ADB Approves US $ 300M China Pollution Control Loan

The Asian Development Bank on Thursday approved a $ 300 million loan to purify Beijing’s notoriously polluted air and pledged to support the Chinese government’s efforts to reduce coal consumption in and around the capital.

Beijing officials issued their first “red alert” on Monday after particulate matter levels rose to dangerous levels and factories, construction sites and many schools were forced to close.

The loan aims to reduce coal consumption in Hebei Province, which is the source of much of the pollution that routinely plagues both Beijing and the nearby port city of Tianjin. Beijing, Tianjin, and Hebei, collectively known as the Jing-Jin-Ji metropolitan area, are home to nearly 110 million people and account for 10 percent of China’s economic output.

Seven of the ten most polluted cities in China are in Hebei, which uses more coal than any other province except one. The ADB loan will support measures aimed at reducing Hebei’s annual coal consumption by more than 12 million tons.

“Even though they tried hard, the pollution is still there,” said Satoshi Ishii, an ADB development specialist. “The basic topic is the coal-based economy and industrial structure of Hebei.”

The grant package is ADB’s first “policy loan” in China. The Chinese government has traditionally been reluctant to involve foreign credit institutions in political decisions on critical issues such as the environment. However, the complexity of China’s environmental challenges has underscored the need to tap into outside expertise.

“It is less common to make a policy loan to an upper-middle-income country like China,” said Hamid Sharif, ADB’s China Country Director. “But since China faces complex problems like air pollution, it is open to political dialogue and input.”

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

Provincial borders are just one of many hurdles to clearing China’s air as competing bureaucratic fiefs and concerns for local jobs, economic growth and debt stand in the way of a blanket response in the smog-filled North China plains.

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

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

At a briefing on Thursday, Chinese officials stressed the importance of a coordinated regional response.

“Beijing, Tianjin and Hebei need to step up cooperation,” said Yin Hailin, deputy mayor of Tianjin. “The first is to act together.”

In the first 10 months of this year, Beijing closed or relocated 315 stores deemed excessively polluting and demolished 1.7 million square feet of buildings.

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

IBM Air quality prediction tools were launched this week that can predict conditions up to 10 days in advance, potentially allowing authorities to take mitigation action before dangerous smog sets in.

The company plans to expand its cooperation with the Beijing municipal government to include Baoding and Zhangjiakou, two heavily polluted cities in Hebei.

Additional coverage from Luna Lin

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