Section 4 The Japan-China Environmental Model Cities Plan

To date, the undertaking that most strongly reflects the ideals of the ISD (global human security, ownership, and sustainable development) is the Japan-China Environmental Model Cities Plan, which was proposed during a summit meeting of Japanese and Chinese leaders in September 1997.

Severe environmental degradation has been one of the unwanted side-effects of rapid economic growth in China. To give an example, sulfur dioxide concentrations in the cities of Gui Yang and Chongqing have risen higher than the levels registered in Japan during its worst years of pollution.⁷ However, because China is a large country with many cities, Japan is limited in what it can do to help with its own aid resources. The Japan-China Environmental Model Cities Plan was accordingly conceived in the interest of providing more effective aid. The goal of this plan was to select several cities and have them serve as models of efficient environmental planning for other cities throughout China.

The plan constitutes an unprecedented effort in collaboration. Japan and China organized a committee of experts⁸ to study the plan from a professional perspective as well as from medium- and long-range perspectives. Both governments have adopted the committee's proposals as guidelines for action, and moved forward into the implementation stage.

The committee selected Chongqing, Gui Yang, and Dalian as the three model cities, and in April 1999 submitted reports to both governments with proposals for core guidelines and projects considered to deserve implementation priority. At present, both governments are heading efforts to implement the plan in accordance with committee recommendations.

1. Outline of Expert Committee Recommendations

The main text of the expert committee's recommendations included core guidelines for the plan, expectations of related institutions, and a framework for follow-up action. This was supplemented by a list of projects in each city that were considered to deserve implementation.

2. Future Efforts

It is essential that China assume its own initiative if the model cities plan is to be put into action. On that understanding, Japan intends to encourage China to make exhaustive efforts toward implementation, and is committed to providing China with assistance that effectively bundles various forms of aid, including yen loans and technical cooperation. Under its fourth five-year yen loan package for China (two years remaining: FY1999 and FY2000) Japan decided to provide yen loan funding of up to ¥40.5 billion for projects that the expert committee recommended for implementation in the three model cities.

In its recommendations, the committee noted that steady progress in project implementation will be crucial, together with work in the arena of human resources development. As the forefront of Sino-Japanese cooperation in the environmental field, the Japan-China Friendship Environmental Protection Center has a vital role to play, and in that respect, will face the necessity of utilizing its resources effectively. For full realization of the model cities plan, though, several other goals remain to be addressed, including the formation of recycling-oriented industrial and social systems. Japan and China will be expected to cooperate toward the achievement of those goals.

---

Section 5 Environmental Assistance through Collaboration with NGOs

Grant aid for grassroots projects has already earned strong appreciation inside and outside Japan as a means of providing aid to citizens for projects at the grassroots level, and is also finding effective use in the environmental field. In FY1998, Japan disbursed ¥700 million (12 percent of the total in grant assistance for grassroots projects) for 132 environmental projects. Additionally, ¥60 million was disbursed to subsidize 15 NGO-led projects in reforestation, assignment of experts, and other environmental protection-related areas.

In sectoral terms, projects for the supply of safe water and other improvements in the quality of the residential environment accounted for 70 percent of the aid total. One notable feature is that undertakings focused on natural environmental protection accounted for a larger share of this aid than is the case for conventional environmental ODA.

Also, as one of its efforts under the Japan-U.S. Common Agenda Japan has been providing grant assistance for grassroots project for U.S. NGO-led projects in environmental conservation (the Parks-in-Peril program). For example, in Panama it has assisted in a project to establish an international center for environmental education. The center will have the mission of promoting sustainable forms of development near the Panama Canal, an area afflicted by chronic water shortages attributable to local forest depletion and a consequent deterioration in the water retention capacity of the soil.

Another undertaking involved assistance to the Indonesian village of Sengata, which is located in a region of East Kalimantan that serves as a natural habitat for orangutans. Villagers alarmed by the downtrend in the local orangutan population had initiated programs of protection and monitoring. To aid their efforts, Japan supplied observation huts, motorcycles for patrol purposes, and radio transceiver equipment. Ownership will be fundamental to the solution of environmental problems. Accordingly, providing assistance for independent activities by NGOs and local citizens can be expected to have significant benefits over the medium and long range, particularly within the context of fostering a heightened awareness of environmental issues and boosting local capacity to address and counter environmental strains.

---

Section 6 Special Yen Loan Interest Rates for Environment Projects and the Flexible Utilization of Grant Assistance

Although most developing countries have demonstrated a much-improved awareness of the gravity posed by environmental problems, in some cases development still earns top priority while the environmental problems go neglected. This state of affairs has prompted Japan to enlist various strategies of promoting the formulation of more projects in the environmental field. In particular, it has begun offering lower interest rates for yen loans, as well as easier recipient country income level-related terms for the provision of grant assistance.

The following measures were taken in order to induce developing countries to utilize yen loans for projects against global warming. First, in September 1997, Japan eased its terms on yen loans for undertakings in pollution abatement and countermeasures against global environmental problems to an annual interest rate of 0.75 percent with 40year repayment period (including a 10-year grace period). Second, under the Kyoto Initiative announced in December that year, Japan widened the scope of project eligibility for yen loans under these terms and drew up a new case list.⁹ This includes undertakings in a variety of areas that until now were not treated as environmental fields: urban mass-transit systems for the relief of traffic congestion (subways, monorails, etc.), hydroelectric stations (limited to projects that do not pose a heavy environmental load), natural gas-fired power generation facilities, and facility renovation work aimed at conserving energy and other resources. In FY1998, projects to which the special environmental interest rate was applied accounted for 28 percent of the total yen loans (on a commitments basis).

The utilization of more flexible income-related standards has effectively improved grant access even to countries that no longer rely on grants for their development: e.g., particularly for the establishment of environmental centers and other projects that are aimed at boosting recipient capacity to deal with environmental problems.

---

Section 7 Environmental Considerations for General ODA Projects

At least two dimensions characterize the issues for aid in the environmental context. One concerns ways of promoting ODA in the environmental field (environmental ODA), and the other concerns ways of reducing the negative environmental impact caused by development itself. JICA and the OECF have drawn up guidelines for the inclusion of an environmental perspective into the implementation stages for general ODA projects. Furthermore, the above-cited special environmental interest rate is applied to the consulting services for yen loan projects that require environmental consideration in implementation. Also, environmental impact assessments are now an important element of the ex-post evaluation process for completed projects.

---

---

Next Page