I very much welcome and appreciate the privilege of joining you as you begin this important meeting of the China Council for International Cooperation on Environment and Development and of addressing you in this opening session .I am particularly pleased at the opportunity it gives me, as a longtime friend of China, to extend my congratulations to its remarkable people and its government on the outstanding progress that has been made during the past half century in realizing the immense potential of this vast country and transforming it into one of the most dynamic and influential nations of the modern World.

　　Your Tenth Five-Year Plan which you are now formulating and which we will be discussing at this conference is, therefore, of special importance as it will set and guide the direction that China's development will take as it moves into the new millennium.

　　It is already evident that the phenomenon that will have the most profound impact on shaping the human future is what is now generally referred to as "globalization"——the extension and deepening of the web of interdependence driven by the fundamental technological and economic changes which have emerged during the last part of this century and seem likely to accelerate in the period ahead. This deepening web of interdependence has already demonstrated an immense potential to make the benefits of the technological civilization available to people every where. It has also given rise to a new generation of challenges, inequities and dichotomies. The benefits of globalization accrue largely to those who have the knowledge and the capital, which are its principal drivers, and widen the gap between the rich and the poor at the level of both people and nations. It challenges governments to develop new ways of responding to and managing these processes so as to access their benefits without imposing unacceptable costs in terms of their sovereignty or their culture. This will be no easy task as the processes of technological and economic change cannot be managed and controlled through traditional mechanisms of governance. No government, however powerful, can effectively control these processes; nor can any government ignore them or insulate their people and nation from them. Because they have now become universal in nature and global in scale, their management requires new dimensions of cooperation both amongst nations and within the various sectors and actors of each national society.

　　There is no issue which illustrates the dilemmas and the opportunities which this phenomenon offers more than the environment. For environmental problems have arisen largely as an unplanned and often unforeseen consequence of the processes of industrialization and urbanization, which have shaped modern societies: problems of air and water pollution; urban blight; impacts on human health; destruction of forests and vegetal cover; waste disposal; water management; loss and deterioration of productive soil; and, at the global level, the risks of climate change and depletion of marine resources. All these problems arise directly or indirectly from development practices which we now understand are unsound and unsustainable. They are the product of a complex system of cause and effect, which does not for the most part lend itself to management and control on a single issue basis. We are learning that attempts to deal with them primarily as individual issues are more often ineffective and costly than they are successful.

　　As most environmental impacts have arisen as a result of failures and imbalances in our management of the economy and the various sectors which it comprises, they can only be effectively addressed through changes in the ways in which we manage the economy. This means integrating the environmental and sustainable development, dimensions into every aspect of our economic management, beginning with the planning process. That is why your Tenth Five-Year Plan is so important, and why it provides such a timely opportunity for China to take the lead in developing the systemic processes of economic and environmental management on which sustainable development depends. This, it seems to me, is the principal challenge you face in shaping your new Five-Year Plan.

　　I am convinced that this is the most promising pathway to a secure and sustainable future for China in the new millennium. At the same time, let me say that China's success in rising to this challenge will profoundly, and perhaps decisively, effect the future of the entire world community. It is encouraging evidence of China's enlightened awareness of the nature and importance of these issues that it has invited to this meeting of the China Council representatives of the international community and asked us to contribute our views and insights to the formulation of your Tenth FiveYear Plan. As a Canadian, I am particularly pleased that Canada had the privilege of cooperating closely with China in the development and support of this important and unique Council and that some of your sessions here will be led by my good friend and colleague, Mme. Huguette Labelle, President of the Canadian International Development Agency.

　　You have been gracious enough to invite us to give you our advice. But out of my long relationship with China, I have learned that there is no area in which I could really offer advice, which would go beyond what our Chinese friends already know better than any outsider could do. So, having indicated the broad context in which I believe environmental issues must now be addressed, I will offer a few specific examples of the nature of the changes I believe we must make in the manner in which we manage these issues in the global sense. I do so in the hope that our Chinese friends and colleagues may find in them some ideas or insights that may be useful in formulating a Chinese response to these challenges in the new Five-Year Plan.

　　A recent study by the Earth Council pointed out the perverse nature of many of the subsidies provided by governments of both more industrialized and developing countries which have outlived their original purposes and exact heavy costs on the society in both environmental and economic terms. And subsidies are only one of the instruments to which governments influence and incent the behavior of their people and industry. Indeed, I am convinced that the principal means by which governments can lead their nations in effecting the transition to sustainable development called for at Rio's Earth Summit in l992 is to revamp and reorient the systems of incentives, penalties and regulations to remove anachronistic and costly disincentives to sustainability and provide positive incentives for sustainable development. And this can only be done if there is also provision for broad public awareness and public participation in these processes.

　　China in the historic reforms it is now undertaking is establishing a new model of a socialist market economy which, in principle, gives it a comparative advantage in making these changes. In such a vast and complex society change is never easy; but China has demonstrated that it can manage change successfully. And formulation of its TenthFiveYear plan offers an exceptionally timely and perhaps unique opportunity to do this. Let me cite just some of the specific measures which this might include in the energy sector which is at the very heart of the sustainable development paradigm. I was privileged to participate in an important international meeting on energy technology and finance for sustainable development here in Beijing in July at which these issues were examined in depth.

　　China has recognized, as outlined in its Agenda 2l, that the transition to sustainable development will require major changes in its energy economy. Broadly speaking this will entail building on China' s notable progress in making its economy more energy efficient, developing and making better use of its indigenous energy resources and avoiding overreliance on external energy sources, and all of this on a basis that keeps environmental impacts within safe and acceptable limits.

　　Essential to this will be China's capacity to develop, access and utilize the best, stateoftheart technologies. This means extending and improving its own research and development capacities. One of the most important and promising areas of focus in this respect is, of course, the challenge of transforming China's immense coal resources to a longterm sustainable source of indigenous energy. Particularly promising are technologies for the recovery and use of coal bed methane and the development of coal based hydrogen production which could in turn give China a comparative advantage in development of fuel cells.

　　The development of new and renewable resources which have particular application at the village level biomass wind power and small scale hybrid generating systems all offer promising targets for research and development and also require incentives and in some cases subsidies to foster their introduction and use.

　　Research and development need to be accompanied by a major effort to develop the human skills on which the development, dissemination and use of new technologies depends. Institutional structures which stifle innovation, competitiveness and initiative must also be subject to the kind of reforms which China has now initiated. Having myself being involved in restructuring of one of the world's largest electric power utilities in Ontario, Canada and in reform of the United Nations I know how difficult this can be. And to carry out such changes on the scale that is required in China is certainly a monumental task.

　　The availability of finance is a critical factor in facilitating and supporting these processes of change. Domestic sources will always be the principal and most dependable and here China has substantial potential for mobilizing and deploying domestic resources in support of the transition to sustainability. For again it is through your plan that you will set the priorities for investment and establish the incentives and programs that will tap domestic savings.

　　The prospects for transforming China's energy sector are indeed daunting. But they are also promising, given the initiatives China has already undertaken and its recognition of the importance of this sector. But the same will be true of other sectors in which the economic, environmental and social factors interact to produce sustainable progress—improvement of the quality of life in China's cities, managing the rapid growth in the concentration of automobiles in urban areas, maintaining the productivity of agriculture while ensuring its sustainability and making industry more ecoefficient in the use of energy and resources, reduction of pollutants and the avoidance and recycling of wastes. Indeed, evidence now makes it clear that efficiency across all sectors of the economy is the best pathway to sustainability and prosperity. For the most efficient economies are also those which have been most successful in bringing environmental impacts under control and improving both the quality of life and the standards of living of their people.

　　Finally let me say that the entire world community has an important stake in China's future and in the success of its transition to sustainable development. This does not give others any right to dictate or coerce China in the decisions that only it can make in setting its own policies and directions. But it does give the rest of the world a very real and compelling incentive to help and support China in the reform program through which it is effecting this transition. This means China according equal status in the world's trading system through its membership in the World Trade Organization. And it means ensuring that China has the access not only to our markets but to the technologies and that specialized expertise and external funding it requires to opt for and implement the measures which will make its economy sustainable.

　　A primary example is again the energy sector in which in the course of meeting its own energy needs China has already become the world's second largest source of carbon dioxide emissions and if it continues on its present course could become the main source. Yet those who are largely responsible for the build up of green house gases which are the source of manmade climate change, and have been the main beneficiaries of the economic model that has given rise to this, have no right to impose constraints and limitations on China in meeting its energy needs while China's per capita use is still much lower than that of the United States and other industrialized countries.

　　But China,too, has a very real interest in avoiding the risks of climate change which are likely to have an even more serious impact on China than on many of the more developed industrialized countries. These countries share a common interest with China in keeping its greenhouse gas emissions to the lowest levels possible in the course of meeting its energy needs. The best means of giving effect to these interests would be for the international community to undertake a range of new and strengthened measures to support China's own research and development programs, and to provide it with ready access to the external sources of new technology and expertise that can contribute to its sustainability goals. And, most important, it should ensure that China can have access on attractive terms to the additional finances it requires to incorporate the best state of the art technologies into all aspects of its energy development. An appropriate means of mobilizing and deploying the resources required to do this would be the establishment, of a Consultative Group on Clean Energy modeled on the successful experience of the Consultative Group on International Agricultural Research. This could utilize the mechanism of the Global Environment Facility a unique partnership with the World Bank, the United Nations Development Program and the United Nations Environment Program. I do hope that this meeting will generate some support for this proposal.

　　In these opening remarks I've concentrated on the main areas in which I believe that China may find of interest in the formulation of its TenthFiveYear Plan, to take advantage of the great opportunity this provides to integrate into its own planning and development the basic elements of sustainability and ecoefficiency. In doing so it will draw on China's history as one of the most ancient and durable societies and now the world's largest nation, to realize its destiny by leading the entire world community on the pathway which will enable it to avoid the risks and realize the benefits which the technological civilization makes possible.