Explainer: China’s environmental goals

What are the top policy issues in China right now? In this series of explainers on China, we have gathered the knowledge of experts at the World Economic Forum, to write about topics ranging from inclusive growth to urban migration. See the full list of explainers on China’s top policy issues at the bottom of this article, and learn more about our meeting in China, taking place in Dalian, September 09-11, here.

Policy Issue: Environmental Resilience
What: Growing awareness and enforcement of environmental goals
Related live streamed sessions: China’s Clean Growth Agenda II Asia’s Energy Options

After decades of heavy industrial development, China’s environmental challenges are nearing a tipping point such that if not corrected in a timely manner could lead to significant costs and risks to its society and economy. Throughout the country, worsening air, water and soil pollution caused by industrialization, vehicle emissions and polluting power plants present serious damage to China’s environmental ecosystem.

Less than 40% of China’s groundwater is safe for consumption, one-fifth of China’s soil is contaminated with heavy metals, and only eight out of 74 of the largest Chinese cities passed the government’s basic air quality standards in 2014. In response to these problems, the Chinese government declared a ‘’war on pollution’’ and has taken steps to dismantle polluting coal-fired power plants, reduce emission levels and lower particulate matter emission rates.

There has also been a shift in societal awareness, with more public attention on China’s worsening pollution, agricultural conditions and food safety standards, and this has led to more citizens demanding a cleaner environment. With global efforts at COP 21 to reduce emissions, China is also actively seeking ways to diversify its energy consumption patterns from coal-generated power plants and fossil fuels to renewable energy sources as well as nuclear energy.

China is taking an active approach to reverse its environmental conditions: the aim is to reduce greenhouse gas emissions per unit of gross domestic product by 60-65% from 2005 levels and to increase the share of non-fossil fuels in energy consumption to 20% by 2030. China is becoming a global leader in low-carbon technology deployment, contributing to 40% of global capacity additions over the last five years. Moreover, China is also a leader in renewable technology investment and its investments were larger than in the US & EU combined in 2014.

It is projected that the next 13th Five-Year Plan will outline rigorous environmental goals, including reducing major pollutant emissions, changing the energy mix, increasing the quality of drinking water and reversing ecological deterioration. As awareness of environmental problems increases and enforcement is strengthened, there will be immense opportunities in China to help reduce pollution and mitigate the adverse environmental effects of rapid economic development. Reforms are difficult to implement, however, due to vested interests of key state-owned enterprises in oil, gas and coal-related industries. Tremendous public-private partnership and coordination will be needed to reform fuel standards, carbon emissions and vehicle standards. Government determination to reform the environment has strengthened under President Xi Jiping but concrete changes will take time.

More China Insights:

• Need to adapt institutions to maintain economic dynamism and address inequalities
• China’s outbound investments
• China as a world leader in technology