guiding principles of environmental protection, set up an independent environmental protection administrative organization, formed the environmental management policy and system with Chinese characteristics, such as the eight policies of China's environmental management, and speeded up the legislation and enforcement work of environmental protection.
In 1992, the United Nations Environment and Development Meeting made the sustainable development as common development strategy for the future, which had won wide agreement from participant countries. In August, China put forward ten countermeasures on environment and development, explicitly pointed out that sustainable development is the inevitably choice in contemporary and future. In 1994, the Chinese Government approved and issued the China’s Agenda 21, and came up with total strategy, countermeasures and action plans for China's sustainable development. In this period, China began to promote cleaner production. In 1997, China has launched a cleaner production training, cleaner production demonstration and audit activities, organizational building on cleaner production. After 1997, the development of China’s cleaner production turned into policy mechanism establishment stage. In 2002, China promulgated the Cleaner Production Promotion Law. Henceforth, cleaner production entered into a further development stage. In this stage, cleaner production was mostly applied to mainstream activity on industry and environmental protection, while management policies and tools on cleaner production have been established and implemented. Cleaner production gradually developed towards the circular economy.
Since 2004, the view that economic development should be based on circular economy was confirmed, along with the establishment of scientific outlook on development. In March 2004, President Hu Jintao, during his speech at the central forum on population, resources and environment, emphasized that establishing and implementing scientific outlook on development require us to develop a circular economy actively and achieve virtuous circle both in natural ecosystems and social systems. In 2006, National People's Congress approved the "11th Five-Year Plan for Economic and Social Development" where there is a special chapter for circular economy development to set up the contents and policies for circular economy. In order to promote the development of circular economy in China, two batches (about 178) of experimental units were selected from enterprises, industrial parks, and key areas at both municipal and provincial levels, respectively in 2005 and 2007, . Driven by those experimental units, significant accomplishments were achieved in China’s circular economy, promoting energy saving and emission reduction, increasing employment opportunities, and facilitating the generation of new technology. In order to accelerate the development of circular economy by providing guarantee assurance from legal system, the Circular Economy Promotion Law of the People's Republic of China was passed by the Eleventh National People's Congress on August 29, 2008, and became effective on January 1, 2009.
In recent years, a number of specific actions, such as energy conservation and emission reduction, the development of green transport and sustainable building, the promotion of low-carbon economy, the enhancement on environmental protection investment, and the establishment of environmental economic policy system and so on, have been implemented for green economic development. These actions and practice, containing the basic content of the green economy with consistent and unified objectives, have made positive progress and results. During the five years of the "11th Five-Year Plan", the national total energy consumption per unit of GDP fell 19.1%, COD emissions dropped 12.45%, and total emissions sulfur dioxide decreased 14.29%. Implementation of these actions and practice with green economic thinking, to a certain extent, corrected and repaired China’s traditional economic growth pattern, eased the pressure on resources and the environment during the economic prosperity in China and provided valuable experiences and infrastructure for green economic development in the future.
4. The obstacles and challenges of green economic development in China
(1) The inertia of "high investment, high growth" economic growth pattern
China is in the critical period of industrialization, urbanization and modernization. Economic growth will remain the goal and task for future development in a long time to come, and high investment and high growth, the main model to promote development. The transformation of economic growth mode to one that relies on capital efficiency and technological advancement still needs some time. Therefore, under such circumstances that the industrial structure adjustment and economic growth transformation has not been completed, it will need more time for green economic development and green transition, due to the inertia of the traditional extensive mode of growth.
(2) The immatureness of social systems and conditions
Currently, some government departments still have no clear and complete awareness and thoughts of the green economy, but only conceptual understanding. They only execute the instruction of the central authorities concerning restructuring and transformation of economic development passively , without active and in-depth thoughts on how to develop the green economy, and what social, economic and environmental policies adjustments are needed in order to achieve green transformation. In addition, from the environmental governance structure perspective, the mutual interaction of the government, enterprises and the public in environmental protection have not established. The scope and extent of public participation in environmental protection and economic integrated decision-making is very limited. The channels and systems for public participation in environmental protection have not been completely established.
(3) Lack of green investment and green technology innovation
China promulgated the 4 trillion stimulus plan in response to global financial crisis, in which 5% is direct investment on environmental protection. If coupled with funding support for independent innovation, and restructuring and adaptation to climate change, China's green investment in the economic stimulus plan will reach 14.5%. However, in the area of industrial investment, whether in incubation of strategic industries, such as information, new energy, new materials, environmental protection industry, or in "green renovation" of traditional industries, there are no clear national plans or arrangements. Regarding technological innovation, according to surveys, most technologies were introduced from abroad and there is lack of independent research and innovation, especially for information, new energy, and new materials industries. Hence, there is lack of core technological innovation and long-term competitiveness.