Expert view: What to look out for in 2018

Dr Tan Hao is a senior lecturer at the University of Newcastle

A major challenge in 2018 will be establishing a more systematic appraisal system for the performance of local governments and government officials. This would provide both officials and the public with clearer and more consistent expectations.

Local governments and their officials in China often struggle with different priorities that are sometimes subject to ad hoc directives from higher levels in the political system and changes in public opinion that can cause confusion. Recent events, such as the mishandled ban on coal heating in Hebei, have shown that an ad hoc approach in the area of environmental protection may jeopardise China’s effort to improve its environment in the long run.

Of course, the tensions between social, economic and environmental objectives are not unique to China. But the introduction, interpretation and implantation of certain policies in China could become less arbitrary.

Zhang Boju is executive director of Friends of Nature

There are a number of environmental legislative and policy-making processes worth watching in 2018.

The outlook for soil pollution in China is not good, and this impacts directly on food safety and human health. Yet despite its importance there is no legislation so a law for the soil environment is particularly important. In 2017 the legislative process for the Soil Pollution Prevention Law was started, and the resulting consultation draft sparked widespread discussion in professional circles.

In our view the core of the law is responsibility and accountability. The core content of laws should be determining who has what rights and what responsibilities. A sound definition of the responsible party is hugely important for the soil pollution law, and indeed environmental protection as a whole. The main tasks of this law are to prevent pollution occurring, to clean up existing pollution, and to compensate for losses. A clear definition of who is responsible and fully implementing the principle that the polluter pays is the only way to ensure those responsible pay full attention to their duties and take the necessary measures to prevent new pollution occurring, and to make clear who is responsible for restoration and compensation – rather than the current situation of “businesses pollute, the government pays, the people suffer.” The draft of the Soil Pollution Prevention Law does not include clear definitions of who is responsible for dealing with soil pollution, and so the upcoming processes are even more important.

And of course those processes also need to see improvements to the design of the mechanisms for judicial redress, information transparency and public participation and green financing mechanisms. It is very likely the law will be passed in 2018, and so we need more people and organisations to pay attention, carry out research, and offer their opinions and suggestions.

Also, the Ministry of Environmental Protection recently passed its Method for Managing Pollution Permits (Trial). As an important lever of control within China’s environmental protection system, this permit system will link in with a number of other environmental management systems and be an important part of public participation and information transparency. Those in the industry, researchers and environmental non-governmental organisations should pay close attention to it in 2018.

Ranping Song is a senior associate at World Resources Institute

China is on track to beat major climate targets two to three years ahead of schedule. The country pledged to set a 15% minimum target for energy coming from non-fossil fuels and to reduce carbon intensity by 40% to 45% below 2005 levels, all by 2020. By the third quarter of 2017, non-fossil fuel consumption had reached 14.3%. Based on preliminary government data, we also estimate China has already reduced carbon intensity by 45%, meeting the upper end of the 2020 target.

Despite the progress, carbon emissions and coal consumption are projected to rise again, reversing a three-year trend. This is largely due to resumed growth in energy intensive industries, such as steel, chemical and electricity production.

Is this just a blip or a trend? For the vision of Ecological Progress to take hold, more robust measures are needed, many of which make financial sense even for coal power plant owners. For example, new research finds China’s existing coal power plants would lose a whopping US$14.2 billion under the current policy trajectory. However, if China banned new coal plants after 2017, adopted a 30-year retirement schedule for coal plants, and accelerated the deployment of low-carbon electricity in line with the two-degree Celsius goal, losses could be capped at US$2.3 billion. China can also tie the now voluntary green power certificate trading to mandatory renewable energy portfolio standards, and therefore sustain incentives for renewable energy without draining the government budget.

Finally, the national emission trading scheme ought to be closely watched. While carbon trading may not become the main driver for emission reduction immediately, it could lay the foundation for China to step up its climate ambition in 2020.

Paulo Esteves is director of the BRICS Policy Center

Multilateral Development Banks (MDBs) are threatening socio-environmental governance mechanisms by adopting policies that push country systems to the centre of the environmental governance landscape. Instead of focusing on internationally agreed standards, MDBs are increasingly relying on national systems to cope with undesired socio-environmental impacts. Furthermore, the World Bank’s cascade approach, which is designed to create a business-friendly environment, includes deregulation as a way to attract private investment.

Combined, these two sets of policies are stressing already fragile country systems. Moreover, they are part of a broader western response to China’s rise as a key source of investments in infrastructure. In this context, it is critical to monitor how country systems are reacting to this growing pressure, and to have China actively engaged, along with western powers, in a broader debate on socio-environmental governance.

Peter Corne is a managing partner of Dorsey & Whitney Johnny Browaeys a director at Greenment Environment

Enforcement campaigns have recently become a welcome feature of the Chinese environmental landscape, but they are time consuming and require a lot of resources to execute. The government needs to be working towards putting in place a mechanism that relies on self-enforcement rather than simply enforcement drawn from external (i.e. governmental) sources.

Punishment is not enough. Blunt enforcement does not always “land” well; nor does it “stick” well. Alone, it is not the most efficient tool for the purposes of compliance: environmental officials cannot be everywhere all of the time. There needs to be a mechanism that inspires voluntary compliance –  a supporting business culture that will naturally lead to self-governance. This is the challenge that stands between the government and a true “ecological civilization”. And it is the only way that a lot of the flaws in the current system can realistically be addressed.

While enforcement is an important element, several others need to be put in place to ensure that environmental compliance becomes a sustainable reality:  (1) Those that are regulated must become environmentally self-aware, thus more education is needed at all levels; (2) The regulated must become capable of improvement and be given the resources to improve; and (3) the regulated must be engaged in the process of building a better environment and motivated to achieve the goals that the government has set.

So, to illustrate, if due to environmental concerns, a factory owner must move a factory, the owner should be motivated to build a better, cleaner, and more high-tech factory. And the owner should be motivated to retrain the staff that will be affected by such an upgrade.

Enrique Dussel Peters is coordinator of the China-Latin America Academic Network, based at the National Autonomous University of Mexico (UNAM)

There has been an increasing analysis of China´s overseas foreign direct investment (OFDI) in Latin America and the Caribbean (LAC), both in China and in LAC. This analysis, particularly the Monitor of China´s OFDI in LAC by Red ALC-China, highlights a number of relevant issues.

During 2010-2016 China´s OFDI averaged US$14.3 billion annually. Transactions remained highly concentrated in raw materials, public property and in three countries: Brazil, Peru and Argentina. More recently some of this general performance has shifted. It is expected that China´s OFDI in 2017 will fall sharply, particularly as a result of more stricter capital control and new regulations in China.

In qualitative terms it is also relevant to understand that Chinese firms are witnessing a significant learning process in LAC and that this process is proving very expensive in terms of costs and time.