IISD at Annual Meeting of China Council for International Cooperation on Environment and Development

International advisory body submits key recommendations to Chinese Government

WINNIPEG — David Runnalls, President of IISD, and Arthur Hanson, Distinguished Scientist of IISD, joined a meeting of the China Council for International Cooperation on Environment and Development (CCICED) in Beijing. CCICED is a high level international advisory body designed to strengthen cooperation and exchange between China and the international community in the field of environment and development. The Council meets every year and submits recommendations to the Chinese Government related to environment and development. The theme this year is "sustainable agriculture and rural development." The Council is scheduled to meet with Chinese Premier Wen on October 29.

Arthur Hanson, acting as International Lead Expert, was responsible for reviewing research and recommendations from five Task Forces reporting to the Council this year. Together with Honglie Sun, of the Chinese Academy of Sciences, he oversaw the drafting of recommendations to be considered by the Council.

David Runnalls is International Co-Chair of the Task Force on WTO and Environment (TFWE). Together with the Chinese Co-Chair, Dr. Ruqiu Ye, Dr. Runnalls is reporting to the Council on the Task Force and submitting recommendations on what China should do to maximize the environmental benefits and minimize negative impacts resulting from China's WTO accession.

China's accession to the WTO has been the most important development in trade policy for China and for the WTO as a whole since the Uruguay Round. The impact on China's economy has been profound. The impact on the environment has also been significant.

The report by the TFWE looks at six sectors where the environmental impacts are the most pronounced: agriculture, forestry, aquaculture, automobiles, energy and textiles. These sectoral studies represent the most comprehensive assessment of the environmental consequences of trade liberalization policies undertaken by any country to date.

Certain environmental consequences are the result of growth. In many instances, the necessary policy responses are well known. Growing industries are dynamic and engaged in processes of innovation, so often opportunities exist to find solutions that protect the environment without impacting growth. The textile sector is a good example.

Trade liberalization not only promotes increased production; it also creates consumer surpluses associated with falling prices or increased quality. Again there are important environmental measures that can be taken to ensure that the consumer surplus also serves environmental needs. These are particularly pronounced in the automobile sector.

Some economic sectors or activities will actually be reduced because their products can be imported at lower cost or higher quality. Such sectors are less likely to be innovative and do not benefit from the new resources associated with growth. Yet these sectors may still present specific environmental problems that require the attention of policy-makers; these are among the most challenging aspects of the trade and environment debate. Examples may be found in agriculture that is resource-intensive rather than labour-intensive.

The TFWE recommended to the CCICED that, in growing sectors, the government will need to introduce more stringent environmental regulations to improve environmental quality and to promote international competitiveness. In contracting sectors, measures will be required to ensure these sectoral adjustments will not cause unacceptable environmental harm. The forestry sector in particular will require close monitoring to make the necessary adjustments. This review should include domestic policies and conditions, as well as import and export policies, and forests in other countries liable to be impacted by dramatically increasing Chinese imports of their products.

The automobile sector presents particular challenges and opportunities. Prices are falling on account of WTO accession and the number of automobiles is growing dramatically each year. Yet falling prices also permit the authorities to introduce more stringent environmental standards without meeting consumer resistance. The TFWE recommended an accelerated transition to the Euro IV standards, among the most stringent in the world.

Meanwhile, China's WTO accession leads to increased demand for commodities that must be imported. China will continue to seek access to such resources on a global scale. The TFWE recommended that China should consider its ecological footprint and take steps to ensure that its commodity imports are sustainable.