What Chinese cities can teach US about sustainable innovation

Recently I was privileged to join Gov. Edmund "Jerry" Brown Jr.'s historic mission to China. As the only member of the delegation representing hundreds of California and U.S. cities, I was prepared to share some of the successful policies and technologies that local governments are employing to fight climate change while creating more sustainable, resilient cities.

I expected this localized approach would be novel for China's centralized government system. But I was encouraged to find that China is embracing its cities as laboratories of sustainable development by fostering a bottom-up approach to develop and deploy local solutions.

Chinese cities, some of the fastest growing on the planet, are experimenting with ways to maximize electric vehicle development and deployment, green building, an innovative locally tailored carbon market and national low-carbon province and cities program. As Chinese cities become increasingly polluted, they are highly motivated to identify successful pollution reduction strategies.

These efforts are not only having localized successes but just last year China also regained the top spot in clean energy investment in 2012, with a jump of 20 percent. China attracted $65.1 billion in renewable energy investments in 2012, compared to the U.S., which ranked second with $35.6 billion, and Germany with $22.8 billion, according to a Pew Charitable Trusts' report.

Crossing the river by feeling for stones

Using pragmatic pilot projects is nothing new in China. This approach was first promoted by Deng Xiaoping in the early 1980s. China is taking a very systematic approach to creating wide-scale, system-level market transformation. Unique to China in size and scale, the city-based pilot is designed to develop and refine new business models and markets, in order to introduce new technologies.

The pilots generally go through four stages:

1. Selection by the central government
2. Evaluation and absorption where policies are modified and more advanced practices identified
3. Diffusion, where success at the city pilot level is not replicated by central government order but through popularizing the pilot through media publicity, endorsement by leading politicians and government guides
4. Learning feedback loop, where central government pays close attention to how practices and models are being implemented, repeatedly re-evaluating them, modifying models or adjusting speed and range of diffusion.

This process significantly lowers the costs of pilots and reduces risks of reform as well as the impact should the reform fail.

Guangzhou image by Pavel L Photo and Video via Shutterstock.

Risk-taking and course correction

Even with the best of intentions, the rapid development of China's cities doesn't always go as planned. When I toured Guangzhou, one of China's most rapidly developing cities, I observed how an urban development project had gone awry with no effective public transit or green spaces. The situation was quickly fixed with effective bus rapid transit systems and a magnificent revitalization of a former sewer underpass transformed into a beautiful urban center. I saw not only how this one city could be transformed, but also how these lessons are being applied in Hangzhou, a future Tech City proactively developing a sustainable urban plan that includes more than 200 companies which will be headquartered there to drive sustainable economic development.

China recently announced it will deploy a similar regional approach for creating an emerging carbon market, with seven pilot regions: Beijing, Tianjin, Shanghai, Chongqing, Shenzhen, Hubei and Guangdong. Each jurisdiction has its own implementation plan and carbon-trading scheme. Similarly, local pilot projects are driving China's Three-Star Green Building Assessment System, carbon market and the national low-carbon provinces and cities program.

Electric vehicle adoption

In 2009, the Chinese central government announced the "Plan on Shaping and Revitalizing the Auto Industry." They launched a demonstration program of EV deployment in 13 Chinese cities and set a national goal of manufacturing a half-million alternative fuel vehicles in three years.  

A World Bank sponsored survey of the 13 participating cities suggests that while the central government's minimum requirement was just 1,000 EVs per city, by the end of the demonstration period, most of the participating cities will exceed the requirement.

Currently, Shenzhen leads all cities by aiming to deploy as many as 24,000 EVs by the end of the program. As American cities and businesses begin to invest in electric vehicles and infrastructure, China's models for spurring adoption of cleaner technologies and innovations could be a key ingredient for success.

By giving local leaders the ability to tailor programs to their region's needs and characteristics, China is beginning to show tremendous progress locally and through the dissemination of best practices, throughout the country. American city, policy and business leaders would be wise to look at these successful strategies.