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‘Green GDP’ Drive Grinds To A Halt

Boosting economy takes priority over calculating cost to the environment

Shi Jiangtao in Beijing – Updated on Mar 04, 2009 – SCMP

Beijing has stopped calculating the pollution cost of its economic growth as it goes all out to lift the economy, a top environmental official says.

The controversial “green GDP” project, which deducts the economic consequences of environmental damage from the original gross domestic product figures, has been put on hold since early 2007 because of resistance from local officials.

The move came as top leaders repeatedly pledged that an aggressive 4 trillion yuan (HK$4.5 trillion) stimulus package announced late last year would not take a toll on the battered environment.

Analysts said it was a major retrogression for Beijing’s ambitious campaign to cut energy use and pollution, which came after the government promised to combat climate change together with Washington during US Secretary of State Hillary Rodham Clinton’s recent visit.

Environmental vice-minister Pan Yue said on the sidelines of the opening session of the Chinese People’s Political Consultative Conference that “the green GDP project has been cancelled” and “will not be resumed [any time soon]”.

The project, aimed at providing a true picture of the mainland’s degradation by putting an environmental price tag on economic success, has been shrouded in controversy since its introduction in 2004.

It has been widely applauded by the public along with Beijing’s pledges to slash energy consumption by 20 per cent and curb pollution emissions by 10 per cent by the end of next year – but development-minded local authorities have scorned it.

An incomplete calculation of the environmental costs in 2004 showed that pollution caused more than 510 billion yuan in economic losses, or 3 per cent of GDP, according to the only green GDP report ever published, in 2006.

Mainland leaders who had lent their support from the outset of the research scheme were apparently embarrassed by the huge environmental price of the runaway economic development and decided to postpone the release of a second report.

President Hu Jintao shelved the green GDP calculations indefinitely ahead of the Communist Party’s congress in 2007, in an attempt to ensure a successful political reshuffle.

Despite widespread appeals to reinstate the project, analysts said environmentalism had been sidelined again amid the economic slowdown.

Many conservationists have expressed fears about the green impact of the stimulus package, with much of the spending focusing on energy-intensive and polluting industries. Mr Hu and Premier Wen Jiabao had promised several times since December that the mainland would not make the same mistakes of “pollution first and cleanup later”, which contributed to the economic miracle of the past three decades.

However, sources at the Ministry of Environmental Protection said energy and infrastructure projects totalling 800 billion yuan had been approved by the ministry in the past three months.

The ministry had been told not to hamper economic growth, they said.

Analysts said the cancellation of the green GDP project and the ministry’s relatively rapid approval process in recent months were a result of intense political pressure from the top leadership.

“There is a clear conflict between lifting the economy and upholding strict environmental standards,” a Beijing-based environmentalist said. “It is not surprising to see such a result, given the country’s poor environmental record.”

Although Beijing had announced progress in cutting key pollutants, Mr Pan said there was still a long way to go to reverse the worsening environmental degradation.

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