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Will China's Fight Against Smog Influence Canada's Environmental Targets?

12/04/2014 09:11 EST | Updated 02/03/2015 05:59 EST

Citizens of many cities are often frustrated by the challenges of hosting international gatherings of high-level politicians, which often create havoc with local life. In Beijing, however, it is safe to say more than a few people were sad to see the recent APEC summit come to a close. After all, thanks to policy initiatives that reportedly reduced pollution levels by more than 50 per cent, the typically murky skies over China's capital city were actually clear for a week. Local residents fondly called them "APEC blue."

Today, the smog is back. On Chang'an Avenue, the major street leading to Tiananmen Square and the Forbidden City, you can actually taste the pollution, which is why many pedestrians wear face masks as they navigate the bumper-to-bumper traffic that contributes to the issue. Believe it or not, according to the China Daily, search parties have been sent out looking for tourists lost in the smog on at least one occasion. Air travel is also affected. According to news reports, for example, a Russian Aeroflot plane was recently forced to circle Beijing for over an hour while waiting for wind to clear its view of its designated runway.

In addition to traffic congestion, the major sources of the pollution that darkens life in Beijing are coal burning factories, thermo electric plants and construction dust. Inefficient or non-existent pollutant strategies at heavy industrial operations and dust storms coming from the north contribute to the problem. Geography is also an issue. Beijing has mountains to the north and west, which tend to trap pollutants arriving from other provinces to the south.

To clear the skies for APEC, Chinese authorities initiated strategies similar to those followed during the Beijing Olympic Games. In Beijing, public workers were given time off, industrial output was put on hold and private car owners were limited to driving only every other day while 70 per cent of public vehicles were kept off the road. Officials even suspended a relatively common death ritual that calls for clothing of deceased individuals to be incinerated. In Hebei, the province to the west of Beijing, more than 2,000 companies were temporarily closed and work was halted at nearly 2,500 construction sites. Similar strategies were implemented in Tianjin City and Shandong Province.

But after the summit, cars returned to the roads, public employees went back to work, factories were remobilized and construction resumed. As a result, pollution returned to Beijing. And that helps explain why many environmentalists question commitments made at the APEC Summit, where the United States and China--the world's two largest emitters of carbon dioxide--jointly announced plans to battle emissions. The U.S. now aims to reduce greenhouse gasses to levels that are 25 per cent lower than seen in 2005 by 2025. China announced it would begin capping emissions by 2030 and eventually produce 20 per cent of its energy from non-carbon sources.

As we mentioned in our last blog on law and order in China, the West must always be careful about bias when trying to assess the motivations of China's leadership. There is no doubt that officials in China are aware of the severity of the pollution problem, which Chinese statistics blame for up to half a million deaths per year (estimates by the World Health Organization are much higher). There is also no doubt that it is in the best interests of the leadership to deal with this issue.

Keep in mind that heavy pollution leads to discontent among the populace. And although China is not a democracy, the nation's leaders are always focused on maintaining a harmonious society. That's why there are a number of initiatives aimed at the addressing the pollution issue long term. In Beijing, for example, the government is restricting the number of new license plates issued and planning to phase out about 1 million vehicles (out of the 5.5 million registered vehicles) with low emission standards. The government also has plans to cut back emissions by heavy industry while boosting the development of renewable energy. The goal is to reduce the use of coal in national energy production from 70 per cent to 65 per cent by 2017 while also lowering the concentration of harmful particles in the air by at least 10 per cent in the same time frame.

The bottom line is that China's pollution problem has taken a long time to build and addressing it will also take time. After all, the nation must balance its desire to reduce emissions with a real need to maintain economic growth, which also plays a huge role in maintaining a harmonious society.

As things stand, most performance incentives provided to heads of state-owned enterprises and powerful senior government bureaucrats are based on achieving growth and employment targets with only modest attention to the environment. Oversight is also inadequate. The U.S Environmental Protection Agency has thousands of employees while China only employs a few hundred environmental oversight agents. This needs to change.

Nevertheless, China clearly knows it needs to introduce policies that will reduce harmful emissions from all sources. And it is taking action. For Canadians, the real question is whether the joint announcement by China and the United Sates will influence Canada's environmental targets since Ottawa has promised in the past to match U.S. initiatives.

By Jim Hatch & Fengli Mu.

Jim Hatch is a Professor of Finance at Western University's Ivey Business School in London, Ont., who recently completed a study of the Chinese use of the case method in business education with Fengli Mu. A book on this topic will be published by Peking University Publishing House in 2015. Hatch and Mu are currently conducting research aimed at understanding the skill and knowledge gaps of Chinese managers. Jim can be reached at jhatch@ivey.uwo.ca.

Fengli Mu is a Professor of Human Resources at the Chinese University of Politics Science and Law in Beijing and a former visiting scholar at Western University's Ivey Business School. In addition to her academic work, she consults on a wide range of projects for Chinese companies.

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