+++ V.V.I. (FT) ADB approves $300m China anti-pollution loan

(FT)

BEIJING, CHINA - DECEMBER 01: Chinese tourists wear masks as protection from the pollution outside the Forbidden City during a day of high pollution on December 1, 2015 in Beijing, China. China's capital and many cities in the northern part of the country recorded the worst smog of the year with air quality devices in some areas unable to read such high levels of pollutants. Levels of PM 2.5, considered the most hazardous, crossed 600 units in Beijing, nearly 25 times the acceptable standard set by the World Health Organization. The governments of more than 190 countries are meeting in Paris this week to set targets on reducing carbon emissions in an attempt to forge a new global agreement on climate change. (Photo by Kevin Frayer/Getty Images) ***BESTPIX***©Getty

Tourists wear masks to protect themselves from smog in Beijing

The Asian Development Bank approved a $300m loan on Thursday to help clean Beijing’s notoriously polluted air, as it pledged to support Chinese government efforts to reduce coal use in and around the capital.

Beijing officials issued their first “red alert” on Monday after particulate readings soared to hazardous levels, forcing the closure of factories, construction sites and many schools.

The loan aims to reduce coal use in Hebei province, which contributes much of the pollution that routinely blights both Beijing and the nearby port city of Tianjin. Beijing, Tianjin and Hebei, referred to collectively as the greater Jing-Jin-Ji area, are home to almost 110m people and account for 10 per cent of China’s economic output.

Seven of China’s 10 most polluted cities are located in Hebei, which consumes more coal than all but one other province. The ADB loan will support policies aimed at reducing annual coal consumption in Hebei by more than 12m tonnes.

“Although they are making a lot of effort, the pollution is still there,” said Satoshi Ishii, an ADB development specialist. “The fundamental issue is Hebei’s coal-based economy and industrial structure.”

The financial assistance package is the first “policy loan” made by the ADB in China. The Chinese government has traditionally been reluctant to involve overseas lending agencies in policy decisions on critical issues such as the environment. The complexity of China’s environmental challenges has, however, underscored the need to tap external expertise.

“It is less common to do a policy loan for an upper middle income country like China,” said Hamid Sharif, ADB’s China country director. “But as China faces complex issues like air pollution, it is open to policy dialogue and inputs.”

ADB officials added that their discussions about the loan began in January.

Provincial boundary lines are just one of the many hurdles to cleaning up China’s air, as competing bureaucratic fiefdoms and concern for local jobs, economic growth and debt get in the way of a region-wide response on the smog-filled North China plain.

New rules coming into effect next year will force emissions disclosure by thousands of local factories, mills and power plants. Current rules only require public disclosure by 3,000 of China’s biggest polluters.

“You need to know what your neighbour is doing before you can work together,” said Ma Jun, a Beijing-based environmental activist who has lobbied for greater public oversight of China’s pollution problem.

A briefing on Thursday, Chinese officials emphasised the importance of a co-ordinated regional response.

“Beijing, Tianjin and Hebei need to increase co-operation,” said Yin Hailin, Tianjin deputy mayor. “The first thing is to act together.”

Over the first 10 months of this year, Beijing closed or relocated 315 businesses deemed overly polluting and demolished 1.7m square metres of buildings.

“On this problem we share a common fate and must manage it together,” said Li Shixiang, Beijing deputy mayor. “Everybody must have patience and faith.”

IBM this week rolled out air quality forecasting tools that can predict conditions up to 10 days in advance, potentially allowing authorities to introduce mitigation measures before hazardous smog settles in.

The company plans to extend co-operation with the Beijing municipal government to Baoding and Zhangjiakou, two badly polluted cities in Hebei.ADB-approves-300m-China-anti-pollution-loan-FT