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Stimulus projects must meet green standards
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China's 4 trillion yuan stimulus package is a much-needed shot of vitality for a tired world economy. Commentators and markets are busy dissecting the package to see what's there, what's new, what's not, and what effect it will have on the current economic crisis. I want to add a note of cautious optimism, but also a note of worry and some suggestions.

Over the past 30 years of opening up and reform, China has moved from believing that pollution is an artifact of only capitalist systems to recognizing that environmental protection is one of the key services that government provides.

Throughout most of this period, the strategy has been "develop first, environment later". Unquestionably, the strategy has delivered some impressive growth rates, but also some considerable environmental damage.

Humans now have the capacity to radically transform the planet. The United Nations Environment Programme last week warned of a 3 km thick "atmospheric brown cloud" over an area stretching from the Middle East to the Pacific Ocean. Previously, we have seen a gigantic hole open in the stratospheric ozone layer caused by man-made chemicals. We are now in the process of conducting an even larger experiment on the planet's climate system as we add increasing amounts of greenhouse gases to the atmosphere.

In a meeting with the international members of the China Council for International Cooperation on Environmental and Development in Mid-November, Premier Wen Jiabao said that the threat of a global recession should not shift our focus from our long-run goals of energy conservation and emissions reduction.

I completely agree that we should keep our eyes on the horizon and not on our feet. First and foremost, that means ensuring that the stimulus package does no harm to the environment. This will be a challenge. Rushing again now to pump up the GDP numbers in the short term without adequate consideration of the environmental footprint of those investments would only compound an already serious situation.

Of course, there is no time to pause and conduct a lengthy study on how to guide investments under the stimulus package. However, since the stimulus will unfold over the next two years, there is time to give thought to harmonious investment. Fortunately, China already has requirements for sustainable government procurement. These could be readily augmented by a scan of whether investments will lead to increased or decreased greenhouse gas emissions.

For sure, we know that increases are the wrong direction for the atmosphere and the climate.

Investments which promise greenhouse gas reductions should be both prioritized and fast-tracked.

During our discussion with Premier Wen Jiabao, he noted that the current financial crisis represents a "golden opportunity for economic development and environmental protection". He also pointed out that it is an opportunity to redress the imbalances between urban and rural areas. From this past week's announcement, we see that 34 percent of the first 100 billion yuan pledged for this quarter will be spent on rural infrastructure. From the same conversation, it was clear that waste water treatment in rural areas would be one priority focus for investment consistent with the State Council's target of increasing such treatment by 10 percent by 2010.

In addition, I think it is time to think about low-tech investments that could serve a lot of people at the same time. What are some examples? One idea is to give every rural household two 60-watt compact fluorescent light bulbs. Changing to this high-efficiency lighting would result in CO2 savings over incandescent bulbs equal to the emissions from 4 gigawatts of coal-fired electric power. This is 6 percent of the nation's power generation increase last year.

Add an additional 30 million solar water heaters for rural households and the nation would save the greenhouse gas emissions equivalent of another 7 gigawatts. Together with the light bulbs, more than 16 percent of last year's emission increase from power generation would be cancelled out. At the same time, these investments would mean plenty of jobs.

Another idea is household biogas digesters which transform agricultural wastes into clean energy. Each household biogas digester can avoid more than a ton of carbon dioxide equivalent emissions for each year of its operation. With more than 20 million household digesters currently in operation, this is a saving of more than 20 million tons of carbon dioxide equivalent per year.

To get a sense of these numbers, this is roughly equivalent to the annual emissions from more than 5.5 million new cars or 4 modern coal-fired electric generating stations. Last year, China added about 8.3 million cars on the road. The annual CO2 emissions from these cars would be more than negated by reductions resulting from tripling the number of installed digesters.

Everyone knows that China's transport and power sectors have been growing by leaps and bounds. The growth in these sectors is also the primary source of greenhouse gas emissions growth that keeps climate negotiators awake most of the night. These negotiators started their annual meeting yesterday in Poznan, Poland to assess options and opportunities. China has done a lot to address the problem and rightly looks to others to step up their actions. But these days, people around the world are looking to China for help - for both the global economy and the global environment.

Wouldn't it be great if China's growth miracle could be made greener through the stimulus package? Couldn't we make that growth more sustainable by matching it with public investments in the countryside that would also help to stimulate the economy? Couldn't this be a form of eco-compensation where the emissions consequences of the lifestyles of relatively wealthy urbanites would be compensated by investments in the countryside that would improve people's lives, create a more resilient agriculture, and reduce emissions?

Now that would be something to be thankful for.

The author is chief economist of US-based Environmental Defense Fund.

(China Daily December 2, 2008)

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