Role of Green Governance in Achieving Sustainable Urbanization in China

• Author: Gailius Draugelis,Jin‐zhao Wang,Marianne Fay,Uwe Deichmann
• DOI: http://doi.org/10.1111/j.1749-124X.2014.12082.x
• Date: 01 September 2014
• Published date: 01 September 2014

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China & World Economy / 19–36, Vol. 22, No. 5, 2014

©2014 Institute of World Economics and Politics, Chinese Academy of Social Sciences

Role of Green Governance in Achieving Sustainable

Urbanization in China

Marianne Fay, Jin-zhao Wang, Gailius Draugelis, Uwe Deichmann*

Abstract

Since economic reforms began in 1978, China’s urban population has increased by half a

billion. Over the next 20 years, cities will likely add another 300 million people through local

population growth, migration and the integration of nearby rural areas. Cities account for

the majority of resource use and pollution so achieving greener growth will depend on

developing and implementing a more sustainable urbanization model. China’s leaders

have responded to these challenges with ambitious goals and comprehensive environmental

laws and regulations. These have so far not significantly reduced the harm from air, water

and soil pollution: in large measure because China’s green governance does not match its

green ambitions. Drawing on the World Bank’s work on green growth and a recent joint

urbanization study by the Development Research Center of China’s State Council and the

World Bank, this paper reviews recent academic research on green governance in urban

China and discusses its main implications in the context of emerging global green growth

concepts.

Key words: environmental institutions, green growth, urbanization

JEL codes: O13, P25, P48

I. Introduction

China’s industrialization has followed a trajectory similar to most of today’s high income

*Marianne Fay, Chief Economist, Climate Change Vice Presidency, World Bank, Washington, DC, USA.

Email: mfay@worldbank.org; Jin-zhao Wang, Division Chief and Senior Research Fellow, Industrial

Economics Research Department, Development Research Center of the State Council of People’s

Republic of China, Beijing, China. Email: wangjz@drc.gov.cn; Gailius Draugelis, Lead Energy Specialist,

China Office, World Bank, Beijing, China. Email: gdraugelis@worldbank.org; Uwe Deichmann

(corresponding author), Senior Urban Specialist, Development Research Group, World Bank, Washington,

DC, USA. Email: udeichmann@worldbank.org. The findings, interpretations and conclusions expressed

in this paper are entirely those of the authors. They do not necessarily represent the views of the

International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or

those of the Executive Directors of the World Bank or the governments they represent. This paper draws

on recent studies on green growth (World Bank, 2012) and sustainable urbanization in China (World Bank

and DRC, 2014), and the authors are grateful to many contributors to those studies.

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©2014 Institute of World Economics and Politics, Chinese Academy of Social Sciences

countries: a rapid change in the structure of the economy from rural agriculture to urban

industrial activities, accompanied by an equally rapid deterioration of the environment.

With a poverty rate of 84 percent in 1981,1 shortly after the beginning of economic reforms,

and the population growing by approximately 14 million people per year through the 1980s

and 1990s, China’s leaders have been focused on economic growth, which has far outpaced

the country’s ability to manage its impacts on the environment. By 2009, the poverty rate

had fallen to 12 percent and China’s population had increased by more than 300 million,

with the expansion occurring almost exclusively in cities. The environmental legacy of this

growth has been a severe degradation of land, air and water resources.

Much of the increase in pollution has originated in cities, whether from industrialization

or caused by demand from increasingly affluent urban residents. City dwellers have also

experienced some of the most severe impacts on health and overall quality of life. Over the

next two decades, China’s cities are expected to add 300 million people. In addition to

addressing the significant existing pollution problems, policy-makers will need to shift to

an urbanization model that avoids severe and costly pollution in the first place. Although

technical know-how and financial resources are constraints, an emerging academic literature

suggests that the main barrier to greener urbanization is that China’s green governance

does not match the stated ambitions of a greener growth path.

This idea of a greener growth path springs from the general recognition that current

growth patterns are not only unsustainable, but also inefficient. As such, just as the wealthier

population is complaining about the perils of air, land and water pollution for the sake of

better and safer living conditions, it has become increasingly clear that this pollution is

imposing severe economic costs. Furthermore, tackling inefficient use of resources should

allow China to grow cleaner without necessarily growing slower. Nowhere is this clearer

than in the urban context, where cleaner often means not just more livable circumstances

but also greater productivity. For example, reduced urban air pollution goes hand in hand

with reduced congestion and absenteeism linked to health problems and, hence, greater

productivity.

This paper will not provide a detailed review of China’s main environmental concerns,

but the following paragraphs briefly discuss the main issues concerning air, water and land

pollution, as well as some estimates of the cost of environmental degradation. Given the

considerable attention that air pollution in China’s largest cities has received, it is difficult

to believe that on some measures the situation has actually improved. In the 15 years

1See World Bank PovcalNet.