Monday, October 02, 2006

Water Pollution in China - same old corruption story?

There is no getting away from the enormous environmental problems that China is faced with on the back of the phenomenal growth the country has witnessed since the opening up of the country to market forces.

The link between growth and the environment is complex (related to the Kuznets curve debate that we often touch on) and while many accept that growth and increases in incomes can lead eventually to environmental improvements via various mechanisms there is always a short term cost before a country reaches the mythical "turning point". How "short" is short is the problem - it can be a long way to the top of the curve.

China is however taking great strides to improve their environment and in many cases this merely involves attempting to "enforce" exisiting regulations.

In one of today's ENN articles "More Than One Quarter of Yangtze Water Undrinkable" the extent of the problem is evident.

BEIJING — More than one quarter of the water in the Yangtze River is so polluted it cannot be treated to make it drinkable, Xinhua news agency said on Monday.

A new report by the Yangtze River Water Resources Commission showed that 27.5 percent of water tested along China's longest river was seriously polluted and could not be treated to make it potable, compared with less than 20 percent in 1998, Xinhua said.

The remaining 72.5 percent of water quality tests conducted along the Yangtze showed water that could be consumed if treated.

Hundreds of millions of people live along the Yangtze and its tributaries, including in the cities of Chongqing, Wuhan and Nanjing.

Some 30 billion tons of polluted water were dumped into the river last year, 50 percent more than in 1998, Xinhua said, citing the report.

"The major polluted stretches are located near cities along the river and its tributaries," said the report.

China has started to enforce laws on the dumping of contaminated waste water. But enforcement agencies often lack clout against locally powerful industries with ties to government officials.

It is the final paragraph that is perhaps the most worrying. These links between industy and local officals runs very deep due to the nature of the instutional structure of the country.

I return briefly to the Business Week article from the previous China Coal post.

In this article they write:

IN most of the country, enforcement of environmental regulations is lax. The State Environmental Protection Administration (SEPA), which oversees the environment nationally, is woefully understaffed, with a workforce of just 300 in Beijing and only 100 more for the rest of the country. That means monitoring and enforcement generally fall to local officials, or even factory managers -- whose first priority is to create jobs, whatever the environmental cost. A chromium factory was ordered to close in May, 2004, after dumping toxins into a river for five years. But just two months later the local environmental protection bureau let the plant begin producing again even though no new environmental protection measures had been installed, the state-controlled China Youth Daily reported. "The environmental bureaus of local governments would rather develop GDP than perform their role" as pollution watchdog, says Zhao Jian Ping, senior energy specialist at the World Bank in Beijing.

What's more, even where waste-treatment gear is installed, some Chinese companies opt to pay fines rather than operate expensive equipment. The cost of cleaning up wastewater from a yeast plant can reach $610 per 1,000 cubic meters, while the penalties are just $490 per 1,000 cubic meters. Furthermore, noncompliance is preferred by local officials, since fines shore up budgets. SEPA says that while most major industrial plants have water-treatment facilities, one-third don't operate them at all and another third only use them occasionally.

I would suggest with incentives like these they need to train more economists (in theory).

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