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Mark Tercek

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China Offers Important Lessons on Greening the Economy

Posted: 06/16/11 11:59 AM ET

Here in the United States, China is often portrayed as an enemy of the environment. But of course the situation is really not that simple.

To be sure, China's environmental record is far from perfect. Over the years, in a successful and important effort to lift millions of its citizens out of poverty, China has put much more emphasis on building the economy than on protecting nature.

China is the world's biggest emitter of greenhouse gases. Massive deforestation has led to floods and landslides that have killed people and displaced many others. And air quality in some cities is so bad that the World Health Organization in 2007 labeled China's air pollution the deadliest on the planet.

But China is changing -- and providing valuable lessons for both U.S. policymakers and business leaders.

On a recent trip to China, I attended the Boao Forum -- China's version of the World Economic Forum. Leaders from the public and private sectors discussed various issues including the vital link between environmental health and the country's prosperity.

Former Secretary of the Treasury Henry Paulson organized an event for me, basketball superstar Yao Ming, and fellow NGO head Brett Jenks of the conservation group RARE to meet with business and government leaders. We talked about the economic and business benefits of keeping natural resources healthy and productive. Our audience clearly understood the importance and urgency of this topic.

It was a refreshing discussion, especially when compared to some of the ongoing budget debates here in the United States where there are efforts underway to slash our country's core environmental programs.

Shortly before the Forum, the Chinese government unveiled its new Five-Year Plan that lays out the country's economic goals and strategies. In the plan China states its intention to slow the rate of economic growth in order to reduce pressure on the environment. Likewise, the plan calls for much greater investments in clean energy and green industry development.

Under the Five-Year Plan, non-fossil fuel energy production is targeted to increase more than 11 percent over the next three years. Already, China is the top producer of wind turbines and solar energy panels.

The plan also calls for huge investments in reforestation. China aims to reforest 40 million hectares by 2020 -- the largest reforestation program in the world.

Through its Five-Year Plan, China will also launch pilot cap-and-trade systems for carbon and other pollutants. While we have yet to pass comprehensive energy and climate legislation in the US -- and while initiatives to put a price on carbon are demonized by some critics in the US -- China's government is now looking to the very same market-based systems to fight climate change and bolster its economic and social health.

The Five-Year Plan is not perfect, and it remains to be seen how successfully it will be implemented. Over the years, China has been criticized for manipulating its measuring and verification of environmental commitments.

But by laying out such an ambitious plan, and explicitly incorporating investments in clean energy and green development into its economic framework, China's political leaders are clearly positioning the country to move ahead in the environmental area.

Likewise, business leaders in state-owned enterprises and the private sector are on the move. Private investment in China's clean energy sector increased some 40% in 2010 to about $55 billion. Business leaders are also in discussion with The Nature Conservancy and the other NGOs about significant corporate sustainability initiatives.

China has spent decades building its economy and infrastructure. But after seeing the human and financial costs of deforestation, rampant pollution and other environmental threats, China's leaders now understand that the country cannot achieve long-term success without also protecting and investing in its natural systems.

It is a lesson that we in the United States should consider very carefully.