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September, 2008:

Keeping Up With China’s Olympic Shine – Part I

Keeping Up With China’s Olympic Shine – Part I
China must enact policies good for both the environment and economy

Awarded the right to stage the 2008 Olympics, China set to work polishing cities and parks, designing grand architecture, and coaching citizens to be warm and welcoming hosts. No sacrifice was deemed too great for achieving a successful Olympics and sending a message worldwide about China’s can-do spirit. Perhaps more than anyone else, China’s people appreciated the end results, with the emphasis on shining cities, happy and impressed visitors, organized streets, clean air and water. This YaleGlobal series addresses China’s great strides in preparing for the Olympics and Chinese hopes that the improvements in quality of life can be sustained. In the first article of the series, economist David Dollar points to strong economic reasons for protecting the environment. By acting sooner rather than later – to limit cars and energy use, expand public transportation, and increase jobs by improving key services – China can avoid mistakes made by the US and other developed nations. – YaleGlobal

David Dollar – YaleGlobal, 22 September 2008

BEIJING: “The old people in the park say that they have not seen such clean air since the 1960s.” That’s how my Chinese teacher summed up reactions of long-time Beijingers to startlingly clean air enjoyed since the second week of the Olympics. As Beijing prepares to return to its polluting ways, citizens ask: How can we return to the happy days of the Olympics? The Chinese government may struggle to answer the question, yet the success of temporary measures during the Olympics shows that cleaning up is both possible and a smart move economically.

A recent poll in Beijing found 70 percent of people supporting permanent measures to keep the air clean. Now that the Olympics are over, the Chinese government faces a host of daunting challenges – maintaining growth in a slowing world economy, addressing social disparities and repairing the environmental destruction that accompanied rapid industrialization. For most Chinese people, the environmental agenda has the most direct impact on their lives.

The environmental toll from China’s industrialization is well known: water pollution in all major rivers and lakes; 20 of the 30 most air-polluted cities in the world; deforestation reducing forest cover to 12 percent by the 1990s; and China supplanting the US as the largest source of greenhouse-gas emissions. Less publicized in the Western press is that China has made progress on some environmental issues: It has the most successful aforestation program in the developing world, restoring forest cover close to 20 percent. Rivers in the South are gradually improving, and events such as a mass swim across the Pearl River in Guangzhou last year celebrate the progress.

Still, the environmental problems are serious. Last year the World Bank and the environmental ministry prepared the first careful estimates of health costs of air pollution ever done in a developing country: The urban air pollution in China leads to hundreds of thousands of premature deaths each year. We estimated the economic costs of the losses to be 3.8 percent of GDP in 2005, or $85 billion. The air could be significantly cleaned for less cost, and so the economic case for clean-up is clear. And this estimate only takes into account measureable health effects. Psychic benefits of living in a lovely environment are hard to measure, but arguably as important.

China’s current five-year plan recognizes the value of environmental clean-up and sets a number of ambitious targets. Halfway into the plan, there’s progress, but not rapid enough to meet these targets. In two years, chemical oxygen demand emissions dropped 2 percent (target: 10 percent in five years); sulfer-dioxide emissions fell 3 percent (five-year target: 10 percent); energy intensity of GDP declined 5 percent (five-year target: 20 percent). Why isn’t China meeting its own environmental objectives?

First, the pattern of urbanization is too energy intensive. Chinese cities have built a lot of roads, made it easy to register cars and kept parking cheap. The national government has not passed to consumers the full cost of recent hikes in oil prices in the world market. The current retail price of gasoline in China would be a market price if the world price of oil were $92 per barrel. Given recent world prices of $100 to $140 per barrel, China subsidizes firms and drivers to use gasoline. Beijing and other big Chinese cities add 1,000 new cars per day on the road, and these policies encourage them to use cars to commute. On the other hand, there’s been under-investment in public transportation.

The Olympics became a natural experiment for restricting car use by odd-even license plate restrictions, introducing high-occupancy lanes for Olympic-related vehicles and expanding the public transportation system at reduced prices. The vast majority of Beijing residents support similar measures on a permanent basis. The odd-even license plate scheme is inefficient, but other measures could discourage car use: high prices for parking, higher fees for car registration or London-style fees for driving into the inner city. Keeping buses moving fast in special lanes is one of the best measures to encourage use of public transportation over cars. Well-designed policies use revenue raised from registration and parking fees to finance expansion of public transportation.

My driver joked that 70 percent of residents favor these kinds of restrictions because 70 percent don’t own cars yet. That’s exactly the point. China’s at an early stage of urbanization and motorization. It can avoid the mistakes the US made in developing a car-and gasoline-dependent economy. If it waits ten years, it will lock into inefficient energy use for a generation.

The second reason why China isn’t meeting environmental targets is that its pattern of growth is still too reliant on exports, industry and investment – all of which are energy intensive and polluting. China could grow rapidly with less pollution if it shifted toward domestic-demand driven growth – again, a target not being met.

Some voices in China argue that the rapid export and industrial development are needed to create jobs – but that’s simply not true. The industrial sector has become so capital intensive that it creates relatively few jobs. Most jobs are created in the service sector. China gradually moves on policies that would rebalance the economy toward domestic needs – that is, discourage such rapid growth of exports and encourage domestic consumption, both private consumption and government spending on education, health and other social services. The current five-year plan, adopted in 2005, sets an explicit objective of this kind of rebalancing.

The policies to bring this about are appreciation of the exchange rate, higher interest rates, collection of more dividends from state enterprises and higher energy prices. All would tend to reduce profitability in the export sectors, cooling off that part of the economy. That would open up space for fiscal spending to clean up pollution, expand public transportation, invest in health and education, and strengthen the safety net.

China is gradually taking these steps, but so far there’s been little if any rebalancing. The drop in the trade surplus from 11 percent of GDP in 2007 to a projected 9 percent in 2008 may signal some rebalancing. However, this decline is almost completely due to higher prices of China’s imports, especially oil, rather than any drop in exports. In constant prices there’s been little reduction of the trade surplus or rebalancing.

To be fair to the authorities, to redirect the economy from exports and industry to domestic needs and services – without much of a slowdown during the transition – is more art than science. Any big miscalculation would have serious consequences for the Chinese. Rebalancing will lead to some labor-intensive firms closing, with workers losing jobs. Absorbing them into expanding service industries does not happen instantly. If adjustment is too rapid, there could suddenly be many more unemployed, unhappy workers. So, there’s something to be said for a cautious approach.

But it’s clear that the public interest would be served by a shift in priorities favoring a better environment and resource efficiency, at the expense of export and industrial competitiveness. Naturally, interest groups oppose any particular policy change: exporting firms prefer to keep the renminbi’s value low; car owners complain about rising gas prices; factory managers protest costs of emission controls.

The question for the Chinese government in the aftermath of the Olympics is, can they manage these interest groups and bring about environmental policies that are in the public interest and ultimately economically beneficial? This is a much more daunting task than organizing a brilliant Olympics.

David Dollar is World Bank country director for China and Mongolia, based in Beijing. For an ongoing discussion of economic, social, and environmental issues, click here to see his blog.

Rights: © 2008 Yale Center for the Study of Globalization

Pollution Curbs End

22nd Sep 2008 – SCMP

The capital is bracing for a return to smog-ridden reality as yesterday marked the first day in two months that construction sites were allowed to reopen, factories could resume production and all cars were allowed on Beijing roads. The pollution curbs aimed at cleaning the air for the Olympics and Paralympics ended at midnight on Saturday. AP

Games Over, Pollution Back

Updated on Sep 22, 2008 – SCMP

The pollution came back and my eyes started stinging like crazy again.

I realised this must be because the Paralympic equestrian events were over and that Guangdong had been given the green light to “power up” again.

Mark Cryer, Kennedy Town

Bracing For A Toxic Winter

Updated on Sep 22, 2008 – SCMP

Here we go again. Another winter with terrible pollution.

I wonder if Chief Executive Donald Tsang Yam-kuen and the Environmental Protection Department could enlighten us as to why there is no significant change in the pollution levels.

I ask this because was not cleaning our air one of Mr Tsang’s main goals? Maybe he forgot.

However I did find a quote from his Action Blue Sky campaign: “Every small step taken by each individual to support the clean-air initiatives in our daily lives can help reduce air pollution.”

It seems as if this quote also applies to Mr Tsang’s approach to ridding our city of its pollution.

The EPD says too that it is taking vigorous steps to clean our air. Would the relevant authority tell us what these steps are?

From where I sit looking out my window all I see is grey hideous smog covering our city as usual.

Will it never change? I for one think not.

I do not think the powers that be really care.

Terry Scott, Sha Tin

Goodbye Games, Hello Gripes And Gridlock

Reuters in Beijing – Updated on Sep 21, 2008

Beijing was grinding back to its congested normal condition yesterday after two months of traffic restrictions and factory closures that kept the city’s notorious pollution at bay for the Olympic and Paralympic Games.

The capital is one of the world’s most polluted cities and there has been widespread debate about whether the traffic controls should be retained. Although the Olympic regulations did not officially expire until midnight last night, cars with both odd and even number plates were already on the streets by mid-morning.

The ban on vehicles on alternate days according to their registrations – aimed at taking 45 per cent of cars off the roads – was not only successful in clearing the skies, but also eased congestion.

The jams and frustration are likely to resume with the return to work tomorrow.

“If there are no restrictions in the street, maybe the Beijing roads will become big parking lots some day,” an internet surfer called Dao Madan wrote on

Car owners had opposed the controls, citing the lack of sufficient public transport.

“If you do not allow me to drive, make sure you can provide enough seats on buses and subways,” Xiao Pao wrote on the same forum. “Don’t force me into that sauna.”

Restrictions on government-owned cars, which make up some 10 per cent of Beijing’s more than 3 million vehicles, will continue, in a move some experts see as a necessary pre-requisite to imposing wider controls.

Worse pollution than normal might be expected this autumn as factories and power plants in Beijing and surrounding provinces strive to reach their annual production targets despite the two months when they were forced to reduce emissions.

Dust can also be expected to add to the pollution from the hundreds of building sites around the city that had to suspend operations from July 20.

Prostitutes have returned to certain streets, while shops are now openly selling pirated DVDs again.

Security checks at the city’s 11 municipal parks, including the Temple of Heaven and the Summer Palace, will also cease, the media reported.

Beijing saw high levels of security for the Olympics and Paralympics to deter terrorist attacks which the government perceived to be the biggest threat to the events.

The Olympic media regulations put in to place in January last year, which allowed foreign journalists more freedom to report around the country, expire next month.

Hong Kong Air Pollution

Urban Jungle

Celebrity vet Eric Lai shares his views on society through the eyes of animals. Give him your feedback at

Dr Eric – Updated on Sep 19, 2008 – SCMP

This week: Air pollution

Making my way to work today reminded me why I moved to Sai Kung recently. When approaching Causeway Bay along the Island Eastern Corridor, I am usually greeted by the impressive panorama of the skyline from Causeway Bay stretching out to distant Sheung Wan, the break of water of Victoria Harbour, then the new skyline of Tsim Sha Tsui stretching back to Whampoa. The view can be breathtaking when you can see it, but today I couldn’t see any of it through the heavy haze of air pollution. It was absolutely atrocious; the air was thick with a brown-yellow particulate matter and my airway allergy was acting up and I was coughing as I choked on the air. I couldn’t believe that I was voluntarily going into the heart of the haze to breathe in that air – I wanted to turn around and run away. It was sort of scary really.

It is undoubtedly true that the horrible air today as reported by the Hong Kong Observatory was partly due to light winds in the Pearl River Delta and Hong Kong and the low-pressure system over Taiwan trapped the pollution in Hong Kong. And because of the sunny weather and heat, there are photochemical reactions between pollutants that form ozone, which is a strongly oxidising agent that will readily react with other chemicals such as nitrogen oxide from vehicle admissions to form the smog.

The report from the Hong Kong Observatory highlights several issues. The prevalent calm weather has caused this smog to stay in Hong Kong, which implies this amount of air pollution exists every single day of the year but today nature hasn’t had the grace to blow it elsewhere. I find the situation totally unacceptable. It is shocking to see and breathe what we Hongkongers have created and it is equally shocking to know that we accept this amount of pollution normally because it gets blown elsewhere, where it is someone else’s problem. There is a saying that goes, “You reap what you sow”, and it will be future generations that will suffer as a result of the air pollution we are creating.

The government on numerous occasions in the past has laid the blame for much of Hong Kong’s air pollution squarely on the shoulders of our Shenzhen and Pearl River Delta neighbours, but there is much evidence to show that most of the air pollution over Hong Kong is created right here. It has been shown that 50 per cent of the nitrogen oxides and particulate matter in the air is caused by electricity generation in Hong Kong. The Castle Peak power plant operated by CLP Power has been cited as the world’s third most polluting power plant, an accusation that the power plant denies. Hong Kong roads rate as among the world’s most polluting. Much of the blame lies with the thriving goods transport sector between the busy harbour terminal and neighbouring Shenzhen and the Pearl River Delta.

I was shocked at the recent government tax cuts for the slightly less polluting Euro V diesel fuel during the recent oil price rises, when only 23 per cent of the vehicle fleet is made up of diesel trucks and they create more than 80 per cent of the pollution. This tells us that the groups that represent these diesel users have unusual amounts of influence over the government or the government made a knee-jerk reaction based on inadequate or poorly evaluated data.

The Environmental Protection Department, which was set up to help monitor and solve air pollution problems, set its own air quality objectives for seven air pollutants in 1987. These objectives haven’t been reviewed once since their establishment and even though the street-level pollution index exceeds their own air quality objectives consistently, nothing has been done.

As a resident of this otherwise great city I urge the public to take a more active interest in improving air quality. The effects of air pollution are not just irritation to the airways when the pollution is particularly bad. There are horrible long-term side effects, such as chronic respiratory disease, lung cancer, heart disease and even damage to the brain, nerves, liver and kidneys.

We need to encourage the government to support green industries that are actively looking for a way to decrease pollution. We should also support the scientific community in its search for alternative energy sources and ways to clean up air pollutants. The government should be more active in policing the dialogue between its own departments and that of the mainland in decreasing air pollution. This dialogue exists but its agenda has been delayed time and time again. We citizens need to stop being hypocrites and accept the loss in productivity and income that is sometimes needed to decrease the amount of destruction we are causing to the environment.

Reinventing The Wheel

Updated on Sep 19, 2008 – SCMP

The revolution towards an environmentally friendly automotive industry has left the back roads and taken to the streets. General Motors’ unveiling this week of the production version of its electric and petrol-powered Chevrolet Volt marks that point. But this does not mean that the era of gas-guzzling, pollution-spewing vehicles is over. Government will and presence is now necessary to ensure that clean-car technology takes hold and predominates.

We have, after all, been at this point before. As innovative as electric and hybrid cars may seem, they were around when the industry was in its infancy at the turn of the last century. Henry Ford’s decision, in 1908, to opt for petrol to fuel his mass-produced Model T (it could even run on biofuels) steered the course. Ford was swayed by an oil-discovery boom that saw the advent of a cheap, easily-available fuel. His assembly lines produced affordable vehicles that, within a decade, had driven out the more expensive steam and battery-powered competition.

New technologies have been flirted with and abandoned, nuclear and solar among them. US carmaker Baker Motor Vehicle Company produced thousands of electric cars between 1899 and 1915, despite their low speeds. Engineer Ferdinand Porsche created the first battery-and-petrol hybrid in 1901 with his Mixte, which was too expensive to produce commercially because it needed 2 tonnes of batteries to operate the engines on each of its wheels. Battery technology breakthroughs allowed Toyota to take up the hybrid baton again with its Prius in Japan, in 1997.

As pioneering as the Prius has been, the fact that it switches to petrol when speeds of about 25km/h are reached make it rife for a successor. The Volt reverses that, with petrol only used when its batteries run low. There are still difficulties with development, though, and whether the anticipated launch date of late 2010 can be met remains to be seen. But, with the realisation that, for the sake of the environment, vehicles need to be non-polluting and that fossil fuels will one day run out, it is clear that hybrids are only a bridging technology. The Renault-Nissan Alliance is at the forefront of this thinking, indicating that it wants all-electric cars to be ready for mass production by 2010.

Automotive consultants and historians I contacted were in no doubt that electricity was the future fuel. But, for all the innovations and apparent direction of the industry, we should heed the past. University of Dayton science and technology historian John Heitmann pointed out that the industry is at the same crossroads it found itself in the late 1960s.

Then, innovations saw the creation of electric-powered prototypes like Ford’s Commuta. The three-wheeled car unveiled in 1967 – two generations ahead of GM’s move this week – was capable of speeds of 40km/h, with a range of 60km between charges. Unlike the Volt, it was completely non-polluting.

Dr Heitmann laments that the car industry dragged its heels on the innovation, determining that shaking up its manufacturing and way of thinking was not in its interests. Had the developments been built upon, there is no telling where the world would be today. Without doubt, though, there would be far less dependency on Middle East oil, and urban pollution levels would be considerably lower. In consequence, the past decade has been spent reinventing the wheel.

Americans have the world’s biggest auto market and love big vehicles – but not high petrol prices. The cost of oil has dropped by about a third from its June high and the US$4 per gallon threshold that turned the US market to smaller cars and hybrids is being forgotten. GM says it is committed to the Volt, but there are few parts of the US where the infrastructure for electric cars is in place.

Oil is a finite resource, no matter what the price. Fossil-fuel-burning vehicles are the biggest source of urban pollution. Circumstances have driven carmakers to where we have been before but, this time, there can be no turning back. Governments have to ensure, through incentives for innovators and consumers, and penalties for polluters, that the progress continues.

Peter Kammerer is the Post’s foreign editor.

Tower Blocks Will Overwhelm Street Market

Updated on Sep 18, 2008 – SCMP

Angela Tang, of the Urban Renewal Authority (URA) misses the point (“Hawkers back Graham Street market revamp”, September 11) of my own letter about decision-makers failing to come to grips with urban planning and the way we live in Hong Kong (“Officials must change the way they look at public planning”, September 6).

The public knows the link between tall buildings, the road canyons they create, the air pollution trapped at ground level, the air we breathe and its respiratory consequences. It also knows of the detrimental effects of high-rise living, lack of green open space, traffic congestion and pavement crowding that the nearby Graham Street public and those in Central and Mid-Levels must endure.

The URA market redevelopment plans of four bulky high-rise tower blocks, a three-level shopping podium and a construction period of more than six years will overwhelm the hawkers, the historic street market and the available road and pedestrian infrastructure – and destroy Hong Kong’s oldest street market.

This is a place the public can call and use as its own precisely because a street market is a special egalitarian space open to all and not competing with sectional interests, for example, the security guards that you may find in, say, Times Square.

Shoppers, residents from adjacent areas and further uphill and people working in Central, visit, shop and use the present market and can see the sun because it is predominantly a low-rise area. And they have the freedom to walk on four totally pedestrian streets (Peel, Graham, Staveley and Gutzlaff) and partially pedestrianised Gage Street. All these people, although they are not themselves hawkers or residents in the URA redevelopment area, are also stakeholders in this project.

There are countless examples of bad urban planning in Hong Kong and the proposed Graham Street market redevelopment is one. The new political reality is that bad urban planning and all its adverse consequences are fundamental issues and because of them, the public will judge our decision-makers.

We want something a lot better than the sad, hackneyed, destructive models that URA officials, but not other people, think is good urban planning.

John Batten, Sheung Wan

Cleaner Option For Our Buses

Updated on Sep 17, 2008 – SCMP

I refer to Clive Noffke’s letter (“New deal can save Sokos”, September 10), and the announcement to scrap CLP Power’s proposed natural gas terminal that was going to add significant costs to consumers in Hong Kong (“Gas plan for Sokos ditched by CLP”, September 12).

The Hong Kong government can now support a plan to change the heavy diesel bus fleets over to compressed natural gas from the Towngas system, instead of building another terminal to receive the propane version of liquefied petroleum gas (LPG) for use in heavy engines. Taxis and minibuses use the butane version of LPG.

Heavy buses using compressed natural gas produce 80 per cent less in emissions than diesel engines. A study in Australia found that traffic fumes stunt the growth of babies in the womb, which should be a concern to health officials given the canyon-effect of multi-storey apartment blocks that can bottle in cancer dangerous particulates.

Bus depots in Brisbane Australia have installed compressed natural gas equipment that can refuel six buses in four minutes, while the bus is being cleaned and maintenance-checked before going back on the road. Single-deck buses are designed to have seven cylinders in the roof section of the bus. Double deckers would need a different design.

Compressed natural gas buses produce half the engine noise of diesel buses.

Hong Kong can become a leader in adopting new heavy vehicle fuel systems that could significantly reduce the grey smog that pollutes our skies. Our children could grow up breathing cleaner air which benefits their mental and physical development.

Ross Smith, Shek Tong Tsui

Pick of the day: Suffocation

Updated on Sep 17, 2008 – SCMP

Sixteen-year-old Sam Inglis’ digital photographs (pictured) focus on Hong Kong’s air pollution problems. Opens today; reception, Fri, 6.30pm-8.30pm. Mon-Sat, noon-10pm, Fringe Club, 2 Lower Albert Rd, Central. Inquiries: 25217251. Ends Oct 4