Ruminations

China and the illegal logging industry

Image source: Reuters

At a seminar in Singapore a few months ago I shared a table at lunch with some Singaporean Ministry of Defence personnel. One of these officials commented on the illegal logging going on in Kalimantan, covertly supported by the Indonesian military, who accept bribes to turn a blind eye to what is going on. Indeed, a posting there is highly sought after because it represents such a lucrative opportunity.

In an article in The Economist this week, Green Guise, there is a suggestion that having stuffed up its own environment through excessive logging, China is now helping other countries to do the same. (The article is reproduced in full below.)

Green guise

Mar 23rd 2005 | BEIJING
From The Economist print edition

China protects its trees, devours others

IN 1998, after deforestation caused the Yangzi river to burst its banks, costing 2,500 lives and billions of dollars in damage, China's government got serious about trees. It issued orders to protect healthy forests, rehabilitate distressed ones and replant many woodland areas cleared for farmland. It cracked down on illegal loggers. Could it be, conservationists whispered, that a combination of tragedy and self-interest had forced a great emerging consumer to go green?

Alas, the answer is no. While claiming that a sustainable timber industry, able to meet the nation's needs, was its goal, the government slashed tariffs on imported timber. As imports have soared, so have corruption and incompetence within the sector; stipulated checks on the provenance of imported rough-cut logs are often neglected or inadequate. While praising China's efforts to manage its forests better, the same conservationists say it is the main hub of a global trade in illegal timber.

The government, of course, denies it. One of its departments, the State Forest Administration (SFA), which recently completed a five-year survey of China's forests, claims the country's consumption and production of timber are neatly balanced, and that it will continue meeting its need for wood from its own forests for the foreseeable future. According to one senior SFA official: “It is out of the question that the country would satisfy its domestic demands by increasing tree felling from neighbouring countries.”

Yet, according to conservationists, China is already importing vast quantities of timber, much of which is illegally harvested. And even if that were not true, China's predicted growth—at an average of 8% over the next five years—suggests that it soon would be.

A British-based green group, the Environmental Investigation Agency (EIA), says that China imported 1m cubic metres of logs in 1997, and 16m cubic metres in 2002. The country currently consumes 17 times less wood per capita than America, but that figure is expected to shrink. By 2010, according to the World Wildlife Fund, China will be able to meet only half of its demand for industrial wood from domestic supplies.

It is impossible to estimate what proportion of the timber China imports is illegally harvested. Yet cases of abuse are numerous and well-documented, involving timber from Russia, Myanmar and Brazil among other culprits. In a new report, EIA describes a timber-smuggling chain that each month brings 300,000 cubic metres of merbau, a valuable hardwood, from Indonesia's Papua province, to the Chinese port of Zhangjiagang. With most of its forestry already felled, Indonesia bans most exports of timber. Yet according to the EIA, illegal logging is rife in Papua thanks to collusion between Indonesia's army and certain Malaysian logging gangs there.

Chinese conservationists say the logs from Papua are shipped to China with falsified Malaysian paperwork, which Chinese customs officials are unable to verify. To end the racket, they suggest Malaysia's customs should give notice to their Chinese counterparts when legal shipments of logs leave their shores.

But ending the illegal shipments would come at no small cost to China. A short distance from Zhangjiagang lies a small town called Nanxun, which five years ago produced only modest amounts of wooden floorboards. The town now hosts 500 floorboard factories and some 200 sawmills which, according to the EIA, together process one merbau log every minute of every working day.

Many of Nanxum's boards are sold domestically. But some also end up back at sea, being exported to Europe and North America. To end the illegal trade would take help from governments in those regions, and would sadly involve their citizens paying more for their polished floorboards.

Economic growth in China

A young migrant worker shovels heavily polluted mud and water from an almost dried up river bed. Image source: AFP.
http://english.epochtimes.com/news/4-2-5/19422.html

On BBC World these last few days, I've been watching China Week with interest - a special feature on the consequences of rapid growth in this country. One clip that particularly caught my eye was the one on the disastrous Three Gorges Project, which I have written about before in this blog. What worries me is that while you do get the odd snippet of good news coming out of China regarding sustainable development, the simple fact of the matter is that if the Chinese live like North Americans, we're in big trouble. To get some idea as the stresses and strains Chinese consumption at American levels would cause, I recommend the latest Eco-Economy update written by Lester Brown (reproduced below if the link is broken). As a student of international political economy as well as ecological economics, in my darker moments I ponder about the geopolitical consequences of the Chinese not being able to feed themselves.

March 9, 2005-2

Copyright © 2005 Earth Policy Institute

LEARNING FROM CHINA
Why the Western Economic Model Will not Work for the World

Lester R. Brown

Could the American dream in China become a nightmare for the world? For China’s 1.3 billion people, the American dream is fast becoming the Chinese dream. Already millions of Chinese are living like Americans—eating more meat, driving cars, traveling abroad, and otherwise spending their fast-rising incomes much as Americans do. Although these U.S.-style consumers are only a small fraction of the population, China’s claims on the earth’s resources are already becoming highly visible.

In an Eco-Economy Update released in February, we pointed out that China has replaced the United States as the world’s leading consumer of most basic commodities, like grain, coal, and steel. Now the question is, What if consumption per person of these resources in China one day reaches the current U.S. level? And, closely related, how long will it take for China’s annual income per person of $5,300 to reach the 2004 U.S. figure of $38,000?

During the 26 years since the far-reaching economic reforms of 1978, China’s economy has been growing at a breakneck pace of 9.5 percent a year. If it were now to grow at 8 percent per year, doubling every nine years, income per person in 2031 for China’s projected population of 1.45 billion would reach $38,000. (At a more conservative 6 percent annual growth rate, the economy would double every 12 years, overtaking the current U.S. income per person in 2040.)

For this exercise we will assume an 8 percent annual economic growth rate. If the Chinese consume resources in 2031 as voraciously as Americans do now, grain consumption per person there would climb from 291 kilograms today to the 935 kilograms needed to sustain a U.S.-style diet rich in meat, milk, and eggs. In 2031China would consume 1,352 million tons of grain, far above the 382 million tons used in 2004. This is equal to two thirds of the entire 2004 world grain harvest of just over 2 billion tons. (See data.)

Given the limited potential for further raising the productivity of the world’s existing cropland, producing an additional 1 billion tons of grain for consumption in China would require converting a large part of Brazil’s remaining rainforests to grain production. This assumes, of course, that once they are cleared these soils could sustain crop production.

To reach the U.S. 2004 meat intake of 125 kilograms per person, China’s meat consumption would rise from the current 64 million tons to 181 million tons in 2031, or roughly four fifths of current world meat production of 239 million tons.

With energy, the numbers are even more startling. If the Chinese use oil at the same rate as Americans now do, by 2031 China would need 99 million barrels of oil a day. The world currently produces 79 million barrels per day and may never produce much more than that.

Similarly with coal. If China’s coal burning were to reach the current U.S. level of nearly 2 tons per person, the country would use 2.8 billion tons annually—more than the current world production of 2.5 billion tons.

Apart from the unbreathable air that such coal burning would create, carbon emissions from fossil fuel burning in China alone would rival those of the entire world today. Climate change could spiral out of control, undermining food security and inundating coastal cities.

If steel consumption per person in China were to climb to the U.S. level, it would mean that China’s aggregate steel use would jump from 258 million tons today to 511 million tons, more than the current consumption of the entire Western industrialized world.

Or consider the use of paper, another hallmark of modernization. If China’s meager annual consumption of 27 kilograms of paper per person were to rise in 2031 to the current U.S. level of 210 kilograms, China would need 303 million tons of paper, roughly double the current world production of 157 million tons. There go the world’s forests.

And what about cars? If automobile ownership in China were to reach the U.S. level of 0.77 cars per person (three cars for every four people), China would have a fleet of 1.1 billion cars in 2031—well beyond the current world fleet of 795 million. The paving of land for roads, highways, and parking lots for such a fleet would approach the area now planted to rice in China. The competition between automobile owners and farmers for productive cropland would be intense.

The point of this exercise of projections is not to blame China for consuming so much, but rather to learn what happens when a large segment of humanity moves quickly up the global economic ladder. What we learn is that the economic model that evolved in the West—the fossil-fuel-based, auto-centered, throwaway economy—will not work for China simply because there are not enough resources.

If it does not work for China, it will not work for India, which has an economy growing at 7 percent per year and a population projected to surpass China’s in 2030. Nor will it work for the other 3 billion people in the developing world who also want to consume like Americans. Perhaps most important, in an increasingly integrated global economy where all countries are competing for the same dwindling resources it will not continue to work for the 1.2 billion who currently live in the affluent industrial societies either.

The sooner we recognize that our existing economic model cannot sustain economic progress, the better it will be for the entire world. The claims on the earth by the existing model at current consumption levels are such that we are fast depleting the energy and mineral resources on which our modern industrial economy depends. We are also consuming beyond the sustainable yield of the earth’s natural systems. As we overcut, overplow, overpump, overgraze, and overfish, we are consuming not only the interest from our natural endowment, we are devouring the endowment itself. In ecology, as in economics, this leads to bankruptcy.

China is teaching us that we need a new economic model, one that is based not on fossil fuels but that instead harnesses renewable sources of energy, including wind power, hydropower, geothermal energy, solar cells, solar thermal power plants, and biofuels. In the search for new energy, wind meteorologists will replace petroleum geologists. Energy architects will be centrally involved in the design of buildings.

In the new economy, the transport system will be designed to maximize mobility rather than automobile use. This new economy comprehensively reuses and recycles materials of all kinds. The goal in designing industrial processes and products is zero emissions and zero waste.

Plan A, business as usual, is no longer a viable option. We need to turn quickly to Plan B before the geopolitics of oil, grain, and raw material scarcity lead to political conflict and disruption of the social order on which economic progress depends.
Copyright © 2005 Earth Policy Institute

FOR ADDITIONAL INFORMATION

From Earth Policy Institute

Lester R. Brown, Outgrowing the Earth (New York: W.W. Norton & Company, 2004).

Lester R. Brown, Plan B: Rescuing a Planet Under Stress and a Civilization in Trouble (New York: W.W. Norton & Company, 2003).

Lester R. Brown, Janet Larsen, and Bernie Fischlowitz-Roberts, The Earth Policy Reader (New York: W.W. Norton & Company, 2002).

Lester R. Brown, Eco-Economy: Building an Economy for the Earth (New York: W.W. Norton & Company, 2001).

Lester R. Brown, “China Replacing the United States as the World’s Leading Consumer,” Eco-Economy Update, 16 February 2005.

Lester R. Brown, “World Food Prices Rising,” Eco-Economy Update, 28 April 2004.

From Other Sources
BP, Statistical Review of World Energy 2004 (London: Group Media & Publishing, June 2004).

Energy Information Administration, “World Oil Demand,” International Petroleum Monthly.

International Monetary Fund, World Economic Outlook: The Global Demographic Transition (Washington, DC: September 2004).

International Iron and Steel Institute, Steel Statistical Yearbook 2004 (Brussels, 2004).

LINKS

International Monetary Fund http://www.imf.org

Iron and Steel Statistics Bureau
http://www.issb.co.uk

United Nations Food and Agriculture Organization
http://www.fao.org

United States Department of Agriculture http://www.usda.gov