Red Light for China's Green GDP Report

Last month, Beijing announced that it was indefinitely suspending the release of its 2005 "green GDP" report, a study designed to calculate the environmental costs of China's economic development. The announcement has generated considerable speculation and reveals much about both the growing burden of China's environmental woes on the decision-makers in Beijing, and the complexities of Chinese domestic politics.

Originally scheduled for release in March, 2007 (Reuters), the officially titled Environmentally Adjusted GDP Accounting Report for 2005 was slated to be the more thorough, more detailed follow-up to a 2004 report of the same nature, and a major notch in the belt of China's emerging environmental policy.

Growing social unrest over horrendous and harmful environmental problems at home, as well as the increased international consciousness of global climate change, have elevated environmentalism to a political priority in China. Last fall, the National People's Congress set forth ambitious goals to improve energy efficiency, reduce consumption, and fight pollution (China Brief, Vol. VII, Issue 16). From my own observations, since that time, China has also begun listing environmental concerns and global warming among its common interests with regional neighbors and international powers. Calculating "green GDP" is part of a broad approach that attempts to inject a sense of environmental responsibility into China's economically-minded, "development first" political culture.

China launched its "green GDP" project in 2003-2004, jointly administered by the State Environmental Protection Agency (SEPA) and the National Bureau of Statistics (NBS). The first product of the endeavor, the 2004 report, was released in 2006. Assessing the scale of environmental pollution in 10 provinces, the report found that pollution cost China over $67 billion US dollars, 3 percent of its GDP, in 2004 (Worldwatch).

The 2005 report was national in scope, and measured the country's "green GDP" according to seven different criteria, including environmental pollution. The other criteria included depletion costs of mines, forests, land, water, and wildlife, as well as costs to the ecosystem (China Brief). The 2005 report also provides a provincial breakdown in each category, creating a "green GDP" report at the provincial as well as national level.

Obviously, given the increased scope of the study and the expanded criteria, not to mention China's continued struggle to rein in its energy appetite, the 2005 report promised to deliver more disturbing statistics than its predecessor. This alone would be enough to make already-antsy officials in Beijing reluctant to release the results of the report for fear of generating further social unrest, especially with the 17th Party Congress around the corner in the fall. Furthermore, the localization of blame (at the provincial level) for the country's environmental problems introduces additional opponents to the report into the picture (provincial and local officials). According to Wenran Jiang, in some provinces, the cost of pollution, resource depletion, and damage to the ecosystem would actually cancel out the economic gains of the province's GDP for the year (China Brief).

Chinese officials appear divided over the report and divisions, at least publicly, seem to adhere to the old adage about Chinese politics, "Where you sit is where you stand." Officials with the NBS claim that the report's release has been indefinitely suspended due to conflicts over the scientific accuracy of the statistics and technical issues pertaining to publication (Worldwatch). Indeed this is true. As NBS Chief Xie Fuzhan (pictured left) recently told reporters, China is essentially pioneering the creation of a "green GDP" index and the use of "green GDP" to measure and confront environmental degradation (Asia Times). No international standards exist for such a project. According to the 2003 UN Handbook on National Accounting, "there is no consensus on how 'green GDP' can be calculated and, in fact, still less consensus on whether it should be attempted at all." How to quantify environmental elements in terms of monetary value remains an extremely challenging and uncertain task. (Note: this article from Resources for the Future attempts to bridge the gap between environmentalism and economics)

Officials in SEPA meanwhile, and other environmental agencies, remain more loyal to the cause of 'green GDP' and are more candid when discussing the motivations behind suspending the report's release. Wang Jinnan from the Chinese Academy for Environmental Planning (CAEP) recently revealed, "There exist major differences between the environmental-protection agency and the statistical bureau regarding the content of the report and its distribution," (Asia Times). As he told Beijing News:

"In the current sensitive climate where everybody is talking about 'green change,' some provinces fear publicizing their revised [green] GDP figures...Some local governments have lobbied us and tried to put pressure on us not to make the report public."

SEPA, CAEP, and Chinese environmentalists support the report's release, despite technical difficulties and political opposition. The NBS sees things differently. This gap in perspective has put the 2005 report on the shelf until further notice.

But while the 2005 report may not be made public, the importance of addressing China's worsening environmental woes will not fade away so easily for the Chinese government or the Chinese people. China is, and will continue to be, one of the most polluted countries in the world until it takes some drastic steps to address its pollution problems and curb its consumption of energy and natural resources. The launching of the "green GDP" project a few years ago seemed like a new and exciting step in the right direction: an active, ambitious, and creative approach to a demanding challenge. The tie-up over the 2005 "green GDP" report suggests that the more things change, the more they stay the same. In China, "face" and positive financial statistics remain more important than results.

On a positive note however, the concept of "green GDP" is not dead, nor is environmentalism in China. The 2006 report, perhaps in hopes that it will yield more positive results, and perhaps because its release will not precede any high profile political conferences, is still going ahead as planned (China Daily). Outside observers may be helpless to remove political obstacles to the development of China's "green GDP," but international actors and non-government actors can still play a major role in tackling the technical challenges of the index, and more importantly the environmental problems the index aims to address.