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Our Insights 28 Jul 2014

On Our Radar: Has China’s Environment Hit an Inflection Point?

By Mohammed Al-Shawaf

Mask wearing has become a common sight in downtown Beijing. Taken April 2014 © Chris Wash.

An abbreviated version of this piece was originally published in the summer issue of Radar Magazine – Issue 04: Better, Connected.

The Chinese government’s declarations of environmental concerns as first-order priorities have a spotty history in heralding imminent change, due largely to uneven enforcement on a state and local level. So one could be forgiven if the flurry of actions announced in the first half of 2014, which include statements by a government advisor that the country will set an absolute cap on carbon dioxide emissions for the first time and adopt a revised Environmental Protection Law (the first in 25 years) imposing harsher financial and criminal punishments to polluters, is viewed with scepticism. But stakeholder activity to hold the government accountable for their environmental stewardship, whether by protest or product offering, has risen too. We have seen more signs of environmentally-sparked protests, like one fought over the construction of an industrial plant in Guangdong province or another that incited a riot in Hangzhou over plans to build Asia’s largest waste incinerator project, take place this year.

Meanwhile, Chinese-based and multinational companies are betting on the growth of the anti-pollution market, regardless of what the government does or does not do. Among them, Unilever is buying a majority stake in a Chinese water purification company, while Alibaba is selling inexpensive water testing kits to help empower citizens. In a foreboding sign of things to come, Panasonic and Coca-Cola have announced that they will be paying ‘hazard pay’ to China-based employees to account for the country’s air pollution.

What to look for: Contrary to many reports, there has been no official announcement by China on an absolute emissions cap, nor what the cap would be if instituted. While this will continue to be the most significant international proxy for an inflection point (especially in advance of the critical Paris Climate Conference in 2015) we will be tracking further signals that Chinese and foreign companies develop and invest in anti-pollution products/services and how this activity, and the heightened awareness that comes with, helps further catalyse bottom-up environmental activism.

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