Center for Environmental and Development Research of Chinese Academy of Social Sciences

Introduction

Founded in 1995, the Center for Environment & Development (CED) is one of the earliest important responses of Chinese Academy of Social Sciences (CASS) to serious environmental problems at both national and international level. CED was founded in a period in which almost all-environmental researches in China were carried out in the natural sciences. From the outset, CED has insisted on changing the unbalance and filing the gap between social and natural disciplines in environmental research which has being caused so many “Policy failures” in China’s environment and development. The CED seeks to continue its pioneering role by carrying out interdisciplinary research, which anticipates the social issues concerning sustainable development. CED is a cross-institute organization but mainly based on two institutes: The Institute of Quantitative and Technical Economics and the Institute of World Economics and Politics. Researchers are from a wide variety of disciplinary backgrounds, including economics, ecology, environmental engineering, agriculture, energy, international politics and international trade, mathematics etc. Most of economists of CED have engineering degree.Researchers of CED are also from other institutes within CASS, such as institute of law, sociology, philosophy, population ….

For 3 years, CED has carried out a considerable amount of externally financed programs for government, (both local and national) international institutions and companies (both private and state-owned, domestic and foreign ones), particularly in the field of environmental economics and environmental industry.

During the period CED organized 4 high-quality workshops in which most papers represented the frontiers of theoretical research on “environmental the valuation”, “strategy of China’s sustainable development”, “environmental industry” and “environment ethics”.

Main Researches works during 1995-1998.6

1. Environmental Valuation

(1) In 1995, CED finished its first estimation of economic loss caused by environmental degradation in China (90’s). It’s a program supported by National Environmental Protection Agency (NEPA). It included three parts:

1. Economic loss caused by environmental pollution;
2. Economic loss caused by ecological disturbances;
3. Economic loss caused by destroyed ecological environment.

(2) In 1997, CED submitted it’s second estimate of national economic loss (only by pollution) to World Bank as background papers for its report “ Clear Water, Blue Skies – China’s environment in the new century” (1997.9), and discussed technical issues on the first and second drafts of this report with related experts of World Bank.

(3) In April, 1998, CED finished it’s third estimate of China’s economic loss by environmental degradation during 1990’s, a program of UN University (Tokyo).

(4) In the field of “estimate of economic loss”, CED is known as the most “academical group”, i.e. it has devoted much energy to methodology of valuation, particularly the theoretical basis and technical issues in transferring international experiences to developing countries. To correct common confusions in environmental valuation, a lot of theoretical and empirical work has been done by economists of CED to distinct the concepts natural resources, from man-made assets. This character is showed in theoretical papers by members of CED including critical comment on reports of World Bank. It is also showed in CED’s research in design of sustainable development index and estimate of green saving etc.

(5) Being an independent research institute, CED has a better understanding of combining, different disciplines, which belong to separated sectors. CED has developed very close cooperative connection with NEPA, ministries of Agriculture, Health and etc.

2. Environmental industry

(1) In 1996, Based on a national survey of environmental industry, CED completed a systematic analysis on the new industry (only 10-15 billion CNY sale value in the beginning of 1990’s) which belongs to a UN program complemented by China’s Association of Environmental Industry.

(2) Cooperations with division of environmental industry (NEPA) and with Stafe Economic and Trade commission have being carried on to design national policy to promote development of environmental industry.

(3) Several case studies on some of China’s environmental technologies, such as a. technical improving for boiler of power station?b. perspective of desurfur technologies?c.status of using coal powder.

3. Theoretical foundation of China’s sustainable Development

CED has published its researches on theory of sustainable development. Some of findings are:

(1) It is impossible for any one nation into “sustainable development”. Since we are still in the period in which “taking” (or internalizing) global’s natural resources (environment) is more profitable than “Saving” it, it is hazed to expect a real cooperative game among different nations and people until further changes of some crucial variables. The “crucial variables” includes not only the awareness of potential environmental crises in our planet, the new “no regret green technology”, but the narrowing of the economic gap between main developed and developing countries.

(2) No one can understand the essisencial issues of China’s sustainable development without knowing a series of dilemmas there: e.g. she has to entree a marketed stage but has no room now for her people to do the same things like western countries did hundred years ago.

(3) For China, “sustainable development” is not a “political fashion”, but a choice related to her economic and social sustainability.

(4) A new environment-friendly policy is not enough for China’s sustainable development. It needs a new political-economic-social system. The Principe of sustainable development should be taken into account in current China’s reform.

4. Study of policies for Environment and development

5. Environmental Ethics

Research strategies for 1998.7-2002

As an independent, interdisciplinary research organization, CED’s main objective was summarized as contributing to a new idea of development, i.e. sustainable development. (See” CED’s research strategy (Jan. 1996)”), for which four research fields was defined. The four fields of research were:

1. Awareness of situation of China’s development in next century. Is there a potential environmental crisis?
2. “Feasible area” of new developing strategy in China.
3. The global implication of China’s strategy of environment and development. National competitiveness and global interest.
4. The political economics of sustainable development.

In June of 1998, CED redefined its field of research. The four fields of research will be carried on as before in CED’s next programmatic period (1998-2002) with two new requirements: the first requirement for research is to focus on crucial problems, i.e. instead of only telling people what policies of sustainable development ought to be, we should analyze the causes why the things that ought to be could not come to true? The second requirement is to do more quantitative studies as well as more careful analysis of the data came from China’s special condition. CED considers current common practice “Chinese data plus western model", as a preliminary stage in history of sustainable development, real cooperative research is needed.

CED has established new research program for the period 1998-2002 in the field of research respectively:

A. Awareness of situation of China's development in next century.

1. Valuation of real economic growth.
   In spite of difficulties both in information and methodology, vaulting environment in China has entered into its second stage: trying to influent policy-decision. Based on the estimation of economic loss by environmental degradation, CED is to analyze economic performance both in macro-and micro level. While “sustainable development Indies”, or “Green GDP” may need much more time to become operative, there should be some “intermediate product” in the direction which are used to show up the environmental cost ignored by GDP.
2. Methodology of Contingent Valuation in developing country. CED does not stop in commenting “transfer of international data” in application of CV; it is now carrying on a survey of WTP for environment issues in a Chinese large city. The question such as “what is the value of life in different countries with different income level” should be answered.
3. Combining economists with agricultural experts, environmentalists, and medical scientists to set up an interdisciplinary research which seeks to a “programmed valuation” to generalize environmental valuation in China. This is great of demand in China now.

B. Feasibility of policies of sustainable development

1. Being an independent academic research institute, CED will choose “inter -sector issues” to study China’s policies of environment & development. The reason is that the policies from different sectors often offset each other. There have already been so many researches and designs of policies from one sector, (such a policy belonging to an sector of environmental protection or a policy belonging to an energy development sector, etc.) but few policies were effective as designer had expected. “Interest neutral” (among different governmental sectors) is a principle of CED in research of policies.
2. For each policy researched by CED, three feasiablities should be considered: the first is technical feasiabity, which is in general well studies in China; the second is economical feasibility, which is not well-paid attention to in China. The third is “political” feasibility (some interest groups who make new policy impossible to be carried out) on which few studies have been done by now.
   Failing to do CBA (cost-benefit analysis) in modeling cost curve (e.g. cost of reeducating emission of SO2), and failing to analyze interests of different groups of people, are the two reasons why many strategies of “sustainable development” have been so weak.
3. In this field, CED focus on of crucial issues of sustainable development in China:
   • Water resources in Northern China
   • Energy strategy and air pollution
   • Environmental industry, green production and foreign investment.

In these “old issues”, some new findings are expected with the help of new approach in which environmental valuation, pricing system and analysis of institutional economics are essential parts.

C. National interests Vs “our common future”

Though a CGE model of CED was used in spring of 1998 to analyze global warming issue, i.e. the cost of deduction of emission of CO2, a theoretical framework for the whole complex issues has not been well sketched. An independent interdisciplinary research of this are related to

1. Various cost concepts (costs of abatement or of inaction)
2. Modeling technical change (including technical transfer from western countries).
3. Cooperative and noncooperative games amony countries.
4. Decision criterion that should be adopted: Pareto? Kaldor? Or others?
   Ethical and philosophical foundation which human must establish to deal with low probability but catastrophic events. CED notices that before qualified researches of these issues, it is indiscreet to answer controversial questions such as: What is the “optional” CO2 emissions? Can China afford “sustainable industrialization”?… CED will also pay attention to the relationship between the evolution of China’s industrialization and the economic globalization.

D. Political economics of sustainable development

1. Case study:
   The relationship between MBIs (market-based instruments) and uniform regulation to control heterogeneous environmental degradation in China.
2. Case study and policy research: Reform of ownership of natural resources and sustainable development
   e. g: usage of water; grassland, trees,…
3. Political economics of water regulation in China. Issues of public choice, interest groups in China.
4. Theoretical research
   Market-oriented reform and sustainable development in China —an opportunity of institutional innovation? Or a matter of “follow up the leader”?
5. Political economics of natural disasters (such as drought and flood).