Environmental Assessment Report Summary Environmental Impact Assessment Project Number: 42383 October 2008 People’s Republic of China: Shanxi Small Cities and Towns Development Demonstration Sector Project Prepared by the Shanxi provincial government for the Asian Development Bank (ADB). The summary environmental impact assessment is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. CURRENCY EQUIVALENTS (as of 17 October 2008) Currency Unit – yuan (CNY) CNY1.00 = $0.1461 $1.00 = CNY6.8435 ABBREVIATIONS ADB – Asian Development Bank BOD5 – 5-day biochemical oxygen demand ClO2 – chlorine dioxide CO2 – carbon dioxide CODCr – chemical oxygen demand determined through the dichromate reflux method CSC – construction supervision company DMF – design and monitoring framework EA – executing agency EAMF – environmental assessment and management framework EIA – environmental impact assessment EMC – environmental management consultant EMP – environmental management plan EPB – environmental protection bureau FSR – feasibility study report GDP – gross domestic product GHG – greenhouse gas HDPE – high-density polyethylene IA – implementing agency LDI – local design institute MSW – municipal solid waste NH3-N – ammonia nitrogen NOx – nitrogen oxides O&M – operation and maintenance pH – a unit of acidity PM10 – particulate matter ≤10 micrometers in diameter PMO – project management office PPTA – project preparatory technical assistance PRC – People’s Republic of China RP – resettlement plan SEIA – summary environmental impact assessment SO2 – sulfur dioxide SPG – Shanxi provincial government SS – suspended solids TN – total nitrogen TP – total phosphorus TSP – total suspended particulates UNESCO – United Nations Educational, Scientific and Cultural Organization WTP – water treatment plant WWTP – wastewater treatment plant WEIGHTS AND MEASURES oC – degree Celsius dB(A) – A-weighted decibel ha – hectare kg – kilogram km – kilometer km2 – square kilometer Leq – equivalent continuous noise level (in decibels) m – meter m2 – square meter m3 – cubic meter m3/d – cubic meters per day mm – millimeter m/s – meters per second MW – megawatt t/a – tons per annum tCO2e – tons of carbon dioxide equivalent t/d – tons per day t/hr – tons per hour NOTE In this report, “$” refers to US dollars. CONTENTS Page MAP I. INTRODUCTION 1 II. DESCRIPTION OF THE PROJECT 4 A. Wutong Town 5 B. Youyu County 7 C. Pingyao County 9 D. Institutional Development and Capacity Building 9 E. Associated Projects Funded by Others 10 F. Policy Dialogue 10 III. DESCRIPTION OF THE ENVIRONMENT 11 A. Atmosphere and Climate 11 B. Topography and Geology 12 C. Noise 13 D. Surface Water 13 E. Groundwater 10 F. Solid Waste 10 G. Ecological Resources 14 H. Economic Development 15 I. Social and Cultural Resources 15 IV. ALTERNATIVES 17 A. With-Project and Without-Project Alternatives 17 B. Specific Alternatives 18 V. ANTICIPATED ENVIRONMENTAL IMPACT AND MITIGATION MEASURES 19 A. Positive Impact and Environmental Benefits 19 B. Impact Associated with the Project Location, Planning, and Design 20 C. Impact and Mitigation Measures during Construction 21 D. Resettlement 24 E. Impact and Mitigation Measures during Operation 25 F. Climate Change Implications 25 VI. ECONOMIC ASSESSMENT 30 VII. ENVIRONMENTAL MANAGEMENT PLAN 31 A. Environmental Management 31 B. Environmental Monitoring 32 C. Institutional Enhancement 32 VIII. PUBLIC CONSULTATIONS AND INFORMATION DISCLOSURE 32 A. Public Participation during Project Preparation 32 B. Plans for Public Participation 33 IX. ENVIRONMENTAL ASSESSMENT AND MANAGEMENT FRAMEWORK 34 A. Environmental Criteria for Subproject Selection 35 B. Country’s Environmental Assessment and Review Procedure 36 C. Review and Appraisal Procedures 37 X. CONCLUSIONS 37 A. Project Risks 37 B. Benefits 38 C. Potential Adverse Impact and Associated Mitigation Measures 39 D. Use of Irreplaceable Resources 39 E. Follow-Up Monitoring and Environmental Management Requirements 39 APPENDIXES 1. References for Shanxi Province 2. Environmental Management Plan for Shanxi Province 3. Environmental Assessment and Management Framework for Shanxi Province ATTACHMENTS 1. Environmental Impact Assessment Report Table of Contents 2. Summary Format of Potential Impacts and Mitigation Measures 3. Environmental Monitoring Program 4. Public Consultation Plan 5. Institutional Strengthening and Training 111o 00'E 114o 00'E SHANXI SMALL CITIES AND TOWNS DEVELOPMENT DEMONSTRATION SECTOR PROJECT IN THE PEOPLE'S REPUBLIC OF CHINA Yanggao Datong 40 o 00'N I N N E R M O N G O L I A 40 o 00'N Youyu Qiaocun er iv R n ga ng Shuozhou Sa Lingqiu Shenchi Fanshi ) r Baode e v i R w o l Yuanping l Kelan e Y ( e H H E B E I ng ua Xingzhou H Jingle S H A N X I Shouyang Gujiao TAIYUAN Yangquan Yuchi Lishi Fenyang S H A A N X I Taigu Mucun Xiaoyi Qi Xian Wutong Pingyao Yushe Zuoquan Qin Xian Huozhou Licheng Qinyuan Pu Xian r e v Lucheng i R n Tunilu e F Pingshun Linfen 36 o 00'N Changzhi 36 o 00'N N Jinshan 0 50 100 Houma Jincheng Kilometers Core Subproject City/Town Yuncheng Provincial Capital City/Town Yongji National Road H E N A N Provincial Road Railway River Provincial Boundary Boundaries are not necessarily authoritative. o 111 00'E 114o 00'E 08-3356a HR I. INTRODUCTION 1. The Shanxi Small Cities and Towns Development Demonstration Sector Project in the People’s Republic of China (PRC) is one of three sector loan projects prepared under a project preparatory technical assistance (PPTA) from the Asian Development Bank (ADB) that also covered sector projects in Hebei and Liaoning provinces. Sector lending is a form of ADB assistance for project-related investments based on considerations relating to an entire sector or subsector. A sector loan is provided to assist in the development of a specific sector or subsector by financing part of the investment in the sector. The loan is expected to improve sector policies and strengthen institutional capabilities. Such lending is appropriate particularly when a large number of subprojects in the sector or subsector are to be financed. 2. The Project will (i) support the development of selected small cities and towns in Shanxi Province to induce the development of other cities and towns in the province and elsewhere in the PRC; (ii) demonstrate how small cities and towns can achieve urban development that is economically, socially, and environmentally sustainable; (iii) support the provision of reliable, good-quality infrastructure including roads and water supply, wastewater, district heating, and solid waste facilities; (iv) support the incorporation of environmental and social considerations in urban planning and development; (v) provide better infrastructure and municipal services to enable the small cities and towns to achieve greater economic efficiency and sustainable development; and (vi) promote the integration of various infrastructure services to maximize the benefits from individual sector improvements. Wutong town, Youyu county, and Pingyao county have been selected as the core subproject areas (Map) to be supported by the Project. Several noncore subprojects will also be selected and implemented later on. The environmental assessment of the Project was based on the environmental impact assessments (EIAs) for the core subprojects and the environmental assessment and management framework (EAMF) for noncore subprojects. 3. This summary EIA (SEIA) for Shanxi Province summarizes the results of eight EIA reports and environmental management plans (EMPs) for the core subprojects prepared by the Taiyuan Science and Engineering University (for Wutong), the Shanxi Environmental Science Research Institute (for Youyu), and the Shanxi Sanitation Bureau (for Pingyao), and contains the EAMF. It explains (i) the sector project approach; (ii) the sector conditions; (iii) the project interventions, benefits, and impact; (iv) the subproject selection procedure; and (v) the selection, review, and appraisal of noncore subprojects according to the EAMF. The individual EIAs incorporated most of the EMP clauses. The other EMP items were developed jointly by the PPTA team and the institutes. The individual EIAs and feasibility study reports (FSRs) went through several rounds of revision suggested by the PPTA team specialists. The EIAs have been reviewed by the Government. 4. The urban population of the PRC has more than tripled since 1980, reaching 577 million in 2006. It is 45% of the total population today and is expected to exceed 50% by 2015. The PRC has 660 cities and about 20,000 towns, with an average population of 32,000 and a total population of 640 million. Urban households have an average disposable income about 3.3 times that of rural households. With increasing mechanization and labor efficiency in the agriculture sector, the urban areas have been swamped by waves of rural migrants in search of work. The PRC must create jobs for 150 million rural people and house twice that number over the period 2000–2020. Its cities cannot absorb all 300 million. The towns, a largely untapped urban resource in the PRC, must now build up their physical and institutional infrastructure for economic and urban growth, and assist the country in coping with its greatest urbanization challenge so far. 2 5. The Government of the PRC views urbanization as a means of increasing national economic productivity and promoting “harmonious development” and more equitable sharing