How can China fight global warming, promote development and prevent inequality? In a report, Chinese and international NGOs address these issues and question the workings of the UN’s Clean Development Mechanism.

International climate talks generally focus on the varying – and sometimes conflicting – interests of different countries. But when it comes to the issue of global warming, we also need to consider the interests of different regions and groups of people within a single country. We must consider their equitable development and varying abilities to adapt to change.

The actors in current international negotiations are all political entities: either countries or groups of countries. On the international stage, deals are hammered out between countries, with each national government acting as the sole representative of its own diverse society. When a gap emerges between the public interest and national policy, the average member of society no longer has their interests protected. The true meaning of equity should be that everyone – especially those from vulnerable groups – has their rights protected. This should also be the case with climate change issues.

Questions of climate change and equity intersect in China. For example, there has long been a disparity between energy consumption in rural and urban areas. In 1990, average energy consumption per person in rural areas was only 27.9% of the average for urban areas (83 kilograms of standard coal in rural areas compared to 298 kg in urban areas). Even allowing for increases over the years, by 2004, rural energy consumption per person was only 44.9% of that in urban areas (109 kg compared to 243 kg). In other words, rural consumption was still less than half of urban consumption.

When we talk about the effects of climate change on development, the key issue is whose development? Over the past few decades, marked social inequalities have emerged. A minority of people, in a minority of areas, have attained high levels of development. But the environmental cost is being paid by the majority. Disadvantaged groups, whose lives were hard enough to begin with, now face pollution, shortages of resources and even the total destruction of their means of survival. When taking steps to mitigate and adapt to climate change, we need to learn the lessons of the past and take note of the potential social problems that may arise. The arguments put forward by China at the international negotiating table – that per capita energy consumption remains low, and that China needs to develop – should also be put to use in the domestic policy-making arena. The idea of unequal development is relevant within the country; the benefits of development need to be more evenly distributed. China may win support for its
development on the international stage, but development has to be implemented evenly and fairly. Otherwise the arguments that support the government’s position at negotiations will lose their moral foundation.

The government needs to give careful consideration to the positive and negative consequences across society of carbon emissions trading, mitigation and adaptation measures. For example, adapting to climate change requires a restructuring of energy resources. This means that large hydropower projects with heavy social and environmental impacts become a more reasonable option. But strict social and environmental assessments must be carried out, legal loopholes must be closed and laws must be enforced. Otherwise, negative environmental effects and clashes with people living in reservoir areas are inevitable – and the people’s interests will be harmed.

Environmental and social assessments should take into account the impacts of hydropower projects on biodiversity and local communities. Public participation should be expanded to increase communities’ ability to tackle climate change. Less-developed regions surrounding the upper reaches of major rivers should also receive compensation for water and soil conservation, which should be funded by the industrialised coastal regions that produce the most emissions.

The evidence shows that markets alone cannot address problems of inequality. The Clean Development Mechanism (CDM) is one example. The CDM means developed countries provide financial and technical assistance to developing countries, which they can use to develop domestic environmental and sustainable development projects. In return, developed nations earn permits to emit more greenhouse gases. China is home to more CDM projects than any other country, but most of the beneficiaries are in urban areas or the industrial sector. Rural regions, which have the least ability to adapt to climate change, find it hard to benefit from the scheme. How can renewable energy projects in rural areas – such as methane energy projects – be brought into the CDM and directly benefit local communities? Reforestation projects could also be brought into the mechanism, with the prerequisite that the effects on local communities and biodiversity are taken into consideration.

China is not alone in the problems it faces. In August 2007, at the UN General Assembly thematic debate on "Climate Change as a Global Challenge", Makhdoom Faisal Saleh Hayat, environment minister of Pakistan, said that the CDM seemed to favour large commercial projects that generate a lot of carbon credits, but have less impact on a country’s sustainable development. He called for more CDM projects to be established at the community level.

Large, commercial CDM projects do contribute to cutting emissions in developing countries, but they do not necessarily solve the problem of unequal development. It needs to be considered that CDM projects can actually exacerbate problems of uneven development inside developing countries. China’s western regions and rural areas contribute little to its overall emissions, but bear the brunt of environmental degradation. They are also less able to adapt. National policies should require different regions to abide by the same principles as different countries in international negotiations: the more developed should take on more of the cost of emissions reduction and mitigation and help the less developed to improve their ability to cope. Climate change should no longer be a question of countries, but of regions. The participation of all interest groups, including NGOs and communities affected by changes, is needed. Only with such participation will we be able to mobilise all the resources of society and maximise the effects of government action.

These ideas were being taken into consideration as early as 2005, during the first meeting of the Parties to the Kyoto Protocol in Montreal. Since then, there has been some development in the application of the CDM to small-scale projects. The CDM Executive Board passed a motion in June 2007 allowing smaller projects to apply, and in July it made some revisions that mean applicants can register as promoters of emissions reduction projects. Small-scale projects using methane and energy conservation projects in public buildings or transport can now brought into the CDM.

The misunderstanding of the CDM by Chinese companies is raising concerns – and risks. One Chinese expert says: "Many companies engaged in CDM projects are in it purely for the large financial benefits. Very few are genuinely concerned about climate change, energy conservation and the environment. The uncertainty brought about by the post-Kyoto era could easily destroy the enthusiasm of many companies – and with it the entire market." The interests of businesses are affected by climate change; incorporating business incentives into the agenda for tackling climate change fits with the way companies work. Corporate participation is critically important in reducing emissions. It is therefore vital that companies understand and support the CDM. The government and NGOs can help to promote the CDM. As carbon emissions are a public issue, there should be public participation in decisions on how to tackle these questions.

The shortcomings of the CDM highlight a much wider issue: the principle of fairness, which is at the heart of any measures that tackle climate change. The development of biofuels, for instance, is causing increasing food and commodity prices in developing countries. China’s current carbon trading system is focused largely on cities and the agricultural communities worst affected by climate change do not benefit. These are problems worth addressing in China. The government needs to consider not only the issue of equality between nations, but also equality within the nation. This is vital to ensure that responses to climate change do not harm the most vulnerable.

This is an edited version of the Feasibility Study on Chinese Civil Society Responses to Climate Change, a report coordinated by eight non-governmental organisations in China: Friends of Nature, Oxfam, Greenpeace, ActionAid, Global Village, the WWF, Green Earth Volunteers and the Institute of Public and Environmental Affairs. It is the first report of its kind to put forward Chinese civil society's position on climate change and guidance for Chinese citizens to take action on dealing with the issue.