Changes and challenges: China's environmental management in transition

Environmental Development 3 (2012) 25–38

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Changes and challenges: China’s environmental management in transition Guizhen He a, Yonglong Lu a,n, Arthur P.J. Mol b, Theo Beckers a,c a

State Key Laboratory of Urban and Regional Ecology, Research Centre for Eco-Environmental Sciences, Chinese Academy of Sciences, Shuangqing Road 18, Haidian District, Beijing 100085, China b Environmental Policy Group, Wageningen University, Hollandseweg 1, 6706 KN, Wageningen, The Netherlands c Tilburg Sustainability Center, Tilburg University, The Netherlands

a r t i c l e in f o

a b s t r a c t

Article history: Received 24 February 2012 Accepted 14 May 2012

China’s 12th Five-Year Plan (2011–2015) announces a shift to a new development model and a new green governance approach. Can we indeed identify a specific Chinese transition mode in moving from a monolithic economic growth path to a sincere green development model? To understand China’s environmental management transition and address this question we assess whether and to what extent China has been shifting course in resource use and limiting environmental pollution. This review paper provides a comprehensive overview of the development of environmental management in China based on existing sources of information. Four major environmental challenges are identified for the future environmental management of the biggest emerging economy in the world. & 2012 Elsevier B.V. All rights reserved.

Keywords: Environmental management China Transition Environmental governance

1. Introduction China is undergoing economic, social, and environmental changes unprecedented for any nation at any time in world history. However, in this development model, economic growth has been prioritized over environmental protection for most of the last 60 years, meaning that China now has some of the most polluted skies and waterways in the world (Chen, 2011; Fu, 2008; Information Office of the State Council, 2006; World Bank, 1997; Yale University and Columbia University, 2011). Many scholars have noted that priorities are changing, especially since the 11th Five Year Plan (FYP)

n

Corresponding author. Tel.: þ86 10 62917903; fax: þ 86 10 62918177. E-mail address: [email protected] (Y. Lu).

2211-4645/$ - see front matter & 2012 Elsevier B.V. All rights reserved. http://dx.doi.org/10.1016/j.envdev.2012.05.005

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(2006–2010). In 2007, the government of China initiated the new strategy for a Xiaokang (well-off) society—a harmonious, stable and prosperous society, in an all-inclusive way. Resource conservation, environmental protection and addressing climate change are key elements of this strategy. Much of the 12th FYP consists of strengthening actions put forward in the 10th and 11th FYPs. However, the 12th FYP has made it particularly clear that China is trying to shift to a new development model and a new green governance approach. The Plan stresses a governance reform, including institutional changes that should be made to end the high concentration of power and lack of supervision over accountability, so often identified as a root cause of implementation failures in environmental management (China Daily, 2011). It is widely expected that the Plan will be transformed into better environmental performances.

2. China’s changing environmental performance China’s Millennium Development Goals (MDGs) Report (2010) analyzed the progress and challenges in natural resource use and environmental protection since 1992 (Ministry of Foreign Affairs of China, 2010). According to this report, the government had carried out many environmental and ecological projects such as returning farmland to forests and grasslands, improving the quality of lakes and wetlands, protecting water and top soil, forest protection, water and air pollution control, wildlife protection, creation of nature reserves, energy efficiency, and renewable resources development. This report concludes that the Chinese government has made great efforts in adjusting the industrial structure and transforming the economic growth mode. Its plan for economic stimulus has been applauded for developing renewable and sustainable energies (but it also brings new challenges, e.g. on the definition of sustainable energy), improving energy efficiency, enhancing environmental protection, and developing a circular and low-carbon economy.

Fig. 1. Water quality of seven rivers (Yangtze River, Yellow River, Pearl River, Songhua River, Huaihe River, Haihe River and Liaohe River) in China, 1991–2010. Source: MEP Report on the State of the Environment in China, 1991–2010. Note: According to Environmental Quality Standards for Surface Water (GB 3838-2002) in China, the function of surface water is classified into five categories as below. There are five grades of standard value to match the surface water functional area. Grade I stands for the best quality, while Grade V represents the worst.

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Fig. 2. Air quality of monitored cities in China, 1999–2010. Source: MEP Report on the State of the Environment in China, 1999–2010. Note: According to the Ambient Air Quality Standard (GB 3095-1996), the functional area of ambient air quality is divided into three groups. There are three grades of standard value to match the ambient air functional area.

Ammonia N discharge Smoke dust emission Industrial dust emission

COD discharge Sulfur dioxide emission Untreated industrial solid wastes 4000 3500 Ten thousand ton

3000 2500 2000 1500 1000

2010

2010

2009

2008

2007

2005

2006

2003

2004

2001

2002

2000

1999

1998

1997

1996

1995

1994

1993

1992

0

1991

500

Fig. 3. Annual discharge of main pollutants in China, 1991–2010. Source: China Environmental Yearbook Committee, 1992–2011.

Most of the natural resource and environmental indicators for China show that water quality is still worse than in the early 1990s, although air quality has been improved gradually over the last decade (see Figs. 1 and 2). Even though water (COD, nutrients) and air emissions (SO2, NOx, VOC) from point sources seem to be decreasing to some extent, this is not the case for most non-point sources and certainly not for greenhouse gas (GHG) emissions (Figs. 3 and 4). The last two decades witnessed an increase in energy and water supply (Fig. 4). In July 2010, China overtook the United States to become the world’s largest total energy consumer. Chinese carbon dioxide emissions have grown rapidly last decade largely due to energy-intensive industrial activities. According to unofficial GHG estimates from China, from 1994 to 2004, China’s annual average GHG growth rate

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Growth rate of energy production Growth rate of water supply Proportion of natural reserves in national land area

25

Growth rate of electricity production Growth rate of CO2 emission Forest coverage rate

Percentage(%)

20 15 10 5

2009

2010

2008

2006

2007

2005

2004

2002

2003

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

-5

1985

0

Year Fig. 4. Natural resources use and the ecological protection in China, 1985–2010. Sources: China Environmental Yearbook Committee, 1992–2011; National Bureau of Statistics, 1986–2011.

was around 4% (The Climate Change Group, 2007). In this period, the share of carbon dioxide in total GHG emissions increased from 76% to 83% (Xinhua, 2007). China’s carbon dioxide emissions rose 10.4% and accounted for 8.33 billion tonnes in 2010. The rate of forest coverage and proportion of natural reserves in national land area have been increasing (Fig. 4), but the protection of biodiversity still faces many challenges including insufficient public awareness, the pressure to extract resources, low capacity for restoration, and insufficient efforts in afforestation (Ministry of Foreign Affairs of China, 2010; Yale University and Columbia University, 2011). For longitudinal national comparisons, scientists are dependent on the official statistics in China. Case studies and urban and regional statistics sometimes show a different picture. According to the latest Report on the State of Environment in China 2010 (MEP, 2011), more than half of the China’s cities are affected by acid rain; about forty percent of the major rivers are so polluted that water can only be used for industrial purposes or landscaping. More than half of the groundwater in 182 cities is tested as ‘‘bad’’ or ‘‘extremely bad’’ in terms of quality. Only 3.6 percent of the 471 major cities monitored received top ratings for clean air. In 2010, China witnessed fourteen major heavy metal pollution incidents, including nine involving lead poisoning. Fast economic development in China is not only harming the quality of water, air and soil, but is also damaging more than twenty percent of the environmental protection zones, with coal mining being the main polluting source. According to statistics, about 32,967 environmental accidents occurred in China from 1991 to 2009 (China Environment Yearbook Editorial Committee, 1991–2010; He et al., 2011a), meaning that on average one incident every two or three days. More ‘Cancer Villages’ have been reported and have caused serious health issues (Kwok, 2009). Health mortality is found to be much higher in China than in the Western world, death rates from chronic respiratory disease and respiratory infections in children are 4 and 44 times higher in China respectively (http://web.worldbank.org). The acceleration of industrialization, urbanization and further economic growth still puts enormous pressure on natural resources in China, as is acknowledged by the Ministry of Environmental Protection (MEP). The pursuit of rapid growth led to severe pollution and excessive demand for resources, which could become obstacles to economic development and social stability (Wang, 2011). The Chinese Academy for Environmental Planning (CAEP) estimated that the total economic losses as a result of the ecological degradation and environmental pollution amount to 1275 billion yuan, 3.9% of China’s GDP in 2008, which is likely to increase in the future (CAEP, 2010). The latest estimates for the cost of water shortages are 1–3% of GDP in water scarce regions, and for the costs of indoor air pollution 1–2% of GDP in some areas. Though the total environmental

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Proportion of environmental investment in GDP 16

Annual growth rate of GDP

14 4

12 10

3

8 2

6 4

1

GDP growth (%)

Proportion of GDP (%)

5

2009

2010

2008

2007

2006

2005

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2003

2001

2002

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1998

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2 0

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Year Fig. 5. China’s growth rate of GDP and proportion of pollution control investment in GDP, 1990–2010. Source: China Environmental Yearbook Committee (1991–2011).

investment has been increasing in the last two decades, the proportion in GDP is still small and the investment in environmental pollution control is still slower than the growth rate of GDP (Fig. 5).

3. Development phases of environmental management in China Although consideration of environmental issues could be traced back 2,000 years, modern environmental management was put on the Chinese government agenda only after the Stockholm Conference on Human Environment in 1972. Over four decades, the management of the physical environment has evolved from a focus on eliminating existing pollution to preventing it all together. In the development of environmental management in China three phases can be distinguished (Lu and He, 2009). The first, from 1972 to 1991, focused on end-of-pipe pollution control. The second, from 1992 to 2001, aimed at pollution prevention. The third, from 2002 onwards, moves towards the integration of ecological and economic concerns. Table 1 shows the characteristics of these three phases. 3.1. 1972–1991: End-of-pipe and damage control After the People’s Republic of China was founded in 1949, the environmental issue was not a priority on the policy agenda, although almost thirty years of political upheaval and natural catastrophe had left China in dire straits. The Great Leap Forward for catching up with the advanced economies in the late 1950s and the follow-up Cultural Revolution made the campaigns to ‘‘conquer nature’’ a nation-wide movement, felling forests for primitive steel furnaces as fuel left forests ¨ denuded, and filled-in lakes and wetlands for ill-advised ‘‘Grain First’’ campaigns (Dikotter, 2010). In 1970, the serious water pollution of Dalian Bay in Liaoning Province and Guanting Reservoir in Beijing started to awaken the Chinese government to the realities of the environmental issues. Environmental management was viewed as vital only when the country took part in the Stockholm Conference on Human Environment in 1972 and gained much experience through this participation (Qu and Li, 1984). In 1973, the first national environmental protection conference was held in China, and the National Environmental Protection Agency was established under the Ministry of Rural and Urban Construction, and is considered the starting point of modern Chinese environmental protection. With the start of economic reform and open-door policy in 1978, China’s environmental protection sector was caught up in a whirlwind of change. In 1983, environmental protection was defined as a national basic policy and so key principles for environmental protection in China were proposed, which included ‘‘prevention is the main, then control’’, ‘‘polluter responsible for pollution control’’ (already introduced in the 1979 environmental law), and ‘‘strengthening environmental

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Table 1 Evolution of environmental management in China: from 1972 to present. Period

Stage classification

Focus of management

Style of management

Top-down strategy; Controlling air, water, and solid waste pollution command and control, from major industries environmental standards; no stakeholder involvement Strengthening industrial Internal integration: Phase 2: Encouraging from reactive to pro1992–2001 pollution prevention: pollution control, and rural, key cities, regional active policies, protecting integrated pollution control and environmental management at conserving biodiversity conditions for pollution source humans and ecosystems Promoting? Energy saving and Sustainable Phase 3: integration of emission reduction, development: 2002–the ecological conservation, environmental, opportunities for present economic and social integrated ecosystem multi-sectoral interests management benefits

Phase 1: Shaping the 1972–1991 environmental arena: improving environmental conditions for human health

Instruments

Characteristics

Legislation; regulatory enforcement by local authorities; add-on technology

End-of-pipe management, concentrationbased control

Emission reduction targets; financial incentives, legal liability; stricter enforcement

Source-oriented pollution prevention, mass-based/ total emission control

Market-oriented, technological, fiscal, social instruments

Integrated and comprehensive management, cleaner production, and life cycle control

management’’. The passage of the first Environmental Protection Law of the People’s Republic of China (EPL, trial) in 1979, the independence of the National Environmental Protection Agency (NEPA) from the Ministry of Rural and Urban Construction as a vice-ministerial level governing body in 1988, and the amendment of the PRC Environmental Protection Law in 1989 represented significant progresses in environmental management in China. Indeed, the Law marked the beginning of a decade in which comprehensive environmental legislation was created to manage the deteriorating environment (Qu, 1991). In terms of the relationship between economic development and environmental protection, Article 4 of the Trial EPL embodies this feature in the first stage: ‘‘environmental protection is in harmony with the economic and social development’’; which can be read to mean: economic development has priority over environmental protection. At this stage, environmental management focused on controlling industrial pollution. Enterprises were encouraged to set norms and to take initiatives in matters of pollution control and environmental protection. Serious air, water and solid waste pollution (‘‘San Fei’’ in Chinese) in major industrial and densely populated areas propelled the research and implementation of new environmental management methods. The objective was to restore proper conditions for safeguarding human health. The environmental action programs targeted large scale industries as the major polluter, and called for the imposition of strict emission standards on production processes and a permit system for state enterprises. In line with the prevailing governance model, a top-down management approach was chosen by the environmental agency, with little or no involvement of other (non-state) stakeholders or local authorities. Major guiding principles in environmental management developed in this era were typical Chinese (such as the Three Synchronizations. Article 26, PRC Environmental Protection Law 1989 which stipulates that the design, construction, and operation of a new industrial enterprise must be synchronized with the design, construction, and operation of appropriate waste treatment facilities.), while more internationally known principles (such as Polluter Pays Principle and Principle of Priority for Pollution Abatement at the Source) were also introduced in a piecemeal fashion. The sector-specific approaches (water, air, waste etc.), environmental quality standards, and maximum allowable levels of emissions/discharges became the core instruments of environmental management. Progress was achieved through end-of-pipe methods by focusing strongly on point source pollution control (especially the major enterprises in chemical and heavy metal industries).

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Table 2 Key environmental management instruments used in China: from 1972 to present. Source: this study. Instruments

Operation time

Operational scope

Command and control approach

1972

National

– – – – –

28 environmental and resource laws 150 national administrative regulations over 200 departmental administrative regulations about 60 international environmental conventions more than 1300 national environmental standards

Selected regions and industries

– – – – – – –

1999, 1999, 2007, 2008, 2008, 2008, 2011,

New Environmental Economic Instruments

Implementation progress

Emission Trading Ecological Compensation Green Credit Green Trade Green Insurance Green Stock Green Tax, pre-design and trial implementation

Emission Trading (ET)

1999

National Discharge Permit System, ET in some regions

– 1987-1998, Discharge Permit System developed and piloted – 1999, a real sense of ET scheme introduced – 2001, joint trial projects; water ET in Jiaxing city – 2002, SO2 ET trial program (‘4þ 3þ 1’ scheme) – 2007, the first Jiaxing City Emission Trading Center in China – 2008, pilot ET in Jiangsu, Tianjin, Shanghai and Beijing – 2012, pilot carbon emissions trading in China

Ecological Compensation

1999

Some regions and industries

– 1999, Conversion of Cropland to Forest and Grassland Program, the starting point – 2006, MEP, MOF and NDRC promulgated some measures – 2007–2008, MEP, the first pilot program in six provinces – 2009, MEP, trial regional eco-compensation in Hebei – 2010–2011, the State Council, grassland ecological compensation in western eight provinces

National

– – – – – – –

Voluntary and information approach

1993, Cleaner production audit demonstration projects 1994, China Environmental Labeling Scheme 1996, ISO 14000 Certification introduced 1999, Voluntary China Energy Conservation Label 2003, Clean Production Promotion Law promulgation; Principles of public participation in EIA Law 2005, All-China Environment Federation establishment; the first national level environmental public hearing – 2006, One voluntary agreement-China’s Top-1000 Energy-Consuming Enterprises Energy-Efficiency Program was launched – 2007, Opening Governmental Information Regulation and Environmental Information Disclosure Decree issued (implemented on 1st May 2008) – 2010, MEP enacted the Instructions on Fostering and Steering the Regularly Development of Environmental NGOs

Environmental management was characterized by top-down command and control approaches (Table 2). A series of principles, policies, laws, measures, rules and standards for environmental protection have been enacted and implemented since the 1970s (Chang, 2008). Eight environmental management schemes were developed, of which ‘‘Three Synchronizations’’ (3Ss), environmental impact assessment (EIA), and pollution discharge fees are recognized as the three main

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environmental management schemes. About 90% of a total of 766,368 projects received the 3Ss permit during 1996–2009. The implementation rate of projects EIA increased from 61% in 1991 to 99.8% in 2009. Till now, almost all the counties and cities have implemented the levy system, and approximately 500,000 factories have been charged for their emissions, still a small percentage of the total number of polluting factories exist in China. Despite certain weaknesses in the pollution levy system it remains by far the largest application of a market-based regulatory instrument in the developing world (Xia et al., 2005; Yang and Wang, 1995). The administrative approach also played an important role in China’s environmental management. The side-effects of this approach became clear and did not differ from similar approaches adopted in OECD countries, such as partial results, a lack of governmental capacity for strategic planning, lack of integration in policy-making and implementation, high costs, no or little attention to diffuse (non-point source) pollution, large implementation and supervision failures (McElwee et al., 2011; World Bank, 2009).

3.2. 1992–2001: Pollution prevention and process control In August 1992, shortly after the United Nations Conference on Environment and Development in Rio de Janeiro, the Chinese government put forward ten major measures to promote sustainable development. In March 1994, the Chinese government approved and promulgated China’s Agenda 21-White Paper on Population, Environment, and Development in the 21st Century. Environmental protection in China started to change from operationalizing the concept of Sustainable Development into a political agenda for meeting the needs of different interest groups. The elevated State Environmental Protection Administration (SEPA) based on NEPA in 1998 indicated the extension of the power and responsibility. Some new issues were added to the environmental agenda which gradually changed the style of policy and decision making processes (Zhang and Wen, 2008). The public was no longer a passive bystander but became increasingly concerned with and engaged in the slow process of improving air, water and soil quality, and also in biodiversity preservation. During this period, environmental management moved from only reactive clean-up operations to pro-active pollution prevention policies. Environmental quality standards for air, water and soil were translated into emission reduction levels for integrated groups of substances. Clean-up of past pollution events and prevention of potential pollution outcomes were introduced simultaneously. The more open style of environmental management, adopted in this second phase, justified a broader set of instruments than top-down command-and-control licensing and laws. Source-orientated pollution prevention and total emission control, in particular, stimulated the introduction of new instruments, such as financial incentives, environmental liability, and emission trading (Florig and Spofford, 1994). The international market demand for greener products in the wake of China’s accession to the WTO in 2001 also pushed Chinese enterprises to go through higher levels of ISO14000 certification, and to develop greater interest in cleaner production, eco-labeling systems (China Environmental Labeling Program and China Energy Conservation Label) and industrial ecology initiatives. Witnessing the most significant environmental policy success of the cap-and-trade approach in USA since the 1970s, China experimented with small-scale local exchanges in the late 1980s for trading in water and air pollutants, aimed at developing the necessary financial and policy tools (Wang and Bi, 2009). From 1987 to 1998, Discharge Permit System (DPS) was launched and experimented within Shanghai and other 16 cities involving water and air pollutants. A real sense of an emission trading scheme was introduced by Environmental Defense Fund (EDF) in 1999. To a great degree, the government often used the ‘‘movement or storm style’’ approaches for environmental management. The government implemented many environmental action programs to curb environmental deterioration, such as ‘Pollutants Total Emission Control Program’, ‘Transcentury Green Engineering Program’, ‘Closure Fifteen Categories of Small Enterprises’, ‘One Control & Two Standard-Reaching’ and ‘Three Rivers, Three Lakes, Two Control Areas, One Sea, One City Pollution Control Projects’ (that is the ‘332111’ program). These programs were concentrated efforts and resources dedicated to specific targets over limited time periods, a typical Chinese way of working in situations where the rule of law was less strongly felt. The effects were reductions of

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pollutant emissions in (point source) the industrial and energy sectors. However, continued economic growth threatened to outweigh the positive effects of both clean-up programs and pollution prevention schemes. Moreover, non-point source pollution from agriculture was hardly addressed. Remarkable progress was made in improving reforestation during the second half of the 1990s, but the quality of environmental stocks and some natural resources continued to deteriorate. The programs were not focused on structural changes in energy, agriculture or industrial production. The lessons learned here concerned the necessity of establishing long-term emission reduction profiles incorporating the polluting effects of potential future production growth (Jahiel, 1997; SEPA, 2001).

3.3. 2002–The present: Integrating environment and economy This phase encouraged the integration of environmental and economic goals by enhancing the relevance of environmental concerns in national priorities. The elevation of the former SEPA to the MEP in 2008 represented significant progress in empowering environmental governance in China’s governmental system (Qiu and Li, 2009). The promulgation of Cleaner Production Promotion Law (2002) indicated a strategic transition of environmental management from end-of-pipe control to pollution prevention in China. The notion of the circular economy marked the change in the Chinese pollution treatment model, from end-of-pipe treatment to structural change of the economy. It is marked by the Sixth National Environmental Protection Conference and the issuance of the Decision of the State Council on Implementing Scientific Development Concept and Strengthening Environmental Protection in 2005 (No. 39 [2005] of the State Council). It was stressed by the central government that ‘‘economic development should be in harmony with population, resources and environment’’, as summarized in the report of the Seventeenth Party Congress. Chinese environmental management is a government-oriented mode, and its environmental policies continue to be executed in a top-down fashion, notwithstanding some regime tolerance for environmental non-governmental organizations (NGOs). The government broadened the scope, from strict environmental pollution control to promoting sustainable development both at the local and the national levels. The style of environmental management became gradually more open, with increasing flexibility, more decentralization, further transparency and more involvement of the public. More recently, conceptions of what is economically and technologically practical, ecologically necessary, and politically feasible are changing. With the large diversity of actors involved in environmental governance, various instruments for environmental management have been developed and applied at different levels (Mol and Carter, 2006). The many levels of government in China increasingly make trial use of market-based instruments to manage the transition to sustainable development (Table 2). Since 2007, China has introduced a series of environmental economic policies (Pan, 2007). By the end of 2010, 18 provinces implemented emissions trading schemes on a trial basis. The pilot eco-compensation program was conducted involving mineral rehabilitation, urban sustainable development, water function zoning and water basin environmental protection, and natural reserves, and different departments have set up special funds for specific projects (Bennett, 2009). Other environmental economic instruments included green credit, green insurance, green trade and green taxation. These economic incentives have been implemented and will be further promoted in the 12the Five-year Plan (Wang and Ge, 2006). With further application of environmental economic policies, emerging problems have to be coped by the decision-makers including the legal basis of implementation, technical guidelines, common understanding by stakeholders, regional decentralization, insufficient monitoring and information disclosure (Tao and Mah, 2009; CAEP, 2010). The industrial relocation with manufacturing globalization and a rising middle class are becoming salient drivers of environmental change in China during the last decade (Liu and Diamond, 2008). Embracing the global culture of consumption involves a rapidly developing green market. The Chinese government is in a position to respond positively to these demands, where good environmental laws and regulations often go ignored with the consumption risk. Perhaps not surprisingly, partnership programs and voluntary agreements, public information programs became professionalized, for instance with respect to energy saving and industrial risks (Table 2). The last decade witnessed a rapid increase of ISO 14000 certificates in China with the average annual rate of

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52%. As of December 2009, about 55,316 Chinese companies had been certified as ISO 14001, accounting for nearly one-fourth of the total number of certificates worldwide (ISO, 2010). The MEP conducted compulsory clean production auditing for over 7000 enterprises and checked and accepted 5248 enterprises from 2003 to 2009, and published the main emissions reduction achievements (China Environment Newspaper, 2011). There are several joint initiatives between MEP and other ministries to promote certification labels of environmental, energy and forest products, such as voluntary China Energy Conservation Label, mandatory China Energy-Efficiency Label, Low-Carbon Product certification (Chen et al., 2011; CFCC, 2009; Fridley et al., 2008). Citizens or citizen groups have become more involved in the environmental issues than ever before (Ho and Edmonds, 2008; Zeng, 2011). The environmental information disclosure is expected to speed up the transition from conventional government-dominated environmental regulation to a more transparent and ‘‘modern’’ environmental governance system in China, though there is a huge gap between the expectation and reality of transparency in environmental reporting by the government. In a large number of disclosure requirement cases and requests corrupt development forces collide with China’s environmental protection interests (IPEA & NDRC, 2010; He et al. 2011b; Mol et al., 2011). Less progress was made in dealing with environmental problems caused by diffuse sources in this period. Local and regional environmental quality objectives proved hard to meet, and levels of energy use, CO2 and NOx emissions, and resource uses are still far below sustainability levels. Reaching these levels will demand both changes in consumption patterns and technological regime shifts, and even institutional reform. The 12th Five-Year Plan (2011–2015) was approved by the National People’s Congress, China’s top legislature, in March 2011. This Plan assigns specific targets for new motor vehicle emission standards and sets goals for a wide variety of environmental infrastructures, including wastewater and solid waste treatment. There is also a strong emphasis on reuse and recycling, or what the Chinese call the ‘‘circular economy’’. A projected $600 billion is committed to growing sectors such as information technology, clean energy, environmental protection and scientific research and innovation. Especially the booming investment in renewable energy has caught international attention and shifted global opinions from regarding China as the world’s polluter to the world’s leading green investor. The Plan also marks another turning point: a shift from the highly successful domestic producer model of the past thirty years to a flourishing internationalized consumer society. This shift will generate, however, new forms of environmental and ecological pressure and hence will require new modes of environmental governance in China

4. Environmental policy implementation: successes and failures As shown in the previous section, China’s environmental management system has achieved some successes over the past decades. At the same time, with respect to quite a variety of environmental challenges, progress in mitigating environmental pollution stagnates and policy targets are not within reach and/or the formulated policy goals are quite ineffective for reaching sustainability. There is a growing literature and insight on the reasons for implementation failure in China’s environmental politics such as poor implementation mechanisms and inadequate penalties (Mol and Carter, 2006; Lo and Tang, 2006; Van Rooij, 2006; Tang and Lo, 2009; Mol, 2009). Some causes of implementation failure are quite familiar and can be found across the globe, others are more specific to China as they touch upon the special institutional settings of China’s environmental management system. In this section, four main reasons for implementation failure are reported. Unarguably one of the key reasons behind implementation difficulties is the unprecedented economic development China has been undergoing over the past two decades. The close to 9% average annual economic growth, the changes in the economic structure, the concentration of people in major urban centers in the East, and the changing lifestyles of its population all contribute to accelerated and highly dynamic environmental impacts, which are difficult to handle and mitigate as they multiply. This makes it true that successes are measured in terms of relative improvements (e.g.

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lower pollution levels per GDP unit, lower emissions per car or unit of energy produced), but absolute environmental improvements remain below expectations and targets. A second implementation failure of environmental policies is related to the dominance of economic policy institutions over environmental policy institutions, which is not unfamiliar across the globe. The major state economic organizations, such as the National Development and Reform Commission (NDRC) and several sector line ministries (industry, agriculture) have much more power, resources and influence than the MEP (which has only recently been upgraded to ministerial status). This operates at the national as well as at the local level. But in China this power relationship has a somewhat different nature from the one in most OECD countries. The close connections between major (and polluting) state-owned companies and these economic ministries make such polluters well-protected by their ‘mother’ ministries when confronted with calls to clean-up. Although there is a clear tendency to further separate the state from the market (hence, state-owned companies from ministries), and to bring the former under a market regime with increasingly independent state oversight, formal and informal ties between the two remain short. This does not help with strict implementation of environmental standards, instruments and programs that run against short-term economic interests of these state-owned companies. A third main reason behind implementation failure is the autonomy of local networks and governments. China has witnessed several decentralization programs over the past two decades, giving more autonomy to provincial, municipal and lower governmental entities as centralized control proved to be too inflexible, bureaucratic and hampering of economic development. The consequence has been a growing relative autonomy of local governments. Increasingly, one can witness far-reaching commitments to environmental improvements at the central level, to sustainability and environmental programs, but a failure to motivate, direct, steer and control local power elites regarding the implementation of these environmental priorities. This national–local gap is intertwined with the still existing close connections and common interests between local state elites and economic elites, making enforcement of national policies at the local level difficult. Fourthly, implementation of environmental policies could be further strengthened by a stronger countervailing power from civil society. The development of an active civil society in the field of environment is definitely in the making. Environmental NGOs have emerged throughout the country, both nationally and locally; the number of environmental demonstrations and protests is increasing, often linked to pollution, health and food safety; a well-functioning environmental complaints system is present; the media are becoming more and more active and open in reporting on environmental accidents and controversies (Yang and Calhoun, 2007; Yang, 2010); environmental disclosure policies are legally installed; and more participatory policy-making can be witnessed (e.g. in EIA, water policies; Johnson, 2010; Zhong and Mol, 2008). Participation of environmental NGOs or the public in decisionmaking is still limited and official policies on disclosure, participation, protest and media reporting are often overruled, especially by local state and economic interests. This comes together with a still poorly functioning system of the rule of law, where environmental victims can start procedures against polluters that harm them in some way. Only very recently the first NGO got access to the judicial system.

5. Future challenges With ongoing rapid economic development, a large and diverse country and population, a fast changing position in the world, and growing expectations of the Chinese consumers, future challenges to drive China towards a sustainable society are enormous. Combining the current implementation failures with future outlooks of growing resource use, mobility, pollution and consumption, four main and interrelated challenges are presented as follows. The first challenge is related to the ecological restructuring of the Chinese economy. If China continues the current pace of economic growth in rapid expansion mode it would sooner rather than later run up against its resource and environmental limits, if the structure of the economy is not fundamentally reoriented. Levels and growth rates of non-renewable resource extraction and consumption, of pollution, and inequalities are not sustainable in their current form. Hence, a significant restructuring will be necessary in modes of consumption and production. It is evident

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that new signs of changes towards renewable energy production and consumption have been foreseen. Some ideas are circulating among scientists and policy-makers, for example, at regional, industrial park, and industrial levels such as iron and steel industry and electric power, zero-carbon cities such as the renewable energy in Baoding city and low-carbon buildings in Shanghai, green GDP indicators for 273 cities in China. But these are just the first very modest ideas. Until now China’s environmental management efforts have primarily been concentrated on domestic developments. One of the key new challenges for China will be to develop a global outlook and agenda, for several reasons. Increasingly, China has become a major exporter of (semi-)finished products to the outside world, marked by China’s membership in the WTO. This has come together with growing imports of natural resources from a variety of countries in the region and beyond (Mol, 2011). Hence, China’s ecological footprint has moved far beyond its domestic capacity (WWF, 2010). Moreover, China has become a leading power in the world polity, and other countries are also expecting ecological leadership from China, for instance, in the stagnating climate change negotiations or the Rio þ20 process. The overall target set by the Chinese is to reduce carbon intensity (carbon emissions normalized by GDP) by 40% by 2020 compared to 2005 levels. China is also supporting the establishment of an international system of standards and goals, along with an enforcement agency not solely dominated by the EU and the US. Since China is on track to meet its 2020 emissions target, it also promotes the Summit’s key goals: accountability and implementation. Hence, one of the future challenges for China will be to develop a global agenda to further legitimize its international position. Third, one of the key challenges will be to further institutionalize the domestic sustainability agenda in the economic institutions and actor networks. Up to now, China’s environmental management has been strongly state-driven and -organized, but clearly the governance capacity of the central (and also local) state in greening China is limited, similar to what is seen elsewhere around the world. Getting economic and market institutions and actors involved in the environmental reform process will be crucial for the success of China’s environmental management. Such processes are sprouting or are in the making, for instance, Peoples’ Bank of China is slowly getting involved in sustainability activities (Aizawa and Yang, 2010), and public and private companies are showing interest in corporate social and environmental responsibilities (Mol, 2009). Market institutions are also making resource efficiencies and environmental management services (e.g. pricing of environmental goods, trading of emission rights, payment for environmental services schemes, launching of environmental insurances). But major steps have to be made here in ways that can deviate from what OECD countries have done in the past. Fourth, major challenges lie ahead at the crossroad of the environmental and social dimensions of sustainability. Increasingly we see that environmental agendas meet social agendas in different ways. Sometimes interests run parallel, for instance where further disclosure, participation and democratization of local citizens occur, it can strengthen environmental advocacy in conflict with one-dimensional economic ‘progress’. But in other instances, the two agendas will be in conflict when expectations of Chinese consumers for more goods, mobility, and services will put sustainability further under pressure. China is the engine of the global economic recovery. To maintain economic growth, it is vital to stimulate domestic consumption. How to handle such conflicting interests, now that full centralized control is no longer feasible or effective? What are the benefits and limits of environmental authoritarianism (Beeson, 2010)? And how is this related to the first challenge: that of a fundamental restructuring of the Chinese economy? Without any doubt, even more than today, the future strengthening of environmental management in China will be decisive for the sustainable development of China and the world.

Acknowledgments This research was financed by the National Natural Science Foundation of China (41071355 and 71103175) and Chinese Academy of Sciences visiting professorship for senior international scientists (2011T1Z23). We thank the editor and reviewers for their critical and helpful comments and suggestions and Tony Fuller for the improvement of the text.

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