TED Case Studies

China and Coal



          CASE NUMBER:         234 
          CASE MNEMONIC:      CHINCOAL
          CASE NAME:          China Coal and Pollution

A.   IDENTIFICATION

1.   THE ISSUE

Coal accounts for about 70% of China's total energy consumption. 
The development and production of the coal industry provides
stability in China's economic growth.  The coal resources in China
have been exploited since 476 BC, and it is estimated that even
with all the years of coal exploration, China has total coal
deposits of 4, 490 billion tons which are as deep as 2,000 vertical
metres.  Eventually China will exploit its coal resources until
they are eliminated.  However, this is not the central argument of
this case study.  More importantly, the concern is that with the
rapid exploitation and high dependency of coal productivity, China
is damaging not only the physical environment, but China is also
creating health problems for Chinese people, and people in the
surrounding countries.

2.   Description

Articles in Worldwatch, Environmental Science Technology, Science,
and World Resources, have demonstrated different types of
environmental degradation due to coal production in China.  For
example, in northern China, cities like Beijing and Shenyang have
poor air dispersal and low-level temperature inversions.  In fact,
"urban centers in that region record some of the highest readings
in the world for total suspended particulates (TSP) and SO2."

In southern China, areas such as Sichuan, Guangxi, Hunan, Jiangxi,
and Guangdong, have growing acid precipitation problems and overall
emissions of China is increasing.  Since coal burning is a major
source of particulates and SO2, this is a main contributor to the
air pollution.  To illustrate, in 1992, nationwide emissions of SO2
were estimated at 16.85 million metric tons.  This increased 4%
from 1991, and 13% from 1990.  Furthermore, soot emissions rose
7.6% in 1992 from 1991.  

Another pollutant generated from coal burning is carbon dioxide. 
The carbon dioxide emissions from coal burning is larger than any
other energy sources such as, petroleum and liquefied natural gas. 
In addition, analysts argue that increases in carbon dioxide will
contribute to global warming.  Besides carbon dioxide, sulfur
dioxide, which is believed to cause acid raid, is another pollutant
generated from coal burning.  When sulfur dioxide is emitted into
the atmosphere, it takes approximately ten days for it to settle to
the earth.  In this period of time, the sulfate particles can
travel several thousand kilometers.   China is not the only country
suffering from acid rain problems.  Other Asian countries, such as
Japan, Taiwan, S. Korea, and the Philippines have all reported acid
rain problems originating from China's coal burning pollution.  The
Central Research Institute of Electric Power and Industry in Japan
has reported that acid rain from the China mainland will soon be a
major problem for Japan.  Recent studies in Shimane and Tottori
prefectures claimed, "half of the acidic fallout recorded came from
China, one-third came from Japan, and one-sixth from the Korean
Peninsula".

Toxic substances emitted into the air from coal burning have
dramatically affected human health in China.  For example, "chronic
obstructive pulmonary disease (COPD), linked to exposure to fine
particulates, SO2, and cigarette smoke among other factors,
accounted for 26% of all deaths in China in 1988".(1)  China's
death rate related to COPD deaths, is five time higher in China
than in the United States.  In addition, pulmonary disease and
strokes have increased in Chinese people because of the exposure to
indoor emissions from poor-quality coal used for cooking and
heating.  In Xuanwei, for example, scientists have researched the
relationship between lung cancer and particles from indoor coal
combustion.

In sum, coal burning in China is having a significant impact on the
physical environment, as well as the population in China, and the
overall world atmosphere.  Scientists have predicted by the year
2025, China will emit more carbon dioxide and sulfur dioxide, two
products from coal burning, than the United States, Japan, and
Canada combined. 

China is one of the world's largest coal producers.  There is no
known figure on the amount of coal resources in China, but some
estimates have been as high as 1 million tons.  China leads as a
coal-rich country with the Soviet Union and the United States in
second and third place respectively.  China's coal consists of the
majority being bituminous coal.  About 20% is anthracite coal, and
lignite coal makes up the smallest portion.  

Since 1949, China has suffered mostly from a shortage of coking
coal.  Coking coal is an important part required for the steel
industry.  A shortage of coking coal has limited the growth of the
steel industry in China.  Another problem with China's coal
resources is its unusual location.  Approximately 80% of China's
coal resources are located in mountainous regions far away from the
industrial centers.  Therefore, it costs these industries more
money in shipping since they need to transport the coal a good
distance.

Despite these two problems of quality and location, China's coal
industry remains abundant and prosperous.  Coal resources in the
pre-war era was more than sufficient to support the industry in
China.  The growth in coal production continued more rapidly in the
1950s.  By the 1970s, two of the eight mining bureau produced over
10 million tons per year.  Today, the coal enterprise is the main
contributor to China's "economic miracle".  Coal accounts for 76%
of China's energy supply.  With this acceleration however, has also
come significant environmental issues.  Two of these problems
include severe air pollutants which is comprised of acid rain and
global warming, and health deterioration in China's population.

The first problem resulting from coal burning is how it pollutes
the air.  China has been burning coal since the late 19th and early
20th centuries.  The time has come when China is now witnessing the
results of this environmentally unsuitable industry.  Even more
astonishing however, is that despite proof of toxic air pollutants
and acid rain, China is making minimal efforts in converting coal
burning plants to more environmentally safe methods.  For example,
according to an article dated January 14, 1995 in the South China
Morning Post, a company called Hopewell Holdings is planning to
build a 2,640 mega-watt coal burning plant on the eastern shores of
Mirs Bay.  Environmentalists fear that the northeasterly winds
common in this area, will blow the fumes from the plant to Hong
Kong.

When the rain falls in metropolis cities in China, the pollution is
clearly visible.  Soot coats the pavement turning it into slippery
muck, and turns the leaves a black-brown color.  The Chinese
environmental protection agency has listed five species of
shellfish as newly extinct, and most of the water in rivers fail to
meet fishery standards.(2)  Furthermore, the sulfur dioxide
produced from coal burning is drifting to other countries.  For
example, ecological problems have been documented in Taiwan, Korea,
Japan, and the Philippines.  People in Inner Mongolia have
complained of the water causing skin blisters, and in Beijing the
skies are full of smog.  Japan has made the most attempts in
working with China to prevent increased acid rain.  The Japanese
government has proposed acid-rain abatement programs which provide
cities in China five-year, low-interest loans to reduce acid rain
degradation.  The funding has been capped at $10 billion in loans,
but the plans are still being negotiated.  The Chinese government
argues that at least $15 billion should be provided in loans in
order for the project to work.  China's officials have been quoted
as saying that if the Japanese are the ones concerned about acid
rain, then they should properly fund what is needed for the
prevention plans to be executed correctly. 
     
The reason why acid rain from China is having such an impact on
Japan, is because China relies heavily on coal as a fuel.  Only
about 30% of the country's coal is used for generating electricity. 
The rest of the coal is inefficiently used by being burnt directly. 
Furthermore, approximately 81% of the coal used in households, is
not washed which causes serious pollution, and health hazards.  In
1993, China generated 19 million tons of sulfur dioxide.  Recently,
China passed the United States as the world's largest generator of
sulfur dioxide.  Since sulfur dioxide is a byproduct of coal
burning, and is also the key component of acid rain, one can
estimate how the acid rain problems will magnify in China in the
near future.  Moreover, the equipment required for coal-burning
plants, to reduce the discharge of gases, such as sulfur dioxide,
is in limited supply.  Dust-collectors in China have been installed
in the coal-fired plants, but these do not remove the toxins from
the discharged gases.  China should model the Japanese by
installing desulfurization and denitrification devices.  These
devices remove more than 90% of the virulent gases.  So far, China
has made no concrete plans to install these mechanisms.

Air pollutants generated by coal burning relates to another
environmental issue, which is the deteriorating health of the
Chinese population.  Scientists have demonstrated that China's
rapid economic growth attributed to the coal industry has led to a
rise in cancer and lung disease.  A report from the National
Environmental Protection Agency titled, The Condition of China's
Environment, read, "the death rate due to cancer in urban areas had
increased by 6.2% and that of lung cancer by 18.5% since 1988".(3) 
In 1993, China's death rate was 664 per 100,000, and the number one
cause of death was respiratory disease in agricultural areas.  In
city areas, the number one cause of death was cancer, and lung
cancer accounted for 37 of every 100,000.  In addition, in the
northern urban areas of China, the total suspended particle
readings averaged 407 micrograms per cubic meter per day, and 251
micrograms in southern cities.  Some places read as high as 815
micrograms.  The World Health Organization safety guidelines are
set between 60 and 90 micrograms for total suspended particles. 
China's readings are over two and three times what is considered
healthy.

In Xuan Wei County, Yunnan Province, lung cancer is one of the
highest causes of death particularly in women.  Studies have
determined that the lung cancer is associated with the indoor
burning of "smoky" coal, as opposed to smokeless coal or tobacco
smoking.  Smoky coal emits high concentrations of sub micron
particles containing mutagenic organics.  One study determined an
etiologic link between domestic smoky coal burning and lung cancer
in Xuan Wei.  Mumford, Wise, Cao, and Chuang found it unusual that
tobacco smoking is rare in Xuan Wei County females (less than 0.1%)
and more common in males (40% or more), yet the female population
had an abnormally high death rate of lung cancer.  The local
industries in this city of one million people, are mostly coal
mining, electric power generation, light manufacturing, and
farming.  The mines in Xuan Wei distribute smoky and smokeless
coal.  The scientists found that fuel burning in shallow unvented
pits has resulted in high indoor air pollution levels.  Moreover,
traditionally the women start the fires and cook, where men spend
most of their time working outside the home.  Thus, the lung cancer
in Xuan Wei, "is associated with the domestic use of smoky coal
under unvented conditions".(4)  The scientists determined that the
presence of the alkylated three and four-ring PAHs in the smoky
coal which is extracted when the coal is burned, is a significant
factor in the high lung cancer mortality rates in Xuan Wei, China. 

3.  Related Cases:

     JAPANAIR case
     KORPOLL case
     SULFUR case
     ECCARBON case
     CLEAN case
     CHILEAIR case

     Keyword Clusters         

     (1): Impact                   = CHINA
     (2): Bio-geography            = TEMPerate
     (3): Environmental Problem    =  Pollution Air [POLA]


4.  Draft Author:  Angie Littlefield

B.  LEGAL CLUSTER

5.  Discourse and Status:  DISagree and Allegation (ALLEGE]
 
6.  Forum and Scope:  CHINA and UNILATERAL

7.  Decision Breadth:  1 

8.  Legal Standing:  TREATY

The Environmental Protection Law of PRC is the basic law of
environmental protection in China.(1)  It contains only a number of
provisions on general principles.  In the case of air pollution,
scientists in China have discussed changing the fuel mix to solve
the pollution problem.  However, because of China's immense
resource inventory, coal will continue to be the principal fuel.  

Articles 1, 2, and 3 have general stipulations which could be used
to protect the pollution caused by coal burning.  Articles 17 and
19 could be used to defend the people against harmful toxins
created by coal burning.  The problem however, exists in the
enforcement.  Even though the environmental law in China reads as
though they have instituted strict environmental provisions,
China's main concern is economic growth, and environmental
protection will take second priority if necessary.  Therefore, many
times these general environmental provisions stated in the law are
overlooked or not enforced.

Article 1.  This law is formulated pursuant to Article 11 of  the
Constitution of the Peoples Republic of china, which stipulates
that "the state protects the environment and natural resources and
prevents and eliminates pollution and other hazards to the public".
     
Article 2.  The Law on Environmental Protection of the PRC
undertakes to rationally utilize the natural environment and 
control and prevent pollution and damage to the ecology so as to
create a clean and salubrious environment for people's life and
work, protect people's health, and promote economic growth in the
interest of socialist modernization.
     
Article 3.  The term environment used in this law encompasses the
air, water, land, mineral resources, forests, grasslands, wild
plants and animals, aquatic life, places of historical interest,
scenic spots, hot springs, resorts, and natural areas under species
protection, as well as inhabited parts of the country.

Article 17.  No enterprise or institution that may pollute the
environment may be built near living quarters in cities and towns
or beside protected areas of water, places of historical interest,
scenic spots, hot springs, resorts, or natural areas under
protection.  As for those already existing, measures should be
taken to control their pollution, to readjust them, or to remove
them to other sites in a given period.
     
Article 19.  Effective measures must be taken to eliminate smoke
and dust from smoke-emitting equipment, industrial kilns and
furnaces, motor-driven vehicles, and boats and ships.  Harmful gas
should be reduced to standards fixed by the state. 

In Chapter IV, Environmental Protection Organizations and Their
Responsibilities, Article 26 allows the State Council to implement
these laws, draft standards and regulations, formulate goals,
organize and survey the environment, and direct protection under
various departments.  The officials have the power to enforce these
laws, but the law is vague in specific areas.  For example,
"effective measures" may be taken to eliminate smoke and
dust-emitting equipment, but these "effective measures" are never
explained. The United Nations has teamed with China and created
documents such as, Environmentally Sound Planning in China.  This
publication establishes a goal, i.e., coordinating economic and
environmental development, and why they should achieve this goal,
but no indications of how to enforce their plans.

C.  GEOGRAPHIC FILTERS

9.  Geography

     a.  Geographic Domain:   ASIA
     b.  Geographic Site:     East Asia [EASIA]
     c.  Geographic Impact:   CHINA

10.  Sub-National Factors:  No

11.  Type of Habitat:  TEMPerate

D.  TRADE FILTERS

12.  Type of measure:  Regulatory Standard [REGSTD]

13.  Direct vs. Indirect Impacts:  INDirect

14.  Relation of Trade Measure to Resource Impact

     A.  Directly Related to Product:     No
     B.  Indirectly Related to Product:   Yes Coal
     C.  Not Related to Product:   No
     D.  Related to Process:       Yes Pollution Air [POLA]

15.  Trade Product Identification:  COALRaw

16.  Economic Data

The exact amount of the coal resources in China are not known. 
However, coal accounts for approximately 76% of the energy supply
in China as their number one resource.  Coal mines and factories
can employ in the hundreds of thousands.  China leads in the world
as the largest coal producer.  In 1990, China produced 1.09 billion
tons of coal.

17.  Degree of Competitive Impact:  High

Initially the cost of converting coal burning plants to
environmentally safe technology will be very expensive, but the
costs to the environment will be much higher if something is not
accomplished.  Japan has offered $10 billion in low interest rate
loans to China in order for them to prevent increased acid rain
problems.  China is still negotiating with Japan since they feel it
will cost at least $15 billion.

China has developed a model coal burning plant called Luohuang. 
The plant consumes 1.8 million tons of the world's lowest-quality
coal.  China boasts that Luohuang can prevent 98% of the pollutant,
sulfur dioxide, from reaching the environment.  However, the
director of planning for the Chongqing Environmental Bureau, Guo
Chengmo, says "Luohuang requires too much money to operate.  It can
represent the future, but what we really need now is technology
that suits the current level of our enterprises".(6) In the "Guide
to Global Environment by the World Resources Institute, the
estimated annual cost of air pollution-related mobidity will be
around 5 billion yuan or 880 million dollars.  This estimate does
not included other indirect costs, such as pollution-induced damage
to food crops.  The predicted cost of damage to food crops is 15
billion yuan or 2.6 billion dollars.  In other words, the situation
will continue to get worse and costly unless money is invested into
prevention plans now.

18.  Industry Sector:  MINE

19.  Exporter and Importer:  MANY and CHINA

E.  ENVIRONMENTAL FILTERS

20.  Environmental Problem Type:  Pollution Air [POLA]

Coal burning has dramatic affects on the air by producing smog and
acid rain, and contributing to global warming.

22.  Species

     Species:       Homosapiens
     Genera:        animal/mammal/primate
     Biodiversity:  NA

The Chinese population has a growing problem of lung cancer and
respiratory problems related to the coal industry.  In 1994, the
death rate due to lung cancer had increased 18.5% since 1988. 
Furthermore, the sulphur dioxide levels and suspended particle
readings are well above what is considered safe by the World Health
Organization in most of China's major cities.  China recently
passed the United States as outputting the most sulphur dioxide, a
key ingredient in producing acid rain.

23.  Resource Impact and Effect:  HIGH and REGULatory

24.  Urgency and Lifetime: MEDium and 20-30 years

Scientists predict by the year 2025, China will emit more carbon
dioxide than the United States, Japan, and Canada combined.  Thus,
China needs to find new alternatives to coal burning, or implement
ways in which the environment and people are not affected so
severely.

25.  Substitutes:  Conservation [CONSV]

Some criticize Chinese officials for not enacting laws suitable to
air pollution control, water pollution, noise and vibration
control, and other special laws.  Ross and Silk offer a proposal
which they feel should be enacted as a law on air pollution control
in China.  This proposal is to "set air quality standards and
revise the standards for pollutant discharge".  Without
environmental standards, it is impossible to evaluate the quality
of the environment in China.  The environmental law in China does
not set any standards, and is vague in their provisions.  Ross and
Silk offer five key components which they believe are essential in
setting quality standards in China.  

The first component is to exercise control by area and class, and
protect key areas.  Since China encompasses a large territory,
there are major differences in the character, natural conditions,
and population.

The second component is to grasp the main contradiction, work out
effective measures, and concentrate efforts to solve the main
contradiction.  The main goal in controlling and preventing air
pollution is to control the sources of the air pollution.

Set up an air pollution monitoring network is the third component
of setting quality standards in China.  Monitoring environmental
degradation will provide a primary source of information and an
important basis necessary for the implementation of environmental
legislation.

The fourth component is to carry out the system of collecting
effluent fees.  According to the China Law of Environmental
Protection, "fees shall be assessed according to the amount and
concentration of pollutant as stipulated by regulations on
enterprises that discard more pollutants than the state standard
permit".(9)

Finally, the fifth component is the legal sanctions.  Ross and Silk
stress that those who violate air pollution control law should be
given administration sanctions, civil sanctions, or criminal
sanctions.

Ross and Silk suggested ways in which China could improve their
environment and the laws related to it.  Another alternative which
would limit the overall world demand for coal and reduce the air
pollution in China, would be to use other resources for energy
production.  China has extensive unexploited reserves of natural
gas, "which would supplant oil and coal use in buildings ,
transport, industry, and power generation while emitting about 60%
less carbon dioxide".(8)  In addition, although natural gas only
accounts for 2% of China's current energy use, they could import
natural gas to slow the growth of coal pollution and production. 
China could also potentially develop other energy projects
including, solar, wind, biomass, and geothermal resources.

Another effort in reducing the amount of degradation resulting from
coal burning has been studied by organizations such as, the China
Clean Coal Engineering Research Centre.  This Beijing-based
center's goal is to develop clean coal engineering technology and
find ways of using coal which are more efficient and make a cleaner
environment.  The center offers technical training and consulting
services which help China draft policies for developing clean coal
technology.  

The Central Coal Mining Research Institute is second example of an
organization which focuses on cleaning up China's environment.  The
institute oversees seventeen research facilities, and employs
80,000 scientists and technicians.  Like the former organization,
the Central Coal Mining Research Institute researches and develops
technology for the state in order to provide safer and more
efficient ways of coal burning.

In 1994, China signed an agreement with a United States-led
consortium to construct the world's longest coal slurry pipeline. 
The project is a multi-million dollar project and is not expected
to be complete until 1997.  The agreement between Pittsburgh's
Custom Coals and China's Ministry of Coal Industry will produce a
500 mile pipeline from Shanxi province to the coastal province of
Shandong.  The Yu-Wei project, as it is termed, will include the
construction and operation of a coal cleaning plant, pipeline, and
port facilities.  The environmental benefits of this project are
astounding, and definitely a contributor toward the goal of
achieving a cleaner environment and reducing the deterioration from
coal burning.  The consortium partners have agreed to pass the
ownership of the project to the Chinese government after fifty
years.  The project is expected to being in late 1995, and
beginning construction costs are estimated to start at fifteen to
twenty million dollars.

F.  OTHER FACTORS

25.  Culture:  No

26.  Human Rights:  Yes

27.  Trans-boundary issues:  Yes

Coal burning in China is affecting other Asian nations, such as
Japan, Taiwan, North and South Korea, and the Philippines.  Studies
have been conducted proving that coal burning in China is producing
acid rain in other Asian countries.  The winds can easily carry the
particles, like sulfur dioxide which are main ingredients in acid
rain.  Moreover, China's the abundant amount of coal burning will
in the long run, enhance global warming.  This is not only an Asian
regions concern, but a global problem.

28.  Relevant Literature

Asai, Hideki.  "Pollution Problems in China Already Raining Down
on Japan".  Tokyo Business Today. pg. 44.  December, 1993.

"Bordering On a Crisis".  South China Morning Post.  January 14,
1995.  pg. 16.

"Breathing The Air of Success".  Economist, February 15, 1992. 
V. 322n7746, pg. 40.

Chuang, Jane C., Wise, Cao, and Mumford.  "Chemical
Characterization of Mutagenic Fraction of Particles From Indoor
Coal Combustion:  A Study of Lung Cancer in Xuan Wei, China". 
Environmental Science and Technology, Vol. 26, No. 5, 1992.

Lenssen, Nicholas.  "All The Coal in China".  World Watch. 
March/April, 1993.  

Radin, Charles A..  "With China's Miracle Pollution Surges".  The
Boston Globe.  January 2, 1995. pg. 47.

Ross, Lester and Silk.  Environmental Law and Policy in the
People's Republic of China.  Quorum Books, Westport, CT.  1987.

Saiget, Robert J.  "Lung Disease, Cancer in China Blamed on
Pollution."  June 10, 1994.  

Walker, Tony.  "China in Dollars 888m Coal Pipeline Deal".  The
Financial Times.  August 19, 1994.  pg. 3.

Weimin, Chang.  "China:  Search For Clean Coal Picks Up".  May 8,
1994.  Business Week.

World Resources: A Guide to The Global Environment. 1994-95.

Wright, Tim.  Coal Mining in China's Economy and Society 1895-
1937.  Cambridge University Press, 1984.  


                          References

1.   Asai, 74.

2.   Radin, 22.

3.   Saiget, "Lung Pollution."

4.   Chuang, et al, 999-1004.

5.   Environmental Protection Law, September 3, 1979.

6.   Radin, 25.

7.   Ross, Lester, and Silk, 116.

8.   Ross, Lester, and Silk, 119.

9.   Lennson, 27.





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