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A coal-burning power station can be seen behind migrant workers as they walk carrying their shovels on the construction site of a water canal, being built in a dried-up river bed located on the outskirts of Beijing. (DAVID GRAY/DAVID GRAY/REUTERS)
A coal-burning power station can be seen behind migrant workers as they walk carrying their shovels on the construction site of a water canal, being built in a dried-up river bed located on the outskirts of Beijing. (DAVID GRAY/DAVID GRAY/REUTERS)

Green agenda gets top billing in China's 5-year plan Add to ...

When some 3,000 Communist Party delegates gather inside the Great Hall of the People for the once-a-year sitting of China’s rubber-stamp parliament, which starts Saturday, they will pass a document that is expected to finally set the world’s largest second-largest economy – and largest polluter – on a greener course.

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Premier Wen Jiabao will open the National People’s Congress with a prepared speech that will lay out the broad principles for the country’s next five-year plan. It will include hard new energy efficiency and pollution-reduction targets aimed at putting the country’s notoriously dirty industries on a more sustainable path. Massive new investments in renewable sources of energy are also expected as the country tries to gradually wean itself off its reliance on coal, and sources say an “environment tax” is in the works, though it may not be immediately introduced.

The green plan, combined with a move toward slower, more sustainable growth and measures to narrow China’s widening income gap signal a new effort by the leadership to guide the country away from a ‘growth at any cost’ approach.

Pan Jiahua, executive director of the sustainable development research centre at the state-run Chinese Academy of Social Sciences, said the five-year plan would make clear China “is very serious about a green transformation.”

The environment is a hot-button issue in China, especially among those – like the country’s senior leadership – who have to endure life in Beijing and other heavily polluted cities. The air quality index in Beijing now regularly exceeds 500, the level previously considered the top of the air-pollution scale. Last month it hit 595, as choking smog cut visibility to 200 metres in some parts of the city.

Green measures appear set to share top billing in the five-year plan with an effort to deal with the yawning gap between the rich and poor. The official Xinhua newswire reported Wednesday that the NPC would consider a proposal to raise the minimum threshold for paying income tax, a move that could exempt tens or even hundreds of millions of people from having to pay tax.

Details won’t be made public until the conclusion of the assembly (which usually lasts 10-14 days), but Mr. Wen set the tone by announcing the country would seek slower growth to focus on better income distribution and more sustainable development. After a decade of double-digit annual expansion, Mr. Wen said Sunday the government would aim to slow the pace of annual economic growth to 7 per cent.

Until now, any kind of slowdown was seen as taboo, with yearly GDP expansion of at least 8 per cent seen as necessary for warding off social unrest.

The new, more measured pace is to be guided by an array of environmentally motivated measures. Mr. Wen said energy consumption per unit of production would be reduced by 16 to 17 per cent over the next five years, while environmentalists are expecting a green energy push to bolster nuclear and hydro power production. A tax linked to carbon emissions will also be introduced over the coming five years, likely first via pilot programs in specific regions and industries.

In 2009, China shocked many by investing nearly twice as much in green energy as the United States, spending $34.6-billion, up sharply from $2.5-billion just five years before. However, China has also overtaken the United States as the world’s top emitter of the greenhouse gases blamed for causing global warming.

While some environmentalists argue the energy consumption targets laid out by Mr. Wen should have been tougher, given the scale of China’s environmental problems, many others lauded the overall direction the government is taking.

“The 7 per cent [GDP growth]target is a big indication from the senior leadership that we can’t go on like this any more. We need to slow down, and focus not just on speed [of growth] but on structure,” said Wu Changhua, China director for The Climate Group, which presented a policy brief to the government while the five-year plan was being drafted.

The economy, however, will still remain highly reliant on coal for the foreseeable future. Currently, coal accounts for almost 70 per cent, and while that share is expected to drop to close to 60 per cent by 2015, total coal consumption will continue to rise in the near term as China’s population and economy continue to grow.

The overall goal of the five-year plan – the 12th since Mao Zedong introduced the Soviet-style economic blueprints in 1953 – is to move the country away from the heavy industry associated with being the cheap-labour “workshop of the world” and toward a more service-oriented economy. The shift will rely more on domestic consumption than the exports that have propelled the country’s growth for the past two decades.

While part of that transformation is driven by a desire to keep the economy chugging along as overseas markets falter, the need to reduce industrial pollution is a key motivation.

“We'll never seek a high economic growth at the price of the environment, as that would result in unsustainable growth with industrial overcapacity and intensive resource consumption,” Mr. Wen said during his heavily scripted online question-and-answer session.

This is one of those instances when China’s top-down system of governance is particularly effective. The message that will now trickle down to local officials – accustomed to being rewarded for delivering the highest possible rate of growth, and at almost any cost – is that the standard by which they are judged by their superiors is about to change.

“You have inertia. The local governments have old ideas and old plans and investments,” said Mr. Pan of the Chinese Academy for Social Sciences. “But if the senior leadership determines that the indicator for performance has shifted away from GDP growth, the local governments will act to make the [green]transformation happen.”

The NPC opens amid a third week of calls for Chinese to gather and protest Sunday against the government in Beijing and other cities. There were sparse turnouts the first two Sundays, as thousands of police were deployed to the designated protest sites.

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