TCS Daily


China From Red to Green

By Roger Bate - March 22, 2006 12:00 AM

Senators Charles Schumer (D-NY), Lindsay Graham (R-SC) and Tom Coburn (R-OK) arrive in China today to discuss the US-Chinese relationship. One area the Senators should address is the sustainability of China's growth. Financial and labor constraints may be the current focus of concern, but a far greater threat to China's long-term economic growth lies in its lack of attention to ecosystems.

Chinese surface water is depleting rapidly in quality and quantity. As the Peruvian economist Hernando De Soto says:

"For most Americans, it is unimaginable that the great Mississippi River would one day dry up and not reach the ocean. Yet between 1974 and 2000, China's Yellow River....ran dry 18 times. In 1998, the Yellow River failed to reach the ocean mouth for more than 250 days. With 1.3 billion people to feed, such water shortages are not just a major agricultural problem but a serious threat to China's economic and political stability."

And it's not just surface water: The deep aquifer under the North China Plain in Hebei Province (around Beijing) -- which will not be adequately replenished and is generally used as a last resort when the shallow aquifer runs dry -- is now being drilled and depleted at 10 feet a year, says the 2001 survey by the Geological Environmental Monitoring Group in Beijing. The impact of surface and groundwater depletion could be significant and soon: Charles Wolf of the Rand Corporation estimates such water shortages could indefinitely lower annual growth by as much as 2%.

But there is plenty of water in China, it's just in the wrong places for development and massive hydraulic infrastructure projects are needed to address the imbalance. But more importantly, property right systems are needed to ensure that allocations of water are used fairly and efficiently, particularly the new water brought by the huge engineering projects.

China should also adopt a system of water property rights much like that in US western states. Having successfully incorporated market forces into other areas of its booming economy, it's time to extend the same approach to the environment.

China's leadership needs to understand that market mechanisms can protect the environment every bit as effectively as they boost the production of CDs and cars.

But the Chinese Government will not get much support from the international community for this approach. To those meeting in Mexico for the fourth World Water Forum, climaxing today with UN's World Water Day, market solutions are rarely mentioned and never encouraged, and hence China considers itself safe to ignore such approaches.

To be fair China's task is made more difficult by the human rights and green groups, currently in Mexico, which undermine their own credibility by opposing dam development as a matter of principle. From the Three Gorges in China to the Narmada Dam in India, these groups ignore the benefits such projects can bring, such as generating electricity, reducing the risk of flooding and providing better irrigation for food production. Their exaggerated approach obscures the valid concerns about the dangers of ecological catastrophe and relocating tens of thousands of inhabitants. This makes China's Government defensive and less open to any sensible advice coming from international experts.

China's development patterns resemble those in the West in the early 20th century, when pollution was viewed as the inevitable price of growth. That's a common attitude in China today. For example, one Chinese businessman told me that pollution is a "price worth paying" -- an opinion shared by many local officials.

In building the Three Gorges, China has embarked on the largest dam development program the world has ever seen. According to the 2003 World Commission on Dams, China has the vast majority of the world's dams (47,655 representing 46% of the world's total) and the largest dam projects -- the Three Gorges Dam contains 26.43 million cubic meters of concrete and is twice the size of the former largest water conservation project in the world, the Itaipu Dam in Brazil. On the heels of that, the south-to-north water diversion project aims to divert water from the Yangtze to the Yellow, Huahe and Haihe Rivers at a rate of 38 - 48 billion cubic meters of water a year to accommodate the needs of 300 million people.

Yet although 70% of China's water supply is used for agricultural purposes, China's food production is not benefiting as much as it should. The efficiency level for crop production (the amount of water absorbed by plants and not lost to evaporation) is well below 50%, compared with over 65% in the U.S. Part of the reason is that many of China's irrigation Schemes were hastily designed, poorly constructed and built with inferior materials. Another reason is that China's massive size and population exacerbate the degree of damage done by any policy failure.

So why is China now facing a far greater ecological danger than the one those Western countries experienced when they went through similar phases of rapid development in the 20th century? The reason is that in the UK and the US, individuals had ownership rights over their local environment, even if they weren't always enforced. Ordinary Chinese, on the other hand, have never had those rights.

Efficient water use is closely linked to rights of property afforded by the English common law, for example, as all landowners may demand that water flowing past their land remains in decent, natural condition. The remedies available are injunction against polluters, enforceable by law and carrying a prison sentence for breach; and importantly, the polluter is responsible for compensating the owner for any loss and restoring the water to its former quality.

By the 1960s, lawsuits brought by individuals against polluters in the UK had led to the cleaning up of many rivers, long before government agencies added a layer of bureaucracy to such efforts.

In the US, river water is effectively owned by local landowners and fishermen in places like Montana and Wyoming. Although excessive federal government regulations often makes it difficult to trade, or even exercise, such rights, their very existence can empower individuals and act as a constraint on still greater government interference. And in many other countries, from Chile, to South America, Mexico, and especially Australia, allowing individuals to own water rights has benefited the poor and helped to improve the environment.

In the absence of such market solutions, China's rapid development has brought it to the brink of ecological disaster. Pan Yue, vice minister of the environment, addressed the problem at a news conference last year: "'China's population resources and environment have reached the limits of their capacity to cope. If we continue on this path of traditional industrial civilization, there is no chance that we will have sustainable development."

This problem cannot be solved until China allows local people, especially farmers, to own their water and trade usage rights. Allowing them to do so would ensure more efficient farm production, and lead to less water waste. Over the long-term, ownership rights can empower people and lead to political pressure for change.

As Russia is discovering, it's not possible to throw off the shackles of communism and then confine yourself to the bits of capitalism that appeal to the current oligarchs. Success will require the discipline of the market as much as the opportunity and growth it brings, and growth without responsibility is not sustainable.

Perhaps if the US Senators arriving today in Beijing discussed these issues with the Chinese Government they could do more for economic freedom in the region and strengthen ties with America's largest future trading partner. They would also be protecting the often beautiful but rapidly degrading Chinese environment.

Roger Bate is Resident Fellow of the American Enterprise Institute and his book "All the Water in the World" will be published later this year.

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13 Comments

china from red to superpower
Good article, its a perspective I haven't seen and I agree with much of it.

Makes me wonder about one small point presented about midway through. It struck me as I was reading, but disappeared as quickly as it appeared.
"To be fair China's task is made more difficult by the human rights and green groups, currently in Mexico, which undermine their own credibility by opposing dam development as a matter of principle." ...
"Their exaggerated approach obscures the valid concerns about the dangers of ecological catastrophe and relocating tens of thousands of inhabitants. This makes China's Government defensive and less open to any sensible advice coming from international experts."

So human rights and green groups are making it more difficult for China to use market forces to build more dams. But the human rights and green groups' concerns are valid. And China is defensive and less open because of it. Then 2 paragraphs later the author explains China has 46% of the world's dams.

Huh?! How many sides does a mouth have? I don't disagree necessarily, it just seems like this was added to the piece just for the purpose of taking a jab at human rights and green groups. It just has so little to do with the story. Its probably because TCS wouldn't publish the piece unless it had some negative comments toward human rights and green groups. You know, gotta keep taking shots in the culture war.

I do wonder what is meant by the "exaggerated approach" of these groups.

China from red to green
Agreed--good article.
What's wrong with taking a swipe at human rights and green groups? Their stock and trade is in taking swipes at others. Should they not be held to the same standard? They have done a lot to discredit they very causes they purport to support by playing demonizing politics.
China has 46% of the worlds dams because they've not paid attention to human rights and environmental groups. At this point they must be realizing that communism is a dead end, and if they want to operate legitimately on the world stage they're going to have to play by a few rules--some of which involve at least listening to advice from human rights and environmental groups. Plus there's plenty of empirical evidence to suggest that maybe their country is close to reaching it's carrying capacity for humanity should they continue their current non-eco-friendly course.
I can't answer for sure, but I'd guess the "exaggerated approach" the author speaks of regarding eco/human rights groups is their typical approach to everything--throw it all at the wall and see what sticks. Sorta like what a 2 year old does with a bowl of spaghetti.

china from red to green
I guess I just have a different perspective on human rights and green groups. I don't see how their stock and trade is in taking swipes at others or that their typical approach is to throw it all at the wall and see what sticks. They exist for a reason, and that reason is to help people defend themselves against over-zealous industry and government. They've evolved to protecting the environment from the same forces, who show no value for the environment or long-term affects of their activities.

Eco/human rights groups absolutely should be held to the same standard. And I concur there are groups that are too extreme, that take it too far. I'd much rather they take it too far in that direction, than take it too far in the other direction, and give industry everything it wants (as Bush is trying to do). Whats more important, the environment or the economy? If you say the economy, you have a wire loose in your brain. The economy does not exist without the environment, people do not exist without the environment. If our values are in the right place, we should err on the side of caution with the environment, even if means some pain to the economy. There is a balance to strike. China has ignored the balance, the Bush Administration ignores the balance, so eco/human rights groups are necesary to keep the balance and protect our future. We should be critical of these groups, so that we know who they are and that we can trust them to do whats right.

Our founders created a judicial system so that "the people" would have a venue to fight the power and organization of industry or government when they trample our rights or break the law. Eco/human rights groups are on our side, the side of the people. Criticism is essential to hold them accountable, but not broad swipes like I referred to in the article. I realize an ideology, perhaps even a political party, has joined with industry to fight environmentalists. This ideology is corrupt and values a growing economy and profits over the sensible balance of environment and industry. It doesn't have to be a war, but honestly the right has made it that way in their quest for power.
Its interesting that before 2000, environmental lawsuits, more often than not, had the government's name attached to the environmental side. Now that is very rare, and indeed most cases the government's name is attached to the industry side.

More than that
They've got these dams because of the economic and environmental advantages of hydro electricity. In this area, the environmental groups have been entirely on the wrong side of the issue. Every time you hear about Three Gorges, think, that's 40 coal-fired power plants that don't exist as a consequence, with a huge net environmental benefit as a result. Moreover, even if Three Gorges never produced a single watt-hour of electricity, it would still be fully justified environmentally because of flood control. There's no river in the world that's killed more people or caused more environmental devastation through floods than the Yangtze.

dams
How old are these dams? Were many of them built before the Human Rights/Environmental groups started getting so vocal?

Secondly, I've never noticed the leaders of China having much of a concern regarding other people's views of their actions.

Thirdly, the authors point was that these HR/E groups are making it more difficult to get China (and other countries) to adobt market based solutions, because of their reflexive rejection of market based solutions.

That's what they claim
but it's misleading. The majority of the environmental groups exist to undo parts of what they see as undesirable in our civilization. Theirs is a luddite movement, pure and simple. It is not rational, but has a fundamental mysticism at its roots. It is malthusian, and many, many times has demonstrated its desire through public statements and policies to reduce human living standard and material quality of life.

The environmental movement is morally corrupt at its roots, because what it sells to the public is not what its goals in fact are. It claims to act in the name of a cleaner environment, but in fact what it advocates is fewer people and greater poverty. They do not advocate a balance between industry and environmental concerns; they advocate the supremacy of environmental concerns, even imaginary ones, over any or all other concerns. That's not balance, that's religious fanaticism.

On Chinese dams
Many of them date back to the Great Leap Forward. They are principally earth dams, built with little more than human labor and in many cases are failing badly. China has a rather large program underway to replace them with modern structures that will not fail as catastrophically as some of these have. The older Chinese dam architecture has essentially nothing in common with modern development such as Three Gorges.

Who cares about the ENGOs? They've been on the wrong side of this issue anyway. See my other post. More to the point, you're forgetting that if you want to make real progress on development and environmental issues, the last thing you do is listen to a bunch of anti-development, malthusian fanatics. Perhaps the one thing I like about the Chinese government is that it has the brass to ignore the lunatic fringe, something all too many governments and media have forgotten how to do.

Thats what you claim
Religious fanaticism? Fundamental mysticism? I guess you would know about that stuff ColinH. Do you have any examples of the many, many demonstrations of how environmentalists try to reduce the human living standard?
At least I learned a couple new words.

I'll go along with you ColinH that the environmental movement resembles a luddite movement. But malthusian? Nope, that goes too far. Whats malthusian about requiring factories to install the newest technology in smog filtering when making major upgrades? That seems pretty rational, unless you're a wingnut on the other extreme, pushing for industrial superiority over the balance I talked about. Its not that environmental concerns deserve total supremacy, but they do deserve priority.

I do agree environmental groups do not do enough to advocate a balance between industry and environment. Its unfortunate, but is really a natural evolution in response to the power and organization of industry. Industry is even more entrenched on the other extreme- no regulation or laws or accountability. I wonder ColinH, have you ever been on the side of the environment in a dispute between industry and environment?? Or are you of the corrupt ideology that gives industry everything it wants to the detriment of the people?? Oh, but we have a big new house and shiny new cars, everything must be dandy.

Do you really believe the goal of environmentalists is greater poverty? Thats just stupid. You have a small point in referring to materialism and overpopulation. You don't think materialism is a bad thing? No concerns about overpopulation? Overpopulation is less of an issue in America, but we do still need to be sensible in this regard. Thank God for war, disease and abortion, right? But if you really think materialism is no problem, then you are selfish and irresponsible. Materialism is a personal thing, its a destructive emotion, it leads to unhappiness, we should be critical of it in all its forms. Thats reality, if you disagree you got bigger problems in you that need addressed first.

Wake up
When's the last time you've read or understood anything expressed by Rodney Coronado or indeed anyone or anything issued by the Earth Liberation Front? Know who Dave Foreman is? Know what treespiking is? Can you recall a leading environmentalist wishing in a public speech to be reincarnated as a lethal disease to reduce the world's population? I can, the head of the World Wildlife Federation no less.

Encouraging poverty? Yes, and they do far worse than that. The net effect of all of their policies with respect to the developing world is to increase poverty by blocking any development in developing nations where it cannot meet the standards that only industrial nations can afford. They enhance poverty by encouraging governments to create huge nature reserves and the expulsion of the local population. Governments agree because tourism, even ecotourism pays more taxes than subsistence farming and the resulting number of DPs from environmentalist pressure in Africa has been huge in the past decade or so. Environmentalism has killed more people than wars during the 20th Century with the DDT ban alone.

Pretending that environmentalism is nothing more than insisting on the lastest technology for tailpipe emissions is simply foolish. Lamentably, my friend, in the environmentalist world, you fall into that class of persons that Lenin called "useful idiots".

Take off your blinders
"Pretending that environmentalism is nothing more than insisting on the lastest technology for tailpipe emissions is simply foolish."

Equally foolish is pretending that environmentalism is nothing more than ELF and treespiking. You present the most extreme examples as a representation of the whole, and that is inaccurate and misleading. But I understand your perception, you are anti-environment, so it suits your comfort to group extremes and moderates together so you can easily dismiss the whole effort. I don't really know if you're a conservative, but that is the way of conservative argument.

Ok, lets take it to the developing world. You have a point here, giving priority to the environment in the developing world can have a negative effect on their development. In contrast, do we let them cut down every last tree? For what? So they can grow crops and still be in poverty? Lets help them develop industries that don't destroy the environment. You have a good point - tourism and eco-tourism. Lets help them develop that industry, so it becomes more stable and attractive, so a steady market develops for it. Its interesting you paint tourism/eco-tourism in a negative light, like its only a bad thing because governments get more tax revenue from it.

You know, I'm not pretending anything. I'm talking about balance and giving environmentalists the benefit of the doubt because they have their priorities in the right place. If I have to choose between ELF torching some SUV's and a power plant's freedom to pollute as much as it wants, I'll go with ELF. I don't condone violence, but ELF's intentions are better than an industry's, where the goal is only to make money. It seems clear that you value the economy over the environment, why is that? If you want to talk about useful idiots, your role for industry is much more accurate than mine for environmentalists. Is there ever an instance where you're critical of industry?

BTW, why is DDT banned? Do you know something nobody else does about how its safe? Was it enviros that banned it? Perhaps you should focus your criticism at the people who actually banned it. I know very little about the issue, but knowing you think it should not be banned makes me think its the right call to ban it.

"Useful idiots" is a good description of the Bush constituency, I'll have to remember that one.

Sorry, you're ignoring basic facts
Of course ELF and ALF are extreme. Who do you think funds them? Sierra Club, for one of a host of supposed moderates. You fund an ecoterrorist, you are an ecoterrorist. Why should the ENGOs be held to a different and more lax responsibility for their actions than any other group in society? You do not understand my position at all; I am very much in favor of environmental protection. However, I am anti-environmentalist, as the two have little in common. I believe in protecting the environment as the goal in and of itself; they believe in protection of the environment as a means to other goals entirely.

Second, your thinking about industry's desire to pollute endlessly and to cut down all the trees is at least two to three decades out of date. Despite the fact that larger and larger tracts of forest have been turned over for harvesting, forest cover in North America expands every year. A principal reason for that is that the harvested wood has increasingly high value, and the timber companies want to ensure that they have a continued source of high quality, reliable supply of wood beyond the next few years.

Third, the point of the developing world is to allow them to harvest their wood AND GET FULL VALUE FOR IT. The most serious problem they have are the innumerable trade barriers levied against them, led by the United States and the EU with the full encouragement of the environment lobby, to block their products, particularly in things like forestry, agriculture, and textiles. The record of the ENGOs in all three of these areas with respect to the third world has been dismal at best, and they have pandered to the worst protectionist instincts in the United States.

As to DDT, deaths from malaria nearly vanished during the 1960s as a result of DDT. After the U.S. ban by the Nixon administration, deaths skyrocketed. In Sri Lanka for example, annual fatalities went from about a dozen per year to several thousand per year within a five year period. All due to ENGO pressure on the U.S. government to ban a substance for which the U.S. had no need but Africa and other areas did. In the area of malaria and disease control alone, it is not unreasonable to suggest that the ENGOs will be recorded by future historians as among the worst contributors to human misery.

The record of the ENGOs speaks for itself. They have shown what they are and what they stand for. They are a disease in dire need of eradication.

State Of Fear
I appreciate the discourse ColinH, your last response is much more moderate, I appreciate that. You do sound like Michael Crichton's book, like you believe the fictional conspiracy presented in the book.

How do you know the Sierra Club funds ELF? I agree, you fund an eco-terrorist you are one. But how can you possibly know moderate environmental groups fund extremists?? And specifically that Sierra Club funds ELF or ALF? Please give some proof, proof like that will change my mind.
Further, if environmentalists' goals are not to protect the environment, what are they? You say they have other goals entirely, what are they?

Second, I don't think industry's desire is to pollute endlessly. I don't doubt they would pollute zero if they could do it at no cost. But, reducing pollution hurts their bottom line, so they'll do what costs least, regardless of the effect it has on people or the environment. This is why ENGO's are needed.
I agree with you on the tree harvesting, except its more like 1 decade out of date. It wasn't until the 90's, maybe even late 90's that wood companies started to change their philosoph in that regard. Besides, my comments were related to the developing world, not America.

Third, I just differ than you on this point because I blame the ones who create the trade barriers to developing countries. And there are many more reasons governing bodies do this than just appeasing the environmental lobby. Environmental lobbyists are not blameless, but are also not the key player. ENGO's did not ban DDT.
You do clearly have a bias. Which is hard to understand, if you really favor environmental protection, that makes you an environmentalist. As I said earlier, there are different levels in the commitment to environmental values. You're just playing with semantics to say you're anti-environmentalist but favor environmental protection. If you oppose certain groups, fine, let that be known, but you're going much further than that.

ENGO's exist out of necesity. They are a counter-balance to the power of industry. They both have lobbyists, they both have extremist surrogates.

Like anything else, to understand the ENGOs, just follow the money
If all the world's environmental problems were solved or the public somehow got the impression that they were considerably alleviated, then who would send in the donation checks to the ENGOs?

Who would pay for the nice offices in Gucci Gulch (lobbying area in Washington, D.C.)?

Who would watch Al Gore's movie?

The answers (any answers, actually) to the above that the folks running the movement think of is why the ENGOs are so fanatic and demogogic.

Oh, and hating humanity also helps.

For those reasonable poeple who care about the environment, the answers they come up with to the above are often the the same that the fanatics think of: "Why, nobody would send in the checks because we will be living in a world where it would be unnecessary to do so." But, unlike the fanatics in the movement who also derive lots of bread and butter from it, reasonable folks would consider that a good sign, not a catastrophe.

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