Until recently the startling growth of Asia's economies took place with scanty heed to environmental consequences. But that's changing.
By Clifford Coonan
Cleaning up the dirty skies
Asia is a continent renowned for its natural beauty, wealth of resources, abundance of labour and growing importance as part of the global economy. However, newspaper articles about the need to pay attention to environmental matters are making headlines alongside the glowing financial reports from Asia's quickly emerging economies. For every report of double-digit growth rates and runaway output increases, there are tales of over-enthusiastic land clearing making way for flooding, or a river poisoned almost to the verge of extinction.
Yet the sight of solar panels on a farmhouse roof located near a coal-fired power plant shows someone is at least thinking about renewable energy in the world's fastest-growing economy.
And there are growing signs in China and other Asian countries of at least a recognition that something needs to be done about the unsustainable situation. Asian nations are gradually waking up to the need to pay attention to the environment, and green issues such as the importance of renewable energy and clean means of production are being aired.
Central to the success of the environmental issue in Asia is China, the world's most populous nation. So huge is its impact that pollution from China creates haze above Los Angeles, and for many years the focus here has been on industrial growth at whatever cost. China has been eating up natural resources, many of them imported from Australia, and not paying too much attention to the form that production takes.
However, the economy is now in dire danger of overheating, and the terrible pollution in the cities could potentially undermine the ruling Communist Party. Also, with the Olympic Games taking place in August, China's pollution record is coming in for closer scrutiny than ever before. Something needs to be done, say China's rulers.
At the annual parliament, the National People's Congress, Olympic organisers sought to reassure the world that the capital's air would be clean during the August Games.
Their assurances came after Ethiopian athlete Haile Gebrselassie said that he would not compete in the marathon because of concerns about pollution.
Zhang Lijun, deputy head of the State Environmental Protection Administration (SEPA), has full confidence in anti-pollution plans drawn up for the capital and surrounding provinces: 'Our experts predicted the standard of air quality can be guaranteed, and the commitment we made could be fulfilled after this plan is realised.'
China still relies on dirty coal-fired power plants for 80 per cent of its electricity, and the vast majority of new power stations being built run on coal. A lack of water is also a growing problem.
Yet China has shown a willingness to use renewable energy sources, largely for sound economic reasons. As well as a focus on solar power, vast wind power farms are being constructed in the remote western regions to fill local energy needs. The plan is for renewable sources to make up 15 per cent of energy consumption by 2020.
SEPA is working hard to improve standards at major power companies and to shut down smaller, heavily polluting plants. Heavy fines can now be imposed on the worst offenders. 'Our country faces severe environmental pressures, and the task of reducing pollution emissions is extremely arduous,' Hua Jianmin, secretary general of the cabinet, told nearly 3000 deputies at the NPC as he unveiled changes in the ministry structure in China that gave more power to the environmental watchdog by elevating it to ministry status.
Developments in China are closely watched in Hong Kong, where pollution is a major talking point and fingers are often quick to point at the territory's huge neighbour when complaining about the smog.
One of the by-products of strong economic growth in Guangdong and other provinces in southern China has been dreadful pollution in Hong Kong. High regional pollution and a continental air-stream were some of the reasons given for record highs in air pollution in the territory. But it's not all China's fault, light winds also trap vehicle emissions, and this is Hong Kong's own problem.
Power generation within the entire Pearl River Delta is a major issue. The Hong Kong government has imposed caps on the emissions of sulphur dioxide, nitrogen oxides and respirable suspended particulates from all power plants. 'We are progressively tightening the caps to ensure that Hong Kong can meet the 2010 emission reduction targets as agreed with the Guangdong Provincial Government in April 2002,' says a government spokesman.
The Bill will also allow power plants to use emissions trading, including cross-boundary emissions trading with power plants in the Pearl River Delta, as an alternative means for achieving the emission caps.
Reading the Hong Kong newspapers, it sometimes looks like the Environmental Protection Department's main job is to urge those who have heart or respiratory problems to cut physical exertion and outdoor activities, and to try to avoid congested streets.
But the Environmental Protection Department also has muscle on enforcement. In January, 38 convictions were recorded for infringing anti-pollution rules, 18 for violating the Air Pollution Control Ordinance, 17 for infringement of the Waste Disposal Ordinance, two for breach of the Water Pollution Control Ordinance and one for violating the Noise Control Ordinance.
Two companies were given fines of HK$30,000 for importing banned waste without permission, and two people were jailed for two months for exporting banned waste without a permit.
Incentives in hyper-capitalist Hong Kong work best when they are financial. Financial secretary John Tsang is working on various tax incentives to encourage better corporate practice on the environment. These include a 100 per cent profit tax deduction for capital expenditure on environment-friendly machinery and equipment in the first year of purchase. Tax breaks on environment-friendly vehicles and equipment are also on the cards.
Clean air and the environment are becoming central to Hong Kong's long-term survival. Hong Kong is planning to build a trading platform for carbon and other emissions-related products. The International Monetary Fund says Hong Kong needs to provide a broader range of financial services that are less dependent on mainland China in order to secure its long-term future as an international financial centre.
The IMF believes that Hong Kong needs to become more like Singapore, which has developed financial services that are not reliant on a domestic economy or hinterland.
'Developing new markets and instruments, including emissions trading or ageing-related products, could bolster further Hong Kong's role as a less China-centric and more international financial centre,' the IMF says.
Financial arguments tend to carry the most weight in most of Southeast Asia, but increasingly in this region, environmental awareness is no longer the exclusive preserve of eco-warriors and natural scientists. Analysts are expecting a massive rise in the market for emissions trading after the US election if the Republicans are ousted, which offers big opportunities.
Central to the growth of this sector is emissions trading, which is based on incentives created by the United Nations' Kyoto Protocol. Investment is rising strongly in companies that specialise in reducing emissions of carbon dioxide, methane and other gases causing global warming.
Under the terms of Kyoto, a polluter in a developing country that reduces its emissions can receive allowances from the UN that can then be sold to polluters elsewhere, mostly in the European Union, Japan and Canada.
In exchange for rights to a portion of these allowances, project developers are paying polluters, mainly in BRIC countries (China, India, Brazil) and Mexico, to build emissions-reduction projects at their facilities.
As developing countries continue to see output expand as their economies grow, emissions trading is expected to benefit in line with the need to keep cutting harmful emissions.
While Hong Kong's harbour disappears under a cloud of smog from southern China, Singaporeans are considering whether or not to go for a hydrogen-powered BMW.
When seeking to lure foreign companies to set up bases in the Southeast Asian region, Singapore uses its environmental friendliness as a selling point against Hong Kong. It's easy to see how this works.
A quick glance through the Singapore newspapers shows that environmental issues are well in hand in the rich city-state. As countries such as China are dealing with staggering emissions problems and industrial waste on an enormous scale, the environmental focus in Singapore is on sustainable airconditioning, fighting mosquito-borne dengue fever, maintaining high standards of hygiene among street hawkers and keeping the number of litter louts on the decline.
Three Singapore agencies have responsibility for environmental issues: the National Environment Agency, the Singapore Environment Council and the Urban Redevelopment Authority. Singapore has environmental issues, but its cleanness compared to Hong Kong is often cited as a reason for relocation by expatriate workers.
MGM International, a Miami carbon-trading firm that is working to reduce greenhouse gases through carbon credits, has set up its Asian hub in Singapore. The global market in carbon trading was US$30 billion last year and climbing.
Malaysia is one of the richest countries in the region in terms of resources but it also stands to suffer particularly harshly if temperatures start to rise. Climate change is expected to cause heavier rainfall in Malaysia, which means indiscriminate land clearing must stop or else flash flooding could cause massive loss of life and damage to property.
A major challenge in Malaysia is raising awareness. In January, natural resources and environment minister Azmi Khalid lashed out at the local media for not doing enough to cover environment issues. 'When it comes to issues such as geoscience, animal conservation and extinction, the print media seldom publish such articles, as I think they find it not so interesting,' he told a news briefing. 'It is true the public doesn't truly realise the importance of environmental conservation. This is where the newspapers should come in.'
Environmental activists in Malaysia are focused on stopping land clearing, but also on reducing waste, Malaysians produce around 2kg per person per day in waste, as well as upping the amount of household waste that is recycled from its current level of 5 per cent.
Palm oil is one of Malaysia's biggest exports, and prices are riding high right now, but importing nations, particularly in the West, want guarantees that the palm oil they are importing comes from sustainable sources. The industry is currently working on standards for sustainability to ensure they meet the criteria required. Malaysia also wants to capture 10 per cent of the global biodiesel market by 2010 based on its palm oil plantations.
Tourism, particularly of the environmentally friendly kind, is a challenge for Malaysia, but one that it is meeting. Efforts to promote areas such as Sabah as ecotourism destinations are paying off.
Though trailing Malaysia in the development stakes, Vietnam has made some strong economic advances in the past decade. While the government's focus is similar to that of many developing countries, that is, the focus is on first generating wealth, there is a growing consensus that sustainability will play an important role in future development.
Waste treatment is still at a very low level. About 65 per cent of industrial waste water from the garment industry goes untreated, and nearly 90 per cent of 500 paper-makers have either no systems, or low-standard ones, to treat water.
The government is planning to establish a scheme later this year that will create a more environmentally friendly industry. The government spends about 1 per cent of the national budget on the environment, while it also receives funding from development aid for environmental projects.
In March, Hanoi hosted the country's first eco-products fair, aimed at boosting public awareness of the need for environmentally friendly products and the importance of sustainability. Vietnam issued its first law on environmental protection 15 years ago, as National Assembly vice chairman Nguyen Duc Kien pointed out when he opened the fair, 'Sustainable development for a better life'.
Broader notions of sustainability are also being discussed in Asia. Breakneck growth in Chinese industry has meant that corporate social responsibility (CSR) has had to take a back seat as entrepreneurs seek to get up to speed with the competition.
Lately, there are signs that the concept is making its way onto the agenda on the shiny new meeting tables of the country's new corporate citizens. Integrating social and environmental benefits with profitability is becoming a strategy.
Earlier this year Xu Guanju, president of the eastern Chinese chemical company Transfar Group, suggested to the CPPCC, an advisory body to the National People's Congress, that the government set out a CSR system for Chinese enterprises. The system would cover issues such as job creation, environmental protection, energy conservation and care for employees.
Zhu Yicai, founder and chairman of Yurun Group, one of China's largest meat processors, agrees. 'A private company may only belong to the business founder himself at the very beginning,' Zhu told state media. 'But as it grows and flourishes, it no longer belongs to any individual person.'
A sense of collective responsibility combined with a head for business could just do the trick to transform China's dirty skies into something far more palatable for it and the whole region.
For further readings on corporate social responsibility in Asia visit the CPA Library.
Clifford Coonan is a journalist based in Beijing. In addition to INTHEBLACK, he writes for The Irish Times, The Independent, Variety, Monocle, and the South China Morning Post.
