1. ICCE
European Culture and Business of
Shanghai Normal University, China
UPS
University of Paris South, France
Energy Policy and
Environmental Protection in China
Key Words:
energy ; environment ; energy sector ; green house gases ; carbon emissions
; CDM ; environmental impact assessment ; information principle ;
participation principle ; prevention principle ; environmental liability ; health
impact
Aloïs GALLET
Law
June 2008
1

2. DISCLAIMER
The views and opinions expressed in this essay are the responsibility of the author and, therefore do not
necessarily coincide with the ones of Shanghai Normal University or Université Paris Sud.
2

3. ABBREVIATIONS
CO2 Carbon Dioxide
CDM EB CDM Executive Bureau
CPPCC Chinese People’s Political Consultative Conference
CDM Clean Development Mechanisms
CPC Communist Party of China
ECM Environment Cost Model
EIA Environmental Impact Assessment
EIS Environmental Impact Supervision
EPIV Environmental Protection Inspections and Verifications
GHG or GHGs Green House Gases
GDP Growth Domestic Product
CH4 Methane
MEP Ministry of the Environmental Protection
NDRC National Development and Reform Commission
NEB National Energy Bureau
NELG National Energy Leading Group
NOx Nitrogen Oxides
PRC People’s Republic of China
RMB Renminbi, the Chinese Currency
SEPA State Environmental Protection Administration
SO2 Sulfur Dioxide
TOE Tonnes Oil Equivalent
UK United Kingdom
UN United Nations
USA United States of America
USD American Dollar
WB World Bank
WHO World Health Organisation
WTO World Trade Organisation
3

4. RESUME en français
La Chine, ou l’Empire du Milieu pour les plus historiens, compte aujourd’hui parmi les grands acteurs d’un
monde de plus en plus interconnecté. Cette puissance leader en Asie, mais aussi acteur montant sur la scène
internationale, est pourtant mal connue de l’occident qui ignore tant sa culture, que son histoire ou ses intentions. Parmi
les nombreux reproches qui sont formulés à l’encontre des autorités chinoises, la dégradation de l’environnement.
Le monde réalise désormais, et grâce au travaux réalisés par les prix Nobel de la paix 2007, que la crise de
l’environnement et notamment le dérèglement climatique va entraîner de lourdes conséquences sur les économies et les
peuples. La presse internationale fustige la position chinoise, décrite comme mercantile et avide de croissance, au
mépris des considérations désormais incontournables que sont la protection de l’environnement ainsi que la maîtrise
des pollutions industrielles.
Toutefois, peu nombreux sont ceux qui analysent et tentent de comprendre la Chine dans son ensemble. Quelle est cette
crise de l’environnement qui menace les citoyens chinois, et également les peuples de zones côtières du monde entier
s’il on en croit la théorie du réchauffement climatique? L’organisation des jeux olympiques de Pékin est l’occasion de
faire la lumière sur cette Nation qui compte la plus grande population du monde, les investissements étrangers les plus
abondants, et les cas de pollutions les plus graves.
Ce sont tout d’abord les causes et les conséquences de la dégradation de l’environnement qui doivent être expliquées.
Pour ce faire, une multitude de données scientifiques, économiques, sociales et politiques doivent être prises en compte.
Ensuite, puisqu’il s’agit d’analyser la politique chinoise de l’environnement, il faut se tourner du côté de la législation
nationale afin de trouver des indices d’une bonne volonté de la part des dirigeants chinois.
La crise de l’environnement en Chine est, pour une part du moins, de type systémique. Avec l’état des connaissances
scientifiques dans les années 70, lors du décollage économique du pays, rien ne permettait de prévoir que l’industrie
alimentée par les énergies fossiles et particulièrement le charbon, deviendrait le pied d’argile du géant.
La croissance économique doit son succès à l’industrie. Cette dernière qui était de type manufacture jusqu’à la fin des
années 90, a value à la Chine le nom « d’atelier du monde ». Mais l’industrie chinoise d’aujourd’hui est de type
industrie lourde. Le ciment, l’acier ou encore les produits chimiques subviennent aux demandes des marchés mondiaux.
Seulement l’industrie lourde est génératrice d’importantes émissions polluantes, et hautement consommatrice
d’énergie.
La Chine si elle ne manque pas d’énergie, puisque auto suffisante à hauteur de 95%, ne dispose sur son territoire que du
charbon. Ce combustible fossile représente 70% des besoins en énergie du pays, qui sont partagés entre l’industrie et le
secteur du bâtiment. Le charbon est une source d’énergie dite fossile qui lors de sa combustion dégage des gaz à la fois
toxiques et contribuant à l’effet de serre (SO2, CO2, CH4, NOx et les particules PM). La question de l’énergie est
cruciale pour la Chine mais aussi pour d’autres pays. A l’heure ou le prix du baril de pétrole flambe et menace de
provoquer une récession économique majeure, les Etats s’observent et cherchent un coupable. C’est à tord que
l’industrie chinoise est pointée du doigt. Si les prix du pétrole sont tirés dans une certaine mesure par la Chine, c’est de
part le secteur des transports. Quand bien même l’industrie chinoise en serait responsable, il ne faut pas oublier que
c’est une industrie qui est sollicitée par les demandes venant de l’étranger.
Ainsi l’impact de l’économie chinoise sur l’environnement est double. La consommation énergétique puis, l’activité
industrielle alimentée par la première sont les causes de la dégradation écologique, mais entraînent aussi de graves
conséquences sanitaires.
Les observateurs internationaux comme les chercheurs chinois s’accordent sur les effets du charbon, donc de l’énergie.
La facture de la dégradation de l’environnement en Chine se compte en point de PIB. Entre 4% et 8% du PIB, c’est le
coût qui devra être supporté par l’économie nationale pour la réparation des dommages causés par les pluies acides qui
détruisent forêts et cultures, la pollution de l’air et dans une moindre mesure la pollution de l’eau. Ces pollutions sont
toutes générées ou aggravées par la combustion du charbon.
Les préoccupations du gouvernement chinois sont uniques. En effet, la mission numéro un du gouvernement
communiste est bien de nourrir les quelques 1,5 milliard d’âmes qui couvre son territoire. L’approche sociale du parti
4

5. est trop souvent ignorée par les observateurs étrangers. L’hécatombe sanitaire provoquée par l’industrie chinoise n’est
ni raisonnable, ni acceptable pour le gouvernement et commande un radical changement de politique environnementale.
Alors si la face de la Chine sur la scène internationale compte, et pourrait être une raison suffisante pour prendre des
mesures drastiques en matière d’environnement, ce n’est en tout cas pas la première des raisons.
Les réponses apportées à la crise écologique de l’énergie par le gouvernement chinois méritent le détour. A la grande
surprise de beaucoup, le droit de l’environnement existe en Chine, et il semblerait qu’il soit en passe d’intégrer la
réglementation relative à l’énergie.
Tous les grands principes du droit de l’environnement se retrouvent dans le droit chinois. Il ne faut pas oublier que le
droit de l’environnement est issu du « soft law » international largement édicté par les Nations Unies, dont la Chine est
membre permanent depuis sa création. Le principe d’information du public est présent et promet des droits d’action aux
citoyens à l’encontre de administration de la protection de l’environnement. Le principe de prévention est prévu avec
tout un arsenal législatif et réglementaire regardant, notamment, les études d’impact. Le principe de participation du
public est aussi garanti, justement dans le cadre des études d’impact.
Le droit de l’environnement chinois a pendant longtemps été tenu en échec par les administrations locales qui se
retrouvaient face au dilemme classique qu’est le choix entre la protection de l’environnement et la recherche d’une
croissance immédiate.
L’application du droit de l’environnement n’était pas suffisante auparavant. Mais cette difficulté semble en passe d’être
réglée de manière définitive avec la toute récente réforme des institutions gouvernementales. L’ancienne administration
d’Etat en charge de la protection de l’environnement a été élevée, sous la pression des représentants populaires
(CPPCC) notamment, en véritable Ministère de la Protection de l’environnement. Ce dernier s’est vu attribuer le
qualificatif de Super Ministère. Sa mission est de toute première importance. Le secteur de l’énergie a été refondu afin
d’améliorer le contrôle et surtout la gestion de l’énergie. Quoi qu’il advienne de ces réformes, l’environnement comme
la maîtrise de l’énergie et des émissions polluantes sont désormais de véritables objectifs du gouvernement.
Enfin, le Protocole de Kyoto auquel la Chine était partie membre lors des négociations, et qu’elle a ratifié en tant que
pays en voie de développement, fournit un cadre de travail exploitable. Le protocole vise à réduire les émissions de gaz
à effet de serre et bénéficie largement à la Chine, qui n’est pas considérée par le protocole comme un pays industrialisé.
Kyoto met en place des outils de marché qui permettront à la Chine de vendre des crédits carbones aux pays
industrialisés, eux soumis aux objectifs de réduction des émissions. Ce secteur est en pleine expansion. Il permettra, en
partie du moins, de financer la transition vers des énergies moins polluantes.
D’autres outils ont été mis en place par la Chine et indépendamment de Kyoto. Il s’agit d’outils économiques incitatifs
tel que les prêts bancaires verts ou les assurances vertes qui semblent traduire l’idée du gouvernement chinois : utiliser
les contraintes réglementaires nécessaires à la protection de l’environnement pour créer un marché propre, et opérer
ainsi la transition de l’énergie fossile vers une énergie verte.
5

6. EXECUTIVE SUMMARY
In 2006 at the occasion of a speech delivered by a State Deputy before the National People’s
Congress, the state of the environment in China was described as 触目惊心 “chu mu jing xin” which means
that whatever hit the eye is shocking.
The protection of the environment in China is now one of the main objectives of the 11th
Five Year Plan.
The worst of the pollutions in China comes from the structure of the economy. The heavy industry that
allows China to export so much raw materials all over the world I highly polluting and highly energy
consuming. The energy allocated the industry and also to the construction sector comes from the power
plants fed with coal up to 70% of the total of China’s energy demand. The coal is abundant in china, and
new power plants are opening every week. Consequently the coal has become the first environmental issue
of the country.
Fortunately, the government has taken steps toward a cleaner energy sector and a greener industrial
landscape. The Chinese environmental law is not a new born policy; however there is a regain for the subject
matter.
The enforcement of the law in the field of the environment has been subject to a cumbersome application for
many years, when the development path prevailed to the ecological considerations. Things are now
changing. The environmental is integrating the energy policy of the country purposely because the two
issues are closely linked together.
As a milestone it can be observed the elevation of the State Environmental Protection Administration to a
Super Ministry. The environmental policy undergoing a dynamic refreshing and can count on the new
Ministry to supervise its enforcement.
The government is also currently trying some new market based instruments for promoting the clean
developments of the Nation. It seems that the market economy will be the ultimate way to ensure the
transition toward a cleaner society, a cleaner energy.
The president Hu Jintao said it at the occasion of the 17th
Communist Party Conference, the harmonious
society is a dream that can be pursue only if the environment receives sufficient consideration. Other would
simply say that the environment is not a choice for the time being, it is a necessity.
6

7. INTRODUCTION
The booming economy in China has already inflicted terrible environmental consequences. 2008 is
the year of the Olympics hosted in the capital Beijing. The event and its preparation have spread the light on
a country too often ignored or misjudged by the West. The current state of the environment is alarming. Two
years ago, an official begun a speech before the National People Congress saying about the environment in
China 触目惊心 “ chu mu jing xin” which means in English “ whatever hit the eyes is shocking”. It may
have ignited a change in the public awareness.
Although the foreign press media fustigates China as the biggest polluter in the world, only seldom are those
who went deeper in the study of the causes and consequences of the Chinese calamity. The double digit
economic growth enjoyed for the past decades was heavily relying on the industrial sector. The latter
operated a shift about ten years ago, from a manufacturing industry, to a “heavy industry”. Such shift in the
economic patterns combined with the market opportunities located in both China and abroad for the “made
in China” outputs has demanded enormous quantities of energy.
The energy, the production of electricity and ultimately the base ground of the economy rely on the worst
fuels ever: the coal. Indeed, if China is actually the first polluter in the world, and the most polluted country,
it more because of the coal than others chemicals that may be discharge into the rivers, the air or the lands.
Consequently, the entire economy and about 1.5 billion people estimated to live in China is dependant to the
coal. Though, maybe they are not condemned to live in a polluted environment. However, international
observers do not miss a chance to undermine the debate waving the argument of the communist carelessness,
the avidity to sustain the growth by all means. The assumption may lake of solid grounds and references,
especially when the Chinese news relates on a weekly basis the political and legal forecast in the subject
matter of the environment. Ignoring the Chinese press and defending the theory of the greedy China for oil,
coal and money, the environmental steps forward are deemed as faked. It seems that the credibility of China
is often subject to doubt and reluctance from the outside.
Already it comes out; the environmental issues are highly complex and interdisciplinary. Sciences,
sociology, economy and legal matters are involved. Because the systemic causes of the problems of
pollutions, harmful for the environment, but also for the health and the economy of the country, all share the
common starting point of the energy consumption, the latter should be studied with regards to the
environment. The economic and legal approaches will be bond.
The question is, how to conciliate the energy and the environment policies in China? The question covers
two sub questions that are the actual existence of threat to the environment coming from the coal energy, and
the paving of a way out by the Chinese authority. Thereby, the first part will be dedicated to studying the
actual sources and consequences of the energy structure to the environment. The second part will examines
7

8. the existing legal frame and instruments that may combine both policies that are the environmental
protection and the energy immovable factor.
8

9. PART I. DEVELOPMENT AND ENVIRONMENT IN CHINA........................................................................11
CHAPTER I. ECONOMY, DEVELOPMENT AND ENVIRONMENTAL IMPACT............................................11
Section 1. History of the Chinese economy and the people of China .................................................................11
1. Population.................................................................................................................................................................... 11
2. Colonization................................................................................................................................................................. 12
3. Communism and institutions........................................................................................................................................ 12
4. Sustainable economic growth in China........................................................................................................................ 13
Section 2. Economic development and industries,..............................................................................................14
5. Consequences of the economic development............................................................................................................... 14
6. Sectors of the economy................................................................................................................................................ 15
Section 3. Energy and electricity needs..............................................................................................................17
7. Energy demand of China and position in the ranking of the world’s polluters ............................................................ 17
8. Evolution of the demand.............................................................................................................................................. 19
9. Structure of the energy industry and overall consumption........................................................................................... 20
10. International context................................................................................................................................................ 21
CHAPTER II. REVIEW OF THE STATE OF ENVIRONENT IN CHINA AND THE COMING THREATS ..................23
Section 1. Energy and pollution impact..............................................................................................................23
11. Energy and pollution, focus on the fossil fuel......................................................................................................... 24
12. Water pollution ....................................................................................................................................................... 27
13. Atmospheric pollution............................................................................................................................................. 29
Section 2. Non environmental impact.................................................................................................................31
14. Pollution impacts of the material and equipements................................................................................................. 31
15. Health...................................................................................................................................................................... 31
Section 3. Other global impacts and considerations of the energy use and the energy pollution in China .......32
16. Welfare and safety .................................................................................................................................................. 32
17. Confusion on the intention of China ....................................................................................................................... 33
18. Global Warming issue............................................................................................................................................. 34
PART II. ENVIRONMENT AND ENERGY POLICY IN CHINA......................................................................37
CHAPTER I. LEGAL FRAMEWORK OF THE PRC FOR THE ENVIRONMENTAL POLICY ................................................37
Genesis of the environmental law, guideline of the PRC environmental law..........................................................38
19. Energy and environmental Law at the International Level, the Kyoto Conference 1997........................................ 38
- CURBING THE GHG EMISSIONS, GOALS: ................................................................................................................................ 38
- MARKET BASED INSTRUMENTS:............................................................................................................................................. 38
- DEVELOPING COUNTRIES AND INDUSTRIALIZED COUNTRIES:.................................................................................................. 39
CHAPTER II. INTERACTIONS OF ENERGY AND ENVIRONMENT REGULATIONS ..........................................................40
Section 1. Presentation of the relevant laws.......................................................................................................41
20. - Constitution and Institutions:................................................................................................................................ 41
21. - National relevant laws, overview:......................................................................................................................... 42
22. - Environmental Protection: .................................................................................................................................... 43
23. - PRC Five Years Plan: ........................................................................................................................................... 44
24. - Energy Law:.......................................................................................................................................................... 44
Section 2. Precautionary principle and prevention principle.............................................................................47
25. The Environmental Impact Assessment, a preliminary planning instrument for the environmental protection...... 47
- TARGETS FOR EIA: ............................................................................................................................................................... 48
- REALISATION OF THE EIA:.................................................................................................................................................... 49
- PROCEDURE OF THE EIA: ...................................................................................................................................................... 49
- CONTROL OF THE EIA PROCEDURE AND REVIEW:................................................................................................................... 50
- EIA INSPECTIONS ................................................................................................................................................................. 50
26. Environmental Protection Inspections and Verification, a post establishment control mechanisms ....................... 51
- TARGETS OF THE REGULATION: ............................................................................................................................................. 51
- PROCEDURE:......................................................................................................................................................................... 52
27. Emissions licence in the energy and pollution quotas in the industry ..................................................................... 52
Section 3. Information principle and participation of the public, or enforcement of the energy and
environmental law in the PRC.................................................................................................................................53
28. Principle of Information in China: .......................................................................................................................... 54
9

10. 29. The principle of participation and consultation of the public in the EIA:................................................................ 55
30. Energy label: ........................................................................................................................................................... 55
Section 4. Polluter pays principle, Tax Incentives and Legal Liabilities in the field of energy and
environmental law ...................................................................................................................................................57
31. - Tax Incentives....................................................................................................................................................... 57
32. - Grounds for Legal Liability in the Common Law of the PRC .............................................................................. 58
33. - Administrative liabilities....................................................................................................................................... 59
34. - Civil liability:........................................................................................................................................................ 61
Section 5. Polluter pays principle and the legal economic instruments.............................................................62
35. The price of the energy ........................................................................................................................................... 62
36. Clean development mechanisms ............................................................................................................................. 63
37. Banking and environment ....................................................................................................................................... 65
10

11. PART I. DEVELOPMENT AND ENVIRONMENT IN
CHINA
Although China has been sustaining a double digit growth over the two past decades, the Middle
Empire is still considered as a developing country. This common acknowledgement has a great impact in a
global economy and a global society, and as it will be detailed later, on the enforcement of international
treaties such as the famous Kyoto protocol. Among the other developing countries, such as India or Brazil,
China has seemingly taken the lead of the changing geopolitical and economical structure of our world. To
understand the position of China towards the environmental issues, it is necessary to have an inner look at
the specific features of its history, its economy and its politics which are ultimately, the mindset of the
Nation. This basic knowledge will facilitate stressing the link, which is apparently not obvious enough for
the time being, between the holy development path and, what sciences believe to be its consequent
environmental drawbacks. The link from one to another is going to be exposed as factually as possible.
Chapter I. ECONOMY, DEVELOPMENT AND ENVIRONMENTAL
IMPACT
The present first Chapter is aimed at presenting the preliminary basic facts necessary to a true
understanding of the Chinese environmental policy.
Section 1.HISTORY OF THE CHINESE ECONOMY AND THE PEOPLE OF CHINA
Economy and history cannot be set apart. The economical performance of China do not need to be
explained here since enough specialists wrote on the subject, but a quick summary of the last century of
history will give a inner view of what the Chinese culture is or might be and thus, help to explain the
mindset of the deciders the deciders of the PRC when making a choice.
1. POPULATION
There are some obvious facts regarding China that are released in every book of history of
geography. These facts have their importance, and that is why they are going to be reminded once more.
China has a population estimated about 1.35 billion people. Official statistics that are very complicate to
conduct in China due to the greatness of the country, say the workers account for 769.90 millions. The part
of the rural population accounts for 40% of the total. Even nowadays, the Chinese are essentially peasants.
All together Chinese weight for about 20% of global population. Despite the very stringent “one child
policy” which has been implemented in 1979, China still has a considerable growth rate and the first
population in the world. Official forecast estimates the population of China in 2030 to attain 1.6 billion of
people1
. In this year of 2030, other forecast predict that India’s population would overcome China’s, the
1
Chinese Academy of Social Sciences (CASS) in 2005, see http://www.China-embassy.org/eng/gyzg/t228473.htm
11

12. latter would there known a peak in its population that would decrease afterward, and the CO2 emissions of
China would equal emission of the rest of the world by today2
. The regulation is felt by the Chinese people
as a very hard legal impeachment. Chinese people do not have siblings. This point shall not be skipped or
taken lightly since it lays in every political choice. China recognizes in its constitution the multiethnic
population. Fifty four ethnic minorities compose the Nation. The Han ethnic group is the major one as a
result of the long history of the dynasties. It accounts for 95% of the population. The fifty four remaining
minorities represent the last 5%.
Population growth seems to corroborate with economic growth. The combination of the two is a powerful
factor of the environmental degradation.
2. COLONIZATION
The point is certainly not to go back in the history trying to find the very tribal roots of the
development in China and its adverse consequences on the environment. The point is simply to remind the
political state of China no more than 100 years ago. China has been colonized and dominated by the western
nations among which France, UK and USA, during the end of the nineteenth century and until the first half
of the twentieth century. The occupants took commercial advantages over a dismantled country unable to
push back the foreigners. Eventually China was obliged to sign unfair commercial treaties which heritage is
know in Shanghai for instance as the concessions. In Shanghai, there were no less than three foreign powers
occupying the city. The British concession was the first of the three big concessions along with the
American’s (which later merged with the British) and the French concession. The Japanese attack on China
which was already facing occupation problems with other countries marked the darkest period of the history.
It was during the Qing Dynasty and it was felt as the strongest times of humiliation for China. The attack
marked a turning point in the history. As some professor of the Shanghai Normal University say, the history
allows explanation and understanding of the present. The occupation, felt as an humiliating period,
underwent by the people of the Middle Empire became later a source of strength and motivation to rebuild
the country, after winning the freedom after the World War II.
3. COMMUNISM AND INSTITUTIONS
The Communist Party of China (hereafter “CPC”) was founded in 1921 October the 3rd
. This date
has ever since remained an important date in the history of the PRC. It shall not be seen as a mere example
of today’s CPC power over the Nation, but as the pride of a free China in which the power lays in its
people’s hands. At least, this is what the PRC Constitution stands for. History teaches by itself, and knowing
that the CPC is the actor and author of the free China, the logic would smartly link history and explanation
of the patriotism. The terrible events of May the 12th
of year 2008 will stay in mind for decades. Not only
patriotism, but solidarity and national pride took their place in the horror of the earthquake. China had not
been hit so hard since the year 1976. The patriotism of China may be seen in Europe and America as a
speculative demonstration of a blind and deaf nation victim of the propaganda spread by politicians.
2
“Controlling CO2 emissions without hindering economic development is a major challenge for China and the world”
by Ning Zeng, Yihui Ding, Jiahua Pan, Huijun Wang, Jay Gregg See http://www.sciencemag.org
12

13. Furthermore, politicians, economists and other foreign specialist see the patriotism and the nationalism of
China as a dangerous factor for the stability of the world. The recent episodes of the harassment against the
Olympic flame in Paris3
and the terrible earth quake in the Sichuan province showed to the face of the world
a patriotic China in which the entire Nation was united and in solidarity against the challenge for survival,
the challenge for pride, the honour of the Nation. The characters of Mao Zedong and Den Xiaoping are
probably the most highly respected. The explanation lays in the accomplishments made by the two
statesmen. The People’s Republic of China is not all actually a Republic in the sense that the power would
come from its people. The republic, in the western understanding, is slightly different from what it is in
China. Indeed, the CPC rules the State which is much decentralized, and the elective system is sufficiently
indirect so that the members of the government are not worried by the next elections unlike in France. In
these constitutional facts lay some advantages that are the strength of the political decisions. Indeed, since
the government is not threatened by the people as the next elections approach, the political declaration bear
much more weight. Basically, when the President of the PRC announces a reform, there is no reason to
believe that the announcement’s purpose is to please to the voters. The government has one basic duty: make
sure that the population is properly fed! Such political will and courage is what is required in environmental
matters.
The treaty of Paris establishing the United Nations was signed in 1951 by the current permanent members of
the Security Council. The very communist China at that time, few years before the cold war started, was
granted a diplomatic seat at the top of international discussions. Thus, the voice of China weights for as
much as the other 5 permanent members of the UN, the right of veto witnesses. At the time of the signature
of the Paris Treaty, the international community may have thought that a diplomatic voice for China at the
UN was like giving an unloaded riffle to a teenager. China may have been seen as not very important at the
time because its people were hardly properly fed. Well, fifty years later, it looks like things have
considerably changed, and the voice of China is now of the greatest importance.
Few words on the local and central authorities
4. SUSTAINABLE ECONOMIC GROWTH IN CHINA
If the question is to know whether the Chinese economic growth is sustainable, it comes to no
surprise when someone says that the Chinese economy has been the best example of high and sustained
growth over the past decade. The surging economy of China is often nicknamed as “double digit growth”.
The admiration for its achievement is unanimous. Not only foreign observers comment the performance, but
also politicians and experts of the PRC enjoy such success, and they cannot be blamed for being proud.
China has, by far the highest growth in the world. The figure below states the annual average growth of
China over the period 1992-2005 (on the low right hand corner) and already shows very clearly the
3
Protests, patriotism fan Olympic flame by Bobby McGill, available at
http://en.Chinaelections.org/newsinfo.asp?newsid=17228
13

14. comparative advance already taken during the past decade over its economical opponents who simply are:
the rest of the world.
Such impressive growth may be disregarded by the other Nations. Indeed, China is still a communist country
that has in a relative short period of time managed to do much better than hard capitalist countries.
Moreover, the history witnesses that the latter are the ones who set the rules of the game. Eventually,
sometimes questions, curiosity, inquisition, and jealousy maybe will come around. And when the discussion
comes to the environmental impact of China due to its economic growth, the question of responsibilities
shall not be deemed as a small question any longer.
Section 2. ECONOMIC DEVELOPMENT AND INDUSTRIES,
5. CONSEQUENCES OF THE ECONOMIC DEVELOPMENT
By looking at the institutions, we often manage to catch a clear view of the political aims that are (as
said before) very powerful in China. The National Development and Reform Commission (hereinafter
NDRC) bears the word “development” in its heart and echoes the political will. The NDRC was established
in 2003. The NDRC is the successor of the State Planning Commission created in 1952. The official
introduction says the following4 : “The National Development and Reform Commission is a macroeconomic
management agency under the State Council, which studies and formulates policies for economic and social
development, maintains a balance of economic aggregates and guides the overall economic system
restructuring”.
4
http://en.ndrc.gov.cn/brief/default.htm
14

15. Development if it had to be defined here could be: “the process of gradually changing from a stage to
another, most frequently but to necessarily, by seeking improvements directed to one or several specified
goals”. The development of a country can be understood in different ways. Technological, social,
economical or environmental can be forms of development. However, political development may not exist at
all, providing recognition of the theory according to which there is no on ideal model of politic, but several
model for several situations and different nations with their specificities. Development and growth are
tightly bound. Indeed, the first preoccupation for such a country is to feed the population, which inevitably
passes through guaranteeing sufficient economic results so as to buy or produce the necessary supplies. This
is simply to say that development shall not be assimilated to a game of poker, for the players that try to be
richer than their game mates. On the contrary, development and economic growth, in a market oriented
economy5, are fundamental for the well being of a Nation. Judging from a purely economic point of view, it
seems that the accomplishment made by the NDRC has been a success over the years of its creation.
The figure above shows the Growth Domestic Products (hereinafter GDP) increases for the so called boom
period of the Chinese economy. It is now interesting to wonder about where does the Chinese wealth comes
from?
6. SECTORS OF THE ECONOMY
China is also referred to as the manufacture of the world. Indeed, its wealth does not come from the
agriculture, or the sale of intellectual services. China is highly specialized in the production of goods,
machinery and raw materials. The industrial features of China are commonly called the heavy industry. Such
a name comes from the idea that the mass production generates heavy or let’s called big energy demand, big
outputs, and inevitably big emissions of pollutants. The GDP in 2004 was coming up to 53% from the
industrial sector, also called the secondary sector. However, one precision should be made; the heavy
industry in which China has specialized is quite recent compared to the 20 past years of growth. Even
though the secondary sector was and is still the preferred sector of the economy, a shift has been operated
within.
5
Market oriented economy pursuant to the World Trade Organization accession of China on 2001 December 11th
15

16. GDP in 2004*6
Rmb billion % year-on-year change % of total
Gross domestic product (GDP) 13,651.5 9.5 100
Primary industry 2,074.4 6.3 15
Secondary industry 7,238.7 11.1 53
Tertiary industry 4,338.4 8.3 32
* Preliminary estimates.
The importance of talking here about the sectors will be further detailed. Basically, from an environmental
point of view, the relation between the industries and the pollution shall be clearly exposed. Indeed, the
economy of a country specialized in high technology goods and in services cannot be compared with the
economy of China, nor can be the environmental impact.
Two “not to be confused” environmental factors are suspended to the sectors of industry. The first factor is
the volume of pollutants released into the air, the water or the ground by certain industries. The other one
which is the core topic of the present report is the energy consumption of each sector, and the total energy
needs of the general Chinese economy.
The particular case of the cement production is relevant in the analysis of the Chinese industrial sectors since
China is the first producer of cement all over the world. China supplies the world’s demand in cement with
44% of the global production. The booming industry of cement is due to the rapid urbanization of the
formerly so called “third world”, now renamed the developing countries. The construction sector relies on
the supply of cement which is the raw material for nearly every building. According to recent national press7
news released, the construction sector in China is currently adding about 2 billion of square meters per year
for housing offices and stores. This only meets one half of the national requirements. Indeed the urbanisation
of China is currently low compared to the demand. Every year, about 10 millions of people are coming to
the cities. Consequently the demand of building and other related constructions such as roads follows. The
interesting point with the cement is that its production is highly energy demanding, and then, a main source
of CO2 pollution over the world. The 2007 US Geological Survey estimates that cement is responsible for
9% of the CO2 emissions of the country. According to the same source, the cement industry all alone would
account for 4% of the global CO2 emissions.
The other energy consuming sector of the Chinese industry is the steel production. Nowadays, the Chinese
steel supplies about on third of he global demand. The steel production has met the same increasing during
the famous period 2001 – 2006. In 2000 the total production accounted for 130 millions of tones, whereas in
2006 the production passed over the 475 million tones. Thus it comes to no surprise if the energy demand of
China has increased consequently.
6
Source: National Bureau of Statistics, China Statistical Yearbook 2004; National Bureau of Statistics plan report.
7
China Daily 2008/02/02 “EU offers energy saving to help construction”
16

17. China not only develops its industry, its capacity of production its wealth and so on, within its own territory,
but also now goes out of the frontier to make deals with countries from abroad. The most famous case of
external economic development is the agreements signed with African countries. China has built close and
tight relationships with several countries of Africa such as the Democratic Republic of Congo or the Sudan.
Its mains activity is the extractions of resources, especially the ore industry. Some would say that China has
a controversial role in those countries due to the “eyes closed policy” led by Beijing. Indeed, Beijing was
used to take, until recently, very shy positions on humanitarian issues such as the one of the Darfour by
waving the flag of the “internal affairs issue” and the non-interference duty. Other watchdogs, who might be
slightly better advised would make another analysis: first of all China, by legally exploiting the resources
since the mine are object to legal concession accorder by the African relevant states, is not doing any worst
than any other nation. Second of all, China, as a developing country with such history, is well aware of the
true needs of African partners. China repays for the concession permits with construction of buildings, roads
and bridges. This might simply be what Africa needs to develop in a more efficient way. There cannot be
any development without means of transport and safe ways to ship goods. About Sudan, Beijing has
softened its policy and taken steps for further discussion that led to humanitarian outcomes. On bad point
though, when China goes abroad and make deals that allow her to extract the ore for instance, China is not
respecting any further environmental regulations that the one imposed by the hosting country. This so called
bad point or reproach is a typically western point of view. Indeed, when Europeans see an ethical issue in
pursuing or not a deal with a State that fails to respect the human rights, China on the contrary is likely to
see internal affairs of the relevant State. As a consequence, the environmental impact of China goes beyond
the impact within its frontiers. China may pollute, but shall it be deemed as a lack of ethic, or simply as a
systemic consequence of its heavy industrial polluting activities in and out of the boundaries.
On top of the Chinese industrial sectors, there is a demand which comes from the industrialized countries,
the biggest and first consumers of Chinese goods and Chinese outputs (for the raw materials such as steel).
The ones to be blamed are definitely various.
Section 3. ENERGY AND ELECTRICITY NEEDS
7. ENERGY DEMAND OF CHINA AND POSITION IN THE RANKING OF THE WORLD’S POLLUTERS
As seen above, whereas more and more western countries are sliding from an industrial model of
production to a service oriented economy. China is still doing very industrial activities. Let us have a look to
the actual consequences of such an economic model over the energy demand.
The industrial development is inevitably linked with the capacity of China to meet the energy demand.
China is currently feeding its economy with energy. The demand of energy has steadily increased since the
industrialization of the country got started in 1978. But the long growth of the energy consumption has been
surging since 2000 and over the last 8 years. The growing concern of the outside world toward the appetite
of China for coal, oil and gas is the result of the last 8 years of observation, which matches with the time of
the shift in the industry.
17

18. F I G U R E 1 . 7 Total Energy Consumption in China, for the period 1978–2005
CHECK IF RELATION HEAVY INDUS/EN DEM SURGE EXPOSED
As mentioned before, such increase is principally explained by the shift of economic sectors. The switch has
been made from a manufacture model which relies more on the manpower rather than on the machines
power, to the heavy industry which relies more on the machines power and the energy required to make
them work, than on the man power. The current industry of China is said to be responsible for 70% of the
national energy consumption8
(whereas the global energy consumption for the industry is 40%, see figure
below) and for 35% of the world’s energy dedicated to the Chinese industry9
.
Another factor must not be omitted, it focuses on the individuals. Indeed, since China has been enjoying
economic growth for years, the growth has been partly allocated to the people who have consumed more and
more goods. Chinese individuals are now looking to drive their own car, to purchase goods, to have Air
Conditioned in their houses, and they now want to take the plane to go on business trips or even on holiday,
8
In 1997 according to “Proceedings of the Workshop on Learning from International Best Practice Energy Policies in
the Industrial Sector” 2000
by Lynn Price, Ernst Worrell, Nathan Martin, Bryan Lehman, Jonathan Sinton, see http://industrial-
energy.lbl.gov/node/201
9
report of “Global Cement to 2020”
18

19. sometimes in China, sometimes abroad. Actually, the people of China are not only workers anymore, they
are consumers too. Their behaviour is not different from the behaviour of westerners, no matter if they are
individuals or if they are enterprises. If someone is to be blamed for this hike in the energy consumption, it
is no one but the growth.
8. EVOLUTION OF THE DEMAND
The Chinese demand for energy has evolved according to two main factors. The first factor is the
demand of energy itself, which reflects the industrial growth, and the economic demand. More production
leads to more energy consumption. The second factor is related to the efficiency of the energy.
F I G U R E 1 . 8 Energy Use (SCE) to Produce 10,000 Yuan of GDP
This figures extracted from the World Bank Report “Cost of the pollution in China”, which will be further
presented later in the report, reflects the increase in the energy efficiency. If the need of energy for
producing a GDP growth of RMB 10.000 has decreased during the period 1978 – 2001, it means that the
technology used in the power plants has tremendously improved over the period. As shown in the figure
above, the energy efficiency (called the energy use in the graph, which actually means the same thing) has
its limit. Indeed, the point where the curve starts going up again in 2001 – 2002 coincides with the regain in
the Chinese economic growth combined with the shift of industrial sectors (from manufacture to heavy
industry) and when the economic growth got started again.
When the demand rises, the ways to respond are basically of three kinds. Either China can simply decide to
spend more money and time in the energy prospecting so as to ensure to meet the demand, or, China can
decide to spend more money and time on Research and Development (hereafter R&D) so as to increase its
energy efficiency (which itself has structural limitations), or, China could as well focus on new energies,
especially if the latter are renewable and low carbon emissions. The observation of the behaviour of China is
likely to come to the following conclusion: China is taking measure to tackle the energy challenge by all the
means at its disposal.
19

20. 9. STRUCTURE OF THE ENERGY INDUSTRY AND OVERALL CONSUMPTION
The figures below have been realized by the International Energy Agency (hereinafter IEA). They have been
reproduced in the present report so as to show how the part of the coal in the energy structure of China.
The Chinese energy sector looks like the following: coal accounts for 70% of the total energy use in China
with, in 2005 about 1.15 billion of tones oil equivalent (hereinafter TOE). Then comes oil with about 0.18
billions of TOE and far behind, gas with 0.0426 billion of TOE and also hydraulic power with 0.0341 billion
of TOE10.
Thus, China deeply relies on the coal technology to supply its Energy needs. Coal is allocated to power
plants only for the purpose of electricity production (see figure below), whereas oil is mostly allocated to the
automotive sector.
This figure shows that the Coal remains on of the most important form of energy, although it is the last of
the three fossil energies.
10
2005 data from the International Energy Agency at
http://www.iea.org/Textbase/stats/balancetable.asp?COUNTRY_CODE=CN
20

21. The figure above shows that the production of coal has generally increased all over the world, but no other
region than China has encountered such an increase. China is not only the biggest producer of coal in the
world, but also the most dynamic producer since 2001 with a hike in the volume of coal production. Let’s
note once more that the hike of 2001 in the coal production corresponds to the boom of the economy.
Indeed, in China two new coal power plants are every week, and coal mines
11
10. INTERNATIONAL CONTEXT
The barrel of crud has never encountered such a price over the entire history, and it is currently
flirting with the all time record of USD 130. Although this would not be unpleasant to some countries
producer of oil, or some experts and defenders of the blessed and must be high barrel price12 so as to reduce
the energy consumption, it remains a highly preoccupant issue. The response to such increase can take
several faces. China which is relatively low oil dependant, compared with the USA for example, is however
implied by such international influence. China who has the habit not to take position on the external affairs
of the partner countries is nevertheless an actor of the energy dispute. If the Chinese energy firstly comes
from the coal, the size of China and its need lead the country to a top ranking in the oil consumption as well.
The government is trying to ensure the meeting of the needs with the increase of the prospecting
expeditions. INSERT FIGURES AND CHINESE OIL COMPANIES DATA. The soil of China is not likely
to supply the country with sufficient oil. On the contrary, there may be a shortage of energy in China, but
this shortage is would definitely be due top the oil, certainly not due to the coal13. Whereas coal is abundant,
oil has to be seek into the contiguous waters of China. The expeditions into the sea waters are very often
subject to dispute with the neighbours countries such as Japan. The fossils energies, highly pollutant in terms
11
2005 data from the International Energy Agency at
http://www.iea.org/Textbase/stats/balancetable.asp?COUNTRY_CODE=CN
12
See Jean Marc Jancovici in “Le plein s’il vous plait”
13
According to Pan Jiahua, economist and expert in environment and energy related issues for the Chinese Academy of
Social Sciences in an interview for “Connexions” Le magazine de la Chambre de Commerce et de l’Industrie Française
en Chine numéro 39.
21

22. of CO2 emissions are relatively low efficient compared to the nuclear energy for example. But their
producing cost in lower. In such context, squeezed by the international pressure on the crud oil barrel price,
the disputes over the ownership of the sea based oil reserves; the abundant coal in China is a favourable
option, since its extraction which requires a lot of man power, but only few machines.
22

23. CHAPTER II. REVIEW OF THE STATE OF ENVIRONENT IN CHINA
AND THE COMING THREATS
The economic and energy features of the development in China have been presented earlier. Now
the focus is on the consequences of such development onto the environment starting with the pollutions.
Because the environment is a complex issue, it would be a mistake to think that the only offences
perpetrated against the environment are the pollutions. The changes and the depletion of the environment
may take the form of simple deregulation of it, or losses of its quality or its biodiversity. All the forms of
environmental harms should be thought through since they have already taken a large extent which is likely
to worsen. The only pollution generated by the energy consumption is hard to describe fully. As a
consequence, the following are basic reports of the main facts concerning the environment degradation of
China over the past decades, with a special attention to the influence of the energy consumption and the
energy related pollution, provided scientific data allows it. Despite such complication for a comprehensive
analysis of the state of the environment in China, basic distinction can be made to clear up the scope of
study. Health consequences (section 3) and non health consequences (section 2) of the pollutions are
differentiated from the purely environmental consequences (section 4). But first of all, the energy related
pollution should be define (section 1)
Section 1. ENERGY AND POLLUTION IMPACT
Pollution can be described as follow: “The contamination of air, water, or soil by substances that are
harmful to living organisms. Pollution can occur naturally, for example through volcanic eruptions, or as the
result of human activities, such as the spilling of oil or disposal of industrial waste. The pollution may take
several forms. The lights in the city emit light rays that leave to ground to the sky and the space, it is known
as light pollution. Continuous noise that is loud enough to be annoying or physically harmful is known as
noise pollution. Heat from hot water that is discharged from a factory into a river or lake, where it can kill or
endanger aquatic life, is known as thermal pollution etc.
There are different kinds of pollution. When talking about the pollutions related directly or indirectly to the
energy use, which means related to the development path, the pollution may take two important forms : the
air pollution principally, and also water pollution to some extent (thermal pollution mainly). The pollution
related to the use of energy is definitely a human kind pollution which has nothing to do with the natural
pollutions. Consequently, the awareness on this point should be willing to listen to the scientific declarations
of today “ we, as human beings, are putting in danger the environment, so we are putting in danger our own
specie”.
23

24. 11. ENERGY AND POLLUTION, FOCUS ON THE FOSSIL FUEL
The one impact of the energy pollution must be précised here. Most of the energy in the world
comes from the so called fossil energy. Fossil energy stands for the energy that comes from the underground
coal mines, gas pockets or oil wells. The three fossil energies have several common characteristics. They
share different but parallel history.
The first common point is Coal, oil and gas comes from thousand of year of natural chemical transformation
of sediments (all forms of dead organic matters that have laid down and deep in the ground or the sea for
millions years, on which natural chemistry has operated a transformation that make these substances, either
solid, liquid or gas, highly flammable).
The drawbacks for using fossils energies, which may be hard to understand is that, even though fossils
energy comes from the nature, the process of burning it releases in the air toxic gases. Toxic gases are the
first form of pollution in the world. Among them, Sulphur Dioxide (SO2) is one of the most hazardous gases
for the human health released by the burning with a less famous but as much dangerous Nitrogen Oxides
(hereinafter NOx) . There are others toxic gases which do not directly come from the burning of fuel. Some
of these gases of another kind may be non toxic, but still harmful for the environment and the planet
ecological balance, they are known under the names of Global Warming gases (GWgs) or Green House
Gases (GHG). Methane (CH4)is another natural toxic gas, flammable as well but which the industry does
not use as an energy (basically because of it lacks in abundance) although some new technologies allow to
reuse the methane fumes. Methane is a natural gases responsible for the global warming. It is trapped in
huge quantities in the coal mines. The coal extraction in the coal mines inevitably lead to the release of the
toxic and GHG.
The second common point of the three fossils energies, which is directly linked with the first point, is that
they all release Carbon dioxide (hereinafter CO2) in the air when they are burnt. CO2 is another natural gas
that every living organism emits in the process of breathing: oxygen comes in, CO2 comes out. But the CO2
is now commonly admitted to be the main responsible for Global Warming (3 sub section 18).
The very high demand of energy in China leads to a very high consumption of Coal which releases in the
process of its burning in the thermal power plants huge quantities both toxic and GHG gases such as the
CO2, SO2 and NOx.
24

25. The two figures above come from the latest survey of the International Energy Agency14
. They show the part
of CO2 releases into the air according to the kind of combustible that has been used, and according to the
14 Key World Energy Statistics 2007
25

26. region. The truth is that CO2 emissions have not been properly calculated in the different regions named in
the survey. But the computation of the energy consumption multiplied by the average CO2 emissions per
energy gives a idea of the share of CO2 per regions. China has a very big share as a country, mainly due to
its size, its growth and its development path. It is worth noting the correlation between the use of energy in
China in general, and the increase of the use of coal especially.
The causes of pollution in China are multiple, so are their forms. A report of the World Bank in date of 2007
and conducted by the World Bank experts in cooperation with Chinese experts of the former State
Environmental Protection Administration (hereinafter SEPA) draw, for the administrations, the government
and the experts of the environmental issues in China, an appraisal about the environmental state of China.
This report is the equivalent of the famous Stern Report for the UK, since it focuses not only on the
pollutions, but also on the cost they implied. The report is published to the entire nation, but most probably
to the State administration. Indeed the results are alarming. It calls for prompt actions of the government. It
is said that the report was censured before its release and that about 20 pages were asked to be erased by
Beijing. The final version of the report is details enough to provide a clear idea of the state of the
environment and the pollutions in China. Instead of presenting the 151 pages report the main data are going
to be selected and then analyzed.
The World Bank report named “The cost of pollution in China” and in date of July 2007 has been written in
cooperation between the World Bank and the SEPA. Assuming this report is an up to date source of
information concerning the particular case of China, its information can be presented here. There is one
point of actuality that might be discussed concerning the integrity of its content. Although the report has
been written by the SEPA and the World Bank, the PRC government formulated an iterative request. The
Financial Time15
revealed a piece of information saying that Beijing obliged the World Bank to cut off 30
pages of the report. The point of the request was to hold back the publication of the estimated number of
death related to the state of the environment in China. The government said that such disclosure of
information would provoke the fear and the panic among the Chinese citizens, and that it was not the
purpose of the report to provoke instability.
15 Financial Time, Tuesday 3rd of July 2007
26

27. 12. WATER POLLUTION
The water (H2O) is essential for life. The forms of water pollutions can be distinguished according
to their location. Water runs from the mountains, to the lands and underground, then to the rivers and
ultimately jumps into the sea. Talking about pollution, surface water and underground water should be
distinguished. The surface water is found in the river, the lacks and the sea. Underground water goes
underneath the surface of the earth, but ultimately reaches the sea.
Water pollution is probably the most obvious source of pollution. Thus, as soon as concerns grow over
pollution of water, measures to tackle the problem should be promptly taken. The reason is likely to be
linked with the common say “water is life”. The state of the environment regarding the water resources in
China is deeply alarming. The standards established by the World Health Organization (hereinafter WHO)
serves as a starting point to evaluate the water quality. According the World Bank, about 54% of the rivers
are polluted. According to another survey conducted by the SEPA about 50% of the ground water of China
would be polluted so that the ecological functions cannot be revived. These two surveys stand for the surface
water for which pollution is easily measurable. Water pollution basically releases a twin concern over the
natural resources and over the health matters (discusses later in the report).
For the non health matters, maybe a sufficient explanation to act with no delay would be the theory of the
food chain. We, as human beings are ultimate consumers since we eat everything, but no one on the planet
eats us. The water degradation spoils the acqutic food resources that it contains. The spoiling of the
biodiversity may be invisible to the eye, but still have the same effect on the food chain (reference to the
plankton, the very basis of the aquatic food chains for example).
The most famous and well known example is the situation of the Taihu Lake in the Jiangsu province. The
Jiangsu province hosts this beautiful place in China where a successful tourism industry could have taken
place. The Taihu Lake is currently dealing with an algae issue. Indeed, about 80% of the water in the lake is
contaminated with the blue green algae believed to be the worst algae ever. This algae basically kills every
27

28. form of life in the lake since it sucks out all the oxygen. Thus flora and fauna cannot develop or live
anymore. Local people when looking at the lake say the Chinese add “Nothing can stop the dragon when it
wakes up”. The Jiangsu province is pretty concerned about water issues since about 2 millions of resident
who used to rely on the lake’s water for their drinking and cooking needs would be threatened by a
shortening of drinkable water. The case of the Taihu Lake is a natural disaster, which means that en entire
ecosystem is about to disappear. The causes of the pollution are known, and the energy related pollution is
not innocent. The main responsible are the chemical plants based around the lake, the use of fertilizers and
also the effect of Global Warming, directly to the energy uses, that heats the lake temperature. Such
alterations promote the expansion of the algae and worsen the State of the lack. In order to tackle the
problem, wishes and concerns have been expressed at the occasion of the last CPPCC session held in March
2008. One of the deputies suggested to obligate the use of bio pesticides is the area (the latter only account
for 4.8% now).
F I G U R E 2 . Water Quality Levels, 2004
Generally speaking the rural areas (unlike the urban areas; not to confuse with the remote areas) are more
severally hit by the consequences of water pollution. Poor mitigation methods toward the industries that use
water and that release water into the rivers, poor treatment technologies and backward methods of
evacuation of the waste water are worsening factors. Shanghai could be severely concerned by the water
pollution since there are many chemicals plant based all along the Huangpu River. Thanks to a modern
water treatment system (run by Veolia environmnement, a French founded company within the PRC), the
water problem are more or less hindered. However, the water in Shanghai shall not be drunk. The figure
above shows general water quality in China. The more there are dots and the darker are the dots, the worst is
the general surface water quality. The East of China, the most industrial part of the country is having serious
and recurrent water problems. In many rural provinces the waste water is directly flushed into the river,
which causes sanitary problems, bad smells inconvenience and may possibly led to infectious diseases.
28

29. The guilty industries are the chemicals, beverage, cement or paper producers. The purely energy sector is not
involved in the direst pollution of the water. It remains true that their activities worsen the environmental
degradation, by heating up the water (theory of the Global Warming here again).
Water pollution is also linked to other problems that regard the resources. The water resources are lacking
more and more dramatically. There is a depletion of the ground water.
F I G U R E 4 . Groundwater Depletion and Polluted Water Supply
Henan, Anhui, Jiangsu and Shangdong provinces are the places encountering the worst water pollution
issues. Local governments are likely to take actions. Private entities are the true responsible for water
pollution and are willing to bear responsibilities for the de-pollution of the areas, the chemical industries
located in the Jiangsu province say to be currently seeking for redemption16
.
13. ATMOSPHERIC POLLUTION
A polluted atmosphere is first of all human beings concern. Even though the environment
understood as the flora and fauna, might suffer or be endangered by the poor air quality, the first reason for
governments to take prompt actions is related to the public health. The United Nations funded in 1948 April
7th
the World Health Organisation. On a WHO 1998 survey, it has been underlined that among 272 cities,
the PRC had ten of the most polluted atmosphere in the world. And among the top 10 of the most polluted
cities in the world, seven of them were Chinese cities (Beijing at the world rank thirds position, Lanzhou,
Taiyuan, Urumqi, Chongqing, Jinnan and Shijiazhuang). Plus according to the PRC official data, among 338
cities reported, two third are polluted, and two third of these are moderately to heavily polluted. Indeed,
16 See China Daily of March 24, 2008, “ A green Revolution”
29

30. atmospheric pollution is likely to be the worst of all the pollutions in China, (even though when talking
about air or atmospheric pollution it is uncomfortable to talk about national pollution). The WHO conduct
surveys, but also make reports that eventually lead to recommendations, aimed at preventing consequences
on health.
There are four principle chemicals seek at the occasion of air pollution investigations. The first one is
Sulphur Dioxide, SO2 that mainly comes out from the burning of coals, then the Particles Means, PM that
are found in the fumes from both power plants and vehicles, Ozone molecules (O2) that are well known to
attack the ozone layer that will conduct to skin cancer and heating of the poles, finally, Nitrogenous Dioxide
(NOx). For all these polluting substances and molecules, the WHO made recommendations to set the
maximum levels over which air quality would be considered as not acceptable. It means it would arm the
people’s health. It would favour respiratory disease such as asthma or even lung cancer.
We will discuss the impacts of low air quality in the section 2 of this report
F I G U R E 1 . 2 TSP and SO2 Concentrations in China, 2002
The most exposed cities to air pollution are known to be the cities of the Shanxi, and Shaanxi province, and
also Beijing or Tianjin.
In 2005, still 50% of the cities in China were unable to meet the air quality standards given by the WHO.
SO2 is mostly concentrated in the urban areas, where it is actually created.
Beijing is very strongly hit by the air pollution problems. The Olympics approaching, it pushes Beijing to
take further measure since participating countries expressed their concern over the health of the sportsmen.
Of course, the tourism opportunities that Beijing represents are another cause of making efforts to clean up
the air.
30

31. Section 2. NON ENVIRONMENTAL IMPACT
The WB report “cast of pollution in China” is the basis of this section sine about a 150 pages of
work paid attention to evaluate the cost of the pollution. Of course such evaluation does not attempt to
calculate the economic cost of the harm to the environment and the loss of biodiversity for sector that are not
economically worked out by the human. The non environmental cost of pollution concerns both the health
cost, and the material costs. Basically they writers of the report put it that way “health and non health costs”.
Let’s first look at the material cost of pollution and then at the health cost of pollution, namely “health” and
“non health” cost of pollution according to the English version of the report.
14. POLLUTION IMPACTS OF THE MATERIAL AND EQUIPEMENTS
There should be no censorship on this point. The cost and consequences of the pollutions, is already
outstanding and could worsen with the time. The pollution of the air and more precisely the release of SO2
in the atmosphere is responsible for the acid rains that are famous for being very destructive. And the release
of SO2 is directly linked with the energy consumption in China which comes principally from the coal. The
burning of coal by the numerous power plants in China is responsible for a high release of SO2 and the
generation of acid rains that are especially destructive for the flora and fauna, the crops and the forest. The
damages done to the crop should account for material damages since the crops of rice or tea in China are for
the market; therefore, they are not part of the environment. The World Bank report tries to evaluate the
actual impact of the pollution over the equipments. The computation method used there is known under the
name Environment Cost Model, and is not going to be detailed here. The total damages would then account
for 5% to 8% of the national GDP. It means between 175 and 280 billion of USD should be either lost or
spend to counter act the already existing degradation. Moreover, the consequences of acid rains are unfair
because they damage unevenly the places in China. Thanks to the wind blowing, the true air polluters are
likely no to be the first victims of their emissions and consequent acid rains. Acid rains are likely to travel
during thousands of kilometres before forming in rain and falling down. This issue of transboundary
consequences of the energy pollution will be discussed in Section 3.
15. HEALTH
Every form of pollution is harmful for the citizens’ health. The World Bank dedicated almost one
third of its report only to evaluate the actual costs of pollution over the people’s health. It is alarming in its
final version and may therefore justify in some extent the governmental decision to lay off 30 of the pages.
Although the environment cause is new, when it comes to the public health, things cannot be ignored any
longer.
Sometimes, when an argument is very powerful but does not manage to meet its goal, other ways must be
found. That is what happens with the struggle for a better environment. Now, the health cost, or the impact
on the people health is erected as a must known fact to urge the taking of decisions.
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32. The water quality can be precisely analysed and conclusions are drawn by the experts. Water of low quality
is responsible for the spread of diseases such as diarhea and even intestine cancer. Diseases engendered by
water pollution alone are said to account for 1.9% of the GDP.
As for the air pollution, the main responsible is clearly identifiable. It is the burning of coal and the fumes
emitted by the cars (no less than 17 millions in the entire China, figure which does not include the trucks and
buses) and other transports. So basically, the atmosphere pollution is a problem of energy consumption as
well as a consequence of the development. Are these development drawbacks avoidable? Some would not
be certain and China does not look like to be certain of the fatality neither. Unlike the water pollution, the air
pollution is hardly directly connectable to the health matters. In China the air pollution would firstly hit the
remote provinces and then only, the eastern coastal cities. Asthma and other respiratory diseases does not
need the help of the pollution to exist, but the medical data and the WB report draw the link between the
surge in the cases of clinical cases in the emissions of SO2, NOx, and PM. The latter I medically said to be
the first responsible of respiratory diseases.
The last human cost of the energy it the death rate for the mining industry. The data are explicit and draw the
attention of the government. The suffocating atmosphere to which the miners are exposed all day long when
digging is highly toxic. CH4 and other particles combined may kill hundreds of miners every year (no
official data). On top of that, and according to the State Administration of work safety, the mining accidents
caused in 2006 the death of 6.434 miners17
. All together, the coal industry generates very heavy human
losses and health damages that have an important cost.
Section 3. OTHER GLOBAL IMPACTS AND CONSIDERATIONS OF THE ENERGY
USE AND THE ENERGY POLLUTION IN CHINA
16. WELFARE AND SAFETY
The environmental cause is known as the “green cause”. This colour displayed as a symbol of the
ecological and environmental cause might have work against it. The green refers to the forest, the
ecosystems, the flora and fauna. Many of the latter cannot possibly prevail on the all mighty GDP. However,
there exist considerations that goes beyond the ecological aspects of the environment. The resources and
health drawbacks have been presented earlier, but political and strategic considerations should be taken into
account too. These “other impact” may be observed at both internal and international level.
The 2007 Nobel Prize of peace says it too well. The environmental crisis in general and the Global Warming
pollution in specific are not only problems of environment, but shall be considered as a moral issue18
. The
depletion of resources and contamination of both air and water are factors of instability over the societies. If
the nation do not manage to curb the environmental global issues that are already becoming more and more
clear, the planet and its people are going to suffer from really serious difficulties to breath, to feed, to
17
http://www.china.org.cn/english/features/press/130447.htm
18 Words of Albert Gore in “An Inconvenient Truth”, film, 2006
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33. reproduce, to live old, and so on. The health cost itself, as an independent and measurable data unbalance the
harmonious society goal. The situation looks like the economic growth sustain by the energy demand which
creates ecological and health catastrophes bear so huge debt that the system may soon shows some limits.
This is not without forgetting that the public’s health is a priority of any State toward its people, and in case
of failure to ensure this public basic duty, the peace of the society would be threatened.
More important maybe, the international order has evolved since the past century. The economic domination
over the other nation is not a shield against any political, economical or even military contestations. Because
the link between production and development, or the link between development and polluting emissions
cannot be argued any longer, time for responsibilities and relevant actions has now come for the
governments. Who is going the bear the responsibilities for the trans-boundary pollutions, the possible or
assumed consequences on the health of the people? Let’s note it is now possible to hear voices talking of
indirect threat on public health from one country onto another one. For instance, China’s heavy industry is
said to be responsible of acid rains destructions in Japan. The acid rains are not likely to kill people or even
jeopardize their health, but it definitely may damage the crops and the equipments. Such factors could
intensify diplomatic tensions and raise hostility between the China’s foreign partners.
All this global issues every country is facing now, China is facing more intensely since the country is much
bigger, the population is much bigger, and the industry is much backward. Saying that China is not making
any effort for a better and safer environment means that China is not moral or lack of ethics principles. It
also would mean that China is not aware of the current hot topic on which the human beings all rely. It is
very important for China to make its position clear and clean before the observations from abroad. The
energy consumption of china is the the second highest of the worls, the oil consumtion of the PRC itself is
going bigger years after. It is now said that China’s energy demand is the main responsible for the hike in
the oil crude barrel price. The coal consumption is the highest, therefore the SO2 emissions are the highest.
For the moment China and Japan are in good business, technology and diplomatic relations. But the
environmental involuntary attacks of China on Japan could make things different.
17. CONFUSION ON THE INTENTION OF CHINA
The year 2008 is a very special year for China. At the middle of the year, on the 8th
of august 2008, which
can be scribed down as “8/8/8” is a symbol of luck according to the Chinese traditions. Therefore the world
is about to set the light on the Empire of the Middle, that far East country about which the children learn at
school for its size, its population and that is often all. Thanks to the Olympic Games hosted in Beijing, China
has a chance to show its best image to the world, share its values, its history its heritage. Unfortunately so
far, the first semester has been very hard for China. Indeed, the Chinese people have been stricken by an
abnormal cold winter, a epidemic that hit the new born babies in the hospital, and the biggest earthquake of
the past century in terms of economic and construction damages.
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34. The episode of the Tibet has been quite noticeable too. Voices are rising against the on going growth of
China which is responsible for the hike of prices over the energy and the raw materials. Consequently to the
general growth of China, which automatically induces a hike in the energy consumption and thus in the
emission of pollutants.
So, one of the sub question of this Part I is whether China is taking good note of the changing environmental
situation, if there is one, due to the requirements of the foreign partners inside or outside China, or is this
apparent step toward an environmentally friendly society directed to the primary and first interests of the
people of China?
18. GLOBAL WARMING ISSUE
Global Warming is a scientific theory according to which the human activities that use the fossil as
the base energy has emitted sufficient GHG, among which CO2 or CH4into the atmosphere (into the air) so
that the atmosphere’s temperature has globally increased. Whatever is released in the air either gets
dissipated or stay in the atmosphere. Thanks to the relatively low density of the atmosphere and the
relatively heavy density of the CO2 gases, the latter can travel and fill the atmosphere. The consequence is
that the atmosphere is getting much dense in CO2, all over the world, the heating of the atmosphere is not
regional and thus, it is global. The Global Warming pollution does not refer to the total average increase of
the temperature on given area, but the global increase of the temperature on the entire planet.
The Global Warming issue is definitely a hot topic of our times and probably the biggest challenge of the
century. China is taking steps at the international level. It is clear that the CO2 emissions for which China is
responsible cannot be hidden. China has a responsibility, so have the other nations, and this is the topic of
the UN conference on Climate Change.
Kyoto in Japan held the first conference of its kind and China was a member.
The computation methods that are used to estimate the CO2 emissions per country are subject to other
discussions. It is not clear whether the total amount of CO2 per country should take into account the
population, the industrial past of the countries or other factors. The computation based only on the total
emissions is quite unfair for China who is now emitting a lot but, who has not emitted as much as western
countries for decades since its industrial system was not as much developed. The size of a country is a
important factor but also a factor of unfairness if taken into account solely. Some voices proposes that the
CO emissions would be computed with reference to the “per capita”. It means that, like for the GDP per
capita, the total amount of CO2 per year, which was 1.37 billion metric tons of carbon in 2004, would be
divided by the population so as to give a clear idea of how much the Nation emits. This computation
methods would also allow a better view of the responsibility of the individuals of a country, by considering
their emissions as consumers, more than just estimating emissions of the activities located on its soil (which
is an arguable point considering the numerous foreign invested enterprises that are established within the
PRC). Another option is to set the estimate the total CO2 emissions with a retroactive reflection. Indeed, the
Global Warming issue seems very likely to be linked with the outstanding changes that occurred since the
34

35. end of the World War II. The USA and the European countries have been producing a lot of goods and raw
materials highly energy demanding and thus with a heavy carbon footprint. It is said often said at the
occasion of the Conferences on Climate Change that the West has committed mistakes that the Developing
World cannot allow to repeat. China is willing to take its part of responsibilities, but at the same time,
demand that the developed countries take their responsibilities first and lead the struggle for Climate
Change. That was the most important outcome of the Bali Conference held in last December.
Even internally, China may be exposed to very bad consequences of the Climate Chang. First of all is the
city of Shanghai. The City is at sea level, which means in case of severe flood that the raise of the ocean
would promote since the Global Warming process accelerates the ice caps melting, the city would be under
waters. 17 millions of people are currently living in Shanghai, and would hence be forced to move out of the
city toward more remote places. The humanitarian effect of such natural disaster would have economic,
social, health and peace consequences. The UN already estimates the central and south Asia would see their
crop decline by about 30% due to the Global Warming effects on the lands and their fertility properties.
Obviously, the Climate Change challenge means not only a legal but also an economic effort. So here is a
problem, the surging economies currently pollute more than the developed economy because of the
industrial economic reliance and their backward energy technologies. Looking back at the history wouldn’t
it be fair that the developed countries born a bigger part of the burden? Final consideration, the economy of
the developed countries is not as healthy as they were used to be, and the costs that “green” efforts would
generate are strongly inconvenient.
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36. CONCLUSION OF PART I:
China is a highly polluted country. All forms of pollution are present in China, the environment is
undergoing a preoccupant degradation, and the people health is getting more and more affected. China is
under the spot lights, and the US press pressures China to accuse and at the same time, make forget the USA
still refuse to ratify the Kyoto protocol. The overall balance requests prompt actions. However, tackling the
environmental issue in China with proper actions would mean tackling the development process at the same
time. But there is no way out.
Either the environmental issue is approached with the smooth option which may not be smooth at all for the
economy, either nothing is done, the energy demand, the economy and the development path stay on the
same rails and things might take another face. Things would be maybes less complicated if the world was
not implicated in a global market competition where the productivity performance is the best way to pass
over the other competitors. The international competition is going to keep on, but its rules must be amended.
The shift from a model of development toward an energy sustainable and environmental friendly model
implies heavy costs. To what extent has China already started to mitigate the environmental impact of its
development? Has china well understood that its development path was all relying on the energy supplies,
and that energy was the main cause of all the environmental, pollution, health and climate change adverse
consequences of China? Finally has China truly taken the steps and measures necessary to achieve the dream
of the Harmonious society? Let’s see if the proper honest measures that are the laws and the regulations
have been taken by the Chinese government to tackle the pollution problems and especially to restructure its
energy policy.
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37. PART II. ENVIRONMENT AND ENERGY POLICY IN
CHINA
The second part of the present report is an attempt to analyse the dynamics of the PRC energy law
and its counterpart, the environmental law. The following developments are aimed at evaluating the
efficiency of the announced commitment of the PRC to the build of the harmonious society, with regards to
the restricted area of the energy policy and the environmental law. According to the logic and according to
the speeches delivered by the president of the PRC himself at the occasion of the 17th congress of the CPC,
the build of an harmonious society is not conceivable without a deep work of the authorities to restore a
clean environment. The developments remains encompass in the energy sector in order to allow some
precision of analyse that would not be possible if the development were about the entire environmental
policy of China. This Part II tries to analyse and draw conclusion about the actual or the potential efficiency
of the PRC legal frame work in the matters. The principles of the International environmental law are taken
as instruments of measure and comparison of the PRC law. The Part II is divided in two Chapters; the first
one is about estimating the influence of the international law (Chapter I) and its nature on the national law
that transposes it; the second is a study of the relevant laws, regulations and practices of the PRC concerning
the energy law and its consequent environmental provisions under the light of the great principles of the
environmental law (Chapter II).
CHAPTER I. LEGAL FRAMEWORK OF THE PRC FOR THE
ENVIRONMENTAL POLICY
When it comes to evaluate a country’s commitment to a cause, here to the “green” effort, the clues
may be found in the place of its legal system. Especially in China where the politics has its importance,
“legal frame and the politic should walk hand in hands”19. When seeking for the honesty and truth of a
commitment, maybe the first way to look are the regulations. Then, the content of the regulation could be
corroborated with the political speeches, or not. Furthermore, as unlikely as it seems, in China the
environmental law has actually forgone the political will. Indeed, whereas the proper environmental
concerns related by the public persons have only very recently been heard, the first environmental law dates
back to 1979. There has been a shift in the environmental policy which is a brand new concept and a
powerful preoccupation of today, and there is now a regain of power for the environmental and green related
legislation. The study that is going to follow will also help to judge the actual efficiency of the legal
protection for the environment, and ultimately, the protection against the danger of the economic growth.
19
See “Climate Change Law and Sustainable Development” 2007/05/15 by Chrisotpher Tung from Mallesons Stephen
Jacques, published on www.legalstudio.com
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38. The environment cause finds its roots at the international level (Section 7) on which the national law has
then come over in order to stretch from the so called soft law, to the hard law (Section 8). The purpose of the
struggle in this is one: positive outcomes.
GENESIS OF THE ENVIRONMENTAL LAW, GUIDELINE OF THE PRC
ENVIRONMENTAL LAW
The environmental law finds its very roots back in 1972 at the time of the Stockholm conference
held by the United Nations. There, the principles of the environmental law have been formulated for the first
time. The PRC, as a UN member has been implicated in all the conference on Environment and development
since day one, and also to the famous Kyoto Conference.
19. ENERGY AND ENVIRONMENTAL LAW AT THE INTERNATIONAL LEVEL, THE KYOTO
CONFERENCE 1997
There is a wide confusion in people’s mind and possibly in the decider’s mind as well. The
environmental protection, the biodiversity, the climate change issue seem to be all put in the same basket on
which it is written “Green”. Indeed, it is not easy to separate all these environmental matters. The industrial
activities are connected all of the environmental matters. The energy sector, because it is at the base of all of
today’s industrial activities is inevitably linked to all of the matters. However, the Climate Change and
Global Warming issues, which both stand for the same purpose, are more directly related to the energy, than
to the discharge of chemical into the rivers.
- CURBING THE GHG EMISSIONS, GOALS:
The Kyoto conference was the first meeting organised by the United Nations to attempt to put a break to the
global emission of GHGs. The energy policy in China is closely linked with the frame work established by
the Kyoto protocol. The Kyoto conference set the frame work for the nations to put a stop to the increase in
the GHG emissions at the national level, and the Kyoto protocol sets the obligatory targets to be reached for
every countries. A calendar was attached to the application of the Kyoto protocol. The effective date of the
Kyoto protocol was set at 2005, that is to say eight years after the conference.
- MARKET BASED INSTRUMENTS:
The Kyoto Protocol bears emissions goals to be reached for the market instruments aimed at curbing the
GHG emissions. These instruments were the first of their kind. Based market instrument stands for
contractual and economic tools aimed at formatting the trades between private entities. Basically the Kyoto
Protocol relies on the profit oriented actors rather than on the States to effectively reduce the GHG
emissions, by creating the carbon market. Indeed the protocol set a couple of based market instruments
which allow the developing countries to beneficiate from the technologies and the funds of the developed
countries. This is what is happening now in China (see part III) especially with the Clean Development
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39. Mechanisms (CDM). The Kyoto protocol has been highly criticised at the time of its disclosure.
Environmental watchdogs fustigated it for launching a right to pollute. USA and China are the first
responsible for making dirty the atmosphere, so should they take responsibilities as the first GHG emitters.
However, USA and China are not equally treated. China is in a tricky position On the one hand, China is a
developing country under the consequences of what, the goals and target set by the Kyoto protocol are not
compulsory for the country. On the other hand, the situation is kind of funny since China as a developing
country has, under the protocol, no obligation to fulfil commitments nor goals, although no country in the
world. Aside from the United States of America releases such a volume of carbon dioxide per year.
- DEVELOPING COUNTRIES AND INDUSTRIALIZED COUNTRIES:
The protocol takes the form of an international agreement which sets target for 37 industrialized countries
plus the EU (15 members at the time) for reducing the GHG emissions that are known to be responsible of
the climate change and its devastating consequences on the cities and their habitants. The Kyoto protocol
commits the member states to do what it takes sot reduce the GHG emissions. All the member states are not
committed to the Kyoto protocol since it discriminated the industrialized countries from the developing
countries. The latter, and as incredible as it is of which China belongs, are not committed to the Kyoto
protocol. The USA, as incredible as it seems, are not committed neither the protocol, since they always
refused to ratify it. And this is the point both China and USA share in common, though for different reasons.
The effect of the Kyoto protocol must be a handicap for the states who decide to implement it. The reduction
of emissions have been seen almost until now as an obligation to reduce the industrial activity. What is true
for USA is true for China and vice versa. Both economies are highly industrialized. The industry is highly
energy consuming and ultimately highly responsible of GHG emissions. China and USA feed their
industries with Coal and Oil, known to be their first emissions of GHG. The PRC, as a developing country
has never been committed to the Kyoto protocol, although it was a member of the Kyoto conference. Thus,
the internal measures that have been taken by the PRC so far are not connected, at least directly, with the
international pressure pursuant to the Kyoto protocol. But the Kyoto protocol took into consideration the
potential capacities of cutting the GHG emissions of the developing countries.
The energy related pollution in China shall not be a diplomatic issue, since it is definitely a domestic issue
first. Therefore, what are the legal tools of the PRC aimed at cleaning the air, reducing the GHG, being a
responsible state for both its citizens and the sake of the livings on Earth?
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40. CHAPTER II. INTERACTIONS OF ENERGY AND ENVIRONMENT
REGULATIONS
Initially, the environment law is directed to the so called green cause, the protection of the
environment, the biodiversity, the preservation of the forest and the surface waters… It is not always clear
whether the environment is not part of a recreational policy which would consist in providing a comfortable
clean area to families going on holiday in the common heritage of the people, the nature. But this idea fails
to take into consideration what as been demonstrated in the part one, the environment is actually at the very
ground of all the human development and society and economy and health. The economy at the beginning,
now changing thanks to the development of the tertiary sector, was build on the industry which consist in
using the natural resources and transform them into a valuable product that is further sold on the market. The
use of the resources shall be wisely conducted since they are not unlimited. This is the ground theory of the
sustainable development that urge to change our economic model from thoughtless consumption to eco
responsible. The resources ar limited, so is the energy. One the first hand, energy is limited (scientifically,
there is a given amount of coal or oil that cannot be renewed once it is all gone in fumes, and technically,
some reserves may be to hard to access, or too costly).
The Rio Summit held in Brazil in 1992, also known as the Earth summit, made a summary of the current
environmental issues. Since almost all the economies in the world today relies on the liberal model which
defends the virtuous circle of creating wealth creates consumption which creates wealth, the industrial
economies such as China’s relies on their ability to meet their needs in energy demand. Consequently,
energy law and environmental law walk, or run maybe on parallel roads. Though, it seems that the two legal
subject matters shall wlk closely now, maybe even jointly and work one for another. Precautionary,
prevention, information and participation of the public, sustainable development are the main principles of
the environmental law. The weakness of all those powerful principle is that since there have been issued as
international law principle, their enforcement is non existent. It is called the soft law. The soft law cannot
legally force not oblige the deficient party to compensate the failure by economic means. The soft law
become enforceable when it enters the national law of the countries. And it is enforced as such. As a
consequence, the PRC may have implemented the international law principles into the national order.
Instead of putting the two laws and their numerous regulations in a catalogue, or maybe two catalogue, the
following work attempts to analyse the two separated legal subject matters in the scope of the basic principle
of the environmental law according to the Rio summit (section 2, 3, 4). But before, a short listing with
comments of the effective laws regarding environmental protection and energy management is presented
(section 1).
40