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Let investors help with environment protection

China Daily

Last Friday was the 36th World Earth Day and there were lots of celebrations in China. Unlike festival celebrations, the gatherings, ceremonies and speeches on that special day were anything but joyous.

It was the 16th Earth Day to be celebrated in China, which joined the global initiative in 1990. What has happened to this fast developing economy provides telling evidence of how important it is for China to enhance its environmental awareness.

China's gross domestic product (GDP) growth was more than 9 per cent on average in each year of the past two decades, a few times higher than in the developed world. But the country's environment has deteriorated. Air pollution, water contamination, soil erosion and excessive waste discharges have all harmed the public interest.

"We must attach paramount importance to the problems caused by economic growth," said Han Meng, secretary-general of the Centre of China Earth Day under the Chinese Academy of Social Sciences (CASS).

"Protection of the environment is one of the prerequisites for economic and social development," said Han at a seminar on Earth Day held by the centre and CASS's Environment and Development Research Centre last Friday.

Various studies have shown that the environmental cost of economic development could offset part of our hard-won GDP gains, ranging from 3 per cent to up to 40 per cent of the GDP growth.

Facing serious environmental constraints, China must strike a balance between economic development and environmental protection. It has put forward the idea of following a "scientific" development pattern and promoting a "circular" economy.

Good policies are needed to help realize those concepts. Otherwise, they risk being degraded into good-for-nothing slogans.

A way of improving the environment may be to mobilize non-governmental forces to engage in various environmental causes, experts suggest.

The government has shouldered the bulk of investment in the environmental protection field so far, but that might need to change.

Take the country's mountains that have large mineral deposits for example.

The environment in many such mountains has been damaged due to excessive exploration. But if investment can be pooled to return those areas to nature, not only the environment will benefit, but also investors would profit handsomely.

China has seen 1.57 million hectares of its land damaged by mineral exploration. Only less than 10 per cent has been restored. Such damage can cause grave ecological disasters.

"Recovered land could be re-ploughed, planted with trees, used as parks, or for business development, which would bring impressive profits for investors," said Hu Kui, from the Ministry of Land and Resources, at the seminar.

There are such examples. "In East China's Zhejiang Province, a company invested 2.4 million yuan (US$289,200) to restore a hill damaged by mineral exploration. Now the beautified hill is valued by experts at more than 200 million yuan (US$24.1 million)," said Hu.

But it requires a mentality change for such a new mode of environmental protection to take hold. Traditionally, resources such as land and hills are owned by the State and private investors have been barred from owning them.

The success of such a new way of operating, however, requires more than a mentality change.

Such investment often does not bring instant profits since it takes many years for the environment to substantially improve.

Without legal and policy guarantees, the interests of investors at the moment cannot be ensured for such a long time because local governments could, at any time, change their policies.

"Policies must be devised to clarify property rights in such deals," Hu said.

Legislation is more important in a country where some local governments are not willing to keep their word.

Lian Shuping, a private investor who put up about 1 million yuan (US$120,400) to plant thorn bushes on a barren hill in suburban Beijing, has encountered such a problem. After she signed a contract with the local township government so she could develop the barren hill and paid rent, she found 4,000 trees on the hill had been chopped down and sold, which went against the contract.

"No one has shown me the permit from the forestry management department to fell the trees," Lian said.

Such a situation offers much food for thought.

If we cannot make explicit legislation to protect such environment-friendly investment, the enthusiasm of investors will be dampened.

Then what is sacrificed is more than the investors' interests.

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