China Renews 'Green GDP' Initiative

China has revived a controversial concept to monitor pollution, a decade after its first attempt at calculating its "green GDP" suffered a swift death.

• By Teo Cheng Wee
• Apr 13, 2015

China has revived a controversial concept to monitor pollution, a decade after its first attempt at calculating its "green GDP" suffered a swift death.

"Green GDP 2.0" was unveiled by the Ministry of Environmental Protection's (MEP) policy bureau chief Li Qingrui on March 30, but its reincarnation has divided environmental watchers, who have greeted the initiative with a mixture of hope and scepticism.

The announcement of calculating green GDP -- which seeks to quantify the cost of environmental damage caused by economic growth -- came a week after China's top leaders coined the term "greenisation".

"Greenisation" was grouped with four other key goals of "industrialisation, urbanisation, informationisation and agricultural modernisation" adopted during the 18th party congress in 2012, highlighting its importance.

"China is reintroducing 'green GDP' now because of the urgency of environmental protection, with the country plagued by serious smog and air pollution in recent years," Xiao Jian, a researcher with Shenzhen-based consultancy Zero Power Intelligence, told The Straits Times.

Proponents of green GDP say it promotes a more comprehensive accounting of economic development and gross domestic product (GDP) growth, and allows the authorities to chart and assess the progress of conservation efforts. 

Li was quoted in Chinese media reports as saying that green GDP will "holistically reflect" the environmental cost of economic activities.

The authorities also plan to study how China can transition towards a green economy. But questions remain over whether the second coming of green GDP will run into the same problems that plagued the first attempt in 2004. The first bid at calculating green GDP produced only one report, in the face of resistance from provincial governments, which resented their growth numbers being sullied by green GDP figures. 

"The Chinese system has an innate drive towards growth," noted Beijing-based legal and environmental scholar Li Dun. "In 2004, powerful quarters within the Communist Party opposed green GDP, while the top leadership made no clear stand. Leaders have in the past pledged to protect the environment, but with little effect."

And when the report was eventually released in 2006, it estimated that environmental pollution cost China US$64 billion in economic losses in 2004. This accounted for about 3 per cent of China's GDP, but some environmentalists believed the real figure should have been closer to 10 percent.

Valuating environmental damage is a problem the authorities are still likely to face, said Mr Ma Tianjie, Greenpeace's programme director for mainland China.

"What price do you put on the loss of a population of birds?" he told The Straits Times. "It's a difficult problem, but one the authorities need to solve."

The MEP said technical specifications for the new index will be set by the end of this year, with pilot cities adopting the methodology starting next year. It did not say when the results will be announced. Still, observers see cause for optimism in China's current drive.

For one thing, the environment has become a far more important issue among the Chinese since 2012, as smog and air pollution came under stronger public scrutiny.

This means there will be greater political will to solve problems related to it.

Already, China has begun implementing a tougher, revised version of its environmental protection law this year, which allows the authorities to detain errant company bosses and removes limits on fines for polluting factories.

There was more good news last week, when the authorities reportedly blocked the construction of a US$3.75 billion dam near Chongqing, in a rare victory for environmentalists, who say the dam would have affected the native fish population.

Key to the green GDP working is a change in the mindset of officials, said Ma.

"They need to stop equating their performance with growth and this will take time," he said.

"But the good news is, with the direction being set by top leaders, I think the process has begun," he added.

 

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