Protecting the Yellow River Basin in the PRC

Water resources throughout the PRC are affected by the management of the country’s river basins.

With the right policies, the Yellow River can help the PRC achieve its goals for ecological sustainability and economic growth.

As the second largest river system in the PRC, the Yellow River transports more than 1.5 billion tons of sediment per year from its headwaters on the Tibetan Plateau to its estuaries on the Yellow Sea. The dynamics between water, land, soil and climate make it a unique, ecologically diverse, and fragile basin.

One of the most pressing environmental and socio-economic challenges surrounding the river is water scarcity. Today, the basin accounts for only 2% of the country’s total water but 26.5% of the national gross domestic product (GDP). Feeding a population of 420 million, it is vital for socio-economic development. People in the river basin depend directly on these water resources as a basis for their livelihoods, including for food production, hydropower, industry, and domestic supply.

In recent years, the river’s flow has greatly diminished, affecting the lives of millions. Land use changes have significantly contributed to ecological deterioration and ecosystem alteration. It is estimated that human activities, such as destruction of natural vegetation, have augmented natural soil erosion by about 40% in the basin.

Water-related disasters are another major issue in the basin. The July 2021 floods in Henan province – which sits in the middle course of the Yellow River – were triggered by a record-breaking rainfall over 24 hours, almost the equivalent of the annual average. Temperature in the basin increased faster than the global average. Climate models indicated that extreme events such as droughts and severe floods could become more frequent in certain areas of this region, with the probability of increasing in the future. Exacerbated by climate change, extreme weather events may threaten agriculture and animal husbandry, putting at risk both rural and urban livelihoods.

The lack of basin-wide planning is a key barrier to protecting the river’s environment. Addressing the challenges in the Yellow River basin requires a planning and management approach that spans the whole ecosystem. The basin should be treated as an ecological corridor: a clearly defined geographical space that is managed over the long-term to maintain or restore the ecosystem.

As part of this, nature-related aspects need to be an integral component of financial planning and fiscal policy reforms. Such investments must address nature’s complexity and maintain and restore biodiversity.

The Yellow River basin is a natural treasure to be preserved, a home to millions of people, and the foundation for economic progress.

River basins, such as the Yellow River, can help achieve the country’s targets for ecological sustainability and economic growth. Healthy ecological corridors improve biodiversity while enhancing food security, climate resilience, and disease resistance. There are four policy actions that are critical to achieving this.

First, ensuring that nature-based solutions (such as using constructed wetlands for wastewater treatment or ecological embankments to mitigate flood risks) are built into policies, planning and financial mechanisms. These measures can improve natural capital protection, restore fragile ecosystems, and foster sustainable agriculture, simultaneously building resilient and equitable rural economies for the most vulnerable communities.

Second, applying the gross ecosystem product (GEP), an accounting mechanism developed in the People’s Republic of China for valuing and pricing ecosystem goods and services, can improve ecological and spatial planning and inform decision-making.

Third, using governance and financing as incentive mechanisms, including eco-compensation and water funds, can expand natural capital investments by generating ecological benefits and economies of scale.

Fourth, integrating environment, social, and governance criteria into lending and investment decisions can increase private sector participation and private capital injections into projects to protect natural resources. Based on these criteria, investors can observe and evaluate the performance of enterprises based not only on their financial performance but also on their contribution in promoting sustainable development and fulfilling social responsibility.

The Yellow River basin is a natural treasure to be preserved, a home to millions of people, and the foundation for economic progress. Conceived as a single watershed, it can offer ecosystem services to people and nature and generate multiple benefits. Even though physical boundaries and human engineering have split the river into an upper, middle and a lower course, it is important to protect the entire basin as a single ecological unit from source to sea. Effective strategies for adaptation to climate change are essential for the sustainable development of water resources in the Yellow River.

Author
Silvia Cardascia

Silvia Cardascia

Water Resources Specialist, East Asia Department, ADB

This blog is reproduced from Asian Development Blog.

Paving the Way for Urban Mobility Transformation in Xiangtan

Scaling Natural Capital Investments in the Yellow River Ecological Corridor

How ADB Plans to Help the PRC Tackle Flood Risks

RKSI attended an inception TA workshop recently to see how ADB plans to help the PRC mitigate water disaster threats.

Asia’s Eating Habits are Changing and the Environmental Impact Could be Huge

These charts illustrate the environmental impact of agriculture in Asia and the need to move toward sustainable and healthy diets that are also environmentally friendly and affordable.

The critical role of agriculture to Asia and the Pacific’s development can hardly be overstated. In the 1960s, food supply was a severe problem with most economies in the region struggling to feed their growing population. Many economies depended on food aid, while shortages and speculation prompted food crises in a few others.

The adoption of green revolution technologies in the 1960s increased agriculture productivity and not only allowed the region to meet increasing food demand, but also release labor to contribute towards vibrant manufacturing and services sectors.

In 2018, daily calorie intake per capita in the region, which is now home to more than half of the world’s population, had increased from 1245 kilo calories (kcal) in 1961 to 1914 kcal. Despite this progress, different forms of undernourishment such as stunting and wasting of children persists, even as obesity is rising in many parts of the region.

Today agriculture in the region faces a different kind of food supply challenge. Higher incomes and increasingly urban lifestyles have changed the needs and preferences of consumers. Instead of a diet heavy on traditional staples such as rice and wheat, consumers today prefer a more diverse diet. Per capita consumption of rice has leveled off; while that of fruit, vegetables, eggs, dairy products, as well as meat and seafood is increasing.

Although the consumption of cereals in developing countries in Asia increased between 1961 and 2018, its overall share in the diet decreased. The share for meat and animal products increased from 1% to 4%. This represents a more than six-fold increase in protein intake from animal meat from 1.5 grams to 10 grams per person per day. Still, this is well below the 34.6 grams average in advanced economies outside of the region.

In the PRC daily calorie intake more than doubled between 1961 to 2018, reaching 3205 kcal in 2018. Cereals only make up 46% of the diet, while the share of meat and animal products increased from a mere 3% in 1961 to 21% in 2018. This represents a 20-fold increase in per capita intake from 1.1 grams in 1961 to 19.7 grams in 2018.

To meet these changing food preferences, agriculture in the region will have to reorient from a traditional focus on the production of food staples to high-value crops such as fruit and vegetables, as well as livestock and aquaculture. This will mean a more resource-intensive production as well as rising greenhouse gases. As figure 3 shows, animal-based products have a much larger resource footprint, especially with regard to greenhouse gas emissions and water use.

To reduce the environmental impact of agriculture, it is important to move toward sustainable and healthy diets that are also socially acceptable and economically accessible for all. Some ways to achieve this are to promote mostly plant-based diets, reduce red meat consumption, promote fish obtained from sustainable stocks, and reduce food loss and waste throughout the supply chain.

This blog post is based on data from the recently published Asian Development Outlook Update 2021 Theme ChapterTransforming Agriculture in Asia.

Author
Manisha Pradhananga

Manisha Pradhananga

Economist, Economic Research and Regional Cooperation Department, ADB

Daryll Naval

Daryll Naval

Research Associate, Economic Research and Regional Cooperation Department, ADB

This blog is reproduced from Asian Development Blog.

How to Meet Climate Targets with Carbon Capture and Storage

The Asia and Pacific region is responsible for about half of global carbon emissions. Photo credit: ADB.

With the PRC and Indonesia as centers of excellence, a regional program demonstrates how the technology can reduce carbon intensity.

Overview

The PRC and Indonesia produce copious amounts of carbon dioxide (CO2), mainly because their power generation systems are hugely dependent on fossil fuels. The two countries’ carbon emissions are among the highest in the world, and both are keen on becoming carbon neutral as part of their commitments to the Paris Agreement.

Since the turn of the millennium, the PRC and Indonesia have been exploring ways to decarbonize their economies. But much still needs to be done in terms of coordinating oversight for research and development and scaling up deployment of CO2 capture and storage (CCS) technologies.

In 2019, ADB completed a technical assistance to support the PRC and Indonesia in improving their capacity for CCS research and development. Financed by the ADB-administered Carbon Capture and Storage Fund under the Clean Energy Financing Partnership Facility, the CCS program’s objective is to create a stronger strategic architecture and more coordinated research and development for accelerating and scaling up CCS development and deployment, as well as dissemination of best practices on CCS in Asia. The project under review initially concentrated on PRC and Indonesia and later on expanded its activities to Bangladesh, India, Mongolia, and Viet Nam.

Project information

48282-001: Promoting Carbon Capture and Storage in the People’s Republic of China and Indonesia

Project snapshot

      • Approval date: August 2014
      • Closing date: August 2019
      • Total project cost: $3.3 million. Total financing from the Carbon Capture and Storage Fund under ADB’s Clean Energy Financing Partnership Facility
      • Executing agency: Asian Development Bank
      • Financing: 
        • Global Carbon Capture
        • Storage Institute, United Kingdom

Challenges

The PRC is among the world’s largest consumers of coal, accounting for over half of global consumption. Its power generation sector uses more than half of that coal to provide about 80% of the country’s electricity and emits over 4 gigatons of CO2 (GtCO2) per year, 95% from coal-fired power generation. Continued economic growth is projected to drive energy consumption surges for the next several decades. With primary energy coming from coal and the expectation that this reliance on coal will persist for decades to come, PRC will likely continue as one of the world’s largest CO2 emitters for some time. Therefore, wide deployment of CCS in PRC over the long term will be necessary to significantly reduce national emissions. The PRC has announced it would become carbon neutral by 2060 at the United Nations General Assembly in September 2020.

Similarly, Indonesia has a heavily fossil fuels-based economy, consuming coal, oil, and gas produced domestically plus imported petroleum. As the world’s largest coal exporter and a substantial liquefied natural gas exporter, the country is confronted by increasing CO2 emissions from growing domestic consumption of indigenous coal and fossil fuels. It has significant requirements for the deployment of large-scale, low-carbon technology in the long term. Moreover, the government has been increasingly vocal about climate change and its impacts on the developing world.

Both the PRC and Indonesia have been considering the creation of legal and regulatory frameworks for advancing CCS.

Context

The Asia and Pacific region is responsible for about half of global CO2 emissions. Primary energy demand in the region is expected to increase by about 24% by 2030. Despite the rapid increase in renewable energy supply, trends suggest that this increase in demand will still translate into increased consumption of fossil fuels and CO2 emissions in the region. The PRC and India accounted for 27% and 7% of the global CO2 emissions in 2017.

While experiencing rapid growth and development, Asia and Pacific remains one of the most vulnerable regions to climate change. It faces the risk of losing its development gains to climate change impacts if mitigation and adaptation actions are not put in place.

CCS is identified as one of the technologies and practices that can help meet climate targets. The International Energy Agency’s Carbon Capture and Storage Roadmap highlighted the significant role that CCS will need to play in achieving an atmospheric CO2 concentration stabilization of 450 ppm (parts per million) by 2050. CCS will provide about 14% of the total CO2 emissions reductions out to 2050. Achieving this contribution of emissions reductions will require an ambitious CCS growth-path, with 100 projects needed globally by 2020 and over 3,000 by 2050. In both 2020 and 2050, major developing countries, including Indonesia and the PRC, will need to contribute to CCS deployment.

Solutions

ADB’s technical assistance, approved in 2014, initiated a support program for CCS research and development (R&D) with the institutes in PRC and Indonesia serving as centers of excellence.

The CCS program was administered by ADB to assist in the establishment of the research centers in the PRC and in Indonesia. They are expected to act as local knowledge hubs in this emerging technology. The CCS centers are to implement R&D programs on CCS technologies in the region and organize activities to develop the capacity to enable widespread deployment in both countries and in the region.

Other program activities included conferences, workshops, dialogues, study visits, and other initiatives to foster regional cooperation, establish new partnerships with other institutes in and outside the region, and strengthen leadership in CCS-related capacity development.

Results

The CSS program established three research centers to improve R&D activity on CCS in Guangdong and Shanghai in the PRC and Bandung as well as Jakarta in Indonesia.

Under the CCS program, the activities of these research centers help the host countries adopt CCS technology, create necessary regulations, and obtain financial access for developing projects. They are also expected to foster regional cooperation on these aspects and build capacity in the PRC and Indonesia.

The program also started exploring CCS as a tool to reduce greenhouse gas emission for hard-to-decarbonize industries in the steel, cement, and petrochemical sectors. It produced a background study to help prepare industries for decarbonization by utilizing and not just storing captured carbon. The paper also investigates the financing requirements and mechanisms, as well as policy drivers and recommendations, to advance readiness to shift to a low-carbon era.

The CCS program bridged the gap between policy, technology, and finance mechanisms, and supported the development of demonstration of CCS projects in Indonesia. It expanded activities beyond the PRC and Indonesia and explored possibilities of implementing carbon capture, utilization, and storage in Bangladesh, India, Mongolia, and Viet Nam, creating an opportunity for further engaging these countries.

Lessons

The CSS program offers the following lessons:

Local knowledge and capacity building are important.

Support to research centers should include capacity building to ensure that they are well-equipped to successfully carry out studies and demonstration projects that will pave the way for the deployment of large-scale technologies. More experts are needed to enhance local capacities in developing and implementing demonstration projects, especially in countries that have indicated continued high dependence on fossil fuels to sustain their economic growth.

Ensure government and other stakeholders’ participation. 

Government involvement was found to be critical for the sustainable operation of the research centers, especially in the implementation of large-scale demonstration projects. Future programs supporting these centers should involve government and important stakeholders in their operation right from the start. Coordination with national and local governments, in addition to financial, technical, and administrative requirements, is critical in demonstrating large-scale projects.

Partnerships can be beneficial. 

Partnership with organizations from various disciplines have enhanced information and knowledge sharing, which is important in advancing R&D and deployment of technologies.

Author
Kee-Yung Nam

Kee-Yung Nam

Principal Energy Economist, Sustainable Development and Climate Change Department, ADB

This blog is reproduced from Development Asia.

A Holistic Ecosystem-Based Approach to Ecological Protection and Green Development: The Case of Huangshan in the PRC

Greening Development in the PRC: A Dynamic Partnership with ADB

These Policies Will Put the PRC on the Path to a Green Economic Recovery

The pandemic is an opportunity for the PRC to develop “greener” policies.

To rebuild greener and address climate challenges, the PRC should “green” its investments, financing tools and fiscal spending while at the same time developing a robust monitoring and evaluation framework.

Thanks to strict virus containment measures and an array of supportive monetary and fiscal policies, the PRC rebounded quickly from the shock of the pandemic. The country’s fiscal and monetary stimulus policies to mitigate the adverse impact of COVID-19 on the economy have amounted to $2.3 trillion, or 16.1% of gross domestic product (GDP) by the end of August 2021. The economy is now forecast to grow 8.1% in 2021 and 5.5% in 2022.

The government’s policy priorities must move from rescue to the recovery mode, from short-term stabilization measures to long-term economic recovery. In addition to rescue measures, the government announced recovery measures amounting to around $407 billion. However, the “green” share of the recovery spending – that which is likely to reduce greenhouse gas emissions, reduce air pollution and/or strengthen natural capital – only reached 12%, which was comparatively low compared to those of countries such as Canada (75%), Germany (47%), and France (38%).

The PRC already has ambitious long-term targets on environment and climate, such as peaking carbon emissions before 2030 and reaching carbon neutrality before 2060. Ensuring these targets are met requires policies that address climate challenges to ensure a green recovery from the COVID-19 shock.

At the same time, Organisation for Economic Co-operation and Development research shows that well-designed green stimulus measures can bring critical economic and environmental benefits. Also, thanks to falling technology costs, which enable more choices of green investments, green measures would support the economy and employment more strongly than in recovery from the 2008 Global Financial Crisis.

The PRC already has ambitious long-term targets on environment and climate.

Rebuilding greener requires the following policy actions:

Align public investment with long-term environmental goals. 

To boost public infrastructure development and to support economic recovery, the quota for new local government special bonds reached CNY3.75 trillion in 2020 and CNY3.65 trillion in 2021. This significant financial support to public infrastructure highlights the opportunity to allocate public resources toward sectors supporting the environment, such as renewable energy, biodiversity, and water management.

Leverage green finance. 

The PRC would need annual investment in energy transformation equivalent to 2%–2.5% of GDP from 2020 to 2050 to achieve a long-term low carbon transition pathway (2-degree transition pathway), according to a report by Tsinghua University’s Institute of Climate Change and Sustainable Development.

By the end of 2020, the sizes of outstanding green loans and green bonds were the world’s largest and second largest, respectively. Despite this rapid expansion of the green finance sector, a large financing gap remains. Thus, more capital needs to be mobilized to fund green infrastructure, which requires more private participation and broader funding base in addition to a well-designed and implemented public policy such as tax incentives, grants, legislation, and regulation.

Budget green.

The environmental impacts of the government’s budget choices are important to consider when designing policies. While public debt needs to be consolidated, public expenditure on social protection and green projects should be prioritized. The government can increase fiscal revenue by taxing emissions and polluting activities. International experience shows that green budgeting commonly involves tagging budget measures according to their climate and environment impacts. For example, 30% of the budget in France was allocated to green recovery measures in September 2020 based on this framework.

Monitor and evaluate the policies.

The government needs to identify and monitor the environmental impacts of its policies to ensure their alignment with climate and sustainability goals. Currently, such assessment is not fully in place yet, and there are only few databases to track and assess the environmental impact of government policies. Defining clear criteria and indicators for different policy areas and disclosing related results would be a good starting point.


The PRC has a historic opportunity to craft a “green” recovery from the pandemic if the right policies are put into place.

Author
Wen Qi

Wen Qi

Associate Economics Officer, PRC Resident Mission, ADB

This blog is reproduced from Asian Development Blog.

Unveiling the Sandstorms in the PRC

Early this year, the worst sandstorm in a decade hit Beijing, the PRC’s capital. How did this happen? What can ADB do to help tackle hazardous sandstorms? RKSI spoke to an expert who “loves desert lands”.

 

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