What should I do if there is insufficient funding for ecological protection in the Yellow River Basin? Seek breakthroughs in the development of green and low-carbon industries

In the two years since the implementation of the major national strategy for ecological protection and high-quality development of the Yellow River Basin, the ecological protection and governance of the Yellow River has achieved positive results, but there are still many problems in terms of financial guarantee, such as a large number of historical debts, insufficient financing channels, and an imperfect mechanism for the transformation of the value of ecological products. Guided by the concept of "two mountains", we should promote the integrated development of ecological environmental protection and green and low-carbon industries in the Yellow River Basin, rely on the introduction of green and low-carbon industries, ecological environment governance and the integration of green and low-carbon industries, give full play to the role of fiscal and financial policy guidance and market mechanism regulation, and leverage all parties to participate in the ecological protection and high-quality development of the Yellow River Basin.

Focus on the key points and solve outstanding problems

The contradiction between ecological protection and industrial development in the Yellow River Basin is prominent, and the pace of coordination and feedback is slow. The Yellow River Basin is rich in coal, oil, natural gas and non-ferrous metal resources, with coal reserves accounting for more than 50% for a long time, and is an important energy, chemical, raw material and basic industrial base, making outstanding contributions to the national economic development. However, due to the influence of various factors such as natural environment and historical development, industrial development and ecological environmental protection are generally separated from ecological and environmental protection in the protection and development practice of various parts of the Yellow River Basin, and industrial development fails to fully consider the resource and environmental endowment and ecological impact in the introduction, project approval and planning and construction of projects. Most of the ecological environment construction projects are regarded as pure investment, and the overall consideration of the integrated development and mutual promotion of ecology and industry, the ecological governance feedback mechanism and the cultivation of "ecological +" new business formats is insufficient, resulting in the overall development level and quality of industrial ecology and ecological industrialization are not high. The resource-driven industrial development model of the Yellow River Basin is no longer sustainable, and the old path of "pollution first and then treatment" and "pollution while control" is not working, and new ways must be sought to achieve ecological protection and high-quality industrial development in the Yellow River Basin.

There is a large funding gap to further promote the ecological protection and high-quality development of the Yellow River Basin. As of June 2023, there are 5,738 projects in reserve, with a total investment demand of 875.93 billion yuan. Among them, the top three investment needs are clean heating projects in the northern region, major projects to respond to climate change and major projects to improve the water ecological environment, with 124.49 billion yuan, 119.52 billion yuan and 100.00 billion yuan respectively. The above is only to solve the investment needs related to ecological and environmental problems, if you consider the upgrading of green industries, ecological environment security, water conservation and utilization and other fields, the investment demand will far exceed one trillion yuan.

Under the dual influence of a weak economic foundation and the prevention and resolution of local debts, it is difficult to rely on local finances for capital demand. In 2022, the GDP of the nine provinces (autonomous regions) of the Yellow River will be 30.7 trillion yuan, accounting for 25.5% of the national total. Henan and Shandong provinces in the middle and lower reaches account for more than 50%, and Qinghai, Gansu, Ningxia, Inner Mongolia and other upstream provinces (autonomous regions) except Sichuan account for only 13.11%, showing a pattern of "strong upper (swimming) and weaker (swimming)", and the per capita GDP indicators are only Inner Mongolia (964.74 million yuan) and Shandong (860.03 million yuan) are higher than the national average (856.98 million yuan), and the rest are below the average level. At the same time, the nine provinces (autonomous regions) of the Yellow River have limited space for ecological protection and high-quality development. Since the issuance of general and special bonds was launched in 2015, the local debt levels of the nine provinces (autonomous regions) of the Yellow River have risen significantly. At the end of 2022, Shandong and Sichuan ranked second and fifth respectively in terms of debt scale, accounting for 11.7% of total local debt. Measured by the debt ratio (government debt balance/local comprehensive financial resources), except for Shanxi, the debt ratios of the remaining eight provinces are above the 100% warning line, especially in Qinghai, which is more than 150%. In this context, it is urgent to broaden the existing financing channels and mobilize government departments, financial institutions, and social capital to work together to solve the funding gap.

Implement precise policies and identify key areas

The author suggests that, in combination with the existing industrial base of the nine provinces (autonomous regions) of the Yellow River, the following areas should be focused on promoting the ecological protection and low-carbon industry development of the Yellow River Basin.

First, in Shanxi, Inner Mongolia, Henan and other areas with heavy mine restoration and governance tasks, the restoration of the mine ecological environment is taken as the entry point, combined with green and low-carbon industries such as cultural tourism and animal husbandry and photovoltaic complementation, to carry out the integrated development of mine ecological restoration and governance and cultural tourism, animal husbandry and photovoltaic complementation.

The second is to carry out actions such as green hydrogen substitution, cleaner production transformation and upgrading of energy and chemical bases in the comprehensive energy bases mainly in Shanxi and Ordos basins and important energy bases such as Ningdong in Ningxia, Longdong in Gansu, northern Shaanxi and Haixi in Qinghai, so as to promote the green and low-carbon development of the energy and chemical industry.

Third, in areas with serious water shortages such as Inner Mongolia and Ningxia, as well as cities at and above the prefecture level with a large demand for reclaimed water and a certain foundation for reclaimed water utilization, accelerate the utilization of sewage resources, and carry out the integrated development of green and low-carbon industries such as regional reclaimed water recycling and cultural tourism and modern agriculture with characteristic advantages.

Fourth, in important tributaries such as the Wei River, the Fen River, and the Shushui River, we will intensify the comprehensive treatment of water pollution in the tributaries and the hinterland of the river basin, and carry out the comprehensive treatment of water pollution in the river basin and the integrated development of green and low-carbon industries such as cultural tourism, planting of special agricultural products, and deep processing of agricultural products.

Fifth, in key agricultural irrigation areas such as the Hetao Plain, the Fenwei Plain, the Yellow River Irrigation Area, Wuliangsuhai, and Dongping Lake, we will intensify the control of agricultural non-point source pollution and the comprehensive improvement of the rural environment, and carry out the comprehensive treatment of farmland water pollution, the improvement of the rural living environment, and the integrated development of green and low-carbon industries such as the planting of special agricultural products, the deep processing of agricultural products, and cultural tourism.

Take multiple measures at the same time to play a synergistic role

To promote the ecological protection and green and low-carbon development of the Yellow River Basin in an integrated manner, it is necessary to effectively stimulate the enthusiasm of relevant departments, financial institutions, enterprises, public welfare organizations and think tanks in the nine provinces (autonomous regions) along the Yellow River, and form a joint force to promote the ecological protection and high-quality development of the Yellow River Basin.

The first is to increase financial support at all levels. The central government has increased the support for air pollution prevention and control funds, water pollution prevention and control funds, soil pollution prevention and control funds, and rural environmental improvement funds for the Yellow River Basin, and the allocation of funds is in line with the key tasks of the Yellow River ecological protection and governance. The central government has appropriately increased the scale of funds for the construction of major regional development strategies (ecological protection and high-quality development in the Yellow River Basin), and increased support for the nine provinces (autonomous regions) along the Yellow River in the funding arrangements for pollution control, energy conservation and carbon reduction, and comprehensive water environment management in key river basins. Encourage the special funds for ecological and environmental protection that have been established at the provincial level to be given priority to the key tasks of ecological protection and high-quality development of the Yellow River in the region.

The second is to guide financial institutions to increase supply. Accelerate the implementation of eco-environment-oriented (EOD) model projects that have been put into storage and climate investment and financing pilot projects. Drawing on the environmental protection loan model in advanced regions in China, encourage the nine provinces (autonomous regions) along the Yellow River to establish a library of environmental protection loan (burden) support projects, and provide credit support for enterprises engaged in the ecological protection and management of the Yellow River through the environmental protection loan (burden) model. Actively explore and practice the environmental protection credit investment model, and guide banks to give preferential options to enterprises with high environmental protection credit ratings, such as loan amounts, risk mitigation measures, and interest rate levels, so as to reduce the financing costs of enterprises. Encourage the nine provinces (autonomous regions) along the Yellow River to accelerate the trading of carbon emission rights and emission rights, as well as the trading of energy use rights, water rights and emission rights, and support market transactions such as transfers, transfers, mortgages, and shares.

The third is to give full play to the power of social capital. Promote the backbone central enterprises engaged in mining, coal chemical industry, petrochemical and other industries in the Yellow River Basin to participate in the restoration and management of historical mines in the Yellow River Basin, the comprehensive improvement of the water environment in the basin, the protection of key ecological function areas, the ecological restoration of ecologically sensitive and vulnerable areas, and the comprehensive improvement of the rural environment, as well as the integrated development of green and low-carbon industries such as ecological culture, tourism, health care, intelligent manufacturing, new energy, new materials, and rural revitalization. Attract provincial, municipal, and county-affiliated state-owned enterprises and private capital to actively participate, give full play to their respective characteristic advantages in fund raising, project construction, operation and maintenance, and jointly promote development.

The fourth is to establish a public welfare community model for the ecological protection of the Yellow River. Encourage relevant public welfare organizations that have common values for the ecological protection of the Yellow River, whose activities involve the Yellow River Basin, and whose funding funds have reached a certain scale, to form a public welfare community for ecological protection, organize the public welfare community to negotiate and determine the funding plan for ecological protection projects, and raise funds to support afforestation and natural vegetation restoration in key areas such as the Hetao Plain, the Fenwei Plain, and the land desertification area of the Loess Plateau, as well as the habitat protection and restoration of rare and endangered species such as pandas and golden snub-nosed monkeys.

Author's Affilications:Chinese Academy of Environmental Planning, Ministry of Ecology and Environment