1 - 7 ESTABLISHMENT OF A TRANSFER CENTRE FOR ENVIRONMENTALLY SOUND TECHNOLOGY

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1. Project Summary and Relationship to China's Agenda 21

This project aims to establish a transfer center for environmentally sound technology, to conduct training programs, to set up an information network, and to construct demonstration projects, in order to improve the capability of China and other Asian Pacific countries in the exchange, selection, assessment, introduction, development and application of environmentally sound technologies.

This project is based on programme area 12C of China's Agenda 21, and is related to programme areas 6D, 6E, 12B and 13C.

2. Background

Industry is the major environmental polluter contributing about 70% of the pollution in China. In 1995, the countryís total discharge of industrial wastewater was 22.25 billion tons, and industrial solid waste was 22.27 million tons. Air pollutant emissions also increased. Flue dust emissions rose to 8.45 million tons, powder dust rose to 6.30 million tons, and SO2 emissions increased to 13.96 million tons. As a result, 1,963 industrial pollution accidents occurred in 1995. In particular, the major polluting industries such as the chemical, pulp and paper, food processing, and building material industries accounted for over 60% of the total industrial energy consumption and pollution generation.

With China's economic development in the last decade, small- and medium-sized enterprises (SMEs) have become a vital new force of industrial development. However, most of these enterprises are confronted with problems of low efficiency in utilisation of raw materials, excessive waste of natural resources, and heavy industrial pollution which causes great damage to the environment and human health. These problems arise from their use of obsolete technologies and facilities, and unskilled work forces, preventing China from achieving the goal of sustainable industrial development. They are exacerbated by insufficient information availability and accessibility, and limited financial resources.

Today, this situation has drawn great attention in China. The Chinese government has taken measures to constraint the development of energy and pollution-intensive industries and products. A number of SMEs with low efficiency and serious pollution have been closed or merged or their productions have been suspended or transformed. Furthermore, the government has established special funds for environmental protection and technological innovation, in order to support key national pollution control projects and cleaner production projects.

However, these measures only alleviate the problem; they do not eradicate environmental pollution. Instead, measures must be taken to guide and encourage industries, especially SMEs to adopt technological innovation and process improvement by introducing and developing environmentally sound technologies (ESTs), and adopting cleaner production. This is the only way to address the industrial pollution problem and to achieve sustainable industrial development. During the transition to sustainable industrial development, there are huge market demands for ESTs with less or zero pollution. However, numerous difficulties exist in EST introduction, development and application. They are:

(1) Poor availability and accessibility of information on EST for industrial sectors and enterprises. There is currently no coordinated information system on ESTs in China. As a result, there is no reliable way of linking information services and service providers with particular industries.

(2) Lack of capacity in identification, assessment, introduction and application of EST. For example, obsolete technologies are transferred to China through foreign capital investments without thorough assessment.

(3) Inadequate financial resources and experiences in EST transfer.

(4) Imperfect incentive mechanism for EST research, development and application. Furthermore, there are almost no effective economic policies or laws to prevent transfer of energy and pollution-intensive technologies to China.

On the basis of the existing conditions of the Administrative Centre for China's Agenda 21 (ACCA21), particularly the China Sustainable Development Network (CSDN) being installed in ACCA21, the State Science and Technology Commission (SSTC) plans to establish a Transfer Centre for Environmentally Sound Technology (TCEST) under the technical assistance of the Asian Development Bank (ADB). The objective of TCEST is to facilitate EST transfer, diffusion and application. Moreover, because most SMEs in China take the development steps similar to those in other Asian and Pacific countries, the EST information network to be established in this project will also enhance information exchange and experience sharing throughout the greater region which will advance sustainable industrial development not only in China but in other Asian and Pacific developing countries.

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3. Objectives

3.1 Long-term Objective

To enhance the capacity of China and other Asian-Pacific developing countries in the exchange and acquisition of EST information and in the assessment, introduction, development and application of appropriate ESTs, in order to foster EST transfer, to reduce industrial pollution, and to realise sustainable industrial development.

3.2 Immediate Objectives

• To establish a Transfer Centre for Environmentally Sound Technology (TCEST), to strengthen the capacity of industry in EST introduction, development and application, and improve related management skills;
• To select key pollution-intensive industries and representative enterprises to establish demonstration projects for EST transfer so as to provide experiences for other industries and enterprises.

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4. Outputs and Activities

4.1 Establishment of EST databases and an information network to enhance the availability and accessibility of information on ESTs

• To conduct a survey on EST introduction, development and application in China's key industrial sectors, collect data and materials related to the EST transfer, development and application in industrialised countries and other Asian-Pacific countries, set up a library based on the outcomes of analysing and summarising both domestic and international materials;
• To assess the present situation of EST application in China and predict its development trend, identify the major users, data and information sources, and design the framework for the EST information system;
• To install the EST information system, set up a WWW server in connection with the Internet, develop a TCESTís home page to disseminate EST-related information including relevant organisations and companies, and technologies of energy conservation, cleaner production, wastewater treatment, solid waste disposal, greenhouse gases abatement, acid rain control, biodiversity conservation, etc.;
• To establish 10 branches of the TCEST across China and provide consulting services to local governments and enterprises.

Monitoring Indicator: an EST information network connected with the Internet

Implementing Agency: ACCA21

Time Schedule: October 1996 - December 1998

4.2 Training programs on EST transfer to upgrade the capacity of managerial and technical personnel in assessment and consultancy on ESTs

• To train TCEST staff and core experts on EST assessment, market analyses, feasibility studies and EST licensing, and place the TCEST staff in selected overseas technology centres;
• To develop teaching materials, conduct training on EST for the staff of TCEST branches as well as managerial and technical personnel in key industrial sectors, local agencies and other Asian Pacific countries, publish and distribute the regular newsletter on EST;
• To convene international workshops and symposiums on EST research, development, application and transfer, exchange and share the information on ESTs among countries and industrial sectors;
• To conduct EST training programs for management and technical personnel in Chinese local governments and enterprises, especially those in SMEs, taking advantages of the branches of the TCEST.

Monitoring Indicator: an EST training network

Implementing Agency: ACCA21

Time Schedule: June 1997 - December 1999

4.3 Formulation of economic and technological policies which foster the introduction, development and application of ESTs and promote foreign investment in ESTs

• To study the existing laws, regulations, technological and economic policies related to EST transfer, including the patent law, and the mechanisms of intellectual property rights protection;
• To conduct EST market analysis, put forward a list of key technologies to be transferred, develop assessment criteria for EST transfer projects involving both technical evaluation and financial analysis.
• To conduct monographic studies on financing of EST transfer projects, organise investment promotion workshops on such topics as the foreign investment environment, opportunities, trends, latent problems, co-operation conditions, outputs and benefits, etc., in order to advance the co-operation on EST transfer between China and other countries.
• To establish financial mechanisms for EST research, development, application and transfer, e.g. establish an EST transfer fund, formulate related incentive policies;
• To produce the first five-year development plan for TCEST, including market strategy, staffing program.

Monitoring Indicators: a Guideline for the Identification, Appraisal, Construction and Operation of EST Projects, a Report on EST Market Study, Guideline for Foreign Investments in ESTs, China's Strategy for Introduction, Development and Application of ESTs, a Report on Financing ESTs, a Five-Year Development Plan for TCEST, etc.

Implementing Agency: ACCA21

Time Schedule: January 1997 - December 1998

4.4 Establishment of demonstration projects for EST transfer

• To select 5 sectors among such pollution-intensive industries as the chemical, pulp and paper, electroplating, tannery, dyeing and textile, food processing and building material industries, and assess and identify one representative enterprise in each of the 5 sectors;
• To conduct environmental audits on the 5 targeted enterprises, identify existing environmental problems and key areas where technological transformations are necessary;
• Making use of the established EST information system, to identify ESTs for the 5 targeted enterprises;
• To carry out a comprehensive assessment of the selected ESTs taking into account the technical, economic, regulatory and financial aspects, and complete feasibility studies and engineering designs for the demonstration projects;
• To procure and install the selected ESTs in the 5 targeted enterprises, and train technical and managerial personnel;
• To evaluate the 5 demonstration projects, formulate a work plan for EST promotion on the basis of experiences gained from the demonstration projects.

Monitoring Indicator: 5 EST demonstration projects

Implementing Agencies: 5 selected enterprises, ACCA21.

Time Schedule: January 1998 - December 1999

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5. Inputs

5.1 Chinese Inputs

Chinese inputs will be mainly used for the expenses of domestic staff, data collection, office and communication, and for partial funding of the demonstration projects.

5.2 International Inputs

International inputs will be used for expenses of experts, information collection, establishment of information systems and network, training materials and necessary equipment, and the demonstration projects.

5.3 Budget

The total budget needed for this project is US$ 33.60 million. The Chinese side will raise US$ 11.40 million from domestic sources, while the international sources will cover US$ 22.20 million.

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Table 1. Budget by Item (in million US dollars)

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Table 2. Budget by Output (in million US dollars)

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6. Benefits

This project will greatly enhance the capacity of the Chinese government and industry, especially the TCEST, in the selection, assessment, introduction and application of ESTs. Nearly 1,000 professionals in different organisations will be trained, which in turn will prevent the disadvantageous transfer of energy and pollution-intensive technologies to China, and promote EST research and development. Furthermore, the established TCEST will not only provide consulting services for China's industrial sectors and enterprises on EST transfer, but also could, through the EST information network installed at TCEST, be an effective channel for information exchange and sharing between China and other Asian Pacific countries, and thus contribute to the EST transfer in those countries.

The target beneficiaries of this project are the TCEST, the selected pollution-intensive industries and enterprises, and the relevant agencies and companies in other Asian Pacific countries.

7. Risks

The possible reluctance of some industrial sectors and foreign institutions in revealing and sharing data, materials and technologies will hamper the implementation of this project. It is important to strengthen the coordination among industrial sectors and international agencies, and to establish partnerships with commitment to work towards development and benefit for all interested parties. The risk can be alleviated by the strong support of the Chinese government and the Asian Development Bank and by enlisting the commitment of key polluting industries by convincing them of the direct benefits to their enterprises and to the climate in which they function.

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