Dear Friends:

　　It has been 13 years since I first became associated with the China Council, and this year, I have once again had the pleasure of being directly involved in the Council's work. This time my role has been to serve as Co-chair of the Task Force on Review and Prospects. You will hear more on this subject tomorrow.

　　Today, I want to reflect on China's very significant experience with environment and development, and on the path ahead. We are in for interesting times in the decades ahead. The nations of the world are being challenged by environmental change in ways that even a few years ago most political, business and community leaders would not have considered possible or likely.

　　An example is the economic report on climate change impacts prepared for the British Government by Nicholas Stern, suggesting that without proactive efforts, the cost of climate change to the world economy could reach 7 trillion dollars. Another example is the international scientific report released this past week in the journal Science. It suggests that world fisheries resources as we know them now could be decimated by mid-century, with the oceans turned into simplified, even toxic ecosystems. And, over this past year, we have seen a worldwide rush to biodiesel and bioethanol, raising new questions about food supply security, agricultural subsidies, and environmental sustainability in rural areas

　　China is not immune to impacts of environmental changes happening elsewhere, nor is the rest of the world oblivious with the growing influence of China on the world's environment. For these reasons alone, the CCICED should be a useful mechanism in the years ahead to build a shared understanding of solutions for environment, economy and development issues.

　　Our Common Future, the 1987 report of the World Commission on Environment and Development set out a very important path, which was further elaborated in Agenda 21 and the other agreements among nations at the 1992 Earth Summit in Rio. China was the first nation to produce, and then to act upon its own Agenda 21. The value of this early thinking is apparent now, with the new 11th Five Year Plan, which provides a coherent sustainable development framework.

　　The reach of sustainable development has now spread to all parts of China, and influences China's international relations. This is a remarkable achievement since it means that hundreds of millions of Chinese citizens have access to new economic opportunities, access to basic needs including clean drinking water and sanitation. At the same time, despite many remaining, difficult environmental problems, there is a base of experience for moving forward. Success in some cities we visited in early years of CCICED such as Dalian, now a model for a "green city." Success in China becoming the country with the most businesses, industrial parks, etc., adopting the ISO 14001 environmental management standard. An initiative fostered by a very successful CCICED-sponsored meeting held years ago. And the achievement of setting aside some 15% of the country's land as protected areas.

　　Clearly, however, the subject matter of environment and development has grown more complex. The solutions proposed today are rarely without their own problems. Energy and environment relationships, and the new concerns about environment and pandemics are prime examples. And the economic stakes are getting higher. Nations working together should be speeding up the process of finding appropriate solutions. Yet action is far too slow still—at the level of nations, and certainly globally. This is true not only for the global conventions signed in 1992 at Rio, but for almost all other multilateral environmental conventions, and their relationship to economic growth.

　　China's efforts to address its domestic environmental problems, and to become a responsible global environmental citizen are to be commended. All of us around this table have had the privilege in contributing to these efforts through CCICED.

　　As we complete this third phase of CCICED, I have been thinking back about some of the major accomplishments for China that are in one way or another related to CCICED initiatives. Here are a few that really do stand out.

　　First, is the impressive upgrading of environmental laws, and China's commitment to developing through the rule of law. We have seen legislation introduced on the Circular Economy, on Environmental Assessment, on Nature Reserves, among many examples.

　　Secondly, there is a long march to the introduction of natural resource and environmental pricing. The task of building a market-based approach to protecting ecological services and applying the polluter pay principle is far from complete. But what a change from even a decade ago, when energy, water and other resource prices had little effect on conservation practices.

　　Another theme of national and international significance has been CCICED's work on trade and environment. The decade of activities on this theme started in 1994-95, well before China acceded to the World Trade Organization. Without a doubt, China was much better prepared as a consequence of CCICED policy recommendations and capacity development,

　　We also felt the concern of China as it began to tackle difficult issues such as the reforestation of forests and grasslands, Western China environment and development, and, of course, the massive development of many forms of energy. Many of us felt humbled even being asked to provide inputs based on our own nations' experiences. It is impressive how open China has been to rapid introduction of sustainable technologies, for example, the use of wind power on a large scale in parts of Inner Mongolia and elsewhere, and on the interest in technologies of the future such as hydrogen-fuelled buses.

　　There have been so many examples of what might be termed "turn-arounds." By this I mean taking a problem and turning it into economic opportunity combined with environmental improvement. The successful commitment to reforestation is an example with long-term positive consequences. Our task force on Forests and Grasslands provided an early assessment of performance that was an outstanding example of analysis. The work of this task force was listened to and acted on by the Government of China. It also became a model for the new style of work carried out during Phase 3 of CCICED.

　　I know there are many other good examples that could be mentioned where CCICED has provided significant policy advice that has been well-received by the Government of China.

　　Now the question is—what about the future? Given China's commitment to Xiaokang and rapid rise in GDP, its need to expand domestic consumption, its continued emphasis on increasing both exports and imports, China's expansion of development assistance, and strengthening of Asian relationships, this is not an easy question to address. Can these objectives be made to fit within a common and harmonious environment and development framework?

　　Rapid economic development of China is bringing tremendous pressures on its environment and resources, with a number of social consequences. China is not alone in this respect, but because of a number of factors, such as its increasing population, its economic and industrial growth, its continual rise in living standards, and its rapid urbanization, its road to 2020 presents major challenges.

　　These are having significant impacts and by 2020 or earlier, predictions are for major energy shortages, exacerbating water shortages and huge amounts of household and hazardous wastes. Additional consequences will be on air pollution, desertification, food security, health, water pollution from human waste and chemical effluents, and on the cost to China.

　　A few selected statistics from Chinese sources remind us of these issues:

　　o On energy, China's oil needs by 2020 are expected to be between 10.1 to 13.1 million barrels per day.

　　o On transportation, a conservative estimate is that the number of cars will increase from 43 million in 2005, to 131 million in 2020.

　　o On health, WHO estimates that currently in 11 mega-cities, particles in the air cause 500,000 deaths per year and 400,000 cases of bronchitis; it is estimated that this will increase several fold if air pollution is not curbed. Emissions from vehicles have become one of the main pollutants of urban air.

　　o The current economic losses from air pollution are 3 to 7% of China's GDP – if pollution is not abated, this cost will increase further.

　　o On water, among 661 cities, 420 are short of water, with 114 subjected to severe shortages.

　　The space for conventional economic growth approaches, high investment, heavy pollution and huge exports is increasingly shrinking. But we can envisage a different future, one that will meet the vision of xiaokang.

　　A future where:

　　1) Integrated planning includes not only the benefits of economic growth, but its costs on people, the environment and on future damage control;

　　2) Front-end investment in science, technology, clean production and sustainable cities, for example, will prevent the cost of repairing future damages, saving lives and avoiding social disruption;

　　3) The right and early combination of laws and regulations, financial incentives and pricing are used judiciously instead of each being used in isolation;

　　4) The focus of transportation is on mobility of people and goods, with well interconnected public and affordable transit, a system of bicycle and walking paths, inter-modal goods transportation and new technology non-polluting cars using renewable energy;

　　5) Sustainable cities with the best of China's and the world's experience, cities which are liveable, vibrant and peaceful;

　　6) People are part of the solution and are empowered through highly accessible information; these people demand sustainable solutions of their leaders in government and in industry. As well, a new generation has been educated from their early years to live and consume more sustainably;

　　7) Coal thermal plants and reliance on oil will have been significantly replaced by alternative sources, which are adapted to industries, residential buildings and households;

　　8) Water use will be significantly reduced and will meet standards for healthy living;

　　9) Recycling will be a definitive feature of life, with many of the current disposable items having been banned from use and by then, having become archival material.

　　We have heard the aspirations of China through statements of its leaders, and from the economic and environmental experts in China and elsewhere in the world about what it will take to be successful. A much greater proportion of China's GDP will have to be devoted to environmental protection and improvement, perhaps even more than the 1.5 to 2% now suggested.

　　Sustainable technologies, especially in the energy sector and in transportation, are not advancing fast enough, nor are those that are available being adopted quickly enough. This is a great concern given that China's infrastructure for energy generation, public transport, water treatment, and urban buildings is being constructed over the time between now and 2020. With something like half the world's construction for major buildings during the next ten years happening in China, there is a major opportunity on the verge of being lost to create energy-efficient, people-friendly, "green buildings".

　　I recall the years of work by our Energy and Environment Working Group, which was visionary in terms of what might be done to diversify energy sources and to develop clean coal technology. Some of these recommendations were adopted, but the key matters of implementing advanced coal gasification and other innovative approaches to use of this vital fossil will require much additional attention.

　　Similarly, CCICED has had a long-standing concern for development of the private automobile as a stimulus for domestic economic growth. China appears to be heading down a pathway that many western countries are now spending enormous effort and money to redress. What is the best approach for China to follow so that the environment of cities is not overwhelmed by this best of friends, worst of enemies machine?

　　The renewed governmental emphasis on China's countryside—including the where and how of environmental protection and improvement—is crucial. We all recognize just how important water quantity and quality, soil conservation, and, of course, protection of biodiversity are to China. What I have learned from my work with CCICED is the remarkable influence fiscal reform can have on rural environmental success. How can economic and regulatory instruments be used more effectively to deal with pressing problems such as acid rain impacts on the soil, on non-point agricultural pollution on lakes and rivers, and for payment to farmers for the ecological services they safeguard?

　　China's massive commitment to planning for a sustainable future is based on thousands of years of experience for land and water use as well as innovation based on best environmental practices throughout the world. This planning is already a top-down, bottom-up approach, but, as we have repeatedly heard over the years, good ideas are not always successfully translated into satisfactory action at local levels. How can decision-support tools such as the use of Geographic Information Systems (GIS) be used more effectively to support provincial to village level initiatives? How can enforcement of environmental laws be improved at all levels, national to local? We know that China is taking serious steps to address these types of question.

　　One of the important ways is China's recent effort to increase its transparency surrounding many types of environmentally significant decisions. As many countries have discovered, the value of combining local know-how with scientific expertise can lead to better, and more acceptable environmental actions. CCICED has consistently called for greater levels of public participation in environmental matters. It is gratifying to see that this appears to be happening now. There are many creative ways to make public participation meaningful—with positive consequences not only for the health of the environment but also of people.

　　Colleagues and friends, as I close my brief remarks, I wish to highlight the important and constructive role China can play in the improvement of environmental governance and action internationally.

　　China is now a major player internationally. There can be no doubt about that, whether the subject is economy, environment, or international relations generally. The important signal that China is sending to the world is that it will be a rules-based nation, prepared to play by international rules of the game, whether in the field of environment or any other. The trouble is that environmental rules are still very much a work in progress.

　　Here is where China's role as a responsible world environmental citizen becomes so important. As a country with high standing among both developing and rich nations, China is uniquely placed to shape precedents and to press for action internationally that will benefit China's own environmental situation. Also, to demonstrate the possible through its domestic environmental accomplishments on those issues of broader concern to the international community. If China waits for global environmental governance systems to be perfected before enhancing its own efforts involving trade, biodiversity protection or climate change, for example, then it may be too late.

　　And here is my final message. China cannot be expected to carry the burden of accumulated environmental effects arising from the excessive consumption and poor environment and economy practices of others. Nor should China be expected to take over the responsibilities of other nations towards adequate protection of their own environments when they produce raw materials or other products for export to China. Hence the need for a better sense of partnership and of international cooperation in dealing with environment and development in the future.

　　In many ways China has shown us new ways to tackle old problems. The remarkable efforts to recycle paper, plastics and metal from abroad is one example. We will see others in the future. But the complex undertakings necessary for all of us to live comfortably, perhaps globally in a Xiaokang fashion, demand an unprecedented level of learning from each other.

　　That has always been a fundamental point for the CCICED, and I hope it will continue to be so in the future.

　　Thank you all for your attention. I wish the China Council for International Cooperation on Environment and Development continuing great success!