Where Poor Is A Poor Excuse

China ranks 113th among all countries, with poor scores in air pollution and other ills of industrialization.

Ask Chinese officials why their nation's environment is so toxic; you'll get a list of scientific-sounding explanations. The population is huge and dense. Arable land per capita is alarmingly sparse. Despite stunning rates of economic growth, many Chinese remain poor and rural, prone to ungreen behaviors such as tossing pollutants and trash into the rivers. But the real question is why China fares poorly in Yale and Columbia's Environmental Performance Index (it ranks 101st overall, but dead last in its income category). Its weaknesses are legion: air pollution, stifling levels of industrial ozone, poor fishing practices, bad water quality and other ills.

The problem is not a lack of good intentions. For years President Hu Jintao and Prime Minister Wen Jiabao have been reciting the mantra of sustainable development (and, for good measure, "Green Olympics"). They've set serious goals but have yet to institute the tough regulatory reforms needed to achieve them. Enforcement lags and market mechanisms aren't in place to give industry incentives to adopt green practices. Groundbreaking initiatives—most recently an effort to establish a "Green GDP" to measure the environmental progressiveness of each province—have languished due to lack of cooperation within the government.

China's environmental headaches run the gamut, but most can be linked to the scorching pace of economic growth. Factories that emit copious amounts of smog, soot and carbon have sprouted quickly and cheaply. Polluting, unsafe coal mines are so busy (and lucrative) that coal czars are loath to curb China's overriding dependence on coal as an energy source. As a result, China scores poorly on key categories such as water pollution, industrial CO2 emissions and indoor air pollution (which in some cases is linked to the prevalent use of burning coal bricks for warmth during winter). One third of China's rivers and three quarters of its major lakes are "highly polluted," according to the OECD, which late last year reported that up to 300 million people drink contaminated water.

Hu Jintao and other leaders have exhorted the masses to create a "resource-saving, environment-friendly society." But compelling local apparatchiks to follow this slogan is a huge conundrum because for decades the biggest factor in their promotions has been their localities' economic-growth rate. This has come at a huge cost to the environment. According to the World Bank, pollution and other environmental damage costs the Chinese economy as much as 12 percent of GDP annually (including medical expenses and damage to crops and fish). The Green GDP was supposed to incorporate those costs.

Pan Yue, a reformist vice minister in Beijing, was an early champion of the notion of using a Green GDP to rank officials by their greenness and punishing those found wanting. Pan managed to win the tacit support of his bosses in Beijing, but the project was a nonstarter in the provinces. Authorities in hardscrabble regions with a lot of polluting industries—such as Ningxia, Hebei, Shanxi and Inner Mongolia—opposed the Green GDP idea from the get-go and refused to invest in improving the impact of their operations on the environment. "One has to pay a big price" to realize Green GDP, says Chinese Academy of Social Sciences researcher Li Shi.