EDF's Beijing office helps China merge its goals

China's economy has been booming for years as millions of peasants stream into cities seeking opportunity. But China's leaders quickly learned that lifting so many from poverty at such a rapid pace can wreak havoc on people's health and the environment.

That's why, more than a decade ago, China called on EDF's chief economist, Dr. Daniel Dudek, to help design a national approach to reduce pollution. Dr. Dudek, the innovator of the cap-and-trade approach that significantly reduced acid rain in the United States, now heads our Beijing office and a staff of ten.

Having built a strong, well-respected presence for EDF in China, he was appointed to serve on China's Council for International Cooperation on Environment and Development (CCICED) – the only advisory body to the State Council, China's supreme decision-making body. By applying market-based solutions, our Beijing office has helped China build long-lasting solutions to problems ranging from poor urban air quality to rural poverty.

EDF's team is China is now helping tackle carbon dioxide pollution, the main cause of global warming.

Tackling poverty as well as pollution

China is not alone in wanting its economy to succeed: China's miracle has been a major contributor to global growth and will likely be key to a global economic recovery.

But the miracle has come with steep environmental costs: air pollution, water pollution – and a growing share of the world's global warming pollution. According to some assessments, China surpassed the United States in 2007 as the world's largest greenhouse gas polluter.

China's leaders are eager to deal with the problem of pollution. But they cannot ignore the extreme poverty of the 150 million Chinese still living on less than $1 a day or the legitimate aspiration to raise the living standards of the 700 million Chinese living in rural areas. Curbing economic growth is not an option; China must find ways to curb pollution and while continuing to spur economic growth.

Innovation and model projects show the way

Using the partnership model that EDF brings to all overseas work, Dr. Dudek and our staff in China have come up with innovative approaches to solving environmental problems based on realities on the ground. One project at a time, EDF has demonstrated how applying economic rules to environmental goods can help alleviate poverty and promote economic growth.

The main elements of our approach are to:

• Address environmental through the power of economic incentives. Our Beijing office is helping China develop an environmental registry and an emissions trading system supported by major stakeholders, including the government, industries, leading research institutions and pilot trading platforms. Once in place, this will be the first infrastructure to support environmental markets in China.


• Strengthen environmental enforcement. China has many perfectly reasonable environmental laws and regulations that are simply ineffective because penalties for noncompliance are too low. That means breaking the rules can be more profitable than following them.

EDF's Beijing office developed recommendations for reforming China's environmental penalties. Those recommendations were embraced by Premier Wen Jiabao and enacted into law by the National People’s Congress in the recent reform of water pollution laws. EDF is the sole nonprofit group advising the government on bringing similar changes to air pollution laws.

• Build public support for effective environmental management. We are helping educate local managers to understand and create solutions to environmental problems. We have established an institute with Tsinghua University to train business and government officials in market-based environmentalism.


• Set up demonstration projects that cut pollution and alleviate rural poverty. In rural Xinjiang and Sichuan provinces, EDF has piloted projects that benefit poor farmers who adopt friendlier environmental practices, such as installing agricultural waste biodigesters to keep methane out of the atmosphere or managing nitrogen fertilizer more efficiently to reduce nitrogen oxide emissions.


• Export Beijing's successful air quality campaign to more cities. Well before the 2008 Olympics focused global attention on Beijing's air pollution problems, EDF developed a suite of incentive programs to help Beijing employers encourage workers to cut air pollution by walking, biking, carpooling or taking public transportation to work. During the "test drive" phase in 2006, air pollution plummeted 30 percent as more than a million cars stayed off Beijing’s roads.