0 How do China and Brazil deal with water pollution challenges?

A comparative perspective of two emerging countries’ approach to water pollution
problems MSc China in Comparative Perspective
London School of Economics
2009 - 2010

Candidate Number: 24247
Word Count: 9,866

1

2

Methodology 7

Chapter II: Overview
Water Pollution Situation in China and Brazil 10

Chapter III: Comparative Analysis
Industrialisation 13
Urbanisation 17
Rural and Agricultural Development 19

Environmental Policy Enforcement 22

Chapter IV: Conclusion
Conclusion……… …………………….……………… ………….….29

Bibliography………………………………………………………… ……….31

4

CHAPTER I: Introduction

Background and Motivation

Agua, eau, su, lehçe, shui, water. Pronunciation may vary across languages, though its significance for
human beings remains equally important. Water represents up to 60 percent of the human body and
cover over 70 percent of the Earth’s surface (U.S. Geological Survey, 2010). Ancient civilisations,
from Egyptians to Chinese to Mesopotamians, had their beginnings along great rivers for agricultural,

phenomenon near water polluted sources. This is particularly serious in a country that contains some
of the largest fresh water reserves in the world, and the largest population to be supplied.

China’s model of rapid economic growth, however, will not be sustainable without a real change in its
pollution prevention and control mechanisms. The top two most polluted cities in the world are
actually located in China. Excessive industrialisation and reliance on polluting energy resources have
severely damaged the Chinese environment. Pollution causes approximately 400,000 premature deaths
a year and acid rain has increasingly become a serious concern which damage is estimated to total $5-
13 billion (Lew, 1999). Finding a way to ensure water pollution prevention and control is urgent to
China in order to maintain its miraculous story.

On the other side of the globe, Brazil has deserved to be called the Latin American miracle due to its
astonishingly rapid socioeconomic growth as one of the world’s fastest growing economies. This has
contributed to consolidate it among the emerging BRIC countries (Brazil, Russia, India, and China).
Similar to China, Brazil contains large water resources from lakes and rivers, like the Amazons. Water
resources management is undeniably a key element to achieve sustainable growth, as well as a more
equitable and inclusive society. Nonetheless, rapid economic and industrial growth endangers Brazil’s
urban water access. Cities like Sao Paulo are among the largest urban centres in the globe with over 20
million people. Major cities, however, suffer from polluted water due to residential and industrial
sewage. Furthermore, it is believed that only 35 percent of collected wastewater received any
treatment. Uncontrolled urban growth is becoming a growing threat to the environment.

Both China and Brazil are often regarded by many developing countries as models to follow. As they
achieve astonishing economic results, water pollution has become an extremely serious threat to their
sustainable development. This research project will study and compare the approach of each country
to freshwater pollution. I will also evaluate the effectiveness of their policy enforcement efforts to
prevent and control water pollution. Although there is some literature on water pollution that analyses
individually China and Brazil, there are nearly almost no studies that compare both countries together,
despite their growing importance in the world. This dissertation will contribute to the existing
literature by providing a comparison of how two emerging countries that belong to a similar category

7

Methodology

How do China and Brazil deal with water pollution challenges? Emerging countries’ rapid
socioeconomic growth is indeed a great example to follow for many developing countries around the
world. Among them, both China and Brazil have proven in their respective regions that development
is possible for all economies and have drawn a new path towards growth and prosperity. Nevertheless,
water pollution is one of the most severe consequences of such phenomenon, as governments have
advocated for an economic growth first, environmental protection later approach. In the past few
decades, ruling institutions have attempted to tackle the water pollution problem due to the essential
role that water plays in human lives. This dissertation will analyse and compare these two emerging
countries’ approaches to freshwater pollution prevention and control.

In order to analyse and compare the ways China and Brazil deal with water pollution challenges and
assess their effectiveness, I will be looking at the impact on freshwater pollution of: industrialisation
and economic growth, urbanisation, rural and agricultural development, and environmental policy
enforcement. First, studying how water pollution has worsened in China by massive industrialisation,
as factories often fail to meet environmental standards and discharge untreated wastewaters to local
rivers, will provide an important assessment of the Chinese industrial impact on water pollution. The
water consequences of Brazil’s export orientated industrialisation approach, that marked its economic

accessed through the London School of Economics’ library, online journal databases, as well as other
articles and reports available online. Data from books, journals, articles, and reports are accordingly
cited and quoted. All the material has been selected according to content and relevance to the topic,
and analysed carefully to understand the main arguments of authors. Nevertheless, my research
encountered some language limitations, since some data and journals were only written in either
Portuguese or Chinese. Moreover, finding general information about Brazil was limited, as most data
was only found per regions due to Brazil’s federal structure.

This dissertation, thus, explores economic, political, social, and environmental aspects to compare
how two rapidly emerging countries like China and Brazil deal with water pollution. In Chapter II, an
overview of the importance of water for a country’s development will be followed by an introduction
of China’s and Brazil’s water resources and pollution problems. Chapter III will use a comparative
analysis to explore different areas related to water pollution in China and Brazil that will help us to
deeper understand how these two emerging countries deal with the issue. First, the role of
industrialisation in polluting freshwater of China and Brazil will be studied and compared. In order to
assess how China and Brazil deal with the problem of water pollution, the pollution intensity of GDP
and the environmental Kuznets curve will be applied. Second, an analysis of the impact of urbanisation
on water pollution in the Chinese and Brazilian contexts will contribute to the understanding of how
water pollution is caused and controlled. Third, rural development will be compared by evaluating
polluting elements of agriculture in both countries such TVIEs, fertilisers, and agrochemicals. This
will be analysed through the precautionary principle in order to assess the risk of rural policies to
cause harm to the rural environment. Fourth, environmental policy and water pollution control
enforcement in China and Brazil will be studied through the fragmented coordination and

9

bureaucratic competition approaches, as the role of governmental institutions will be considered in
dealing with this problem. Informal rules of behaviour, such as guanxi and clientelism, will serve to
the purpose of analysing how social factors affect policy compliance and water pollution treatment
efforts. Chapter IV will conclude the dissertation with an evaluation of the main arguments raised

10

CHAPTER II: Overview

Water Pollution Overview

Water is probably the most indispensable element for life on Earth. Water not only covers 70 percent
of the planet’s surface, but also represents up to 60 percent of the human body and 83 percent of our
blood (U.S. Geological Survey, 2010). Most great empires and civilisations were born at the meadows
of rivers like the Tigris, Nile, and Huang He. Despite its status as the backbone of life, human beings
have mistreated water and sacrifice its pureness at the expenses of development and economic growth.
Pollution of freshwater is an increasing problem, as there are about 250 million cases of water-related
diseases annually, with up to 10 million deaths (Grinning Planet, 2005). Ingestion of contaminated
water can cause mortal diseases like cholera, typhoid, and dysentery. It is not a coincidence that Asian
rivers are the most polluted in the world and have twenty times more lead than industrialised
countries’ rivers, as Asian economies have performed an impressive but destructive miracle. Chinese
rivers’ waters are mostly undrinkable. However, Asia is not the only continent with water pollution
issues. Latin America’s leading country, Brazil, has become one of the fastest growing economies in
the world. Excessive focus on industrialisation and growth has increased, like in China, water
pollution despite the abundance of its water resources. No development, however, is sustainable
without balanced actions that maintains a clean environment and promotes social wellbeing.

Over the last three decades, China has climbed from a poor developing Communist country to the
world’s third largest economy lifting about 500 million people out of poverty in a generation (Malik,
2009). What is considered by many as one of the world’s greatest social achievements has created
tremendous expectations given that one fifth of the planet’s population lives in China. Its rapid
industrialisation and growth has been carried out without considering environmental degradation and
contamination, which has contributed to reaching some of the world’s highest rates of water pollution
(Economy, 2006). China’s industrial output increased by more than 15 percent annually throughout
the 1990’s, thus becoming the country’s largest productive sector, accounting for 47 percent of its

ensure the continuity of its
socioeconomic miracle. Sadly, it is not
the only emerging country that faces
this difficult challenge. Before the first Europeans arrived in most of what today is known as Brazil, that land was like a
gigantic Eden with clean natural resources and a balanced harmony between men and nature. Since the
discovery of the Americas, Brazilian rivers and forests have been severely damaged for the sake of
large agricultural production and mining, especially due to Brazil’s rich gold resources. As South
America’s largest gold producer, Brazil has released into the Amazon about 2,000 to 3,000 tonnes of
mercury since the 1980’s (Malm, 1998). Moreover, rapid industrialisation and urbanisation has cost
severe water resources contamination, as it happened to China. Just in Brazil’s two largest
metropolitan areas, Sao Paulo and Rio de Janeiro, over 30 million people are affected by water
pollution (Osava, 2007). 12

Water resources in Brazil account for 53 percent of the total in South America with 251,000 cubic
metres/ second (Ferrao Boroi, & Alencar Torres, 1997). Brazil has about 14 percent of the world’s
freshwater resources, but 68 percent are located in the northern regions, which only has 7 percent of
the country’s population (Bernardo, 2008). Although Brazil is a large country with abundant water
resources, these are not homogeneously distributed (Clevelario Junior., 2005). The northern areas are
the least populated but rich in water, while the north-eastern regions have scarcity of water resources
due to a semi-arid climate and large population (Clevelario Junior., 2005). Southern Brazil’s water
scarcity is due to overexploitation and heavy pollution. In addition, there are two opposing groups
involving water distribution: one is made of governmental authorities that want water to serve power-
production and urban consumption purposes; whereas the other group is formed by rural inhabitants
that want water for irrigation and farming (Bernardo, 2008). If Brazilians are to enjoy clean water,


China’s fast paced development has led it to become “the third biggest contributor to global pollution”
(Murray & Cook, 2002). The main contributors to water pollution originate from industrial activities,
chemical, organic, and thermal wastes; urban centres, sewage consisting of human wastes, and
detergents; and rural activities, pesticides, fertilizers, and animal wastes (Brower et. al, 1990).
However, the most fundamental factors causing water pollution are the same that have boosted the
economic success of the rural industry. The causes for such a massive rate of pollution are closely
linked to its rapid industrial growth and the need to slow migration to the cities. China’s National
Environmental Protection Agency acknowledges that the main source of pollution in China come from
the dispersal of industries that was designed to dilute the concentration of industrial pollution, as well
as to improve the rural economies and prevent migration to the main urban centres (Ward & Liang,
1995).

Rapid industrialisation has had a profound impact on China’s environmental degradation and water
pollution. Environmental quality has declined sharply since 1978 (Swanson, 2001). In Zhejiang
province alone, more than 65 percent of the total precipitation is now acidic and the total annual
industrial wastewater discharge has been above 20 million tons since 1986 (Swanson, 2001). Industrial
pollution occurs due to mismanagement caused by a variety of reasons. Every year, rivers, lakes and
coastal water receive some 36 billion tons of untreated industrial wastewater and raw sewage
discharged by factories (Murray & Cook, 2002). According to China’s former State Environment
Protection Administration (SEPA) minister “about 28,000 enterprises still failed to meet the state
environmental standards. Another 7,280 had failed to take action to reduce their discharge of toxic
waste despite repeated warnings to do so” (Murray& Cook, 2002). Poor regulation and enforcement
allow many small enterprises to operate without wastewater treatment, thus exacerbating the water
pollution problem.

Furthermore, water pollution also has an economic burden for China. According to the 1997 World
Bank Clear Skies Blue Water report, the annual cost of environmental pollution and degradation in
China was equivalent to 8-12 percent of the Chinese GDP (Economy, 2006). Water availability is
crucial for economic growth and human wellbeing; however, mismanaged economic activities have a


Massive industrialisation derived from rapid economic growth has increased water pollution to
alarming levels in emerging countries like China and Brazil. However, this could merely be part of the
normal transition from a traditional to a developed economy. Countries with traditional economies
lack of a solid industrial foundation that boosts socioeconomic development. They are usually based
on rural activities for economic growth, such as farming and livestock raising, which generally suffer
from low-productivity. Some scholars argue that historically “during the transition from a traditional
economy to a developed economy, the pollution intensity of GDP has first intensified and then eased”

15

Source: New Zealand MAF
Source: Auty, 1997
(Auty, 1997). When countries
transform their economic
structure towards becoming a
developed economy,
manufacturing is specially
emphasized, whereas service
activities gain importance as the
economy later develops.
Transition length varies from five
generations in average to merely
two generations that has taken in
East Asia (Auty, 1997). This
argument can be explained by
using aggregate pollution patterns that mark the midpoint in the transition process in which
manufacturing reaches a peak. Pollution intensity of GDP can be understood with the inverted U-
shape of the environmental Kuznets curve (EKC): pollution rates and environmental degradation first
increase as manufacturing takes more importance and per capita income increases. After reaching the
17

Urbanisation

Emerging countries compromise about half of the planet’s population (Global Edge, 2009). Alongside
to their economic growth, Chinese and Brazilian cities are developing and urbanising at a remarkably
fast rate. Though it is economically beneficial, this rapid urbanisation has an adverse impact on the


environmental regulators has impeded the successful enforcement of polluting controls, aggravating
the current environmental crisis, thus becoming a pollution cause itself.

It is an unfortunate reality how emerging countries tend to ravage the environment as they climb to
power. Irresponsible dumping is not only affecting rivers and lakes, but human beings, animals, and
their surrounding are suffering as well. In China, statistics suggest that over 70 percent of lakes and
rivers are heavily contaminated, and more than half of the cities’ groundwater is polluted (Zhang,
2006). As reported by the government newspaper China Daily, over a sixth of China’s population is at
risk by severely polluted water, while most of the rural areas have no wastewater system in place
(Gleick, 2008). China’s uncontrolled exploitation of its water resources has reached the terrible point
that its rivers are dying, lakes are pools of waste; groundwater aquifers are being unsustainably
consumed, driving multiple aquatic life species to extinction; adverse impacts on both human and
ecosystem wellbeing are extensive and growing (Gleick, 2008). Sustainable development will only be
achieved when pollution control is effectively enforced to balance population and economic growth, as
well as environmental wellbeing.

The positive correlation between urbanisation and water pollution also occurs in Brazil, where major
and medium size metropolitan areas face increasing problems of water contamination. The rapid
growth of urban population has exceeded the ability of governments to expand sewage and water
treatment infrastructure. Approximately 30 million people are suffering from the water contamination
in Brazil's two largest metropolitan areas, Sao Paulo and Rio de Janeiro (Osava, 2007). Unlike China
where the communist regime left the attachment to the land as its heritage, Brazilian unequal but
democratic system promotes moving for opportunities. As the Brazilian industry and economy keeps
growing, invasions of illegal settlements in metropolis like Sao Paulo are increasingly becoming a real
threat for sustainable growth. According to the non-governmental Socioambiental Institute 2000
census, an estimate of 1.6 million people lives in illegal settlements, which leads to unregulated water
and sewerage runoff (Osava, 2007). As Rio de Janeiro metropolitan area has grown to the west
towards the Guandú basin, the main cause of water pollution is the untreated runoff of water used by
the civilians, particularly in illegal settlements (Osava, 2007). In contrast to China’s major cities

implementation and enforcement of environmental regulations. Local authorities are often involved in
the management of TVIEs. Therefore, conflicts of interest make local governments reluctant to
monitor and penalise for avoiding compliance and lacking wastewater treatment (Wang,
2007). Moreover, due to the dispersion of TVIEs, environmental monitoring staff is unable to carry
out inspections to all the registered enterprises. For instance, in Zhejiang’s Environmental Protection
Agency (EPA) each staff has to monitor an average of 500 enterprises in addition to the urban
enterprises (Wang, 2007). As a result, the Environmental Protection Bureau (EPB) and the local EPAs
focus on large polluters, leaving rural TVIEs immune.

Water contamination resulted from industries is much easier to document than that from agricultural
areas due to the lack of rural records (CR). However, existing reports suggest that massive rural
pollution has resulted from synthetic fertilizers and pesticides carried away in flows leaving irrigated

20

fields (CR). An example is the Huai River, which flows through densely populated farmland between
the Yellow and Yangtze rivers. Half the checkpoints along the Huai River showed pollution levels of
“Grade 5” or worse, with pollutants detected in ground water 300 meters below the river (Hays,
2010). Bottlenecks and elevation changes make the river prone to flooding and collecting pollutants.
In some cases, cities along a river dump pollutants outside their city limits, which create more
pollution for the cities downstream. By doing this, the cities’ authorities pass the pollution problem to
the cities downstream and avoid real policy compliance. Water has reached high rates of pollution
mainly because of poor irrigation and industrial practices, lack of wastewater treatments, and direct
wastewater dumping into the water flows.

A possible indicator to assess the rate of water pollution caused by each sector is looking at the
percentage of Chemical Oxygen Demand (COD), a major water pollution indicator, discharged. In
China, the total wastewater discharge in 2007 was about 30 million tons, 43 percent of which came
from agricultural sources (Xinhua, 2010). In the industrial sector, from all the surveyed TVIEs, paper
manufacturing industries discharged 45 percent of all the wastewater, and 67 percent of the total COD

Sul (RS) alone is responsible for using around 20 percent of all the pesticides utilized in the country
(Primel, 2005). In the region of Paty do Alferes, the Caetes watershed was reported to carry heavy
metals due to excessive use of fertilizers, pesticides, and organic residues. Brazil’s export oriented
agricultural practices have not only harmed the water quality, but it also puts at risks Brazil’s
capability to achieve a sustainable long-term growth.

Since the early colonial period, high expectations have remained about mineral riches hidden in the
Brazilian territory. Mining is one of Brazil’s main rural industries. As a result of 1970s gold prices
increase, since 1980s Brazil has ranked first in South America’s gold production, with nearly 90
percent coming from informal mining (Malm, 1998). However, in artisanal gold mining practices,
particles are extracted burning the amalgam with mercury. In the present gold rush this has led to
about 2,000 to 3,000 tonnes of mercury released into the Brazilian Amazon (Malm, 1998). Elevated
concentrations of mercury have been found in the Tapajos and Madeira river basins, as well as in some
populations (Malm, 1998). The intake of mercury through water or fish causes serious health risks,
such as neurological damage (Leino & Lodenius, 1999). Medical concern and awareness of the need
to reduce the overall exposure to mercury should encourage governments to take anticipatory action to
prevent harm of new activities, processes, technologies, and other discoveries. Because the burden of
proof in these cases relies on the proponents, the precautionary principle is crucial in protecting the
environment and avoiding pollution (Murray & Cook, 2002).

Many of the obstacles to effective wastewater management and water pollution prevention in
developing countries are also applicable to the implementation of environmental policy in Brazil and
China. Lack of trained personnel, budget constraints, inaccurate reporting data, limited public
awareness and participation, weak environmental organisations, insufficient legislative framework,
and ineffective control mechanisms lead to the aggravation of the water and environmental crisis
(Swanson, 2001). 22


countries where policy enforcement is harder and bureaucratic agencies have great power. This system
of fragmented coordination and bureaucratic competition has led to loopholes for bargaining and
uncoordinated policies among state agencies that often fight for increasing their share of power.

23

Fragmented coordination is one of the main reasons for weak policy enforcement, as competing
agencies and government offices may have opposing interests.

Dealing with water pollution in China has been limited by the fragmented coordination and excessive
decentralisation of the country’s ruling agencies. Economic reforms taken during the 1980’s brought
China a new era of management decentralisation in the water sector, as several government agencies
were created to supervise different sectors at national, provincial, prefectural, and country levels.
Although the Ministry of Water Resources was founded in 1949 to manage water resources directly
under the State Council of the People’s Republic of China, it was completely reorganised in 1988
(Ministry of Water Resources, 2010). This ministry was responsible for reviewing and verifying “the
capacity of pollutant load of water bodies, making proposals on the limit of total wastewater discharge,
and providing guidance on the protection of drinking water resources” (Ministry of Water Resources,
2010). The State Environmental Protection Administration (SEPA) was restructured as the Ministry of
Environmental Protection in 2008 to deal with water and environmental pollution issues. However,
sewage is administered by the Ministry of Housing and Urban-Rural Development (former Ministry of
Construction) and groundwater falls is managed by the Ministry of Land and Resources, both founded
after the 1998 Reform Plan of the Ministries of the State Council passed at the 9
th
National People’s
Congress (Li, 2008).

Having such large number of ministries administrating water pollution has created an inefficient and
uncoordinated system that only worsens China’s water pollution problem. Water pollution issues are
not only addressed by these four ministries, but also by other local governments at the provincial,

freshwater sources (Clevelario, 2005). In some cases, there is full detailed information regarding water
conditions, while in other cases, water quality reports are inexistent. This has led to overlapping
actions, and important gaps and/or omissions in some water statistics due to the different interests of
these institutions. Moreover, Brazil’s fragmented judiciary system and excessive political
decentralisation and autonomy has been also a cause of policy implementation failure (Lemos, 1998).
Some scholars have criticised the water privatisation process initiated in Brazil in 1996 to complement
public water agencies to manage water resources (Abcon, 2010). However, cooperation between
private and public enterprises seems to have worked out well, as only one of the two operates in each
designated region.

While China has relied entirely in public agencies to deal with water pollution, the Brazilian National
Water Agency (ANA) introduced in 2001 the PRODES Basin Restoration Programme to finance
wastewater treatment plants through concession contracts to private and public enterprises. This
innovative federal programme pays for treating wastewater based on certified outputs. A contract for
payment for sewage is signed between the Federal Government and the public or private entity that
will provide the service sanitation (PRODES, 2010). The contract establishes the commitments for
reducing pollutant loads, the value of financial incentive offered by ANA and the disbursement
schedule (PRODES, 2010). Participating entities have greater access to commercial credits for the
investment required due to the financial viability of utilities that the programme enhances. PRODES
has focused on the Brazilian south-east, where the most serious water pollution problems exist. The
programme has financed over 40 wastewater treatment plants in 32 cities with total leveraged