Environment Problem in China and the Role of ADB Min Tang Deputy Resident Representative

1. Environment Problem in China and the Role of ADB Min Tang Deputy Resident Representative ADB Resident Mission in the PRC

2. The Environment and Economic Development • China has been the world’s fastest growing economy for the past two decades. Rapid growth will continue (9%). • Rapid economic growth has had environmental costs. • Cost of environmental damage is high, 3%-5% of GDP. • Although environmental degradation decelerated in the 1990s, it was not reversed.

3. Water Resource Isses • Serious water shortage in Northern China. Per capita water availability ranges from 360 to 750 M3 (lower than international definition of water scarcity of 1,000 M3/person). • More than 40% of the water in 7 major river basins does not meet the Grade III national quality standard. Three major lakes have serious eutrophication problems. • Demand for water rising with increasing urbanization; more than half the population will live in cities by 2030. • Low wastewater reuse (34% of urban wastewater is treated).

4. Land Resource Management • Land degradation is a major cause of rural poverty. Almost 90% of the rural poor eke out a living on degraded land. • 28% of China (260 million hectares) affected by desertification. • Most desertification occurs in the Western Region. • Soil erosion worsened during the last 30 years. • 90% of grasslands are moderately to severely eroded.

5. Air Pollution • Since peaking in 1995, emissions have declined (SO2, 16%; dust, 33%; industrial TSP, 37%; CO2, 17%). However: • PRC accounts for 10% of the world’s energy-related carbon dioxide emissions • Over 63% of the cities do not meet Grade II air quality standards • One third of land area affected by acid rain • Coal-burning remains the chief contributor of air pollution; motor vehicle emissions will increase in the next 10 years.

6. Strong Political Commitment to Improve the Environment • Increased environmental investment: 0.73% of GDP in 1990-95; 0.93% of GDP in 1996-2000; 1.3% of GDP during the Tenth Five-Year Plan. • Passage of key environment laws, most recently amendments to the Air Pollution Prevention and Control Act and the Ocean Environmental Protection Act . • Environment is a key priority in the Tenth Five-Year Plan and probably Eleventh Five-year Plan.

7. ADB is the premier development agency for the Asia and Pacific region • Its vision: A region free of poverty

8. Basic Facts • A multilateral development bank, founded in 1966 • A working partnership of 63 members • 33 borrowing members

9. Headquarters and Offices HQ in Manila, 24 external offices

10. ADB OPERATIONS IN THE PRC • Cumulative Lending (as of end December 2003): 105 Projects; $13.6 billion; 2nd Rank (1st Rank is Indonesia with $19.36 billion) Year-wise Lending Amount in $ million

11. ADB’s Environmental Assistance • Helping to address China’s environmental problems is a major priority for ADB because the poor suffer the most from a bad environment. We help to: Improve the policy, legal, and regulatory framework. Build capacity in key agencies. Reduce pollution in cities. Promote natural resource conservation. Promote the use of cleaner technologies.

12. ADB’s Environmental Assistance • ADB has provided 18 loans totaling $2.3 billion to support environmental improvement in China • ADB lending has been complemented by environmental technical assistance grants totaling $62 million • ADB’s 2005-2007 Program includes $1 billion in loans for environmental projects • 2005-2007 program includes $13 million in environmental technical assistance grants

13. Addressing Urban Environment Problems • ADB has provided $1.3 billion to help address environmental problems in 12 cities (Shanghai, Taiyuan, Qingdao, Tangshan, Chengde, Xi’an, Xianyang, Tongchuan, Dalian, Beijing, Fuzhou and Hefei). • ADB urban environment projects helped to introduce cleaner fuels like town gas, natural gas and district heating and supply clean water and wastewater treatment.

14. Promoting NaturalResource Conservation • Under three loans totaling $195 million, ADB is helping address sustainable resource use. • ADB’s current program includes projects to prevent flooding along the Yellow River and the Songhua River. • ADB’s assistance in the areas of desertification in Western China and biodiversity will intensify. ADB is playing a lead role in helping China to develop a strategic partnership with the Global Environment Facility for land degradation in Western China.

15. ADB PORTFOLIO IN THE PRC- SELECTED PROJECTS • Fujian Soil Conservation and Rural Development

16. ADB PORTFOLIO IN THE PRC- SELECTED PROJECTS • Beijing Environment Improvement

17. ADB’s Water Supply/Waste Water Treatment Operations

18. 2005 • Sanjiang Plains Wetland Protection Project (2005,$15 m) • Jiangsu Urban Environment Improvement (2005, $100 m) • Shandong Hai River Water Pollution Treatment (2005,$85 m)

19. 2006 • Shaanxi Qinling Mountain Ecosystem Protection (2006,$35 m) • Inner Mongolia Environment Improvement (2006, $150 m) • Henan Hai River Wastewater Management (2006, $100 m) • Wuhan Wastewater & Stormworks Management (2006, $100 m) • Nanjing Qin River and Huai River Rehabilitation (2006,$100 m)

20. 2007 • Endangered Chinese Herbs Plantation in Central and Western Regions (2007,$25 m) • Ningxia Integrated Ecosystem Development (2007,$100 m) • Ecosystem Development and Environment Protection of Baiyangdian Lake (2007, $100 m) • Anhui (Hefei) Urban Environment Improvement (2007, $150 m)

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