Is China’s Environmental Tide Turning? 4 Things to Watch

After decades of stalled or blocked reforms, China’s environmental protection effort may finally be gaining traction. There are scores of new initiatives; some positive indicators, such as falling levels of coal consumption; and a brand new minister of environmental protection, Chen Jining, who brings actual environmental expertise to the table. Still, as Chinese Premier Li Keqiang has noted, the country’s environmental challenges were a long time in the making and will be a long time in the fixing. So before touting China as an environmental success story, here are four indicators to watch over the next 12 to 18 months:

Level of  Investment

Stated Chinese central government investment in environmental protection has stood at roughly 1.3 percent of GDP for the past 15 years (before that it was 0.8 percent), placing it roughly in the middle of all developing countries. While there is no perfect investment level, Chinese scientists have claimed that it should be at least 2.2 percent of GDP to keep the situation from deteriorating further, while others claim it should be closer to 3 to 4 percent to improve the situation. One Chinese environmental economist recently suggested to me that investment doesn’t matter; what is significant is the adoption of market-based approaches.

I think both matter. Getting water prices right, for example, will make it easier for water conservation and efficiency to become priorities. But at the same time, no market-based solution is likely to address the profound challenge the country faces in remediation of its contaminated soil; only greater investment of resources will start to turn the problem around. So, understanding that such investment matters only inasmuch as it is spent well, will Beijing put its money where its mouth is? Look for the f unveiling of 13th Five-Year Plan (2016-2020) next March – or the details that dribble out before then – for an important clue.

Political Play

China’s new environmental minister, Chen Jining, did not waste any time before trying to shake up what his predecessor, Zhou Shengxian, acknowledged might be one of the worst-run bureaucracies in the world. Chen came out in support of Chinese journalist Chai Jing’s viral video on air pollution, “Under the Dome,” before the rest of the Chinese government quashed it. He has taken steps to address the corruption-plagued system of environmental impact assessments and revived the concept of “Green GDP” as a means of accounting for the environmental externalities associated with China’s economic development. Still to be determined – will Chen be able to sustain this level of energy and enthusiasm? Does he have the political heft to bring about real change down through the ranks of China’s environmental protection system or will he be suffocated under the political weight of other more powerful bureaucracies, such as the National Development and Reform Commission or the Ministry of Finance?

Institutional Reform

Good policies have often died a slow death trying to wend their way through China’s bureaucratic institutions. This is true of the environmental protection bureaucracy itself (including the Ministry and all the regional and local environmental protection bureaus) as well as the legal system, the process of environmental impact assessments, the system of evaluating officials based on how well they protect the environment, resource pricing, and so on. Implementation is the bane of effective environmental protection in China.

The anti-corruption drive may help by ensuring, for example, that environmental monies are actually spent on environmental projects. Reform of the legal sector should also provide a significant boost to environmental protection: amendments to the environmental protection law promise to strengthen public disclosure, allow more access for non-governmental organizations to bring public interest litigation, and raise the bar on fines and criminal prosecution for companies and officials that don’t address their pollution problems. All of these institutional changes enhance the likelihood that policies such as the Air Pollution Prevention and Control Law will be fully realized. At a minimum such reforms need 18 months to 24 months to demonstrate real success.

Civil Society

Over the past several years, civil society has been the most dynamic element of China’s environmental protection system. Environmental NGOs have been at the forefront of civil society development and a driving force for environmental change. After Chai Jing released her video, an app that allows the Chinese public to check for pollution violations by the name and location of a company (developed by Ma Jun, one of China’s best known environmental activists) reached three million downloads. The Chinese people have taken to the streets tens of thousands of times annually to demonstrate their unhappiness with one or another element of the country’s environment. With the more restrictive political environment emerging in the past few years under President Xi Jinping’s leadership, however, it is possible that civil society may face greater obstacles in both formal and informal efforts to organize. New requirements for Chinese NGOs may limit opportunities to access foreign funds; restrictions on Internet usage may result in less transparency; and arguments that protests are driven by “hostile foreign forces” may gain greater currency, raising the bar for Chinese citizens to voice their concerns publicly. Here, too, the next 18 to 24 months will tell much of the story.

Is there a ray of sunshine cutting through Beijing’s smog? Success in China’s environmental protection effort ultimately will be demonstrated by the levels of pollution and environmental degradation that the country experiences moving forward. Tracking these four indicators of environmental change, however, should help provide a sense for whether the country is on the right path.