China, Enormity, Massive Planning, Market Incentives

We’re just three days into our US State Department-sponsored Water Here & There: International Fellows Program, and our program organizers would like us to make some sense of what we’re seeing and recognize what we’re learning. Fair enough – but in the context of the dizzying dynamism that is contemporary China.

We have learned about water: We’ve heard directly from the Ministry of Water, had a lecture from Beijing’s Water Authority, learned about the national zoo’s water system and its ongoing remediation, and received a presentation from the senior researcher at the Ministry of Environmental Protection. Today he spoke with us, tomorrow he speaks with Al Gore. So we’re fortunate to have excellent connections and hear from the right people. More about that later; first – some thoughts on SCALE.

If anything screams at me after these initial days, it’s China’s enormity, population density, and capability to complete massive infrastructure projects in what seems like mere moments. This realization began to sink in when while, on Day 1, we were discussing the logistics of getting water to Beijing’s 20 million people. The most distant reservoir is 600+ miles away in Hubei Province. More amazingly, the government has begun to – quite literally – ‘replumb’ the country: meaning they’ve developed systems to get water from the Yangtze River over to the Yellow River if one or another is insufficiently high. These are massive water systems that are being retooled to meet the needs of the sprawling population.

Then there’s the subway system. In the last decade it has added some half dozen lines. It’s efficient, clean, comprehensive, and rapidly expanding. All of the US participants agreed – there’s no subway system like it anywhere in the US. And this break-neck expansion has come underneath one of the most densely populated areas in the world.

Of course, all of this enormity and scaled-up planning comes in the context of that economic explosion we’ve all been hearing about. And we see signs of that here too. One of our program coordinators told us about the World Expo currently underway in Shanghai – and the Chinese man who walked into the expo with a bag of cash and walked out with seventeen Hummers. The US Embassy is the 2nd largest of US Embassies, 2nd only to the one in Iraq. China is building 60 nuclear energy reactors right now. China is the #1 market in the world for Bentleys. AND – for China, coming from the top level, with such urgency that environmental civil society groups are now permitted and encouraged, the top priority has become the environment. China has 7% of the world’s water resources – and 20% of the world’s population, so China is seeking solutions, now and in a hurry.

What might be those solutions? That’s what’s unraveling for us here as the program proceeds, but one thing is already clear – few people we interact with fear market incentives. Our visitor from the ministry of water was clear, “anyone who uses water shall pay accordingly for this usage,” and this afternoon’s presenter from the Ministry of Environmental Protection was downright enthusiastic – nearly proselytizing – about implementing market mechanisms at the district and municipality levels to discourage polluting water systems.

This gentleman, Dr. Hu, was working to address the pollution problem in the Urumqi River Basin, a relatively short river of 268 kilometers in the Xinjiang Autonomous Region, with a relatively small major city of 2 million. His concern was that water quality is wretched and that districts have little or no incentives to police water quality in their own districts, because it potentially interferes with economic growth. Hu introduced the notion of “local pollution protectionism,” suggesting that districts will do what they can to be sure their businesses retain the opportunity to pollute, because they’re more interested in short-term economic growth than in long-term environmental quality.

Therefore, Dr. Hu is a big fan of a liability mechanism he called an “ecological compensation fee.” This fee, which will begin to be implemented in July of this year, makes districts responsible for the quality of water as it leaves their district. If they don’t meet standards, they get fined. The national government does the fining, and leaves up to district governments the tasks of training and controlling polluters as well as remediating water on the way into rivers. Dr. Hu is excited to see this underway. The national administration is announcing the new rules widely through their media mechanisms in July. And Hu believes the citizens and – especially – netizens will hold the government accountable. He has a lot of faith in netizens – those anonymous online bloggers who keep the government to keeping its word. Speaking of the netizens, another presenter we heard from said, “They are eager, they criticize the government everyday on the internet. They are the strong future for democracy in China.”

Cheers to netizens, and to posting from behind the great porous firewall.

Pictures to come.