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OECD Regional Development Working Papers 2013/07 Urbanisation and Green OECD Growth in China https://dx.doi.org/10.1787/5k49dv68n7jf-en OECD REGIONAL DEVELOPMENT WORKING PAPERS This series is designed to make available to a wider readership selected studies on regional development issues prepared for use within the OECD. Authorship is usually collective, but principal authors are named. The papers are generally available only in their original language English or French with a summary in the other if available. The opinions expressed in these papers are the sole responsibility of the author(s) and do not necessarily reflect those of the OECD or the governments of its member countries. Comment on the series is welcome, and should be sent to either [email protected] or the Public Governance and Territorial Development Directorate, 2, rue André Pascal, 75775 PARIS CEDEX 16, France. ----------------------------------------------------------------------------- OECD Regional Development Working Papers are published on http://www.oecd.org/gov/regional/workingpapers ----------------------------------------------------------------------------- Applications for permission to reproduce or translate all or part of this material should be made to: OECD Publishing, [email protected] or by fax 33 1 45 24 99 30. © OECD 2013 1 URBANISATION AND GREEN GROWTH IN CHINA This working paper assesses national policy and governance mechanisms that can influence green growth in Chinese cities. It applies the OECD conceptual framework for urban green growth to examine the potential challenges and opportunities for increasing economic growth through reducing the environmental impact of urban land use, transport and buildings; through improving water and air quality; and through fostering supply and demand of green products and services. The paper first situates the issue of green growth within the nexus of urbanisation and environmental challenges now facing China. This is followed by a review of environmental and quality of life challenges posed by rapid urbanisation. Opportunities for national policies to influence green growth in four key urban policy sectors are then examined. The paper concludes with an assessment of governance challenges and considers potential changes to facilitate economic growth while reducing the environmental impact of cities. JEL Classification: O18 - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure O44 - Environment and Growth Q01 - Sustainable Development Q55 - Technological Innovation Q58 – Environment, Government Policy R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes R58 - Regional Development Planning and Policy Keywords: Cities, green growth, urban sustainability, green cities, urban development, sustainable development, climate change, green technologies, green economy, energy efficiency, attractiveness, metro-region, China, Chinese cities, regional clusters, innovation, transport, renewable energy, multi-level governance. 2 FOREWORD Green growth has been a strategic topic of the OECD‘s work since 2009, when OECD member countries mandated the organisation to develop a Green Growth Strategy. Green growth has entered a number of areas of work in the OECD, including the Directorate for Public Governance and Territorial Development. The Directorate‘s mission is to help governments at all levels design and implement strategic, evidence-based and innovative policies to strengthen public governance, respond effectively to diverse and disruptive economic, social and environmental challenges, and deliver on government‘s commitments to citizens. This working paper is one of two country-level case studies undertaken by the OECD Green Cities Programme, which was initiated by the 2010 OECD Roundtable of Mayors and Ministers in Paris. The aim of the programme is to increase understanding of the concept of green growth in cities, to enhance the potential of urban policies to contribute to urban and national green growth, and to inform national, sub- national and municipal governments as they seek to address economic and environmental challenges by pursuing green growth. This working paper contributes to the synthesis report of the OECD Green Cities Programme, Green Growth in Cities, and is relevant to the OECD Green Growth Papers series. 3 ACKNOWLEDGEMENTS This working paper was produced at the request of the OECD Secretary-General, in partnership with the China Development Research Foundation (CDRF), and under the direction of Joaquim Oliveira- Martins (Head of the Regional Development Policy Division) and Richard Herd (Senior Economist). Javier Sánchez-Reaza (Head of the Urban Development Unit) and Lamia Kamal-Chaoui (Advisor to the Secretary-General) provided supervision. The paper was drafted by Xiao Wang and edited by Alexis Robert. It draws on key contributions by Sam Hill, David Gierten, the Land Development and Regional Economy Research Institute of the Chinese National Development and Reform Commission, and Professor Stephen Hammer (MIT). The working paper also draws on an urbanisation and green growth seminar organised by the OECD and CDRF in December 2011. Irene Hors, Bill Tompson, Yan Li, Vincent Koen, Adam Ostry and Krzysztof Michalak provided useful input and comments to the report. Interviews with the Natural Resources Defense Council, the World Resources Institute and McKinsey & Company provided key background information. Caitlin Connelly and Istar Vignal provided editing support. Erin Byrne prepared the working paper for publication. 4 TABLE OF CONTENTS FOREWORD ................................................................................................................................................... 3 ACKNOWLEDGEMENTS ............................................................................................................................ 4 EXECUTIVE SUMMARY ............................................................................................................................. 7 1. INTRODUCTION: URBANISATION AND THE ENVIRONMENT IN CHINA ................................. 15 1.1. Urbanisation is occurring on a massive scale as environmental challenges loom .............................. 15 1.2. Promoting a better environment and continued urbanisation are key sustainable development priorities ..................................................................................................................................................... 18 1.3. The concept of urban green growth .................................................................................................... 21 2. DYNAMISM AND EXTERNALITIES IN URBAN CHINA .................................................................. 23 2.1. Characterising urbanisation in China .................................................................................................. 23 2.2. Benefits and limits of Chinese urban areas‘ economic dynamism ..................................................... 25 2.3. Migration and urban expansion........................................................................................................... 29 2.4. Other negative externalities of urbanisation ....................................................................................... 32 3. POLICIES FOR A GREEN ECONOMY IN URBAN CHINA ................................................................ 40 3.1. Linking land-use and transportation policies to reduce congestion and environmental impacts ........ 40 3.2. Managing rising energy consumption from the building sector ......................................................... 44 3.3. Addressing water and air pollution in cities ........................................................................................ 51 3.4. Fostering the growth of green sectors ................................................................................................. 56 3.5 Policy conclusions ............................................................................................................................... 67 4. STRENGTHENING GOVERNANCE TO ADVANCE AN URBAN GREEN GROWTH AGENDA .. 69 4.1. Policy guidance and resource allocation are the central government‘s main tools for assuring compliance ................................................................................................................................................. 69 4.2. Addressing potential gaps in the multi-level governance of green urban development in China ....... 73 4.3. Governance conclusions ..................................................................................................................... 85 BIBLIOGRAPHY ......................................................................................................................................... 87 Tables Table 1.1 The evolution of urban development and green development targets in Five-Year Plans, 2000- 2015 ........................................................................................................................................................... 20 Table 2.1. Summary of Chinese official definitions for cities/towns, urban settlements and urban population .................................................................................................................................................. 24 Table 2.2. China‘s registered population in urban area of statutory cities, 2005 and 2010 ....................... 29 Table 2.3 Population Growth, Motorisation and GDP
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