China Confidential

A former chief economist at the World Bank says China must take urgent action against one of the greatest treats of the new century--global warming.

"If global warming was left uncontrolled, there would be very severe droughts in northern China, severe floods in southern China, and great water stress as a result of receding glaciers and snow caps in the Himalayas," says Stern, who was commissioned last year by the British government to put a price on global warming.

He estimated the cost would be as much as 20 percent of global GDP unless early action is taken and said developing countries would be worst affected.

Stern's report has particular relevance for China, where a rapidly industrializing economy has already resulted in widespread environmental damage. Polluting coal-fired power stations provide 80 percent of the country's electricity needs, and China will soon overtake the United States as the leading emitter of carbon dioxide, one of the gases thought to be changing the world's climate.

Glaciers in the Himalayas are already retreating, and high demand for water from factories and agriculture in northern China means the famed Yellow River sometimes dries up before reaching the sea.

Stern, who has met with government officials and economists in Beijing, says China is starting to move in the right direction, but not rapidly enough.

"There is a sense of urgency in China, but there is a very practical concern with the question of finance and technology," he said.

The country's recent five-year development plan included promoting reforestation and energy efficiency among its commitments.

Stern suggests using economic incentives as a way to encourage efficient energy use by industry, and investment in greener technologies.

But the Chinese government still seems to be of two minds about the climate. On the one hand, it talks a good game wen it comes to being environmentally conscious. On the other hand, China still subsidizes the cost of gasoline, and encourages car ownership--in a country whose roads are already crammed with vehicles belching out more and more emissions.