The Limits of Control: a skeptic’s view on China, Copenhagen, and Compliance

Back in May 2007 I attended a speech given by Feng Zhijun, then a member of the Standing Committee of the National People’s Congress, and the government official charged with corralling China’s Circular Economy law – the most ambitious environmental legislation in Chinese history – through China’s opaque legislative hurdles. The occasion of the speech was a recycling convention in Tianjin, and the advanced, printed copy of the speech suggested that it would be little more than a dry recitation of the law’s proposed provisions. But then, for reasons known only to Feng, he tossed the text to the side and went on a forty-five minute utterly candid rant that included a denunciation of the ostentatious hotel ballroom in which he was speaking, and a frank evaluation of China’s weak environmental regulatory apparatus. A few days later I filed a report on his speech for Recycling International (subscriber only), in which I described the key passage as follows:

… [Feng] turned his attention to the serious problems involved in regulating China’s scrap industry. He recounted that, last year, he and a delegation of environmental officials visited scrap processing companies in the nine provinces of the Yellow River region where “they all use waste treatment facilities.” After this announced inspection tour, several environmental officials remained behind, secretly. “And they saw that after we left, the local factories shut down their waste treatment facilities! They released waste water after we left.” From this example, Feng suggested that the autonomy and independence of local government is the main problem in developing a recycling economy for China. “In the past, there has been no link between law enforcement and legislation.”

No link between enforcement and legislation: anybody who has spent any time looking at China’s environmental problems knows that this issue extends far beyond the scrap metal industry (my friend, Charlie McElwee, of the China Environmental Law Blog, has been particularly eloquent on the subject). China has great environmental laws and regulations in every field; they’re just not enforced. Tellingly, Feng’s didn’t promise that the link would be strengthened in the Circular Economy legislation and, as I go through my notes from that address, it’s clear to me that he wasn’t holding out much hope that anything would change. The problem, as Feng described it, was that China’s central government lacks the personnel, influence, and will to control pollution generated by provincial and town-owned businesses. By and large, local governments do as they please – barring an environmental/human catastrophe that attracts the attention of the media and the central government. It is no exaggeration to suggest that – in all of China – there isn’t a single environmental law that isn’t flouted, regularly, at the local level. How can this situation exist/persist? From my perspective – the perspective of someone who has spent lots of time in provincial and town-owned enterprises that pollute in spades – it comes down to two reasons:

  1. As of two years ago, there were less than 1000 total employees working for China Ministry of Environmental Protection [MEP]; the US EPA, meanwhile, has more than 40,000 employees. It’s widely acknowledged that the US EPA is stretched thin, and regulation – and human health suffers – because of it; what metaphor applies to the absurdly under-staffed MEP?
  2. China’s provincial and local governments own a significant percentage of the nation’s heavy/polluting industries, including coal, steel, and non-ferrous metals. What they don’t own outright, they benefit from: tax revenues from these businesses are important to supporting local governments – and local government officials. Quite simply, there’s a nearly ubiquitous financial incentive for local governments (and officials) to ignore Beijing’s demands. And, due to Beijing’s flaccid regulatory infrastructure, and unwillingness to disturb the economic state-of-affairs in the provinces, they have almost nothing to fear.

I think an actual example will help to show how this state of affairs works in the real world provinces.

Earlier this year the global economic crisis took a serious financial toll on Chinese commodity-based businesses – including scrap metal. The central government, seeing an opportunity to reform a business notorious for its small-scale polluting enterprises, and hyper-competition, took the unprecedented step of announcing that it was going to shut down 300,000 mt of secondary [recycled] copper production, 600,000 mt of secondary lead production, and 800,000 mt of secondary aluminum production. Again, the purpose was to rein in pollution, first, and the excessive competition that some felt hurt the industry, second. Now, below, I’ve inserted a chart (in two pages) drawn up by the China Non-ferrous Metals Industry Association [CNIA] describing 3.64 million metric tons of new “large-scale” Chinese secondary metal factories undertaken since the onset of the global economic collapse. According to Wang Gongmin, Chair of the CNIA’s “Recycling Metal Branch,” most of these projects (most of which have some degree of government ownership) were undertaken with money provided by China’s economic stimulus program. To be sure, they’ll run cleaner than the plants that are being shut down under the aforementioned directive. But, in total, they will pollute more (ie, reduced carbon intensity and increased carbon). Click to enlarge charts.

[The CNIA chart also includes a note that the actual new production capacity is more likely in the range of 4.5 million mt. Matt Yglesias, in a very good post, touches on this issue, as well.]

In recent weeks there’s been quite a bit of talk about China’s role in the upcoming Copenhagen climate talks, its first-offer to reduce carbon intensity by 40% – 45% by 2020 – and whether or not those commitments will translate into actions that are measurable, recordable, and verifiable [MRV]. Quite frankly, these discussions – especially those related to MRV – strike me as preposterously premature and even naive. Now, just to be clear here: I do think that China and other developing nations have an obligation to be at the Copenhagen talks, and I hope that they’ll make a positive contribution. But, at the same time, I think it’s a waste of time, and a political diversion, for developing countries to spend their time worrying about whether or not a country that has shown itself incapable of enforcing even the simplest of health and safety laws will suddenly find the will to enforce a global climate treaty requiring deep economic sacrifices from provincial governments. Put differently: Why, if Beijing can’t control the amount of aluminum, copper, and lead that the Chinese industrial base is manufacturing, if it hasn’t been able to control pollution by scrap metal companies on the Yellow River, would anyone believe that it can control carbon emissions and intensity?

China prefers to make the argument that it lacks the technical and financial resources to reduce its carbon emissions. There’s some truth to that. But there’s also truth the argument that China’s decentralized regulatory system renders it largely incapable of being a serious player at Copenhagen. In fact, the only reason that it is a serious player is that the developed world insists on making it one (if only as a convenient foil for explaining why the developed world won’t do anything on its own). But if the developing world is serious – really, truly serious – about reducing carbon emissions, then reduction in carbon emissions will need to start there, where the financial, technical and – above all – political means of enforcing a climate treaty already exist. Pretending that China is some sort of regulatory equal to the task is naive at best, dishonest at worst..

7 comments

  1. What a pleasure to read something realistic after all the limply positive reporting on China’s promises, claims that China is the only country taking real steps, has the worlds largest environmental ‘roll-outs’, etc. It might only have been added, just for clarity, that even the announced 40-45% reduction in carbon intensity still means an increase in emissions, even supposing there was even the slightest chance such a target would be met.

  2. Excellent. First person I’ve read who isn’t under the influence of the think tank crowd and their china centric view of copenhagen. Anybody putting faith in China to make this happen doesn’t know anything about China.

  3. Carbon emiss wont directly kill anyone. It’s effects will be felt decades from now. Toxic waste being dumped into the main water sources of the country IS killing people TODAY. Cancer villages on the rise. Inability to use the water will choke the country in 15-20 or so years if the trend continues.

  4. If you ever had a chance to talk to local academic people or politicians in China, you will realize that climate change is still not on their top agenda, and they have more to worry about direct pollution and toxicity from the industries. The reason is clear, ’cause you don’t expect people to drive BMW when they are just about to earn sufficient food.

    I think the main incentives for China to join in this global debate are the pressure from the States to push China making promise and self-motivation for making a positive image globally. It is all about politics…

  5. Great post, I learned something there. I work myself in a polluting industry but I never had the chance to stay there and see what the locals do when we are gone. I often wonder why China was so polluted when, on the paper, regulations and standards are for the most part up to international level (this I can confirm)

    One question I want to ask: wouldn’t you say that this phenomenon of 1- understaffed supervision agencies and 2-collusion with local governments applies as well to other industries like consumer goods or foodstuffs? I mean, wasn’t the Sanlu affair as well a case of local corruption + lack of supervision?

    And related to this: would you say cars in China are more polluting than in the West for the same reasons? (ie the built in catalyzers or filters they use and/or the quality of the petrol sold is not properly controlled, even if on the paper they should be Western standards)

    thanks!

  6. Uln –

    In answer to your first question: yes, absolutely. It’s a serious, nationwide problem in China. Agencies are under-staffed and – equally important – under-paid.

    In re to your second question: I don’t know have an answer, though I suspect that you are quite right about the low-quality of pollution mitigation devices on Chinese-manufactured automobiles. That’s an excellent suggestion for investigation.

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