How China is Trying to Go Green

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Sheng Li / Reuters-Landov

Dianchi Lake, in the southwestern Chinese city of Kunming, used to be one of the Middle Kingdom's worst environmental disaster zones. Years of industrialization and high-intensity farming, beginning in the 1980s, had turned what was formerly the "pearl" of Yunnan province into a stinking cesspool. Birds would land on the blackened water and die. Local residents wore masks to protect against the stench of the water. On a toxicity scale of zero to five, Dianchi Lake scored above five—its pollution level was off the charts.

So it's almost unbelievable that today, rich Chinese and expatriates will pay $150,000 or more for luxurious bougainvillea-clad Italianate villas that sit on the lake's newly rehabilitated wetlands. Thanks to a cleanup program that began two years ago, the stench is gone, and Dianchi Lake has become a destination site for pleasure seekers. There's still a long way to go—pollution levels, while lower, are still a five (officials hope to get them down to four by 2020). And while small animals can survive in the water, it's still not fit for drinking. Whether or not it ever will be depends on how willing local officials are to sacrifice growth for the health of its people, and the planet.

That will undoubtedly be one of the key topics discussed at this week's U.S.-China strategic dialogue in Beijing. America and much of the rest of the world wants China to play a bigger role in combating climate change and pollution. China argues that it is too poor to do so. China has a lot of problems—hundreds of millions still living below the poverty line, and plenty of international disagreements over everything from trade to security. But in many ways, the environment is the Middle Kingdom's most crucial problem. Many economists inside and out of the country now agree that it's the biggest potential long-term drag on economic growth—as much as 22 percent of yearly GDP growth by some accounts—and keeping growth high is the only way to ensure political stability in a country that has accepted one-party autocracy in exchange for greater prosperity.

Yet cleaning up the country's air and water requires short-term pain—growth will by necessity be slower if polluting factories are shut down and farmers are forced to cut the use of chemicals which raise their crop yields. The financial crisis has only made it tougher to put China on a path to sustainable development. "The crisis increased stimulus money, but this has also increased the pace of development," notes Dr. Lu Hongyan of the environmental science and engineering department of Sichuan University, who points to the massive infrastructure projects—train lines, new real-estate projects, and the like—now going up all over China, many of them powered by dirty, coal-generated power. And even as China is becoming a leader in green manufacturing (it produces 40 percent of the world's solar panels and is running many of the top wind-turbine firms), it typically uses high-carbon fossil fuels to churn these products out. "It's so ironic that we're using coal power plants to manufacture energy-efficient lights," says Ma Jun, the founder and director of the Institute of Public and Environmental Affairs, a Beijing green NGO.

Premier Wen Jiabao and other leaders are constantly talking up the need for China to take a greener growth path (last week Wen issued another warning about China's unsustainable development). But the problem is that Chinese bureaucracy isn't set up to facilitate a low-carbon lifestyle. Provincial officials are promoted not on their treatment of the environment but how fast they can grow the local economy—and there's plenty of incentive to lie to Beijing about both. (As an ancient Chinese saying goes, "The mountains are high, and the emperor is far away.") Ma Jun notes that government reports of industrial-pollution violations, which are based on provincial reporting, fell conspicuously in 2009, at the same time that the financial crisis was putting pressure on big manufacturers. "Regulation simply got more lax," he says. China's own environmental czar wouldn't disagree. Xie Zhenhua, vice chairman of the national development and reform commission, which oversees, among other things, China's version of the EPA, says, "We have plenty of environmental laws in China, but we do have a problem enforcing them."

Beyond getting tougher on local and multinational polluters, the biggest question is whether China's major push to become a world leader in green technology will enable it to leapfrog its way to green innovation, or whether it will simply become the turbine factory of the world. Despite all the solar panels China makes, 90 percent of them are exported rather than used at home. Meanwhile, new coal-fired plants are going up around the country, and the government is announcing new plans to exploit fossil-fuel reserves in far-flung places like Xinjiang province, in part to enrich and pacify the locals who were involved in ethnic riots last year.

There's no doubt that if the government decrees more use of sustainable technologies at home, it will happen (indeed, some renewable firms are expecting their domestic business to grow rapidly as policy shifts). But capitalism may help just as much. The rich property owners on Dianchi Lake, many of whom are also the type to buy sustainably grown vegetables (creating a nascent market for organic foods) or Western milk products (for fear of contamination in home-grown goods) could become a force for change. As China gets richer, it will slowly but surely create its own equivalent of a Whole Foods buying, eco-tourism-enjoying middle class. That's the very group that will be most likely to question the cost of unbridled development.

Reporting for this piece was done as part of a International Reporting Project (IRP) fellowship