A. The action plan of the Pollution Control Working Group

The Pollution Control Working Group of the China Council of International Cooperation on Environment and Development (CCICED) was founded in 1992.The chairman of China side is Prof. Qu Geping, vice chairman of the Council; the chairman of foreign side is Dr. Schneider, consultant of the Council. The funds are mainly provided by the Netherlands, Canada and Chinese government. From 1992 to 1996, the Chinese experts in the first phase working group were mainly specialists with plenty of experience especially in pollution control representing environmental protection departments of the central government, a provincial government or a municipal government. The foreign experts came with scientific research background on pollution control and environmental management from the Netherlands, the United States, Japan, Sweden and Germany.

In the first 5 years, the Working Group mainly carried out the assessment of current environmental status, development trends and case studies of pollution control strategy in Guangzhou, Chongqing, Zibo and Suzhou.

The achievements of the Working Group achieved high praise from the Council. The Council also suggested that in pollution control field the plan of urban water pollution control and water source protection, and the integrated plan of urban energy and environment should be established; and a coordinating system between administrative regions should be set up so as to solve water pollution, air pollution and the other environment problems among different regions; and the national actions about the global environmental problems including the climate change should be also further studied. At the same time it was pointed out that in the second phase of the Council from 1997, all the working groups should change tasks from general policy discussions to policy demonstration and demonstration projects of a practical nature.

In line with the above opinions of the Council, the Pollution Control Working Group adjusted its membership, and developed into the second phase a Working Group mainly consisting of high-leveled technological and policy experts who had experience in the area of water, air and energy.

In the second phase the Pollution Control Working Group has held 8 working group meetings, 9 workshops and 1 training class from August 1997 to May 2001.The working group meeting is held every half a year. Under the requirement of CCICED, the domestic and foreign members of the working group determine the work plan, select research fields, carry on studying and propose policy recommendations. The workshops and training class include both the continuous work of 1st working group and the scheme of 2nd working group. Also a self-evaluation report was finished by December 1999.

In the August of 1997, the first meeting of the second phase Working Group decided on its 5 years work plan. The plan included 4 aspects as follows:

1. Carrying out research on energy-environment planning in typical cities. During the formulation of the Ninth Five-Year-Plan and the Perspective Objective on National Economy and Social Development in 2010, most cities had made contemporary energy and environment plan separately. But how to realize the coordination between energy and environment, was a weak point of these plans. So it was necessary to choose some typical cities, utilizing proper energy planning models and combining them with environmental quality targets, to analyze the economic development, the way of energy supply and the environmental cost needed and carry out study on the integrated plan of energy-environment.

2. Study on the water pollution prevention in Pearl River Delta of Guangdong Province. On the basis of the study on the water pollution prevention in Dongjiang River Valley by the first phase Working Group, the study on water pollution prevention in Pearl River Valley of Guangdong Province would be carried out in order to implement water pollution control in economically developed areas.

3. Study on CO2 reduction strategy and CO2 mitigation demonstration project. China has been active on the Framework of Climate Change Convention. Although FCCC had no compulsory requirement for developing countries in view of the changing economic development and the implementing sustainable development, it is necessary for China to study CO2 reduction strategies and to carry out CO2 mitigation demonstration projects.

4. Research on acid deposition transfer between provinces and design of an integrated regional prevention plan. Combined with energy consumption and pollution status, it would mainly make use of acid deposition long-distance transportation model to specify acid deposition sensitive regions, carry out study of a regional control plan, and turn the plan into reality by policy and demonstration projects.

The above plans were submitted to the first meeting of the second phase Council in the October of 1997. According to the Council's suggestions and funds, work would be gradually implemented.

Study on the water pollution prevention in Pearl River Valley of Guangdong Province and a Shanghai energy-environment coordination plan started by the Shanghai Environmental Protection Bureau and Guangdong Environmental Protection Bureau before the foreign funds were available.

The second Working Group Meeting was held in April 1998, and the following subjects were discussed:

1. Combination of study on Shanghai energy-environment coordination development plan and Study on CO2 reduction strategy in China, specification of demonstration region in Shanghai, submit of a proposal for demonstration project in details, and search for international funds and technical supports by Council.

2. About the Study on the water pollution prevention in Pearl River Valley of Guangdong Province, international funds and technical support in employee training, water quality model software and typical towns'pollution control, were still necessary.

3. On the basis of the case studies about the current environment status and pollution control strategy in Guangzhou, Chongqing, Suzhou and Zibo by the first phase Working Group, the Guideline of Integrated Assessment and Forecast on Urban Environment would be drafted by Netherlands experts. After the Working Group's discussion and revision, it would be submitted to the Council. Simultaneously the conditions would be created to make use of it and spread it widely within China.

In the third Working Group Meeting in November 1998, the project proposals for CO2 emissions mitigation and the acid deposition were put forward and submitted to the Council. In the Council Meeting, it was decided that the study on policy demonstration and project demonstration for CO2 emissions mitigation would be carried out. During the Council Meeting, prof. Qu Geping met with Dr. Schneider, the Working Group Chairman of Netherlands side, and determined that the core of this project was to overview and summarize the effectiveness of such policies as adjustment of industrial structure, improvement of energy mix, enhancement in energy efficiency, etc., which were formulated with the rapid development of economy since China's reform with efforts made to control growth of CO2 emissions. It meanwhile tries to quantify these effectiveness for stating the contributions made by China to the international society, taking further steps to find out the strategic options for sustainable development to be implemented in future in China. The Netherlands side gave active responses to this project and would raise funds for this study. At the end of the year, under the coordination by Dr. Schneider, the CO2 Emissions Mitigation Project Proposal was drafted and modified. The title of the project is "Study on Policy Options of CO2 Emission Mitigation in China", including the following 5 subprojects: 1. The Study on the Method of CO2 Emission and CO2 Emission Mitigation Calculation, 2. Evaluation of Past Policy Impacts on Slowing Down the Rate of Growth in CO2 Emission, 3. Strategic Options Study for Energy and Environment Sustainable Development, 4. Energy/Environment Planning Study for the Shanghai Area, 5. Demonstration Engineering Projects of CO2 Emission Mitigation. The demonstration project selected by the study of the fifth subproject could serve as a following project of the current one.

Successful efforts were made to get funding from the Netherlands government. Chinese experts also did a lot of work to carry out this project successfully. Whereas the project would utilize funds and technical supports from Netherlands government while studying the situations in China, the title, contents and prospective outputs of the project proposal should be accepted by both sides of China and Netherlands. So in the project background, the basic viewpoint of Chinese government persistent in participating in global climate change actions was expounded. And the research aims to conclude the objective effects by the relevant work in the past years, and by the exploring study on energy and environment sustainable development strategy, improve the technical ability of China taking part in the international activities on Framework of Climate Change, simultaneously provide technical supports for designing the continued CO2 mitigation demonstration projects. As for the CO2 emissions, only the methodology of calculation would be studied in this project. The evaluation of past policy impacts on slowing down the rate of growth in CO2 emissions could be quantitative based on qualified data. The study on the strategic option of energy and environment sustainable development would provide consultation for decision-making of implementing of a sustainable development strategy. The Comprehensive Analysis of Shanghai Energy-Environment Issues is to provide a regional case study for the programme design of CO2 emission reduction demonstration projects.

After intensive discussions and modifications at the Forth (April 1999) and the Fifth (October 1999) Working Group Meeting, the formal project proposal came into being and was submitted to CCICED in October 1999.

Approved by CCICED 1999 meeting, the project of "The Policy Options on CO2 Emission Mitigation in China" started. The funding comes from Netherlands government, of which one third supports the research of by Chinese experts. Netherlands experts propose technical support on the energy model and the integrated the assessment model. The working group participates and is responsible for the coordination of Chinese and Netherlands efforts.

According to the suggestion of CCICED and conditions of the funding agency, the Working Group adapted the original work plan and implemented the modified plan step by step.

The 6th and 7th Working Group Meetings, which were held in March and November 2000 respectively, focused on the research projects and performed the necessary coordination between sub-projects.

The 8th Working Group meeting in May 2001 discussed the final report and schedule of "The Policy Options on CO2 Emission Mitigation in China", and the plan of designing another evaluation tool on economy-energy-environment policies based on the 1st phase's achievements including a policy and demonstration project, which should be submitted to CCICED as the 2nd phase of the CO2 project. This project proposal is being formulated and will be available at the 2001 CCICED meeting together with the final report of the phase 1 project.

B. The main achievements of PCWG:

1. Guidelines for integrated environmental assessment and forecasting in China

China is experiencing a rapid process of industrialization and urbanization. The ratio of population in urban areas to the national was only 1% when People's Republic of China was established, which increased to 20.6% in 1982 and 26.1% in 1990. Up to the year 1998, there were 668 cities and 400 million urban residents in China, accounting for about one third of the total population. According to the estimation in 'Report on the development of population and inhabitation in People's Republic of China', the total urban population will increase to 450 million accounting for 35% of the countrywide by 2000, however, by 2010 the number will be 630 million and 45% (which is very conservative). It is forecast that there will be some mega-cities occurring and billions of new urban residents during the next 20 years.

City, the symbol of human social civilization and development, is the syntheses and center of politics, economy, culture, education, science and technology, which plays an important role in the conglomeration of economy, science, technology, and culture and has greatly promoted the progress of human society. However, the urbanization has resulted in one series of modern 'urban disease', which includes environmental pollution, overcrowding, traffic jam, society problems and urban crimes. Most urban residents are insulated from nature by living in the "desert" of reinforced concrete, forced to breathe the dirty air and view black and odorous river. It is luxury and difficult to enjoy the natural scenery now. At present, although the level of urbanization in China is not so high, the construction of urban infrastructure largely lags the increase of urban population and economy. So the "urban disease" is very severe in China. Improvement of urban environmental infrastructure and control of serious industrial, transportation and domestic pollution are the most urgent affairs for large and medium-sized cities in China.

How to solve the environmental problems in urban areas? In the past, due to the shortage of scientific knowledge and experience, the sporadic and piecemeal steps were usually adopted as the physician who treat the head when the head ache, and treat the foot when the foot hurt. Various kinds of the end-of-pipe measures were taken respectively for the pollution of air, water and solid waste, with high cost and little worth that did not stop the transfer of pollutant between environmental compartments such as air, water, and soil. In the early 1980s', the principal of integrated environmental control was put forward, which looked upon a city as one system. On the basis of this system approach integrated environmental control was conducted and important progress was made. However, there is lack of theory and method on integrated environmental assessment. The 'China Council for International Co-operation on Environment and Development' began to pay attention to this problem since it was established in 1992. In the years after that, experts from RIVM, co-operating with the Chinese experts and the local environmental protection departments, carried out the case studies on the environmental status assessment, on forecasting development trends and on pollution control strategy in the four cities of Guangzhou, Chongqing, Zibo, Suzhou. Based on the four case studies, the Dutch experts wrote the 'Guidelines for integrated environmental assessment and forecasting in China' to provide references for other cities in China. The core of the Guidelines is to emphasize the integrated assessment of the urban environment, that is, carry out not only the assessment on the status of environmental compartments respectively such as water, air, soil, but also the integrated assessment on all polluted environmental compartments together. The Guidelines put forward the method on environmental assessment and forecasting.

The integrated assessment approach brings together relevant information to make policy decisions. It is aiming to produce a coherent picture of causes, impacts and solutions. To realize that goal, integrated assessment uses various sources of scientific information and different methods as well as and inputs from policy and society. These assessments can be carried out for environmental compartments (water, air, soil, etc) and for thematic problems (acidification, the global warming problem etc.). The characteristic of the approach is the generation of optional (effective and efficient) solutions through dialogues between the three grates involved: science, policy and society. An integrated assessment in the field of water for example needs the input from water science, involved societal sectors or stakeholders (industry, agriculture, etc.) and decision maker in the field of water. Beijing. The approach has been designed to reach consensus.

First of all, the subject and the scale of the environmental assessment have to be selected. Than, the stakeholders, the relevant policy areas and the required scientific information have to be identified. Finally, the framework has to be chosen that structures and helps to carry out the assessment.

In order to structure environmental assessment and forecasting it is useful to apply a framework. The DPSIR framework is proposed, distinguishing Driving forces, Foreseers, States, Impacts, and Responses.

The Driving Forces Pressure State Impact Response (DPSIR) scheme

The Driving Forces Pressure State Impact Response (DPSIR) scheme

Driving forces & activities

Response

Pressures

Impact

state

e.g. Industry e.g. Clean production,

and transport public transport,

Regulations, Taxes,

Information, etc

e.g. pollutants e.g. Health Problems

emissions Biodiversity Loss

Economic damage

e.g. Air, Water, Needs process description

Soil quality and modelling

A Driving force is a need. Examples of primary driving forces for an individual are needs for shelter, food, and water. Examples of secondary driving forces are needs for mobility, entertainment and culture.

For an industrial sector a driving force can be the need to be profitable and to produce at low costs. For a nation a driving force may be the need to have a low level of unemployment.

Examples of Pressures are emissions to air, water, and soil, production of waste use of nonrenewable resources, changes in land use, and disturbance by noise. As a result of pressures the State of the environment is affected.

The State of the environment is the quality of the various environmental compartments (air, water, soil, etc.) in relation to the functions to be fulfilled by these compartments. These states determine the quality of ecosystems and the welfare of humans. Changes in the state may have Impact on risks to ecosystems, humans, materials, monuments, etc..

A Response (by society policy makers) can refer to all parts of the Driving Forces (Impact chain, to driving forces, activities pressures, and state.

In some situations, it can be helpful to apply indicators or guide parameters for driving force, pressure, state, impact and response information, especially in cases where no detailed information is available or can be collected. For water for example, coli bacteria (not harmful as such) may serve as an indicator species for a lot of other (harmful) micro-organisms; very often they occur together.

The DPSIR framework can be applied to studies of the present as well as of possible future situations. First of all, a DPSIR scheme has to be set up for the selected problem. Then, relevant variables have to be identified for the different parts of the scheme. Finally, the necessary data for these variables has to be collected (from the shelve or by monitoring) and mathematical models have to be applied or developed to describe the problem quantitatively and to analyze alternative policy options.

The Guidelines, similar with the 'environmental decision based on risk assessment' advocated by United States in recent years, embodies the scientific decision on environmental management and pollution control, which will be educational and helpful to improve the urban environmental management in China.

2. Strategy for Water Pollution Control in Guangdong Basin of the Pearl River

The main theme of the research is the protection of the water environment and water resources. The object is to achieve the development of environment with the best possible results to control the various water pollution problems in Guangdong Basin of the Pearl River by a decision support system.

The systematic and integrated basic information of the water environment in the river basin is the base of the research. At first, according to the basic information and the social-economic development plan in the river basin, the water quality objectives were that included division of water in function zones, and the conservation of drinking water resources. Secondly the computer decision support system for the water environmental management policy of the Guangdong Basin of the Pearl River was built by using GIS, a dynamic database and water quality model. Thirdly, the total and the available uptake capability were calculated, and the total load control of major pollutants and the implementation of total load control were mapped. Finally, aiming on the water problems and the conditions of the water resources and the social-economic development in Guangdong Basin of the Pearl River, strategies were planted to realize the water quality objectives, including strategies for drinking water resource protection, engineering projects for water pollution control, and harmonization of management in the river basin.

The water management system with continuing economic development of Guangdong Basin of the Pearl River is based on the basic information, the division of water function zones, the total and the available pollutant uptake capability, the engineering projects for water pollution control, the harmonization of management, and the computer decision support system of the water management policy.

Major Achievements Description of Study

①A scientific, practical, and flexible water pollution control planning which was aimed to solve the pollution problem of Guangdong Basin of the Pearl River was made by considering the river basin as a overall system. Based on a lot of basic research results, the demand for water quality protection and special problems was fully considered in the planning package that possesses unique local region characteristics. Water pollution control was systematically studied by considering the social, economic and environmental development of the region. Aimed at the complex characteristic of region's water environment, the planning package was required that water environmental function must be considered with the region as a whole system, water, quality objectives must be clearly described, drinking water sources and crossing-boundary water quality management must be emphasized. Combined with the heavy pollution situation in the region, in order to reduce pollution loads at the same time, the planning package also includes total pollution loads control, discharge licensing regulation, strengthening of project management and pollution reduction and rigorous control of new pollution sources. According to the heavy municipal wastewater pollution in the region, the pollutant removal rate will be demand up to 60% and series derail requirements were proposed for municipal wastewater treatment.

②Based on the collection of current information and achievements. The social economy, water environment, and pollution sources of the river basin were systematically analyzed, the change of the water environment of the region was truly exposed.

③Based on the analysis of water quality and quantity of important drinking water sources, the protection planning package for drinking water sources especially for the water supply of Hong Kong and Macao, policy options for the use of drinking water sources of crossing boundary in the river basin, were proposed.

④Based on the analysis of water environment function status and water sources distribution, according to the demand of society, economic development, and water environmental protection, a practical and flexible sooner for water environmental function and drinking water sources distribution was proposed, a water quality management on the while.

⑤Aimed at principal water pollution problems and focused on the feasibility, a total allowable loads control package for water pollutants in the region was given out.

⑥Current and improved models for water environmental management and regulations were analyzed. A water environmental management and monitoring package was developed that can be used to guide the government in a more effectively applied water management.

⑦The dynamic database of Guangdong Basin of the Pearl River was built by using of geographic information system. The water quality management models package which can be used for tidal river network, main river, mountain river, and artificial river was built by carefully choosing available models. A user friendly Water Environmental Decision Support System was designed with a highly compressed database and model package.

3. The Policy Options on CO2 Emission Mitigation in China

China CO2 Mitigation Policy Options project was approved by Chinese Council on International Collaboration on Environment and Development (CCICED), financial sponsored technical supported by government of the Netherlands. Expert team including researchers from China and the Netherlands was organized by the pollution control working group.

The project we carried out with the following considerations:

①With large energy consumption, China is an active participator of IPCC. As one of the most populous countries in the world, China's total energy consumption is listed behind America and holds the second largest, but the average per capita energy consumption in China is only 50% of the world average and 10% of the American level. As a developing country, China will focus on the development of economy and improvement of people's living standard in the long term. Therefore, the energy consumption and total GHG emissions will increase in the future. According to the IFCC, China does not belong to those countries that should reduce the GHG emissions.

②Chinese government emphasizes strongly on environmental protection. During the course of economic development, series of measures have been taken to control pollution. Progress has been made especially in energy use and conservation, which slows the increase of GHG emissions. These efforts not only promoted the sustainable development in China, but also contributed to the global environmental protection.

③The Tenth's Five-Years-plan is becoming into action in China as the turn of the new Millennium. Chinese government will further renovate the economic structure especially in the aspect of energy consumption and continue implementing the energy saving policy to reduce the emissions of hazardous pollutants including greenhouse gases. The strategic and planning objects for economic development in China are accordant to the protection of environment.

④The economic success in China has been prominent since the opening up 20 years ago. The target that China becomes the middle-developed country will be realized by mid-21 century. By then, the mitigation of GHG emissions will come to schedule. Therefore, it's very important to carry out a project, which has been approved by CCICED and supported by international funds and technology aids, to summarize the experiences and propose the policy recommendations for the reference of the China government's decision.

Major task of this project is to summarize the impact of some policies adopted during rapid economic development on mitigation of total CO2 emission; foresee the future economic development and related CO2 emission mitigation through various scenarios and modeling activities, and to formulate policy recommendations.

Summarization of the past focuses on the situations during 1985~1995. The results show:

①Chinese environmental and energy policies are effective

Since reform and opening policy over 20 years ago, to achieve rapid, stable and healthy development, Chinese Government has formulated a series of laws and policies concerning energy development and conservation at the same time that China gradually established law system of environmental protection. China identified the principle of 'pay attention both to development and conservation while give the priority to conservation. The practicing has showed that the energy and environmental policies that consider specific Chinese situations are effective and mutual beneficial. Which centrally symbolized by the continuous decrease of unit GDP energy consumption, also symbolized by the decline in relevant pollutant emissions or decline in the growth rate.

②The integrated result caused by the implementation of relevant policies during 1985~1995: annual CO2 emissions increase rate decreased 4.82%.

Compared with 1985, 1567Mt CO2 reduction was achieved from the decline in energy consumption of unit GDP in 1995, accounting for 75.6% of the total CO2 emissions from fossil fuel combustion in 1990.

Calculation shows that annual CO2 emissions increase rate could be as high as 9.32% if policies/measures for energy conservation and efficiency improvement were not adopted during 1985~1995. However, because of the implementation of policies/measures, actual annual CO2 emissions increase rate decreased to 4.5%, namely the annual increase rate decreased 4.82%, which shows the great success.

③Huge achievements in carbon storage have been made by afforestation

Forest fall was greater than growth in China in 1985, which emitted 3.86Mt-C. Because of the great efforts in afforestation in many years, forest growth was greater than fall in 1990, which achieved a carbon storage of 86Mt-C, namely, 15% CO2 emissions was absorbed by forest in 1990. Carbon storage by forest was 95.55Mt-C in 1995.

To study the future policy options for CO2 mitigation, we established two baseline scenarios. One is 'an 'open' China in a globalised world' (hereafter globalization scenario). The most important assumptions are: rapid economic development of China and the world; rapid technological advancement; free trade and technology transfer, and China can use the global resources in light of domestic demand. The other is 'China oriented at solving regional environmental problems' (hereafter environment scenario). The most important assumptions are: sustainable development of economy, society and environment at the local level; constraints on trade and technology transfer, and China mainly depends on domestic resources.

We put 11 mitigation policies/measures into the two baseline scenarios respectively. The results show that it is possible to reduce CO2 emissions increase rate meanwhile develop economy if the necessary policies/measures are adopted, namely policies/measures for CO2 mitigation are implemented by different extents.

The simulation shows: at a carbon price of around 50 US$/tC, there is a potential for mitigation in China of 0.2-0.3 GtC in 2010, to reduce the same amount of carbon in West Europe, the price will be as high as about 200 US$/tC. Therefore there could be a considerable potential for CDM projects in China.

Based on the simulation output with different policies and measures, combining policies from 1985 to 1995 and current policies, the following policy recommendation are given for CO2 emission mitigation by consideration of economic development:

①Potential for raising energy use efficiency in industry and decreasing unit energy use of energy intensive products is still large.

Effort for energy conservation (and mitigation) should be enhanced on the basis of effectively implementing energy saving (and mitigation) policies in last several decades. Implementing energy conservation and mitigation policies should be focused on power generation sector and other energy intensive products sector.

Energy industry development with focusing on power generation is the important content of energy and environment development strategy in China. Promotion of unit with large capacity, high parameters and high efficiency is the decided direction of power generation modernization. Implement of high efficiency must rely on technology progress. Research results say integrated gasification combined cycle (IGCC) and Natural Gas Combined Cycle (NGCC) are the preferential technology in power generation sector to increase energy efficiency.

Energy intensive product sectors such as steel making industry account for 10% of total energy use in China. Synthesis unit energy use per ton steel is 1.24tce in 1999. There is a significant progress compared with 1.44tce in 1995. However there is still large gap compared with international advanced level. Making further progress on energy use in process such as sintering, coke making, iron making, steel making, row casting, steel rolling etc., improving iron-steel ratio, continuous casting ratio, coal powder injection ratio, achieving the target of synthesis unit energy use 0.8tce first in key enterprise to driving all sector to save energy and mitigate GHGs emission are possible. Implementing of this target could reduce CO2 emission 118.1Mt.

②Mitigation in transport sector should pay attention to traffic structure improvement of railway, road and water transport, beside technology progress.

Research results demonstrate larger road transport which is high unit energy use will be harmful for energy saving and mitigation. Therefore continually improving the structure of water, road and air transport to reduce unit energy use to maximum extent, is a important countermeasure for energy saving and mitigation.

③Changing economy structure, prompting tertiary industrial is the demand of not only economic development but also energy saving and mitigation.

Up to now economic structure change in China did not have the effects of energy saving, .The reason is there is no big change for secondary industry share in GDP after reforming and opening of China, and increase of share of tertiary industry is similar with the decrease of primary industry while unit energy use for tertiary industry is higher than that of primary industry. Energy saving effects could occur when increase in share of tertiary industry will induce decrease in share of secondary industry.

④Improvement of primary energy mix to be cleaner is a long-term policy for energy saving and mitigation.

Research results say there is very large potential to reduce unit energy use of energy intensive product, when the potential is not unlimited and the difficulty and cost will get bigger and. bigger. Therefore, for a country with large use of coal like China, decrease share of coal in energy consumption to further reduce share of fossil fuel, should be a long term measure for energy saving and mitigation and be prompted step by step to make more significant progress.

After reforming and opening of China, there is some improvement of energy mix. However scale of share decrease of coal and share increase of clean energy is relatively small. Even though energy saving effects occurred obviously. Therefore extension of import of petroleum and natural gas, development of renewable energy to elaborate share of coal in primary energy to be below 50% as soon as possible in first half of this century, beside continue to make full effort to develop hydropower, actively develop petroleum, properly develop nuclear.

⑤When effort is made to reduce share of coal in primary energy consumption, policies to reduce high share of coal in end use, implement coal substitution by electricity and gas, increase share of electricity and gas in energy end use, are the urgent required for large scale energy conservation and mitigation.

Research results shows it is possible no more coal use in building for residential and commercial use by 2020.

⑥Financial support is important condition for energy conservation and mitigation.

After reforming and opening of China, large amount of investment were used for energy development and utilization, energy conservation and environment protection. Investment during "Tenth Five Years Plan" was decided. In order to further prompt energy conservation and mitigation, levy of energy tax is suggested. Fuel tax for vehicle could be levied first. Feasibility study for carbon tax should be made to provide background information to start carbon tax in suitable time.

⑦Continually improve the regulation and law system for rational energy development and utilization, efficiency improvement of energy use, energy conservation and environment protection is a important guaranty for sustainable development.

From 20 years after reforming and opening of China, law and regulation for energy and environment made improvement from really beginning and promote development of energy conservation. In 1998 Energy Conservation Law was put into force and energy conservation is insured by the law. However with the energy supply and use going into market, delay of other relative law and regulation affects the effective implementation of energy conservation law. Therefore detail regulation of energy conservation law and other relative law should be published as soon as possible. And it is also suggested to prepare law for renewable portfolio standard.

⑧In order to establish energy supply and consumption pattern to match economic development and minimize environment damage, integrated energy, environment, economic development planning must be designed.

"China 21 Century Agenda" takes this as an important evidence for integrated energy planning management. One of the sub-projects of this study---"Shanghai Energy Environment Planning Study" provides preliminary methodology and experience for information collection.

C. Recommendations

The Pollution Control Working Group proposes the following policy recommendations to CCICED based on the research of "Case Studies on Environmental Status Assessment, Trends Forecast and Pollution Control Strategies of Guangzhou, Chongqing, Zibo, Suzhou", "Water Pollution Control Planning of Pearl River in Guangdong Province", "The Policy Options on CO2 Emission Mitigation in China",

1. The control of urban air pollution is the primary task of environmental protection in China. The crucial measure to improve urban air quality is the change of fuel mix. Therefore,

--The natural gas from Western China should supply the urban domestic use to support to solve air pollution problem as well as the sustainable development of national economy.

--The management of air pollution should embody the principle of "strategy formulation according to geographical characteristics". Hereby, different types of cities should have different deadlines for compliance.

2. The control of river basin pollution is also an important task of environmental protection in China. Comprehensive measures should be taken to control the water pollution,

--By adjustment of the industrial mix, no factory polluting water body would be constructed on the riverside.

--Simultaneously, effective approaches should be implemented to control the pollution from area sources in the drainage basin.

3. The long term pollution prevention should be studied. For instance, the water pollution control in river basins has been studied in recent years and achieved some preliminary success. It needs long term efforts to minimize water pollution. Study of pollution control of area sources in needed to make certain that management and control measures can be taken on sound data.

4. Promotion of integrated environmental assessment. Integrated meaning not only the integrated impact of a pollutant on environmental compartments water, air, and soil, but also the impact of a combination of pollutants on one of these compartments. For example the impact of pollutants such as fine particle, NOx, VOC, on air quality usually is a combined action of all these pollutants.

5. Suggestions for the next phase working group take force:

The research by the 1st and 2nd phase working group encompasses the implementation of thoroughly integrated environmental assessment and pollution control to promote policy options and demonstration projects. With the development of research work, it is further realized that integrated planning of economy, energy and environment, development of evaluation tools for economy-environment-energy policies to promote the targets and policies' coordination of economy, energy and environment is crucial not only for the promotion of integrated environmental assessment and pollution control but also for the implementation of a sustainable development strategy.

It is recommended to select a region with sensitive environment and potential of economic development (such as Chongqing city) and carry out further research on coordinated development planning on energy and environment. Furthermore, the tools should be developed to comprehensively evaluate the policies in macroeconomic, energy- and environment fields. With the rapid economic development, policy demonstration should be put up so as to improve environmental quality through the improvement of economic structure and location. Based on the existing research on demonstration projects, research on Clean Development Mechanism (CDM) should come into action and the demonstration would be carried out on condition of equity and justness that embodies the requirement of CCICED to "carry out policy and project demonstration more relating to real status". Thereby, more operative and pertinent recommendations will be proposed to Chinese government. Netherlands government intends to supply the funding and technical support on this project. The project proposal is being drafted and will be submitted to CCICED for discussion.