Clean and Sobering

AFTER DECADES OF RUNAWAY ECONOMIC EXPANSION, CHINA IS CONFRONTING THE RESULTING MASSIVE POLLUTION PROBLEM.
BY CHRIS WARREN.
ILLUSTRATION BY CALEB BENNETT.

The future of China — and perhaps of the world — is taking shape on a small island just north of Shanghai. Located at the mouth of the iconic Yangtze River, Chongming Island has been selected as the location of Dongtan, a future eco-city that Chinese officials say will be home to 50,000 residents by 2010 and to 500,000 by 2040. By just about any measure, the plans for Dongtan are an environmentalist’s dream: Just a third of the 21,250-acre island will be inhabited, and the rest will be devoted to organic farming and a wetland; the power required to run the city will come from renewable resources like wind, solar radiation, and biofuel; and the city will be built to cater to the needs of cyclists and pedestrians, while the motor vehicles there will operate on electricity and fuel cells. So the city will be self-sufficient for its food, water, and energy needs and will emit virtually no greenhouse gases.

That very well might be the future of China. But it sure isn’t the now of China. Just talk to anyone who has traveled there recently. Chris Flavin, president of the Worldwatch Institute, an environmental advocacy group based in Washington, D.C., recalls a visit to Beijing in early 2007. On the final day of a six-day trip, he was at a revolving restaurant on the top floor of his hotel. While sitting there, he saw something extraordinary, something he hadn’t noticed the entire previous week because of the city’s air pollution. “I realized that there were these quite beautiful mountains close to the city,” he says. “The weather pattern had shifted, and they were getting some clean air that was blowing some of the pollution away.”

Anecdotes tell only part of the story; statistics are far more chilling. Of the world’s 20 most polluted cities, 16 are in China, and 90 percent of China’s cities have contaminated groundwater. China’s Information Office of the State Council, an administrative arm of the government, estimated that pollution cost the country $200 billion in 2005, which translates to nearly 10 percent of its GDP. The list goes on and on and includes very real evidence that China’s environmental problems are increasingly being outsourced to the rest of the world as well. Indeed, as much as 40 percent of the air pollution in Japan and South Korea can be traced back to China. Even continents oceans away aren’t exempt. On some days, as much as 40 percent of the pollution in Los Angeles is generated from across the Pacific, in China.

IN OTHER WORDS, Dongtan is not the norm in China, and there’s a straightforward reason why. Put simply, China’s ascension as a global polluter — by some estimates, China has already passed the United States to become the largest emitter of the greenhouse gases that contribute to global warming — is a direct result of the country’s dramatic economic rise over the past three decades, known as the Great Leap Forward. “One way to look at it is as if China had compressed what was a century of economic development in this country [the United States] and done it in a couple of decades,” says Flavin. “In fact, they’re going through the Industrial Revolution and the Information Revolution simultaneously.”

While this transformation is clearly damaging China’s environment, the flip side is that it is also undoubtedly improving the lives of untold millions of the country’s citizens, as incomes and job opportunities are steadily rising with the expanding economy. And paradoxically, it’s the central government’s desire to keep the economy growing that is now driving Chinese officials and businesspeople to make very real moves to address environmental problems.

In the end, it’s about their own survival, says longtime observer of the country Merrill Weingrod, founder and CEO of China Strategies, a consulting company based in Providence, Rhode Island. “There is nothing that will unwind China’s development or is a bigger threat than environmental degradation,” says Weingrod, who points to the lack of availability of clean water — for drinking, industry, and agriculture — as perhaps the biggest problem. “Nationally, they are very concerned, as they should be. The imperial governments of China only survive as long as they can serve the people and the people’s needs, and water would be one of the big threats.”

Chinese officials themselves, at least in the central government, understand that the country’s environmental challenges are real and threatening. But amid the legitimate concern about how the country will clean itself up is a sense of real opportunity. Indeed, if China is able to develop and manufacture the technologies that will clean its water, air, and land, the thinking goes, it will transform itself into a formidable supplier of those products to the world. Already, the Chinese government is making huge investments in environmentally friendly technology. By greening itself, then, China could again transform its economy, this time from one that manufactures mostly inexpensive goods for the world to consume to one that simultaneously makes the world cleaner and China wealthier.

“I think there is a real opportunity there,” says Alex Wang, a Beijing-based attorney with the Natural Resources Defense Council, a U.S. environmental organization that is working closely with the Chinese government on a wide array of initiatives, including improving construction techniques to reduce energy consumption. “There is a lot of opportunity in water treatment and air pollution- control equipment, where a lot of the best technology is in international companies right now. But the Chinese companies will, before long, really get on the ball on that.”

IN FACT, THE ENVIRONMENTAL revolution is already happening. And the method by which it is happening is very familiar to those who have watched China’s overall economic transformation. Under Deng Xiaoping, the country opened up portions of its economy to outsiders, who poured investment and technology in and created the manufacturing centers that are now so prevalent. A similar dynamic is occurring today with green technology. One indication of this is the amount of money Western venture-capital firms are investing in small Chinese start-ups geared toward producing and manufacturing green technologies. According to Cleantech Network, a research and investment group based in Ann Arbor, Michigan, venture capital invested in Chinese clean-technology companies went from $170 million in 2005 to $420 million in 2006, increasing by 147 percent.

There are also plenty of Western companies looking to marry their best technologies with China’s manufacturing might. Take the case of American Superconductor, a Massachusetts-based company that holds licenses to wind-turbine technology. Though China is currently dependent largely on cheap but horribly polluting coal to supply its energy — it is said that one coal-fueled power plant is put on line every 10 days or so — there is wide recognition there that wind, particularly in gusty places like Inner Mongolia, is a far superior alternative.

In order to make wind energy a viable option, though, Chinese companies need technology — and that’s where American Superconductor comes in. Greg Yurek, the company’s founder and CEO, says that large Chinese manufacturers approached them a few years ago looking to obtain designs for wind-turbine systems, which Yurek defines as everything from the tower to the guts and the blades of a windmill. “They decided wind is big, and it’s going to grow fast in China,” he says. “They wanted in, and yet they didn’t have a design to make these wind turbines.”

Sensing a real opportunity for Chinese companies to make an impact in the wind-energy business, the Chinese government has mandated that 70 percent of all wind-turbine equipment used in the country be produced by a domestic company. Yurek says that the Chinese manufacturers his company works with are ramping up to meet the quickly accelerating demand in China. The first Chinese firm American Superconductor partnered with was Sinovel Wind Corporation, which produced 100 wind-turbine systems in 2006 and expects to manufacture 500 in 2007, 800 in 2008, and 1,000 by 2010 — huge numbers in the wind-energy industry. Yurek says that Sinovel’s CEO has made it very plain that the domestic Chinese market is just a start. “That is the direction the industry is going,” Yurek says. “He is very clear that he wants to manufacture systems not only to meet the continuing demand in China; he really aims at exporting that product outside of China.”

WHILE CHINA SEES its wind-energy industry as being in the fledgling stages, its solar-energy business is fully formed and growing. In fact, China has more solar-powered water heaters than any other nation, and just last year, Chinese companies made $2.6 billion selling them. Already, China can boast that it’s the home of Suntech Power, one of the largest producers of photovoltaic panels in the world. The company recently went public on the New York Stock Exchange, making its founder and president one of the wealthiest men in the country.

It’s hard to find an area of the economy that isn’t in some way a focus of the country’s efforts to go green. The National Resources Defense Council’s Wang is working with the Chinese government to improve the energy efficiency of the country’s buildings, which lags far behind that of Western nations; in fact, Chinese buildings are, on average, nearly four times less efficient than those in the United States and 12 times less efficient than Japanese buildings. Since China is undergoing an unprecedented building boom, constructing buildings that require less energy can do a lot to improve the environment. More than that, Wang says, it’s also a way for Chinese companies to develop the kind of products necessary to boost energy efficiency.

While there are certainly many trends that point to China’s improving its own economy and environment with green technologies and practices, it’s undeniable that many daunting challenges persist. The central government, for example, has been aggressive in crafting many good environmental regulations, but local governments, which often have ownership stakes in the companies operating in their areas, have frequently been lackluster with enforcing them. Still, it’s hard to bet against a country that has been able to so completely transform itself in such a short period of time. Considering the stakes, the rest of the world should be rooting for China to succeed in its Green Leap Forward.

CHRIS WARREN is a Los Angeles–based freelancer who writes for the Los Angeles Times Magazine and Forbes.