Honorable Vice Premier Zeng Peiyan, honorable Minister Zhou Shengxian, Mr. Green Hill, the President of CIDA, and also my fellow keynote speaker this afternoon, the vice Chairman of the National People's Congress, Mr. Cheng Siwei,

　　Sitting here in front of you and being invited to give you a keynote address is a deep and great honor for me because around this table sitting many of my mentors and teachers, so that have enabled me to become in the sense that the person I am today and also to allow me to succeed Clause Topfer who was my predecessor in the United Nations Environment Program, and with whom I have shared many common thoughts on the issue of sustainable development.

　　But also I'm here as a student, as a student of China's development and of China's aspiration in its search for sustainable development. And through the eyes and thoughts and minds of Vice Minister Zhu of the last four years, I believe I have learned a great deal about the thinking and to the challenges that China faces and not least in this very unusual and extraordinary group of people that you have assembled here every year, to advise you.

　　I believe there is little value for me to go back over some of the statistics and to look backwards in a sense; I think you, more than any other nation on this planet today, are acutely aware of the challenges of sustainability and environmentally friendly, as you call it, development. And I think after this morning's session with Premier Wen Jiabao, there is no doubt that the term "transformation" is the term that will determine not only, I think, the discussions over the next few years in terms of the China Council for International Cooperation on Environment and Development, but the term transformation will not only describe China's efforts to come to grips with the challenges of sustainability in development, but truly the term transformation stands for the challenge that we face today on the planet as a whole.

　　The high-level Task Force has produced recommendations and I personally subscribe fully to all of them because I believe them capsulate in their diversity and their multiplicity of approaches, the manual of options that is available to us. But in themselves and by themselves, these recommendations will not necessarily lead to transformation. And the premier, this morning again, described the three transformations that he believes that are the heart of the search and the scientific approach in the search for a harmonious or well-off society. I believe that we are, at this very moment, both in the context of thinking in China, but also globally at the point where truly transformation is the only option we have. There is an imperative to act in the year 2006, or at the beginning of the 21st century, as it has never existed before in the history of our planet, you define much of the dialogue around development at the moment in terms of the domestic imperative to act. I think both the evidence I have seen in the Task Forces over the years in the CCICED, the latest report that the OECD has produced with you, many documents and much public debate inside China has illustrated the necessity to act, to transform. You yourself have described some of the phenomenon just now in your introductive speeches, not only the Vice Premier, but also the Vice Chairman of the National People's Congress. So I will concentrate today, in my presentation, perhaps more on both the forward looking, the future challenges of transformation, and also the international imperative to act. Because China's challenge is, indeed, China's challenge, but also by expansion, it is global challenge. As we meet here, about 5,000 delegates are meeting at the headquarters of United Nation's Environment Program in Nairobi. It is the conference of the parties of the Climate Change Convention. All evidence and data, particularly in the last 24 months, have provided us with drastic illustration of how serious price we are already paying for in the last 15 years, trying to come to the grips with the science of climate change. Only two weeks ago, annual report was published by St. Nicolas Sein, which intended to put a first price tag, both on the cost of climate change, but even more dramatically on the cost of not acting on the development of climate change. I do not have to repeat here the scientific evidence and in some ways the scenarios the world is now facing, but the evidence is deeper, across the globe, the Millennium Ecosystem Assessment demonstrated that today we face with the situation that where the majority of our ecosystem goods and services are either of level of maximum exploitation, or indeed, degradation. And to those who believe that this is an abstract notion, turn on it to Canada where last week a report came out that predicted by noble citizen, from 2050 onwards, we will be deprived the privilege of eating national fish , because on current projections. They are in normal commercial fishing in 2050 across the globe. A few years ago, our environmentalists are accused of being doomed by makers, unfortunately, that was far from the truth. Our problem was that we struggle to master the science and evidence and empirical material to prove that it was a scientific hypothesis maybe 20 or 30 years ago will turn to reality. So the challenge of the transformation in the true sense of the word, which means not the laws in the past governs actions in the future, but in new framework for acting, are truly at the center of our challenge today. But environment is so often viewed as a limitation, as a constraint, a break on development. I think one of the first challenges we face in addressing transformation will be to change this notion of the environmental restriction into something else. Environment, understanding the environment, understanding the ingenuity of the nature, will indeed be the new source of economic development in the 21st century. And I will come back to that in a moment.

　　The second is to accept that environmental impacts today are no longer local phenomenon. The human species on this planet has succeeded in its action and its own ingenuity to have an impact on our planet that today is systemic. Our climate systems, our hydrological systems, our soil systems, all of these are being affected on a scale unprecedented. So our ability to understand this impact is a precondition for also transforming the framework into action. Above all, we must move beyond an economy that is focused on throughput and processing towards what you called here, the circular economy. The amount of wastes that we produce is extraordinary and probably just one or two generations later from us today, people would ask how on earth could we have wasted precious resources on this planet the way we do. And I was struck again by this morning, just in a very simple but another example, that in this hotel here. You will find the soap bar that is normal enough for a person to use for about two weeks. All of us, most in this kinds of hotel for two days, why is it that we produce soap bars of this size when a small one like this would be enough. 8,00 million tourists, 8,00 million hotel nights per day per annum on the planet, you can add up how much soap we produce that we simply throw in the waste paper basket. It's one example, but let me give you another one. If every American household would replace just one light bulb, normal light bulb today with fluorescent energy-saving light bulb, we would save 600 million U.S$ worth of electricity and seal emission equivalent of 1 million cars driving for one year in the United States. Now extract relate that to the kind of consumption pattern we live with today. And when I refer to the early on the ingenuity of nature, I'm very serious. I think one of our challenges is we are living in an industrialized, or slightly pro-industrialized economy. While we have just begun to understand that the way we produce things today, may in fact not be the only way to do it. The energy intensity that humans require to produce steel, to manufacture, to produce commodity that we trade is at the level so extraordinarily higher that nature itself is able to produce things that our science and technology allows us to unlock the secrets of nature. Perhaps production in the future will be very different, and that is perhaps one of the transformative challenges of the 21st century. And for those who view whom have not seen the examples of that, let me just mention two. The material strength of a spider web to this day is equivalent to the production of steel, even stronger than any human produced steel. The spider manages to do this without big compression, without mechanical energy, and certainly without the furnace of 1000 decrees. How it is that nature is able to produce materials without the kind of energy intensity that we humans today require to produce simple commodities? And there are many other examples like this, bio-technologies, bio-mimicry, bio-engineering, these are some of the future sciences and engineering come and disciplines and disciplinary works that will help us better understand how in fact a transformation in the post-industrial society does not mean limit to growth, but means using our resources on the planet for economic development in a different sense.

　　As I sit here as I have done for the last four years, I have been increasingly convinced that it is in China, that above all other nations on this planet, that transformation will find its articulation in the next 10 or 20 years. I'm convinced because I have learned over these years that China has an extraordinary capacity to take ideas and aspirations and turn them into actions. The words to immense the seriousness of the environmental situation in China, and it only sees the degradation, the destruction, the suffering that is imposes on its citizens and more and more also on citizens beyond China. But anybody who has spent time and studied the ability of this government, of this country, and to take and understand problems, to translate them into objectives, to see it transforming into targets, and to see its implementations, must acknowledge the capacity to turn ideas into action, surely in China exceeds that of other nation that has gone through the kind of rapid development process that we witness here today. And I believe as we always cite the figures of environmental pollution here today, let us also remind ourselves how much China has reduced, combated and coped with some of the most destructive side effects of its industrializations in recent years. And China is capable of mastering science of developing matrix, and I have them right here next to me here again in the Eleventh Five-year Plan, matrix measuring is a crucial part of enabling change to happen and indeed it empowers change because it creates accountability. It has governance and institutions that are capable of reaching fast and sometimes deep into the society than virtually any other country in the world. Yes, there are many limitations to that, and Premier Wen Jiabao this morning referred to it in a wonderful way the challenge that SEPA faces to move from passiveness to initiative. Certainly there are many steps to be taken, but China is very able to master its collective resources when political decisions are taken. And indeed, for many other developing countries being able to find the financial and economic resources to invest in a transformative economy is much more difficult. China is in a privileged situation where its 90% economic growth is generating additional financial resources unprecedented for other developing country on this planet.

　　So if it's not the capacity limitation, then the second argument that comes is trying to re-invent the fundamentals of an economic development path, usually say. We cannot do it on our own economy, or we must first bring our people out of poverty and meet the basic need of our nation. In simple terms, can we afford transformation? I think increasingly this is becoming obvious that the cost of not transforming is coming close to exceeding if it not has already the benefit of continuing along the current path. You have just doubled on the Eleventh Five-year Plan the funds on combating environmental pollution. That cost will continue to rise. Tens of thousand of people in China die today. Development was meant to lift people out of poverty; it was to create the well being, human well being.

　　Statistics show that China has achieved extraordinary things; 400 million people have been lifted out of poverty. But dying is not the statistical phenomenon. My son, your farther, your wife, you husband, could be one of the 100,000 people who were alone attributed to the dying of air pollution in China every year. Development should not impose such a price on people, and it is not necessary. It is a matter of trying to understand that in calculating the benefits of the development path, the true price and the true benefit of development needs to be internalized.

　　The global market place is another reason why, for another example, green GDP, may well be, the right way to go. But can China afford to suddenly declare itself of not growing at 9 or 19%, but perhaps 4 or 5% only. What would it do to foreign direct investment? What would it do to the economic development prospects, to its capacity to raise funding in the international market? This is a key question, and I will return to it a little later in describing why the challenge of transformation is, therefore, not only a domestic one, it is, in today's world, truly, an international one.

　　But most importantly in the next few years, the challenge of transformation particularly with the view to environmental sustainability, must transcend the notion of a defensive and ascend a protective approach to sustainability challenge. Much of our environmental discussion today is how to contain development, how we reduce, how we stop, how we punish, not necessarily how we liberate entrepreneurship in our societies. If the scientific approach to a world of society succeeds, it would have to look for the key drivers in economic dimension of affecting change.

　　And here I would argue three standouts in the current economic development phase of China. But they will be much more central hopefully also to the work of the China Council if truly we are to succeed in not only provide limits but in fact avenues for economic development. The first one must be, in production and consumption, in the domestic context. And here we are, in the sense of dealing with two dimensions, the rural economy and the urban economy. Sustainability and many of the instruments described in the high-level Task Force will have to focus on both food production ultimately also in the rural economy in financing and sustaining the eco-system services that the rural areas provide not only to the rural economies and people, but in fact urban populations in China. Many proposals have been made in recent years, and again this morning, we talked about eco-compensation schemes and similar such forms of payment for eco-system services. Our economic instruments are ready to meet today, for us to honor those services and their economic value. The problem is, that the economic industries they use simple overlooks their value, and therefore renders them either of low value or no value and therefore not worth maintaining.

　　And this will take on a much more dramatic dimensional, also in the context of inequality. Two years ago, during our CCICED meeting, we heard about the major investments of China's not directing towards rural economy not least to address the dangers of inequity in a rapidly developing economy, but better win-win proposition, then to redistribute some of the revenue that the modern economy is generating back into the rural economy as a payment to those who in fact sustain the basic ingredients of maintaining life not only in the rural areas, but also in the whole country as a whole. In the industrial economy, the whole notion of sustainable production and consumption will have to be viewed much more from the point of view of how we consume, and how we produce and what we leave behind. Last night, we had a meeting, for instance, together with Prof Qu Geping, with Tongji University, and a simple example of the hydrogen, engine, and the transport research taking place there. Just in Shanghai, 50 thousand vehicles could from tomorrow fuel with hydrogen just produced from the waste, the by-products of industries around Shanghai. These are 50 thousand vehicles that today require imports of oil, release two emissions and so on. Much of China's industrial waste today is not only disposed of in an uncontrolled fashion, but it is indeed a waste in the true economic sense of word because it has not been turned into resource. It is a challenge we face across the world, but it is part of the ambition of redefining how our economies function and indeed that transformational challenge.

　　A second major area concerns trade. China today is a country we must have its value added does sustain the country. In fact in the information communications and technology sector, 90% of the value addition stays outside the country, much of its imports are to be brought in here to be processed and then exported again. And one statement that I read recently, China was asked to consider moving into a made-in-China as a post-processed China economy. Much of what happens with trade both in the export and the import side over the next ten or twenty years will be sensible to the transformational challenge that you have descried in your various documents and we heard about this morning again. I believe that China has the capacity today to have a transformation impact not only in terms of its own production matrix, but indeed in how global market will function in future when it comes to commodities exported and raw materials imported. Innovation and research development, such fields which China are making extremely rapid progress. A few years ago, China expanded one percent on R&D of its gross domestic product, it is now one and a half percent, and I think in just another five to ten years, it's projected to reach perhaps two and a half percent of GDP. Well over 100 billion dollars in R&D resources just from the government are being put into the economy. Image the power of this financial resource to change some of the fundamental boundaries of how we produce and consume today.

　　The following are the intellectual property and patents problems. China today develops six times more patents than just five years ago. The capacity of this nation to be in the frontline of environmentally sustainable production and consumption is something that is not unimagined or a over ambitious target. China is no longer just an industrial economy that in the sense emulates, copies, or produces or processes. It is beginning to develop its own industrial and technological frontiers. And here I come back to the challenge in the international context, China today is in a very difficult situation and whether we charge it unfair or politically manipulative, the fact of the matter is that a world is increasingly in view that we all sit in one boat, and the boat is very full, and China's ecological footprint of 1.4 billion consumers and the economy growing at 10% is making the world nervous. It is making us so nervous that it actually now misrepresents development taking place in China. It manipulates to some extent the way China's engagement in international domain is described. And I was fascinated that somebody who lives in Africa at the moment to follow the international media in its reporting on last week's Sino-African Summit. I urge you to take a closer look at how the world is trying to pay China in typically corner. So the challenge of developments and the ability of china to be a global economic player is in part not only determined by its own ingenuity, and in domestic terms its capacity to deal with the transformations, it must also seriously consider the fact that rebrand China's development is an urgent priority, in south China, a number of provinces have begun this process and branding may seem an utterly commercial concept. But in fact, made-in-China in the 21st century, the way it is being branded by the opposite at the moment, is a century of economy that is preying on the resources of the rest of the world. This is going to harm not only China' capacity to operate as an economic player, it is also going to contribute, without the factors that are happening, to increasing intense competition across the globe for resources and access to markets.

　　It is something that I personally stop at the moment to experience. The generation for China is to some extent, turning into a concern about China and ultimately, may easily be used as a fear factor about China's economic development prospects. I say this because you have a long way to go in meeting the basic needs of your economy and you have indeed a long way to go before you begin to even reach the levels of the resource consumption and wastes that economies in the west are practicing today. Nevertheless, I believe that on the production and consumption front through the trade matrix, and through innovation, research and development, China has the capacity today to look at an industrial future and a commercial future as a globalized economy, where made-in-china is a brand that we'd refer to a sustainable thriving economy that is not a distraction from global world being and human world being, and in fact has added new possibilities and capacities. China and its strive for transformation in the domestic context is ultimately going to be predicted on its engagement internationally. Otherwise, the argument we cannot afford to be green because the other arms will ultimately stop far reaching and transformative actions. And being now in my new position, a member of the United Nations Secretariat, and for part of the multilateral platform that in the world. I would like to advocate once more the necessary and the urgency for China to view its challenge of transformational development as also been one that must be extended to the international context. The WTO, the United Nations, the different conventions, the regional agreements, all these form part of a regulatory environment that we are struggling to build. But competitiveness is an argument that has prevented us over the last 50 years of making transformative changes in the directional sustainable development, because the argument is always if we move, we lose our completive advantage. We are capable of transforming markets overnight and to a degree that is astonishing. We are now living in an economy of 70 dollars barrel price. If you have argued only five years ago that we would have added ten percent to the price of petrol in my country, you have imagined the debate, you would probably have the government follow ward. And yet we now operate in an economy with a 300 percent increase of fuel. Why is it possible? Because everybody has to operate under the same conditions, and economies, and businesses and consumers can cope with that. The regulatory framework is ultimately part of enabling a global market place to function and therefore also for economies to be able to operate in a competitive sense.

　　I would like to end by taking up a term since my first meeting of China Council has been an integral part of the discussions here, sometimes less pubic and increasingly more active. It is leadership. Leadership in today's context is a very two-edge sword. It does not necessarily mean imposing a developing model on others, as it is sometimes interpreted. It is perhaps more leading by example. And china has the capacity to lead by example. It's already leading, de facto, by virtue of who it is and what it does. 1.4 billion people, almost 22% of the world population, simply are a factor that creates leadership by what it does; whether good or bad. The economic footprint of China, with every five years that pass, is becoming a de facto leadership criterion available in the world economy. China's ability to transform global markets to ensure that its imports are ultimately going to contribute to a more sustainable global market place and its exports begin to transform into a competitive advantage because what China produces is in fact the products of the 21st century rather than of the 20th century, therefore is anther way to offer leadership this is not based on the opposite one model but rather leading by example, inspiring others to follow, and above all, empowering developing nations to become part of a globalized economy that will only succeeds if the kinds of three transformations that we have discussed this morning with your Primer who underline the economic development path. In the United Nations family, we look towards China today as truly a place where we will learn how we can live together as a society in the world tomorrow. And as you inspire towards a harmonious society in China, let me tell you we need a harmonious society in the world, and you are part of making that possible, if you follow through on these immense accelerations that your leadership has defined.

　　Thank you.