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Outline

Environmental Modernisation of China:  Opportunities for Australia Mark Diesendorf Sustainability Centre Pty Ltd www.sustainabilitycentre.com.au email: mark@sustainabilitycentre.com.au

CHINA TODAY Land area similar to Australia’s Population 1.2-1.3 billion -- huge internal market. Economy now mix of planned and market; undergoing ‘reform’ Economic growth 1977-1998: average 10% p.a; now 7% p.a

CHINA’S ENVIRONMENTAL PROGRAM: 1998-2007 GOALS Environmental protection sector to grow at 15% per annum over the next 5 years. Total value of sector in 2005 = US$24B (1.2% GDP) up from US$13B in 2000 METHODS Strengthened environmental legislation: 1997, 2000 Investing the equivalent of US$12 billion.

MAIN FOCUS AREAS Air pollution Water pollution Water shortage in N. China Solid wastes Sustainable energy

MOTIVATION Green Olympics 2008 Modernisation Unhealthy cities and degraded rural land

RELATIVE AIR POLLUTION 1999 Source: SEPA

CHINA’S WATER PROBLEMS Pollution of rivers Water shortage in north, abundance in south Low efficiency of water use

‘SHELL RENEWABLES’ ENTERS CHINA Supply RAPS PV home systems to <78,000 homes in Xinjiang Siemens Solar PVs? Chinese company will market, install & maintain.

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US WITHDRAWAL FROM KYOTO PROTOCOL George Bush’s main reasons for declining to ratify: 1. Developing countries are not Parties. 2. Target is too strong

AUSTRALIA’S (?) POSITION ON KYOTO PROTOCOL Australian Foreign Affairs Minister, Alexander Downer: “In that respect I think the Bush administration is absolutely right to take a very strong position. I mean, it is no solution at all if a whole lot of countries need do nothing … if China and India and Brazil can go ahead and pollute the environment to their hearts’ content because we’re all feeling a bit sorry for them..” (Radio interview on 26/3/01)

CHINA’S POSITION ON KYOTO PROTOCOL Those countries that created the greenhouse problem should take the first steps to reduce it. However the unspoken action:……………

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ACTIONS FOR THE NEW DECADE Expanding underground railways and light rail in major cities (e.g. Shanghai, Beijing, Shenzen, Chengdu) Phasing in exhaust emission controls on motor vehicles. Continuing with Olympic environment program for whole of China

CAR-FREE DAY IN CHENGDU

SHANGHAI Pop. 16M 21st century city grows 19th century cultural heritage protected

SHANGHAI MODEL AT PLANNING EXHIBITION

SHANGHAI METRO Planned: 9 new metro lines, Maglev, 6 light rail,

SIGNIFICANT WIND ENERGY POTENTIAL Northern inland region (Inner Mongolia) South-east coastal region (including Hainan Is.) Part of GEF grant to fund wind Government approval required

MISSED OPPORTUNITY FOR AUSTRALIA

POTENTIAL EXPORTS TO CHINA: Technologies & Services Efficient energy use Efficient electricity/heat generation Renewable energy: Efficient water use Waste management, reuse & recycling Air pollution monitoring & capture Building materials: energy & materials efficient

POTENTIAL INHIBITORS OF GREEN EXPORTS TO CHINA Lack of cultural understanding of Chinese way of doing business Inadequate marketing of Australian products in China Economic restructuring of China --> unemployment in short term Consumption society hits China

CONSUMPTION SOCIETY HITS CHINA Rural dweller comes to the big city and finds aroma of Macdonalds

PRESSURES TO INCREASE CHINA’S GHG EMISSIONS  In general, following the US model of high consumption lifestyle Specifically: Fostering car use via road building and allowing cars to drive and park in bicycle lanes Restricting bicycle use on some inner-city roads Planning new urban areas with lower densities

SUBSIDIES TO GHG EMISSION -- INTERNATIONAL Global energy sector gets US$240 billion p.a. in subsidies. Rich countries subsidise production -- e.g. infrastructure, tax concessions, loan guarantees,cheap electricity inputs Poor countries subsidise consumption -- e.g. fuel & electricity German coal subsidy US$300/tonne = US$100,000 /miner Energy subsidies are ineffective in fuelling economic growth and inefficient for helping the really poor. Short-term subsidies can be useful for nurturing young industries (e.g. Danish windpower)

SUBSIDIES TO GHG EMISSION -- AUSTRALIA • Fuel and electricity price subsidies in rural areas where renewable energy is cost-effective; • De facto subsidies to aluminium smelting for electricity & infrastructure; • Tax concessions for company and government cars, and for business use of private cars; • Tax concessions for petroleum exploration & shale oil production; • Heavy bias towards funding roads compared with public transport.

RECOMMENDATIONS RE INTERNATIONAL RELATIONS Australia should ratify Kyoto Protocol without USA and implement the 10 recommended actions. China is now in strong position to take a higher international profile. Australia and China should strengthen their exchange and collaboration programs in order to help each other to reduce emissions. Propose new international agreement to phase out energy subsidies to be signed by all countries at ‘Rio+10’.

PECC INTERNATIONAL ENVIRONMENTAL TRADE FAIR Australian stand and directory (joint) Symposium and business meetings Translation & interpreting Follow up

A STRATEGY FOR AUSTRALIA

SUSTAINABILITY CENTRE PTY LTD Web: www.sustainabilitycentre.com.au email: info@sustainabilitycentre.com.au phone: 02-9801 2976 fax: 02-9801 2986

3 ACTIONS REQUIRING SIGNIFICANT EXPENDITURE Increase funding to local governments by factor of 10. ($130 M) Increase target for new renewable electricity generation from 9500 GW in 2010 by factor of 10, and subsidise until 2010 only. Similar targets for hot water. ($1-2 B p.a.) Provide transitional funding for Australian manufacturers to tool up to make energy efficient products. ($50M)

7 ACTIONS REQUIRING INSIGNIFICANT EXPENDITURE Remove fuel & electricity subsidies (Fed. & States) Legislation similar to USA’s Transportation Equity Act (Fed.) Mandatory energy & greenhouse labelling and minimum performance standards for appliances, buildings & motor vehicles. (States) Mandatory reporting of emissions by all spheres of government, coupled with in-house carbon levies.(all) Plan new suburbs, commercial centres, power stations, etc. to minimise GHG emissions. (State & Local) Remove incentives to sell excessive electricity. Carbon tax, or tradeable emission permits with cap & fee.