[Senate Hearing 113-150]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-150
 
REBALANCE TO ASIA III: PROTECTING THE ENVIRONMENT AND ENSURING FOOD AND 
              WATER SECURITY IN EAST ASIA AND THE PACIFIC 

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON EAST ASIAN 
                          AND PACIFIC AFFAIRS

                                 OF THE

                     COMMITTEE ON FOREIGN RELATIONS
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 24, 2013

                               __________

       Printed for the use of the Committee on Foreign Relations





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                COMMITTEE ON FOREIGN RELATIONS         

             ROBERT MENENDEZ, New Jersey, Chairman        
BARBARA BOXER, California            BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland         JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire        MARCO RUBIO, Florida
CHRISTOPHER A. COONS, Delaware       RON JOHNSON, Wisconsin
RICHARD J. DURBIN, Illinois          JEFF FLAKE, Arizona
TOM UDALL, New Mexico                JOHN McCAIN, Arizona
CHRISTOPHER MURPHY, Connecticut      JOHN BARRASSO, Wyoming
TIM KAINE, Virginia                  RAND PAUL, Kentucky
EDWARD J. MARKEY, Massachusetts
               Daniel E. O'Brien, Staff Director        
        Lester E. Munson III, Republican Staff Director        

                         ------------          

         SUBCOMMITTEE ON EAST ASIAN AND PACIFIC AFFAIRS        

             BENJAMIN L. CARDIN, Maryland, Chairman        

CHRISTOPHER MURPHY, Connecticut      MARCO RUBIO, Florida
BARBARA BOXER, California            RON JOHNSON, Wisconsin
TOM UDALL, New Mexico                JEFF FLAKE, Arizona
EDWARD J. MARKEY, Massachusetts      JOHN McCAIN, Arizona

                              (ii)        



                            C O N T E N T S

                              ----------                              
                                                                   Page

Beck, Hon. Gregory, Deputy Assistant Administrator for Asia, U.S. 
  Agency for International Development, Washington, DC...........    12
    Prepared statement...........................................    14
Cardin, Hon. Benjamin L., U.S. Senator from Maryland, opening 
  statement......................................................     1
Economy, Elizabeth C., Ph.D., C.V. Starr Senior Fellow and 
  Director for Asian Studies, Council on Foreign Relations, New 
  York, NY.......................................................    35
    Prepared statement...........................................    38
Reifsnyder, Hon. Daniel A., Deputy Assistant Secretary, Bureau of 
  Oceans and International Environmental and Science Affairs, 
  U.S. Department of State, Washington, DC.......................     4
    Prepared statement...........................................     6
Roberts, Carter, Chief Executive Officer, World Wildlife Fund, 
  Washington, DC.................................................    25
    Prepared statement...........................................    27

                                 (iii)

  


REBALANCE TO ASIA III: PROTECTING THE ENVIRONMENT AND ENSURING FOOD AND 
              WATER SECURITY IN EAST ASIA AND THE PACIFIC

                              ----------                              


                        WEDNESDAY, JULY 24, 2013

                               U.S. Senate,
    Subcommittee on East Asian and Pacific Affairs,
                            Committee on Foreign Relations,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:02 p.m., in 
room SD-419, Dirksen Senate Office Building, Hon. Benjamin L. 
Cardin, chairman of the subcommittee, presiding.
    Members present: Senators Cardin and Markey.

         OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 
                   U.S. SENATOR FROM MARYLAND

    Senator Cardin. Let me welcome everyone to this hearing of 
the subcommittee of the Senate Foreign Relations Committee, the 
third in our series on the Rebalance to Asia. Let me just 
observe, I just came from lunch at the State Department with 
the President of Vietnam, and I think that underscores the 
administration's commitment to the Rebalance to Asia. The 
relationship between the United States and Vietnam has gotten 
much stronger in the last decade. It is a remarkable change in 
a relatively short time.
    The trade minister was also there, who has been negotiating 
with our trade minister, USTR, on the TPP. So clearly the Asian 
countries are focused on the United States and on developing 
stronger strategic relationships with the United States.
    Our first hearing dealt with good governance and human 
rights. We also dealt with security issues. We had a chance to 
talk to the President of Vietnam about human rights, good 
governance, and on maritime security issues, which are 
obviously very, very important issues.
    This hearing is going to concentrate on the economic 
priorities related to environmental protection and food and 
water security in the East Asia-Pacific region. In June we 
celebrated Oceans Month and were reminded that protecting the 
environment and preserving our natural resources is a challenge 
we must address locally, nationally, and globally. As chair of 
the Environment and Public Works Subcommittee on Water and 
Wildlife, I have dedicated a significant amount of my time and 
energy to advancing domestic priorities that protect the 
Chesapeake Bay. The Chesapeake Bay is a precious resource not 
just to the people of Maryland and to this region, but indeed 
to our entire Nation, and it has global significance.
    In my role as a member of this committee, I have supported 
efforts to ensure my grandchildren inherit a clean and healthy 
Earth. As President Obama noted in his recent climate action 
plan, we have a moral obligation to leave our children a 
healthier planet.
    But environmental protection is not just about our moral 
obligation to future generations. It is also about advancing 
our current national security and economic interests. The 
devastating impacts of climate change and environmental 
degradation have touched every corner of the Earth, sending 
shock waves that have reverberated in communities from the 
Eastern Shore of Maryland to the peaceful plains of middle 
America, to the pastoral communities of Africa, to low-lying 
islands in the Asia-Pacific.
    Regardless of what any of us may think about the scientific 
evidence of climate change, one thing is clear: The security 
and economic impacts of climate-induced shocks and 
environmental degradation are significant.
    For decades, the United States national security and 
intelligence community have documented the strategic and 
economic importance of promoting smart sustainable development, 
protecting the environment, and addressing the global problems 
of climate change, particularly in the East Asia and Pacific 
region.
    Some observers have criticized the Rebalance to Asia policy 
for not focusing on the environment and related food and water 
security issues. However, recent reports and public statements 
by administration officials have underscored the view that 
helping the East Asia-Pacific region address environmental 
challenges is essential for preventing future conflicts and 
instability and advancing our economic interests in the region.
    Just last month, Adm. Samuel Locklear III, the Commander of 
the U.S. Pacific Command, eloquently conveyed the national 
security and economic impacts of climate shock, noting that 
over the past 4 years, nearly 278,000 people were killed in the 
region due to natural disasters and over half a million 
displaced and more than $800 billion lost in economic 
productivity.
    In April during his trip to Japan, Secretary of State Kerry 
spoke of the need for sustainable fisheries, problems related 
to illegal mining and logging, and the need for innovative 
global enforcement mechanisms in the region. In this region, 
each nation's environmental and natural resource consumption 
practices can negatively affect its neighbors and climate 
change impacts are felt across the region. Rivers that provide 
water for drinking, irrigation, industry, and ecosystems are 
stressed by increased demands, pollution, and dams.
    China's damming upstream of the Mekong River for hydropower 
projects has led to agricultural and water supply problems for 
downstream countries. Growing material demands, wealth, and 
poor development strategies have led to illegal wildlife trade, 
excessive commercial logging, deforestation, threatening native 
elephants, rhinoceros, and other species.
    The competition for energy and economic resources, 
including overfishing, has sparked rising tensions in disputed 
waters in the South and East China Seas. I already mentioned 
the fact that maritime security issues are one of our greatest 
threats to regional security and stability. We are all 
concerned that one of these minor flareups could end up causing 
a major problem in the region.
    Rising sea levels in the Pacific Ocean, home to the world's 
largest garbage patch of over 3.5 million tons of trash and 
pollutants, threaten to degrade the water supply, disrupt 
agriculture and food security, deplete marine life, 
biodiversity, impact tourism, and displace millions, including, 
according to the Department of Defense, our own U.S. military 
installations.
    Forest fires in Indonesia create a haze which devastates 
the air quality of neighboring countries. Air quality in China 
is a challenge of epic proportions. During my trip to Beijing 
in June, I did not have an opportunity to see the sun, and 
there were no clouds. You can see the air pollution in China. 
It has become not only a real problem as a health issue, 
including our own Embassy personnel concerned about its impact 
on their children, their ability to live in Beijing safely; it 
has also become a very political problem because the people of 
China see the problem every day and they are expecting their 
government to do something about it.
    In fact, China is doing something about it. They recognized 
that this is a growing problem and it looks like they are 
preparing to take steps to do something about it. There was a 
recent press report that we received today indicating that they 
are prepared to take some pretty dramatic steps to deal with 
the source of pollution and to show real leadership.
    We are pleased that the United States and China entered 
into a working agreement on climate change and we look forward 
to seeing how that will produce results, not only for China and 
the United States, but as a model for the region.
    We have at least one model for success in the region. 
Singapore is a trailblazer, a model for good environmental 
governance, for smart sustainable development. Over the past 40 
years, during a period of tremendous industrial growth, 
Singapore has invested in proactive government reforms to 
implement best practices in environmental planning. Despite 
water scarcity, population growth, and rising sea-level 
challenges, those reforms have made Singapore cleaner, greener, 
and more prosperous, and they inform regional dialogue on 
environmental issues within ASEAN.
    I look forward to hearing from our witnesses not only about 
the challenges, but also the partnership opportunities to 
advance best practices and develop innovative, economically 
friendly solutions to these challenges.
    I expect that the ranking member of the committee, Senator 
Rubio, who has been a real partner in developing the agenda of 
our Rebalance to Asia in this subcommittee, will be joining us 
shortly. He indicated to me he may be a little bit late getting 
here. He encouraged me to start the hearing so that we would 
not inconvenience the witnesses and those that are here. So we 
will do exactly that, and I will yield to Senator Rubio when he 
arrives.
    So let me introduce our first panel. On our first panel, we 
are pleased to have with us: Dan Reifsnyder as Deputy Assistant 
Secretary for the Bureau of Oceans and International 
Environmental and Scientific Affairs. Can you get that all on 
one card? [Laughter.]
    I am amazed at the titles that we give everyone today. But 
anyway, we appreciate the work that you do. You have held that 
position since August 2006, and are responsible for overseeing 
many issues related to environmental protection and 
conservation, from the forests to the wetlands to the coral 
reefs.
    In his prior role as the Director of the Office of Global 
Change, he developed and implemented U.S. policy and global 
climate change. You are a real expert in this area and it is a 
pleasure to have you with us.
    Our second witness is the Honorable Gregory Beck. As Deputy 
Assistant Administrator of USAID for Asia, he has oversight 
responsibility for all of USAID programming in East Asia, 
Southeast Asia, and the Pacific. He has over 15 years of 
senior-level leadership experience in development and in 
conflict and post-conflict environments, including in Asia.
    So, gentlemen, it is a pleasure to have both of you before 
the committee. Your entire statements will be made part of our 
record and you may proceed as you wish.

   STATEMENT OF HON. DANIEL A. REIFSNYDER, DEPUTY ASSISTANT 
SECRETARY, BUREAU OF OCEANS AND INTERNATIONAL ENVIRONMENTAL AND 
   SCIENCE AFFAIRS, U.S. DEPARTMENT OF STATE, WASHINGTON, DC

    Mr. Reifsnyder. Thank you and good afternoon, Chairman 
Cardin and other members of the Subcommittee on East Asia and 
Pacific Affairs. I appreciate the opportunity to appear before 
you today to testify on the important foreign policy and 
security issue of protecting the environment in the context of 
the administration's Rebalance to Asia.
    The United States has a long and rich history of strategic 
engagement with countries in the Asia-Pacific on a 
multilateral, regional, and bilateral basis, and the 
administration's rebalance moves us strategically toward even 
deeper relations with these countries. Their geopolitical and 
economic landscape makes it imperative that we address mutual 
challenges. Issues such as climate change, water, and 
conservation are beyond the reach and power of any one nation 
to address.
    In the Bureau of Oceans and International Environmental and 
Scientific Affairs, we are working to advance cooperation with 
countries in the Asia-Pacific region to help solve these 
difficult problems. I would like to provide you with a few 
concrete examples.
    During the first high-level meeting this month of the U.S.-
China Strategic and Economic Dialogue, the Climate Change 
Working Group agreed to focus on five new ambitious 
initiatives. Their goals include: reducing emissions from 
heavy-duty and other vehicles; increasing carbon capture, 
utilization, and storage; increasing energy efficiency in 
buildings, industry, and transport; improving greenhouse gas 
data collection and management; and promoting smart grids.
    Second, in my written testimony I highlighted the 
announcement by President Obama and President Xi in June to 
phase down the consumption and production of 
hydrofluorocarbons, or HFCs. Such a global phasedown could 
potentially reduce some 90 gigatons of carbon dioxide 
equivalent by 2050.
    With China's support, we hope soon to amend the Montreal 
Protocol to begin phasing down HFCs and to stimulate the use of 
better alternatives. We very much appreciate the letter that 
you, Senator Cardin, sent to President Obama on June 5 
advocating just such an agreement between the United States and 
China.
    Third, in addition to the work with China, we are also 
assisting a number of developing countries in Asia to create 
and implement ``low-emission development strategies.'' Already, 
developing countries account for the majority of greenhouse gas 
emissions and these emissions only increase without concerted 
action to decouple them from economic growth. These strategies 
enable developing countries to chart pathways to economic 
growth that reduce emissions over the long term while also 
achieving domestic growth objectives.
    Three other examples I would like to highlight quickly 
focus on water, forests, and wildlife trafficking. The lack of 
access to safe drinking water and basic sanitation in the Asia-
Pacific region continues to be a major cause of illness. We are 
taking steps to increase access to safe drinking water and 
sanitation, improve water resources management, increase the 
productivity of water resources, and mitigate tensions 
associated with shared waters.
    We are also collaborating with partners throughout the 
Asia-Pacific to conserve and sustainably manage their forests, 
supporting our climate change, biodiversity and development 
goals by working regionally and with key countries such as 
Indonesia to strengthen forest mapping and science, combat 
illegal logging, protect natural forests, and restore degraded 
lands.
    Turning to the last example, wildlife trafficking continues 
to drive protected and endangered species to the brink of 
extinction. The illegal trade, estimated to be between $7 and 
$10 billion annually excluding timber and fish, undermines 
conservation efforts, robs local communities that depend on 
natural resources for their economic resource base, contributes 
to the emergence and spread of disease, and threatens the rule 
of law.
    The Association of Southeast Asian Nations Wildlife 
Enforcement Network, ASEAN-WEN, of which the United States is a 
strong supporter, helps countries share information and 
facilitate the exchange of regional best practices in combating 
wildlife crimes. On July 1 President Obama signed an Executive 
order to combat wildlife trafficking, putting in motion a 
process to marshall new efforts and better coordinate our 
existing efforts against wildlife crime.
    In addition, a special session on wildlife trafficking was 
held recently during the 2013 U.S.-China Strategic and Economic 
Dialogue. Experts from multiple agencies met to review our 
efforts to combat the global illegal trade in wildlife and 
identify areas for increased cooperative efforts. The United 
States is committed to working with China to address this 
global challenge.
    It is becoming more and more vital for the United States to 
demonstrate our firm commitment to the Asia-Pacific through 
engagement on a full range of issues important to countries in 
the region. Achieving a sustainable environment in the Asia-
Pacific region requires the cooperation and commitment of all 
countries.
    I thank the chairman, the ranking member, and the 
subcommittee's distinguished members for the opportunity to 
testify and I will welcome your questions.
    [The prepared statement of Mr. Reifsnyder follows:]

            Prepared Statement of Hon. Daniel A. Reifsnyder

    Mr. Chairman, Ranking Member Rubio, and members of the 
subcommittee, thank you very much for inviting me here today to testify 
on this important issue of protecting the environment in the context of 
the Rebalance to Asia. I would also like to thank the committee for its 
efforts to build bipartisan consensus to engage the Asia-Pacific region 
and advance U.S. interests there. We value working with you and look 
forward to continuing to work closely with you and other Members of 
Congress in the future.
    The Obama administration's ``rebalance'' to the Asia-Pacific region 
is motivated by the desire to develop deeper and more wide-ranging 
partnerships in a part of the world that is increasingly important to 
American interests. The region, which is home to two-thirds of the 
world's population and the world's fastest-growing economies, offers 
increasing opportunities and challenges for U.S. strategic interests. 
As such, the administration's rebalance to the region covers a range of 
strategic objectives from deepening alliances and boosting economic 
growth and trade, to expanding good governance, democracy, and human 
rights. However, no rebalance policy would be complete without also 
examining implications for efforts to protect the environment in the 
Asia-Pacific region and to promote food, water, and climate security.
    The East Asia and Pacific region is known for its vast natural 
resources and biodiversity. Its economic growth has outpaced 
environmental protection, which has led to negative impacts on the 
region's fisheries and coral reefs, forests and grasslands, rivers, 
lakes, and air. Though the region has made great strides to reduce 
poverty, 1.2 billion people still live on less than US$2 a day, 
according to the World Bank. At the same time, in the past decade some 
countries in the region have lost 70 to 90 percent of their natural 
wildlife habitat to agricultural and infrastructure development, 
deforestation, land degradation, and climate change effects, while 
demand for water has almost doubled. Populations of big mammals such as 
elephants, tigers, bears, antelopes, and wild cattle, as well as marine 
turtles, freshwater fish and amphibians have continued to decline over 
the past decade. Many primate populations are in serious decline.
    Much is at stake: communities across the region are experiencing 
great changes from fast-paced economic growth averaging 5 to 7 percent 
annually. Recent growth has reduced poverty and supported progress 
toward achieving the Millennium Development Goals. Yet rapid growth, 
urban migration, extensive new infrastructure, exploitation of raw 
materials, and energy needs also jeopardize the region's natural 
resource base, food security, and traditional livelihoods.
    The United States has a long history of engagement with countries 
in the Asia-Pacific on a bilateral and regional basis. The Bureau of 
Oceans and International Environmental and Scientific Affairs (OES) at 
the U.S. Department of State seeks to advance U.S. foreign policy goals 
in the region in such critical areas as climate change, conservation, 
and environmental quality, to name a few. In my testimony, I will focus 
on several efforts the United States is undertaking in such areas as 
climate change, water, and conservation, among others in East Asia and 
the Pacific, and will highlight some examples of bilateral cooperation 
efforts.
              climate change initiatives and partnerships
    Internationally, we have made strides in the U.N. Framework 
Convention on Climate Change (UNFCCC) toward an approach in which all 
major economies commit to reducing emissions, and we are working to 
negotiate a global agreement by the end of 2015--to come into effect 
post-2020--that is ambitious, flexible, and applicable to all.
    Through the Global Climate Change Initiative (GCCI) and other 
climate-related U.S. Government programs, the United States is 
integrating climate change considerations into relevant foreign 
assistance programs through the full range of multilateral, bilateral, 
and private mechanisms to foster low-carbon growth, promote sustainable 
and resilient societies, and reduce emissions from deforestation and 
land degradation.
    Through the GCCI's Sustainable Landscapes pillar and related 
projects, the United States works with partners to reduce emissions 
from the land sector, and especially from deforestation. These efforts 
are undertaken in order to help stabilize temperatures while conserving 
biodiversity, protecting watersheds, and improving livelihoods of 
vulnerable populations. For example, the United States provides support 
to, and sits on the governing body of, the Forest Carbon Partnership 
Facility (FCPF). The FCPF is a multidonor trust fund housed at the 
World Bank that supports countries to develop and implement their own 
strategy to Reduce Emissions from Deforestation and Forest Degradation 
(REDD+). The United States also supports, and sits on the governing 
body of the Forest Investment Program (FIP). This multidonor trust 
fund, also housed at the World Bank, assists eight pilot countries in 
implementing elements of their REDD+ strategies. The Asia-Pacific 
region is prominent in each of these global initiatives. Cambodia, 
Indonesia, Lao People's Democratic Republic, Papua New Guinea, 
Thailand, Vanuatu, and Vietnam are all participants in, and recipients 
of funding from, the FCPF. Indonesia and Lao People's Democratic 
Republic are FIP pilot countries. Through the GCCI's adaptation pillar 
and related projects, the United States works to help low-income 
countries reduce their vulnerability to climate change impacts in a 
variety of multilateral, regional, and bilateral contexts. The Asia-
Pacific region figures prominently in these GCCI activities because of 
its high levels of vulnerability, as well as its strategic importance 
for U.S. economic and security interests.
    Another example of U.S. engagement in multilateral adaptation 
initiatives is our support for enhanced action on adaptation in 
vulnerable countries through contributions to two multilateral 
adaptation funds overseen by the Global Environment Facility (GEF). The 
United States is one of the largest donors to the Least Developed 
Countries Fund (LDCF) and the Special Climate Change Fund (SCCF), 
multilateral funds created under the UNFCCC. The Asia-Pacific region 
has benefited greatly from both multilateral funds. As of May 2013, 
Asia and the Pacific had accessed 29 percent of total LDCF resources 
approved (roughly US$160 million). For the SCCF, the largest share, or 
30 percent, of financing had been directed toward Asia.
Climate and Clean Air Coalition (CCAC)
    The Climate and Clean Air Coalition is a voluntary, collaborative 
global partnership uniting governments, intergovernmental 
organizations, the private sector, and civil society to quickly reduce 
short-lived climate pollutants such as methane, black carbon, and many 
hydrofluorocarbons. Actions can be undertaken now using current 
technologies. Major efforts include reducing methane and black carbon 
from waste and landfills; avoiding methane leakage, venting, and 
flaring from oil and gas production; phasing down hydrofluorocarbons 
through new technologies; and addressing black carbon from brick kilns 
and diesel engines.
    In the Asia-Pacific region the Coalition's members include 
Australia, Japan, New Zealand, and the Republic of Korea (Bangladesh 
and the Maldives are also members from Asia). In February 2013, the 
Coalition held a regional intergovernmental consultation in Bangkok for 
the Asia-Pacific region. Led by the environment ministers of 
Bangladesh, Nepal, and Maldives and the vice-minister of Japan, over 
100 participants from 19 Asia-Pacific countries, development 
organizations, CCAC partners, scientists, and NGOs participated. CCAC 
is actively working with additional countries, including Indonesia, at 
the subnational level though CCAC initiatives such as municipal solid 
waste management.
Low Emission Development Strategies (LEDS)
    One of our premier international climate activities involves 
support for ``low emission development strategies,'' or LEDS, in over 
20 different developing countries. LEDS provide a framework for 
developing countries to address poverty and development concerns, while 
simultaneously reducing greenhouse gas emissions. In many cases, 
identifying cleaner domestic energy opportunities or finding energy 
efficiencies accelerates economic growth. In Asia, our assistance is 
two-pronged. First, we provide bilateral assistance to Cambodia, 
Indonesia, the Philippines, Malaysia, and Vietnam through the Enhancing 
Capacity for Low Emission Development Strategies (EC-LEDS) program. 
Second, we provide multilateral assistance through the LEDS Global 
Partnership, a largely U.S.-supported platform which provides a space 
for countries to share knowledge and best practices on LEDS.
Pacific Islands Small Developing States (PSIDS)
    From a regional standpoint, the Pacific Small Island Developing 
States (PSIDS), in particular, are especially vulnerable to the impacts 
of climate change. They are small in size, have limited human, 
economic, and natural resources, including freshwater supplies, and are 
located in areas frequently prone to natural disasters, with much of 
the population living within 1.5 kilometers of the shore. We are 
supporting efforts to enhance the scientific and technical capacity of 
governments, regional and local institutions, and communities in the 
PSIDS to: understand, forecast, and use climate information to 
strengthen the adaptive capacity of key sectors, and, to access and 
effectively utilize adaptation financing. We are also supporting the 
Secretariat of the Pacific Community and the Secretariat of the Pacific 
Regional Environment Program to implement adaptation activities in 
local communities across the region to strengthen their food security 
and water resilience in the face of climate change and variability.
China
    With regard to our bilateral efforts in the East Asia and Pacific 
region, on July 10 and 11, 2013, Secretary Kerry hosted the Fifth Round 
of the U.S.-China Strategic and Economic Dialogue (S&ED). This year 
there was a strong focus on climate change, with the recognition that 
both countries need to do more given that together the United States 
and China are responsible for the lion's share of global emissions. 
Secretary Kerry elevated climate change in the U.S.-China relationship 
in April on his first trip to Beijing as Secretary of State, where he 
issued a Joint Statement creating a Climate Change Working Group tasked 
with developing large-scale cooperative action and presenting its 
recommendations at the S&ED. Essentially, the Working Group developed a 
set of new initiatives to help address major sources of emissions in 
the United States and China. The Working Group also emphasized the need 
to work together in fora like the U.N. climate negotiations, the 
Montreal Protocol, and the Major Economies Forum.
    The Working Group Report highlighted the agreement announced by 
President Obama and President Xi in June on the goal of phasing down 
hydrofluorocarbons. Given the enormous climate benefits of acting 
quickly on hydrofluorocarbons, this can only be seen as China stepping 
forward and helping lead the global effort on climate change. Building 
on existing bilateral cooperation, the Working Group and the S&ED have 
put U.S.-China relations on climate change on even firmer footing.
Indonesia
    Indonesia is a leader in REDD+, with President Yudhoyono having 
committed to significant reductions in greenhouse gas emissions, 
largely from the land sector. To achieve this, Indonesia is creating a 
series of REDD+ institutions to help implement a national REDD+ 
strategy. The second Indonesia Tropical Forest Conservation Act program 
is supporting the reduction of emissions from two heavily forested 
districts in East Kalimantan, developing new strategies for development 
on lower emissions trajectories. The United States supports additional 
work on REDD+ in Indonesia in areas such as forest mapping and 
monitoring; peatland emissions and fires; low emissions rural 
development options; and measuring, reporting, and verifying emissions. 
We have provided support to launch the Indonesia Climate Change Center, 
and are working with Indonesia on LEDS.
Korea
    Korea has stepped up its international efforts to address climate 
change. It has housed the Secretariat of the Asia-Pacific Economic 
Cooperation (APEC) Climate Center since the organization's 
establishment in 2005. In 2012, the board of the UNFCCC's Green Climate 
Fund (GCF) voted to locate the Fund's headquarters in Songdo, Korea. 
The Republic of Korea (ROK) is now focused on implementing the GCF's 
mandate, which is to provide assistance to developing countries to help 
them limit their greenhouse gas emissions and to adapt to the impacts 
of climate change. The ROK also cooperates with the United States and 
other governments and organizations in the CCAC working to reduce 
short-lived climate pollutants such as methane, black carbon, and many 
hydrofluorocarbons.
                  forest initiatives and partnerships
    As the United States works to assist the Asia-Pacific region in 
meeting its growing energy, infrastructure, and agricultural needs in a 
climate-smart way, we are also working to prevent or minimize impacts 
on ecosystems, and particularly natural habitats such as biodiverse 
tropical forests. We work regionally to promote conservation and to 
address forest issues through the Responsible Asian Forestry and Trade 
(RAFT) initiative, the Forest Legality Alliance (FLA), the APEC Experts 
Group on Illegal Logging and Associated Trade, and the International 
Tropical Timber Organization.
    Illegal logging is one such forest issue that poses a significant 
challenge in the region. It robs countries, impoverishes forest 
communities, and puts money in the pockets of criminals. It undermines 
sustainable forest management, destroying forests, watersheds and 
habitat. And it unfairly competes with legal production and trade, and 
has even been used to fuel conflict and purchase arms. The United 
States supports efforts to combat illegal logging and associated trade, 
and to promote trade in legally harvested forest products through a 
multifaceted approach in partnership with other governments, such as 
China and Indonesia, the private sector, civil society, and 
international organizations.
    We also work to implement the Lacey Act, a wildlife protection 
statute first enacted in 1900 and amended by Congress in 2008 to expand 
protections to plants and plant products.
    Multilaterally, we work to address illegal logging in cooperation 
with other governments and stakeholders through the Convention on 
International Trade in Endangered Species of Wild Fauna and Flora, the 
International Tropical Timber Organization, the United Nations Forum on 
Forests, the Food and Agriculture Organization, and the U.N. Office of 
Drugs and Crime.
    Regionally in Asia, we participate in three key initiatives:

   The APEC Forum Experts Group on Illegal Logging and 
        Associated Trade, which we worked with the Government of 
        Indonesia and others to establish in 2011. The group includes 
        representatives of trade, forestry, and other ministries to 
        combat illegal logging and associated trade, promote trade in 
        legally harvested forest products, and support capacity 
        building activities.
   The FLA, a public-private partnership to reduce demand for 
        illegally harvested forest products and increase industry 
        capacity to supply legally harvested forest products.
   The RAFT Program, which has assisted in the development of 
        timber legality assurance and chain of custody systems and has 
        helped to bring 1.2 million hectares of tropical forest under 
        Forest Stewardship Council certification.
China
    The United States works bilaterally with China under a formal 
Memorandum of Understanding (MOU) to Combat Illegal Logging and 
Associated Trade. The United States and China have achieved a more open 
and constructive dialogue and relationship on illegal logging since the 
signing of the MOU in May 2008. Discussions about the importance of 
private sector and civil society engagement under the MOU have also 
progressed significantly as there is mutual recognition that in the 
forest sector, civil society and industry are key players. China is 
actively promoting voluntary best practices guidelines for its private 
forestry firms operating overseas and making progress on its wood 
legality verification initiative.
The Philippines
    We have recently signed agreements for a second Tropical Forest 
Conservation Act debt for nature deal with the Philippines, which will 
primarily focus on forest conservation and REDD+ activities. These 
agreements, along with other U.S. efforts, will support the Philippine 
national government's efforts to reduce emissions from forest loss. 
Together these efforts are providing significant assistance to 
conserve, maintain, and restore tropical forests in the Philippines.
Burma
    Burma holds the Association of Southeast Asian Nations (ASEAN) 
chairmanship in 2014 and the government has stated it plans to focus on 
the environment. Sustainable development and good management of Burma's 
rich natural resources will be critical for its stability and success, 
and will provide opportunities to encourage Burmese civil society and 
government officials to implement best practices and promote sound 
environmental stewardship in conjunction with economic growth and 
increased investment. We are supporting NGO efforts to reform the 
timber production sector and combat illegal logging in Burma.
                   water initiatives and partnerships
    Collectively, the Asia-Pacific region has already met the 2015 
Millennium Development Goal to halve the proportion of people unable to 
reach or afford access to safe water. That said, 65 percent of the 
population lacks access to piped water supplies and over 1.7 billion 
people in the Asia-Pacific region lack access to sanitation. The lack 
of access to safe drinking water and basic sanitation continue to be a 
major source of illness within the region.
    As Secretary Kerry said during his chairmanship of the July 1, 
2013, Lower Mekong Initiative and Friends of the Lower Mekong 
Ministerial Meetings in Brunei, ``[the Mekong] is a special river. It 
sustains the lives of over 70 million people. And it is a powerful 
economic engine that connects the peoples of these countries.'' The 
countries of the Mekong Basin are increasingly considering hydropower 
as a solution to their growing energy needs. However, construction of 
dams on the Mekong River poses immediate and long-term threats to food 
security and livelihoods.
    Major infrastructure projects, like dams, are ultimately sovereign 
decisions that the countries themselves need to make. We are, however, 
conscious of both the potential negative impacts these projects can 
have and the opportunities they hold to promote cooperation and 
regional integration. In the case of the Mekong, we believe greater 
U.S. diplomatic and technical engagement could help strengthen existing 
regional institutions (like the Mekong River Commission) and drive the 
region toward better decisionmaking around large-scale infrastructure. 
With plans drafted, and construction already underway, the region has a 
narrow window of time to get this right. Smart, sustainable development 
is the key; deliberative, transparent, scientifically based 
decisionmaking benefits all.
The Lower Mekong Initiative (LMI)
    Launched by former Secretary Clinton in 2009 to foster cooperation 
and capacity-building among the lower Mekong countries--Burma, 
Cambodia, Laos, Thailand, and Vietnam--the Lower Mekong Initiative 
(LMI) has become a meaningful platform for engaging these countries on 
important transnational challenges such as shared water resource 
management. LMI's Environment and Water Pillar, chaired by Vietnam, 
works to advance economic growth and sustainable development through 
transnational policy dialogues and programs to improve the management 
of water and natural resources. The Environment and Water pillar works 
through three key themes: Disaster Risk Reduction, Water Security, and 
Natural Resource Conservation and Management.
               conservation initiatives and partnerships
Wildlife Trafficking
    Wildlife trafficking continues to drive protected and endangered 
species to the brink of extinction. The illegal trade, estimated to be 
between US$7-10 billion annually (excluding timber and fish), 
undermines conservation efforts, robs local communities that depend on 
natural resources of their economic resource base, contributes to the 
emergence and spread of disease, and threatens the rule of law. Asian 
countries are range, transit, and consumer states, linked by multiple 
transportation routes, methods, and facilitators. In recent years, 
demand for ivory and rhino horn has skyrocketed. The scale of the 
illegal wildlife trade in Asia indicates serious corruption at various 
levels of government, including wildlife authorities and customs 
officials themselves, throughout the smuggling chain. Officially 
launched in 2005, the Association of Southeast Asian Nations Wildlife 
Enforcement Network (ASEAN-WEN), comprising law enforcement agencies of 
the 10 ASEAN countries (Brunei, Burma, Cambodia, Indonesia, Laos, 
Malaysia, the Philippines, Singapore, Vietnam, and Thailand), helps 
countries share information and facilitate the exchange of regional 
best practices in combating wildlife crimes.
    In 2012, the APEC Leaders and Foreign and Environment Ministers 
condemned wildlife trafficking and urged members to cooperate to 
counter this crime. We are seeking continued strong statements in the 
2013 outcome documents and have proposed specific workshop activities. 
This past July 1, President Obama signed an Executive order to combat 
wildlife trafficking, putting in motion a process to marshal new 
efforts and to better coordinate our existing efforts against wildlife 
crime. A special session on wildlife trafficking was held recently 
during the 2013 U.S.-China Strategic and Economic Dialogue. Experts 
from multiple agencies met to review our efforts to combat the global 
illegal trade in wildlife and identify areas for increased cooperative 
efforts. The United States is committed to working with China to 
address this global challenge.
The Coral Triangle Initiative (CTI)
    The Coral Triangle Initiative (CTI) highlights the importance of a 
regional approach to issues that transcend the national borders of 
Indonesia, Philippines, Malaysia, Papua New Guinea, Solomon Islands, 
and Timor-Leste: coral reef and marine conservation, food security and 
adaptation to climate change. Goals include establishing sustainable 
ecosystem-based fisheries management for food security and livelihoods, 
strengthening resilience and adaptation to climate change, designating 
and effectively managing priority seascapes, establishing networks of 
marine protected areas, and conserving threatened marine species. The 
United States Government was the first financial supporter and partner 
to the CTI. The U.S. team providing support to the CTI involves the 
State Department, USAID, NOAA, a consortium of NGOs, and a contractor 
which functions as the Program Integrator. Altogether, U.S. Government 
support totals more than $60 million.
                    marine environment and fisheries
    In the Pacific, as elsewhere, the United States has been at the 
forefront of efforts to protect vulnerable marine ecosystems, assess if 
certain fishing practices may significantly harm these ecosystems, and 
develop effective conservation and management measures for these 
fisheries to prevent such harm or halt fishing in these areas. To 
promote these objectives, and to provide opportunities for U.S. fishing 
vessels to participate in certain high seas fisheries, we have 
successfully negotiated two new fisheries agreements that are now 
pending before the Senate, one for the North Pacific Ocean and one for 
the South Pacific Ocean. We urge the Senate to consider these two 
treaties and two other fisheries treaties that are also before the 
Senate, with a view to providing advice and consent to their 
ratification this session.
    The Multilateral Treaty on Fisheries between the Governments of 
Certain Pacific Island States and the Government of the United States 
(a.k.a. the South Pacific Tuna Treaty) remains a cornerstone of our 
economic and political relationship with the 16 states of the Pacific 
Island Forum. The Economic Assistance Agreement associated with the 
treaty remains a primary source of economic development funds for the 
Pacific Island States. Recently, we reached agreement on an interim 
arrangement to extend the operation of the treaty for 18 months, 
through December 2014, while negotiations for a longer term extension 
continue.
                                 trade
Trans-Pacific Partnership (TPP)
    The United States views the Trans-Pacific Partnership (TPP), a 
regional trade agreement that it is negotiating with Australia, Brunei, 
Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Mexico, Canada, 
and Japan, as a unique opportunity to tackle trade-related 
environmental challenges, including harmful illegal wildlife and wild 
plant trade, in the Asia-Pacific region.
    The United States has proposed a TPP environment chapter that 
includes, among other things:

   An obligation to maintain measures against trading across 
        TPP borders in products harvested or exported in violation of 
        national laws that seek to protect wildlife, forest, or living 
        marine resources. Such provisions would reflect and enhance 
        recent trends in a number of countries to restrict trade in 
        products that have been illegally obtained.
   Mechanisms for cooperation among TPP regulatory and law 
        enforcement 
        authorities in implementing antitrafficking obligations, 
        including participation in and establishment of regional law 
        enforcement networks.
   Commitments to develop and strengthen mechanisms for 
        cooperating and consulting with interested nongovernmental 
        entities in order to enhance implementation of measures to 
        combat trade in illegally taken wild fauna and flora, including 
        with respect to voluntary forest certification mechanisms.
Republic of Korea
    The United States and the ROK signed an Environmental Cooperation 
Agreement (ECA) on January 23, 2012, pursuant to provisions in the 
environment chapter of the U.S.-Korea Free Trade Agreement. The ECA 
established the U.S.-Korea Environmental Cooperation Commission (ECC), 
which held its first meeting in February this year. The Environmental 
Cooperation Work Program approved by the ECC identifies priorities for 
cooperative activities is areas such as strengthening environmental 
protection; promoting public awareness of environmental and resource 
conservation issues; protecting wildlife and sustainably managing 
ecosystems and natural resources; sustainably managing ports and 
maritime vessels; and promoting environmentally sustainable cities and 
the use of cleaner energy sources.
Singapore
    The United States and Singapore have a Memorandum of Intent on 
Environmental Cooperation, which was negotiated in 2003 in parallel 
with the Free Trade Agreement. We are actively engaged with Singapore 
in environmental cooperation activities, including exchanging best 
practices in water management, climate change adaptation strategies, 
enforcement of environmental laws, and energy efficiency, among others. 
On June 27, 2013, Singapore's national water agency, the Public 
Utilities Board (PUB) and the United States Environmental Protection 
Agency signed a Memorandum of Understanding (MOU) on Sustainable Urban 
Water Management. Through this MOU, both countries will strengthen 
their cooperation on water management issues by working together on 
safe drinking water research, watershed management, research and 
development for innovative water and wastewater treatment, water reuse, 
and other areas of mutual interest.
                               conclusion
    In conclusion, it is becoming more and more important for the 
United States to demonstrate our firm commitment to the Asia-Pacific 
through engagement on a full range of issues important to countries in 
the region, including the environmental issues I have mentioned today. 
Achieving a sustainable environment in the Asia-Pacific region requires 
the cooperation and commitment of all countries. The United States 
continues to forge this cooperation and these commitments through a 
variety of global, regional, and bilateral approaches.
    I thank the chairman, the ranking member, and the subcommittee's 
distinguished members, for the opportunity to testify, and I welcome 
your questions.

    Senator Cardin. Thank you very much.
    Mr. Beck.

STATEMENT OF HON. GREGORY BECK, DEPUTY ASSISTANT ADMINISTRATOR 
     FOR ASIA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, 
                         WASHINGTON, DC

    Mr. Beck. Chairman Cardin, thank you for the invitation to 
testify on the administration's efforts to protect the 
environment and promote food and water security in the Asia-
Pacific region. As part of the rebalance, a key economic and 
national security priority, the administration has recognized 
the need to preserve natural resources and promote sustainable 
development in the region to ensure mutual prosperity, 
progress, and security. Home to more than half of the world's 
population, Asia is the fastest growing region in the world and 
suffers from a lack of access to clean water and air, 
inadequate food supplies, degradation of natural resources, and 
loss of biodiversity.
    The Asia-Pacific region already accounts for more than one-
quarter of global GDP, a number that is expected to rise 
rapidly in the future. Asia's economic growth comes with an 
increased demand for energy and land, which could in turn 
increase greenhouse gas emissions and further threaten tropical 
forests and marine ecosystems. The effects of these threats are 
not limited to the Asia-Pacific region. Reports have shown that 
air pollution emanating from Asia will cause the temperature in 
the United States to rise as much, or even more, than all U.S. 
greenhouse gas emissions. By some estimates, more than 10 
billion pounds of airborne pollutants from Asia reach the 
United States annually, that impacts the health and well-being 
of American citizens.
    These compelling needs require USAID assistance and support 
to advance U.S. strategic interests. The Presidential global 
climate change initiative invests in developing countries to 
accelerate transitions to climate-resilient, low-emission 
economic growth. During fiscal year 2013 USAID provided $334 
million for this Presidential initiative, of which $65.4 
million was for the Asia-Pacific region.
    USAID's programs work on development strategies to reduce 
emissions from deforestation and degradation, address the 
impacts of climate change on agriculture and marine fisheries, 
and protect biodiversity and wildlife through both the Lower 
Mekong Initiative, or the LMI, and the Association for 
Southeastern Asians, or ASEAN, and bilateral country programs. 
I would like to take just a few moments to describe some of 
these programs in further detail.
    In 2010 the U.S. Government launched the Enhancing Capacity 
for Low Emissions Development Strategies Program, a framework 
for achieving economic and social development objectives while 
reducing greenhouse gas emissions. In East Asia we are 
partnering with Indonesia, the Philippines, Vietnam, Thailand, 
and most recently Cambodia to help governments and institutions 
plan for climate-resilient low-emissions development.
    Regionally, we are focusing on reducing deforestation to 
lower emissions through a program called Lowering Emissions in 
Asia's Forests. Target countries include the countries of the 
Lower Mekong River region, as well as Malaysia and Papua-New 
Guinea, with potential for sharing best practices with other 
countries across Asia. The regional program is working toward 
improving the management of over 1 million hectares of forests 
and reducing an estimated 15 million carbon dioxide equivalent 
tons of emissions.
    Global challenges require global responses and 
participation from all sectors, public, private, and civil 
society. The Tropical Forest Alliance 2020 is an example of a 
public-private partnership to reduce tropical deforestation and 
greenhouse gas emissions associated with key global 
commodities, such as soy, beef, palm oil, pulp, and paper. It 
is a whole of U.S. Government effort that works directly with 
governments and producers and buyers of key commodities to end 
the cutting of tropical forests for their production.
    As environment, water, and food security issues extend 
beyond national boundaries, it is also crucial to foster 
regional cooperation through existing institutions such as 
ASEAN, the Coral Triangle Initiative, the Mekong River 
Commission, and LMI. For example, through LMI the Mekong 
Adaptation and Resilience to Climate Change Project focuses on 
identifying the environmental, economic, and social effects of 
climate change on the Lower Mekong River Basin, which sustains 
the lives of over 70 million people and supports their ability 
to adapt their livelihoods to climate change impacts on water 
resources, agriculture systems, biodiversity, and ecosystems.
    The CTI is a unique example of countries joining forces to 
develop and implement regional solutions for regional problems. 
This area in the Western Pacific Ocean is the world's most 
biodiverse marine ecosystem, providing economic and food 
security benefits to over 360 million people.
    In January of this year, with support from USAID, senior 
officials from the CTI countries signed a resolution to address 
the negative impacts of an estimated yearly $1 billion fish 
trade, a concrete step to support the sustainability of marine 
resources.
    Trafficking of wildlife, the third-largest area of illegal 
trade after arms and drugs, also harms the environment by 
exploiting natural resources and endangering threatened species 
and ecosystems. Asia's Regional Response To Endangered Species 
Trafficking, or ARREST, is USAID's flagship antiwildlife 
trafficking program, working to strengthen law enforcement 
capacity, reduce consumer demand, and promote regional 
information-sharing and cooperation.
    In conclusion, USAID will continue to emphasize cooperation 
amongst countries and help build strong democratic processes 
across the Asia-Pacific region for open dialogue and problem-
solving in relation to the environment and climate change.
    Thank you, Mr. Chairman, for your time and I look forward 
to answering your questions.
    [The prepared statement of Mr. Beck follows:]

                Prepared Statement of Hon. Gregory Beck

    Chairman Cardin, Senator Rubio, and distinguished members of the 
committee, thank you for the invitation to testify on the 
administration's efforts to protect the environment and promote food 
and water security in the Asia-Pacific region. Today, I hope to share 
with you how USAID is helping conserve water and food sources in the 
region through programs which promote sustainable development. I will 
also share details on our regional and bilateral efforts to reduce the 
degradation of oceans, air, and forests.
    As part of the rebalance to the Asia-Pacific, a key economic and 
national security priority, the administration has recognized the need 
to preserve the environment and protect food and water resources in the 
region to ensure mutual prosperity, human progress, and security. 
Within USAID, the Asia-Pacific region has been a focus for the 
environment and food security given its rich areas of biodiversity and 
growing populations. The Rebalance has sharpened our focus and 
increased our investment in support of regional institutions and 
initiatives such as the Association of Southeast Asian Nations (ASEAN), 
the Lower Mekong Initiative (LMI), and the Coral Triangle Initiative on 
Coral Reefs, Fisheries, and Food Security.
    Home to more than half the world's population, Asia is the fastest 
growing region in the world and suffers from a lack of access to clean 
water and air; inadequate food supplies; degradation of natural 
resources; and loss of biodiversity--all of which undermine sustainable 
development. The Asia-Pacific region already accounts for more than 
one-quarter of global GDP, a number that is expected to rise. Asia's 
economic growth comes with an increased demand for energy and land 
which could, in turn, increase greenhouse gas emissions and further 
threaten tropical forests and marine ecosystems. Climate change and its 
impact on natural resources is affecting water and food supplies and 
intensifying environmental and resource problems that communities are 
already facing. More than a billion Asians are projected to suffer from 
its adverse effects. At the same time, natural disasters are becoming 
more frequent and more severe in Asia--an area of the world that 
already experiences over 60 percent of the world's major natural 
disasters. Future environmental threats to Asia are projected to be 
significant, including more extreme weather and rising sea levels.
    The effects of these threats are not limited to the Asia-Pacific 
region. Reports have shown that air pollution emanating from Asia will 
cause temperatures in the United States to rise as much, or even more, 
than all U.S. greenhouse gas emissions. By some estimates, more than 10 
billion pounds of airborne pollutants from Asia, including soot, 
mercury, and carbon dioxide, reach the U.S. annually, which impacts the 
health and well-being of American citizens. Additionally, degradation 
of fisheries in Asian waters impact supply in American markets.
    These compelling needs require U.S. assistance and support to 
advance our strategic interests. As the world becomes increasingly 
interconnected, the U.S. Government, and specifically USAID, recognizes 
that environmental conditions and people's access to natural resources 
underlie efforts to achieve economic security, political stability, and 
peace throughout the globe. If successful climate mitigation and 
adaptation strategies are not adopted in the near term, hundreds of 
millions of people will face increasing pressure on water resources; 
damage to crops and housing; and exposure to extreme weather, diseases, 
and pests. We know that the world's poorest will be the most affected 
by these changes and USAID is working with our partners to mitigate 
these effects and protect the environment, especially in the Asia-
Pacific region.
    With a new emphasis on helping vulnerable communities build 
resilience to natural disasters, the Presidential Global Climate Change 
Initiative invests in developing countries to accelerate transitions to 
climate-resilient, low-emission economic growth. During FY 2013, USAID 
will provide $460.3 million for this Presidential Initiative, of which 
$65.4 million is planned for the Asia-Pacific region.
    As part of these efforts, USAID is implementing several programs 
throughout the region to combat global climate change. For our work to 
be relevant in the Asia-Pacific region, we are using a different 
business model, one that emphasizes work with local partners so that we 
enact solutions that are durable and sustainable. We recognize the need 
for robust partnerships that can have national impact by focusing on 
partnerships with the private sector, other donors, and host country 
governments that leverage significant resources for transformational 
impact. And we also rely on evidence-based development methods that 
draw from advances in science, technology, and innovation. We are 
implementing partnerships with American and Asian scientific and 
academic institutions that are relevant to these complex challenges and 
can build off of the latest research and technology.
    Therefore, we are working in partnership with governments, civil 
society, and the private sector, among other stakeholders, to find 
alternative development pathways that lower greenhouse gas emissions 
and increase the resilience of communities and economies to climate 
change impacts. We are also working to help countries and communities 
prepare for and adapt to climate change and extreme weather events. 
Much of this work involves maintaining healthy forests, rivers, and 
oceans to increase resilience to climate change.
    USAID's programs include working with countries and the private 
sector on low emission development strategies; reducing emissions from 
deforestation and degradation; understanding the impacts of climate 
change on agriculture and marine fisheries; protecting biodiversity, 
including wildlife, through the LMI and ASEAN regional institutions; 
bilateral programs in countries like Indonesia and the Philippines; and 
the Tropical Forest Alliance 2020, a public-private partnership working 
to reduce global deforestation associated with key global commodities.
    I would like to take a moment to describe some of these programs in 
further detail.
            enhancing capacity for low emission development
    First, I'll talk about our efforts to promote climate-resilient, 
low-emission development in the Asia-Pacific region. In 2010, the U.S. 
Government launched the Enhancing Capacity for Low Emission Development 
Strategies (EC-LEDS) program. A Low Emission Development Strategy 
(LEDS), broadly defined, is a country's planning and implementation 
framework that achieves economic and social development objectives 
while reducing greenhouse gas emissions. We are now partnering with 20 
countries to help governments and institutions plan for climate-
resilient, low-emission development. In East Asia, partner countries 
include Indonesia, Philippines, Thailand, Vietnam, and most recently 
Cambodia, which signed on in June 2013. The EC-LEDS program is managed 
by USAID and the U.S. Department of State, drawing upon experts from 
the U.S. Government's Environmental Protection Agency and Departments 
of Agriculture, Energy, and Treasury. Our partnership with the State 
Department helps enhance key diplomatic relationships with partner 
countries as we work to achieve an effective global approach for 
reducing greenhouse gas emissions to levels that protect the climate 
for our children and future generations.
    Our regional mission in Bangkok is advancing countries' ability to 
reduce greenhouse gas emissions through the Low Emissions Asian 
Development (LEAD) program. LEAD supports regional-level training, 
technical assistance, knowledge-sharing, and partnership platforms to 
advance the U.S. Government's international initiatives on LEDS. Among 
its initial achievements, the LEAD program has successfully organized 
and launched the LEDS partnership, a new flagship platform for several 
hundred government and nongovernment practitioners in Asia to engage in 
peer-learning, hands-on training, and knowledge-sharing on a range of 
topics related to LEDS and green growth.
          reduced emissions from deforestation and degradation
    We are also working to reduce deforestation to avoid carbon dioxide 
emissions while actively conserving remaining stands of natural 
forests. Our activities target countries that are large-scale emitters 
from deforestation, such as Indonesia; those with large existing stands 
of forests, such as Cambodia; and those with the potential to reduce 
carbon emissions through reforestation, such as the Philippines.
    Indonesia is a major emitter of greenhouse gases because of 
widespread forest clearance and burning of areas on peat soils for 
plantation establishment. Just recently, Malaysia and Singapore were 
affected by hazardous levels of air pollution from the illegal burning 
of forests and peat lands in Indonesia. USAID is working to avoid such 
emissions. The USAID Indonesia Forestry and Climate Support program is 
an integrated climate change, sustainable forest management, and low 
carbon emissions development activity that is implemented 
collaboratively by the Governments of Indonesia and the United States. 
It builds on 20 years of joint forest management efforts between the 
two governments, and supports key climate change initiatives of the 
Indonesian Government including its pledge to reduce emissions by 41 
percent. The project also supports sustainable development of local 
economies by engaging the private sector. Targeted results include a 6 
million ton reduction in carbon dioxide emissions; improved management 
of 3 million hectares of forest, including 1.7 million hectares in 
priority orangutan habitat; and plans in 12 districts that incorporate 
Strategic Environmental Assessment recommendations for forest and peat 
land conservation to reduce greenhouse gas emissions.
    Regionally, we are focusing on reduced emissions from deforestation 
and forest degradation through a program called Lowering Emissions in 
Asia's Forests. This program is a regional technical assistance program 
helping developing countries in the Lower Mekong to reduce emissions 
from deforestation and forest degradation. Target countries include the 
countries of the Lower Mekong River region (Cambodia, Laos, Thailand, 
and Vietnam) as well as Malaysia and Papua New Guinea, with potential 
for sharing best practices with other countries across Asia. The 
regional program is working toward improving the management of over 1 
million hectares of forests, reducing an estimated 15 million carbon 
dioxide-equivalent tons of emissions, and supporting 25 institutions to 
address climate change issues. The Lowering Emissions in Asia's Forests 
program is also working to integrate gender considerations throughout 
the program to empower 20 women leaders and to strengthen the role of 
women in eight organizations across the region.
                     tropical forest alliance 2020
    Global challenges like reducing emissions from deforestation 
necessitate global responses. Such responses require participation from 
all sectors: public, private, and civil society. The Tropical Forest 
Alliance 2020, called TFA 2020 for short, is an example of a public-
private partnership to reduce the tropical deforestation and greenhouse 
gas emissions associated with key global commodities, such as soy, 
beef, palm oil, and pulp and paper. It is a whole of U.S. Government 
effort, with USAID as lead, working closely with the State Department 
and other departments and agencies. The significance of this alliance 
is its ability to achieve scale in reducing deforestation and 
associated greenhouse gas emissions. It will work directly with 
governments in buying and producing countries, as well as the producers 
and buyers of these commodities, to end the cutting of tropical forests 
for commodity production. In June 2013, TFA 2020 held its first 
workshop in Indonesia on palm oil and pulp and paper. This workshop was 
an unprecedented opportunity as it brought together for the first time 
private sector and civil society groups, often at odds with each other, 
to discuss constructively the challenge of tropical deforestation and 
how to address it. During this workshop, strong private sector 
commitments were made to stop deforestation, and the Government of 
Indonesia committed to protecting the rights of indigenous people 
dependent on tropical forests.
                             food security
    USAID efforts are also focused on strengthening food security by 
improving the agricultural production of small-scale farmers. For 
example, the Cambodia HARVEST program supports Cambodia's Millennium 
Development Goal targets, including reducing extreme poverty and 
hunger; ensuring environmental sustainability; enhancing agricultural 
production; improving harvest yields and distribution; increasing 
access to food; and improving resource management and resilience. 
HARVEST--which stands for Helping Address Rural Vulnerabilities and 
Ecosystem Stability--integrates two Presidential Initiatives: Feed the 
Future and Global Climate Change. In Cambodia's Pursat province, the 
program helped poor women by providing business opportunities, 
promoting the use of sustainable products and offering environmentally 
friendly alternatives to traditional income-generating activities such 
as logging and charcoalmaking. This effort helps communities protect 
their forest resources through a variety of activities, including tree 
nurseries, wood lots, and agroforestry, while providing a source of 
income for villagers. For example, the project helped the Ou Baktra 
Community Forest by planting 2,000 seedlings in an effort to restore 
partially degraded forest areas.
      regional cooperation on environment, water and food security
    As environment, water, and food security issues extend beyond 
bilateral boundaries, it is also crucial to foster regional cooperation 
through existing institutions such as ASEAN, the Coral Triangle 
Initiative, the Mekong River Commission, and LMI. Through these 
regional bodies, we can facilitate knowledge-sharing among countries 
and improve the management of national and transboundary natural 
resources such as water, forests, and fisheries.
    USAID has capitalized on the LMI as a framework to foster common 
interests between Cambodia, Laos, Thailand, Vietnam, and Burma with the 
goal of enhancing cooperation in areas such as the environment, 
education, infrastructure development, and agriculture and food 
security. As part of the LMI, USAID supports several climate change and 
environment programs. For example, the Mekong Adaptation and Resilience 
to Climate Change project focuses on identifying the environmental, 
economic, and social effects of climate change in the Lower Mekong 
River basin, which sustains the lives of over 70 million people. The 
project also assists highly vulnerable populations in ecologically 
sensitive areas to increase their ability to adapt their livelihoods to 
climate change impacts on water resources, agricultural systems, 
biodiversity, and ecosystems.
    Through Feed the Future, USAID has been working to strengthen and 
institutionalize ASEAN public-private sector engagement on food 
security by engaging in public-private dialogues at both the working 
group and minister-levels. The December 2012 ASEAN Public-Private 
Dialogue on Sustainable Fisheries and Aquaculture, a collaboration of 
ASEAN's public and private sectors, established a taskforce for 
sustainable fisheries and aquaculture and formalized operational 
guidelines to focus on accelerating sustainable and responsible 
aquaculture practices. As a result, an ASEAN good aquaculture 
practices, standards, and certification scheme is being developed to 
improve the social and economic situation of small-scale farmers and 
boost the supply of sustainable, responsible, and traceable farmed 
aquaculture products. By increasing the availability of a key protein 
source, safeguarding rural livelihoods, expanding incomes, and reducing 
environmental vulnerability in the region the long-term impact of such 
activities will be enhanced food security.
    USAID is also committed to preserving the oceans in the Asia-
Pacific region through initiatives like the Coral Triangle Initiative, 
a unique example of countries joining forces to develop and implement 
regional solutions for regional problems. The Coral Triangle marine 
area in the Western Pacific Ocean is the world's most biodiverse marine 
ecosystem, providing economic and food security benefits to over 360 
million people in the Coral Triangle region and many more around the 
world.
    In January 2013, with support from USAID, senior officials from the 
six Coral Triangle countries took a concrete step to support the 
sustainability of marine resources by signing a resolution to address 
the negative impacts of an estimated $1 billion per year live reef food 
fish trade in the Southeast Asia and Coral Triangle regions. In 
Indonesia, USAID programs in support of the Coral Triangle Initiative 
continue to focus on building the technical expertise and management of 
the Ministry of Marine Affairs and Fisheries. Our goal is to optimize 
the intersection of conservation, sustainability, and profit so that 
Indonesia's vast marine wealth contributes to long-term national 
development while adapting to climate change. For example, USAID has 
worked with the Indonesian Government and its people to improve the 
management of over 10 million hectares of coastal zones and marine 
protected areas. In addition, the programhas trained over 1,700 
individuals in natural resources management, biodiversity conservation, 
and climate change resilience.
                 biodiversity and wildlife trafficking
    We are also fighting the trafficking of wildlife--the third-largest 
area of illegal trade after arms and drugs and often a source of 
financing for organized crime and terrorist organizations. Wildlife 
trafficking activities also directly harm the environment, by 
exploiting natural resources and endangering threatened species and 
ecosystems. Asia's Regional Response to Endangered Species Trafficking 
(ARREST) is USAID's flagship 5-year, $8 million biodiversity 
antiwildlife trafficking program. ARREST is implemented by Freeland 
Foundation, a Bangkok-based NGO, together with local partners in the 10 
ASEAN countries and U.S. Government agencies such as the U.S. Fish and 
Wildlife Service, State Department, and U.S. Forest Service. ARREST's 
holistic approach works to strengthen law enforcement capacity, reduce 
consumer demand, and promote regional information sharing and 
cooperation across Asia. ARREST continues to build on the ASEAN-
Wildlife Enforcement Network. Successes to date include increasing 
arrests and seizures of illegal wildlife trafficking by elevenfold 
since 2005; training more than 3,000 government officials in law 
enforcement techniques; strengthening regional cooperation through a 
functioning and self-sustainable Secretariat; and raising the awareness 
of more than 100 million individuals about endangered species that are 
threatened by consumer demand. We also partner with international law 
enforcement organizations such as INTERPOL's Project PREDATOR to combat 
the illegal trade in tigers and snow leopards.
                      water supply and sanitation
    And finally, the USAID Indonesia Urban Water, Sanitation, and 
Hygiene project is supporting the Government of Indonesia in its 
efforts to achieve Indonesia's Millennium Development Goal targets for 
safe water and sanitation. The $33.7 million, 5-year effort, which 
began in 2011 and is part of the U.S.-Indonesia Comprehensive 
Partnership, works in more than 50 municipalities across the 
archipelago to help provide access to safe water for up to 2 million 
people in urban areas and access to improved sanitation for up to 
200,000 people. The project has been active in 34 urban areas and in 
the coming year will expand to 20 additional cities. To date almost 
250,000 people have obtained access to a safe water supply, an 
estimated 13,730 individuals now have access to improved sanitation 
and, in areas surveyed, the per-unit cost of water paid by the urban 
poor has decreased by an estimated 32 percent.
    Our work has also improved water access for nearly 800,000 people 
in the Philippines and resulted in the financing of projects that will 
potentially improve water access for 1.8 million more people by 
mobilizing 42 million dollar's worth of loans from private banks to 
fund 7 utility-scale projects; training local government units and 
water districts on project design resulting in the implementation of 
164 municipal projects; and strengthening public-private sector 
partnerships which have implemented 36 village-level water projects.
                               conclusion
    I would like to close by emphasizing the interconnectedness of the 
world particularly in the context of climate change. This is clearly 
the case with greenhouse gas emissions, but also where global commodity 
markets and unsustainable resource management drive deforestation and 
degradation of transboundary water resources. The world is moving from 
an era of simple solutions to one in which we must address more complex 
global challenges like climate change in order to ensure a healthier, 
safer, and more prosperous future for both the people of Asia and the 
United States.
    As such, USAID will continue to emphasize alliances among 
countries, through efforts like the Coral Triangle Initiative and 
public-private sector alliances like the Tropical Forest Alliance 2020, 
and to help build strong democratic processes across the Asia-Pacific 
region, for open dialogue and problem solving in relation to the 
environment and climate change.
    Thank you for your time, and I look forward to answering your 
questions.

    Senator Cardin. Well, let me thank both of you for your 
presentations.
    Mr. Beck, let me just have you talk a little bit more about 
the Lower Mekong Initiative as to what leverage the United 
States 
has working with the Lower Mekong Initiative to deal with some 
of the water security issues and the dam projects that have 
been planned. Can you just bring us up to date as to where you 
think we could be effective in using that initiative to advance 
water security issues?
    Mr. Beck. Thank you, Mr. Chairman, for that question. I was 
most recently out in Brunei with Secretary Kerry and we 
cochaired the Lower Mekong Initiative ministerial. It was a 
great opportunity for us to be working with the five countries 
who obviously are very interconnected by the Mekong. It was 
really interesting because Secretary Kerry talked about his 
experience on the Mekong as a young man and noticed at an early 
age how important it is to protect that for the livelihoods and 
the peace and prosperity of those five nations.
    At the LMI ministerial, I was able to announce two new 
programs that USAID is initiating. One of them is building out 
a platform, an opportunity for us to bring in the technical 
expertise of the interagency of the U.S. Government, from 
USAID, from Corps of Engineers, and to be connecting them up 
with the planners of these large infrastructure projects.
    As you noted earlier, seven megadams have already been 
built up on the upper Mekong in China and I think 20 more are 
in process. So we need to give them the best technical 
information so that they understand what the impact will be on 
the downstream nations.
    The second program that we rolled out is also an 
opportunity for us to connect up those planners with the 
people. Obviously, the 70 million people in the Lower Mekong 
region will be directly impacted by the way those 
infrastructure projects are shaped. So by bringing in the 
people, by bringing in the nongovernmental organizations and 
civil society organizations, to be involved in that 
conversation to help in the planning and to be mitigating some 
of the most damaging parts of infrastructure projects, we think 
we will help to mitigate and also to provide better planning 
and better projects, to ensure that the livelihoods are 
protected of those people.
    I think 70 percent of the population in the Lower Mekong 
Basin survive on agriculture and fisheries. So we believe those 
two projects will be most helpful.
    Senator Cardin. Well, in some cases just the presence of 
the dam itself is going to create a major challenge on these 
issues. In other cases, you can mitigate the effects. How 
receptive are the countries to mitigation plans or using best 
practices to deal with the consequences of the dam being placed 
on the river?
    Mr. Beck. Obviously, because China is where many of the 
dams are being built, but of course also Cambodia and Laos--the 
dam in Cambodia is actually going to have the most impact on 
the people of Cambodia. So we do see some initial opening to 
engaging with us on that by bringing in our technical experts. 
So we are seeing some initial receptivity to that. But I think 
there's still a tremendous amount of work to be done.
    We also find that by working with civil society 
organizations, by strengthening their capacity to advocate on 
behalf of the citizens of the Lower Mekong Basin, that that 
will also be effective in driving the interests of the people 
forward to ensure that they are considered and they are 
protected in those projects.
    Senator Cardin. Thank you.
    Mr. Reifsnyder, I want to get into the relationship with 
China. Could you bring us up to date as to what has happened 
since the commitment to set up a working group on climate 
change between the United States and China? Then I would also 
like you to comment on the press account today that--the report 
says the government said recently it would name and shame 
China's dirtiest cities, as well as force factories to disclose 
environmental standards publicly, in an attempt to bring them 
into line. It also set targets of cutting emissions intensity 
in key industries by 30 percent by 2017.
    At least one banking expert in the region said it is the 
most aggressive policy effort to address air quality issues in 
Chinese history. Is there a real hope here and how is the 
working group functioning?
    Mr. Reifsnyder. Thank you, Senator, for those questions, 
which are excellent. I think that, first of all, let me address 
the second question first because in many ways I think it is 
China's recognition of the problem that is having----
    Senator Cardin. I'm not sure your mike is on.
    Mr. Reifsnyder. I guess it is red when you speak, OK.
    Thank you for the excellent questions. I think the second 
question actually leads to the first, so if I could address 
that one. It is recognition by China of the problem it is 
having domestically in many of its major cities with air 
pollution, just as you mentioned in Beijing in your trip in 
June. I myself have been to China three times this year. The 
air pollution in many areas is just very, very difficult for 
people.
    That is giving rise, as you correctly noted, to a political 
concern. People are agitating for change. I think this is well 
recognized by the Chinese Government. The current 5-year plan 
is very aggressive in this way. Our sense is that the Chinese 
are very determined to take this on, because they have to.
    It is partly for that reason that we have found some real 
receptivity as well to the overtures we have made recently, 
particularly with Secretary Kerry's visit in April, where he 
was able to propose a new working group, a Climate Change 
Working Group, that he asked to develop recommendations barely 
3 months later for the Strategic and Economic Dialogue that 
took place here in Washington just 2 weeks ago.
    That working group met very intensively. Todd Stern, our 
Special Envoy for Climate Change, and Zie Zhenhua, Vice 
Chairman of the National Development and Reform Commission, led 
that effort on each side. They produced new initiatives in the 
areas that I mentioned in my testimony: heavy-duty vehicles, 
reducing emissions from heavy-duty vehicles, which is one of 
the fastest growing areas of emissions in both countries; 
increasing carbon capture, utilization, and storage; increasing 
energy efficiency in buildings, industry, and transport; 
improving greenhouse gas data collection and management; and 
promoting smart grids.
    One of the most interesting developments I think recently 
in China has been the new carbon exchange that has been set up 
in Guangdong province in Shenzhen. We were there right after 
the opening. It is an effort on a regional basis to begin 
emissions trading in China, which is very fascinating. There is 
a cooperative effort being undertaken now with California in 
that regard and we met with California officials also when we 
were there. So there are some very interesting developments.
    I think China is quite serious about addressing air 
pollution and it is also that seriousness, that concern about 
air pollution, that leads to many openings for us to work 
together also to address climate change.
    Senator Cardin. Is there anything we should be doing to 
strengthen the prospects of a constructive outcome with our 
engagement in China?
    Mr. Reifsnyder. Thank you, Senator. In fact you are doing a 
great deal, and I could cite some examples. Your trip in June 
that you mentioned--the fact that we have senior members of our 
Congress going to China, talking with Chinese officials, 
meeting with Chinese enterprises and others, conveying our 
concern and our willingness to work with them, I think that's a 
very powerful message.
    The letter that you sent to President Obama, that you and 
others sent to President Obama in early June about the HFC 
issue, which I think was very helpful.
    The hearings that you are conducting on the Rebalance in 
Asia. I think all of these things are very constructive efforts 
on the part of Congress and we welcome them.
    Senator Cardin. Let me just make an observation from my 
visit. I found the government officials I talked with--I 
thought they were very sincere in trying to develop workable 
plans. I think they have taken steps. They recognize they have 
a political problem as well as a real problem from the point of 
view of the health of their people. So I think there really is 
a genuine opportunity here to make some advancement.
    Let me switch gears a little bit to the overfishing issue 
and the management of fish stock in the region. It not only 
presents a resource problem, but it also is a security issue. 
It is the source of much of the maritime security conflicts, 
fishing rights, et cetera. How can the United States be 
effectively involved here to deal with the management of the 
problems of overfishing?
    Mr. Reifsnyder. Well, perhaps I could start on that. We are 
involved already. We have been for many years in a number of 
regional fishery management organizations. These are efforts 
collectively to try to come to grips with the overfishing 
problems and so forth. We have had some success in these areas 
with reducing illegal, unreported fishing and so forth. So I 
think it is the engagement through regional efforts of 
regional, we call them ``RFMOs,'' regional fishery management 
organizations, that is our best entree to try to help influence 
the overfishing that is taking place.
    Mr. Beck. Mr. Chairman, if I might add, too, just in 
addition to Dan. On the Coral Triangle Initiative, this is also 
I think a perfect opportunity for us to be engaging with the 
six countries who are at the epicenter of fisheries in the 
world. It is known as the Amazon of the ocean at the Coral 
Triangle Initiative. So working at both the policy level to 
ensure that we are aligning policies that are protecting those 
fisheries amongst the six countries, but also then working down 
at the community level to ensure that we are protecting those 
overfished areas, I think that is an opportunity for us also to 
have some impact.
    Senator Cardin. When I was in Korea we talked about the 
problems of North Korea beyond just the nuclear risk factors. 
We talked about deforestation. North Korea has lost 30 percent 
of its forests in the last 20 years. It is having a devastating 
impact on its crop and on floods.
    We have limited opportunities within North Korea and most 
of it is aimed at dealing with the nuclear threat issues. Yet 
the North Korean policies are devastating to the environment, 
devastating to the sustainable economy of their own people and 
the basic rights of its citizens. Is there a way that we can 
work in the region to get North Korea engaged on the 
environmental disasters that they are perpetrating on their own 
country?
    Mr. Reifsnyder. Well, I think, yes, it is difficult, 
Senator. But I can tell you that just a couple years ago I 
visited Primorye in the far east of Russia. There we have been 
working with the Russians on conservation of leopard and tiger 
as well. Those areas are very close to the Korean border. This 
is an area where I know the Russians have been working a bit 
with the North Koreans. The Chinese have also been working with 
them through cooperative agreements.
    So perhaps through some of our partners, Russia and China, 
we have an opportunity to influence some of what is going on. 
But it is very difficult under the current political situation.
    Senator Cardin. Let me turn to Senator Markey, who was an 
expert on this area during his service in the House of 
Representatives. It is a real pleasure to have him in the U.S. 
Senate and particularly on this subcommittee.
    Senator Markey. Thank you, Mr. Chairman, very much, and I 
thank the witnesses.
    The rise of China has transformed the global economy and 
has enabled millions of Chinese people to rise out of poverty. 
China's rise has also had repercussions on global energy 
markets and the environment. As its influence on the world 
grows, we must ensure that China is a responsible partner in 
addressing the energy and environmental challenges that the 
world faces, especially climate change.
    Working with the United States and other countries to 
address climate change is also in the best interests of China. 
The impacts of climate change are already affecting China's 
water and food security. For example, the storage capacity of 
Himalayan glaciers is declining. These glaciers feed Asia's 10 
largest rivers, which supply 47 percent of the world's 
population with fresh water.
    Chinese efforts to reduce carbon pollution from burning 
coal and diesel will also improve air quality and public 
health. China also has an opportunity to improve global 
security by combating the growing market for illegal wildlife 
products. Recent reports have documented a dramatic increase in 
poaching and shown that groups like the Lord's Resistance Army 
and al Qaeda-affiliated groups are raising funds by selling 
elephant ivory and rhinoceros horns. China has some of the 
world's largest illegal ivory markets in the world and a single 
rhinoceros horn can go for $300,000. By reducing demand at 
home, China has an opportunity to increase security abroad and 
save some of the most endangered and beloved species on Earth.
    So I was pleased to hear about the progress that is being 
made through the United States-China dialogue. I am especially 
concerned about black carbon, which is produced by diesel 
engines and burning wood and coal. It has a large impact on 
global warming and public health.
    So my question is, What is the role that the United States 
is playing in helping China to reduce its black carbon 
emissions?
    Mr. Reifsnyder. Thank you, Senator. I think that I can cite 
in direct response to that the new initiative that we launched 
with the Chinese in July, just this month, on heavy-duty 
vehicles, where we are trying to improve standards for heavy-
duty vehicles, we are trying to improve the efficiency of 
engines of heavy-duty vehicles. This work at least is not 
confined to heavy-duty vehicles alone. It could also apply to 
other vehicles, but we need to start, I think, in the fastest 
growing sector of transportation, which is heavy-duty vehicles 
in both countries.
    So it is the particulate matter that comes from those 
vehicles that is creating a lot of the problem in both 
countries. So this is a direct area in which we are working 
with them now.
    Black carbon, though, as you mentioned, is a problem and it 
is something that we have tried to address through the Climate 
and Clean Air Coalition. This is an effort that Secretary 
Clinton began about a year ago when she was still at the State 
Department. It is an effort that has now expanded beyond the 
initial base. We are working very productively. China is not 
yet a member of that effort, but we have made overtures to 
China. We would be very interested in having China participate 
and join with us in the effort to address not only black 
carbon, but also HFCs and methane.
    Senator Markey. So do you feel that China is actually 
accepting the reality of climate change in terms of something 
that they have to do something about? Or are they just still 
relentlessly pursuing an economic development agenda and not 
willing yet to deal with this issue, although there are real 
impacts that China is going to ultimately have to suffer?
    Mr. Reifsnyder. My sense is that China first and foremost 
as a political matter is dealing with air pollution. That is 
the single overriding priority in the country today for 
addressing these kinds of problems. But along with that, China 
is now the No. 1 emitter in the world of greenhouse gases. 
There is no denying that this is--I think it is a spot that we 
occupied for many years. It is not an enviable spot. It is a 
spot where you have a lot of pressure, a lot of reason to take 
action.
    I think that China is increasingly aware of its role with 
regard to climate change. It is working with us now in this 
Climate Change Working Group that we have set up under the 
Strategic and Economic Dialogue. Our cooperation is 
intensifying and we look forward to expanding those efforts in 
the future.
    Senator Markey. Will China actually respond if the United 
States does not take action that they view as significant on 
reducing our own greenhouse gases?
    Mr. Reifsnyder. I think that is an excellent question. I 
think it is very important in terms of demonstrating to others 
that we are willing to act at home in order to be in a position 
to encourage others also to take action regarding their 
greenhouse gas emissions.
    Senator Markey. I think it is very difficult to preach 
temperance from a bar stool. Your father cannot have a beer in 
his hand when he is saying drinking is bad for you, or a 
cigarette or a cigar while he is saying smoking is bad for you. 
So I think that if we are going to be preaching then we have to 
act, and that is why I am so glad that the President has made 
it clear that he wants the EPA to take action on our own coal-
fired plants. I think that is a very strong signal, combined 
with fuel economy standards and efficiency standards, which 
actually the Senate is going to pass in the next week as well. 
So these are strong signals that are being sent.
    Let me ask this. What is the United States doing to stop 
the flow of money from ivory sales that fund wars and 
insurgency groups like the Lord's Resistance Army and the 
Somali Islamic group and other groups that are out there, some 
of them with ties to 
al-Qaeda? What is our government doing?
    Mr. Reifsnyder. Well, the problem is not just the slaughter 
of the animals, because it is not just a problem of the states 
in which the slaughter is taking place. It is also a problem of 
others, of ourselves, in the sense of the countries that are 
buying these products and giving a market to these products and 
creating the opportunities for that kind of trade to take 
place.
    So we are working through a number of--I mentioned the 
ASEAN, the regional, the ASEAN-WEN, the Wildlife Enforcement 
Network. We have set up these networks like the ASEAN 
Enforcement, Wildlife Enforcement Network, in a number of other 
places in the world. We are trying to increase awareness of the 
problem, trying to bring everyone into a solution, because I 
know that we had some short public service announcements that 
were once made. I think Harrison Ford was one, who said that 
when the killing stops the--when the buying stops, the killing 
will, too.
    Senator Markey. Thank you.
    Mr. Chairman, thank you for this hearing. I served 36 years 
on the Energy Committee and 36 years on the Natural Resources 
Committee. So I went to 72 years of hearings. And in one 
hearing you have both of the subjects that are at the top of 
the list of those two committees. So I thank you so much.
    Senator Cardin. Let me point out, I chair the Water and 
Wildlife Subcommittee of the Environmental and Public Works 
Committee, which deals with wildlife issues. So two committees 
that I serve on are very much involved here.
    Your question on the wildlife trafficking is a very 
important point. I will tell you, it is all about the 
economics, and the U.S. market is an important tool that we 
have, not only the direct purchasing by the U.S. market, but we 
are negotiating a TPP now. Have we communicated with our 
negotiators that this should be something considered in those 
negotiations to make sure markets are protected from this type 
of support for wildlife trafficking?
    The United States, if we take a leadership role, we can 
affect the economics of this issue. If we affect the economics, 
we can deal with the species that are endangered as a result of 
wildlife trafficking. Is that something that we are working on?
    Mr. Reifsnyder. Absolutely, Senator. This is something that 
I know Secretary Clinton when she was at the State Department 
was passionate about. It is something that our own Under 
Secretary for Economic, Environment, and Energy Affairs, Robert 
Hormats, has been passionate about. It is something that 
Secretary Kerry is now engaged in.
    I think we are mounting a very concerted effort in this 
area. I personally have been at the State Department since 1984 
and I have watched this issue grow in importance in just the 
past few years in a way that very few issues have. It has just 
zoomed to the top of the agenda. So I would say yes, very 
definitely.
    Mr. Beck. Mr. Chairman, if I might add also on the area of 
wildlife trafficking. USAID's ARREST program, within that it is 
called the Predator Project, and that is working very closely 
with Interpol to address the trafficking of tigers. So Interpol 
is working very closely with 11 countries in the region to 
break down the barriers within their own governments, whether 
it is from customs or interior, and then working on 
enforcement, but also working on the demand end. So, bringing 
those together, we are already seeing a rapid rise in 
acquisition and also in prosecution of traffickers.
    Senator Cardin. That is a good segue to our second panel, 
to which one of the first questions I will ask, is how 
effective our leadership has been on this issue. So we thank 
both of you. We thank you very much for your service and thank 
you for your participation in today's hearing.
    With that, we will turn to the second panel: Mr. Carter 
Roberts, President and CEO of the World Wildlife Fund in the 
United States. WWF is the world's largest network of 
international conservation organizations. Since joining World 
Wildlife Fund in 2004, Mr. Carter has doubled the size of the 
organization, focusing on its efforts to save the world's 
ecosystems by working with businesses to tighten their impact 
on the planet through sustainable resource management.
    Then we have Elizabeth Economy, who is the C.V. Starr 
Senior Fellow and Director for Asian Studies at the Council on 
Foreign Relations. Dr. Economy is a successful academic and 
author. She has written two highly acclaimed books on China's 
energy and the environmental challenges, called ``By All Means 
Necessary: How China's Resource Quest Is Changing the World,'' 
and the other ``The River Runs Black: The Environmental 
Challenges to China's Future.'' Those titles entice me to read 
those books. I must confess, I have not read them yet. But 
maybe on one of those long flights to Asia I will have a chance 
to read those books.
    Mr. Roberts, we will start with you, and if your daughter 
is still here we would like you to introduce your daughter.

  STATEMENT OF CARTER ROBERTS, CHIEF EXECUTIVE OFFICER, WORLD 
                 WILDLIFE FUND, WASHINGTON, DC

    Mr. Roberts. Thank you, Mr. Chairman. I would love to 
introduce my daughter Eliza who is here with me to keep me on 
the straight and narrow. She will be my support throughout the 
hearing. Thank you very much.
    Senator Cardin. It is all about her generation.
    Mr. Roberts. Right.
    Senator Cardin. So it is a pleasure to have her here.
    Mr. Roberts. You are absolutely right.
    Mr. Chairman, thank you for having me. As one of your 
constituents, it is a pleasure to be here. Senator Markey, I 
congratulate you. As a family whose happiness rises and falls 
on the fortunes in Fenway, we are delighted to see you in your 
post. So thank you for having me.
    This is a tremendously important topic. In our work, 
increasingly our eyes turn to Asia and Southeast Asia. It is a 
time when the leaders of that region increasingly value what we 
call natural capital.
    I love maps and I want to talk about a map that hopefully 
we will be able to project onto the screen. I think you each 
may have a copy of this in your materials. There are two pages 
to this map. I want to make sure you have it.
    The map is one produced by Will Turner at CI. It is a 
wonderful map. It is a color-coded map of the world that shows 
the value of ecosystem services country by country and is color 
coded. Blue is a low value, yellow is the highest.
    If you look at that map and you look at the second page in 
Southeast Asia, it is essentially a map of Myanmar and the 
Mekong River. Because those countries have rivers that feed 
their people, they have forests that sequester carbon, they 
still have what most of the rest of the region has lost. And 
those countries are desperate to find a way to grow their 
economies without losing those assets that are so obvious on 
the map.
    You can see what happens--you already talked about what 
happens when you get it wrong, the haze in Singapore, the 
rivers that are polluted in parts of China. You can see what 
might happen in the Mekong River if Lao develops its dams with 
disregard for the fisheries and the rice bowl that are 
downstream.
    This is also a part of the world where climate change has a 
disproportionate impact. Of the 10 countries that are most 
impacted by climate change around the world, 6 of those are in 
Asia, 4 of those are in Southeast Asia, where the population is 
so crowded along the coast that they are enormously impacted by 
what happens with sea-level rise.
    I recently had the chance to spend a morning with the 
President of Myanmar and almost his entire Cabinet here in 
Washington, DC. We spent the morning talking about the future 
of the country. Probably more than any other leader that I have 
had a chance to meet in the world, any other head of state, he 
was eloquent about the choices that are in front of him.
    He has studied dam construction throughout Europe to 
determine which types of dams have less impact on the free flow 
of rivers. He has studied forests in his own country and his 
staff has mapped forests and which ones have the highest value. 
He spoke eloquently about the importance of nature in Myanmar 
and making the right smart choices about the future of his 
country, so that when they build the infrastructure, build the 
dams, build the roads, build everything else, that they choose 
smartly, so they keep the best of what our Ambassador to 
Myanmar calls ``the heart and soul of the country.''
    Sadly--and I will talk about this at the end of my 
testimony--our policy toward Myanmar is sadly devoid of the 
environment as a priority. One of my main messages today is to 
reinsert that as a higher priority in our engagement with that 
country.
    There are other smart choices that we see in the region and 
it is all a question--I think that part of the region sees a 
chance, certain countries see a chance to leapfrog over their 
neighbors in the use of new technologies, whether it is energy, 
dam construction, and the rest. I think this is where our 
country can provide an enormous value, both through technical 
assistance and also through brokering exchanges and even 
providing surgical support and assistance where it matters 
most.
    I will give you some examples. On deforestation, 
traditionally our community addressed deforestation by creating 
parks, and parks are super important. But the gentleman from 
USAID spoke eloquently about the role of big companies in 
reducing deforestation, particularly companies that source 
commodities from around the world. At WWF we have identified 
the 100 biggest companies that control those commodities that 
have the biggest impact on deforestation. We now have MOUs with 
56 of those companies.
    Those companies represent a tremendous force to engage not 
only governments, but with our government, in creating policies 
that can drive new food production away from forests and toward 
land that is already degraded. It is a really elegant solution. 
But we need the power of the market and we need the right kind 
of policies to make it so.
    You have spoken about fisheries. A disproportionate amount 
of the population of Southeast Asia depends on fish for food 
and one of the signature overseas programs of USAID has been 
the Coral Triangle. Building the right governance system in 
that part of the world is intrinsically important to keeping 
those fisheries intact and maintaining stability in that part 
of the world.
    Then last but not least is rivers. I had a chance to be at 
the Friends of the Lower Mekong meeting last year and sat with 
Secretary Clinton and representatives of key countries in 
Cambodia. It is a classic complicated case of the commons, 
where if we can find a way to put the value of that river on 
the table for providing fish in Cambodia and for providing 
water and siltation to the rice paddies in Vietnam and for 
providing power in Lao, put all those on the table, and look at 
what happens when you build this kind of dam versus that kind 
of dam, what happens downstream, my belief is we could knit 
together those countries to incentivize the right kind of 
solutions in dam construction. Then our country could play a 
role in not only providing some technical assistance, but 
helping to broker that kind of agreement between those 
countries, where their futures are bound up together.
    So in conclusion, I would say three things. One is: Help 
make sure the environment is at the forefront of our engagement 
in Myanmar. The second is these regional priorities. Ecosystems 
do not stop at national boundaries and supply-demand dynamics 
do not, either. So the regional initiatives we have for the 
Coral Triangle and the Mekong are enormously important. Then 
the last thing is just to go back to the private sector. The 
kind of relationships we are beginning to build with the 
private sector could be enormously influential in that part of 
the world, and finding creative ways to work with companies 
like Wal-Mart or Coke or Ikea or Mars or Cargill in driving the 
right kind of food production and incentivizing the right kind 
of growth strategy holds enormous promise.
    Thank you very much.
    [The prepared statement of Mr. Roberts follows:]

                  Prepared Statement of Carter Roberts

    Mr. Chairman, Ranking Member, and members of the subcommittee, 
thank you for the opportunity to testify before you today. My name is 
Carter Roberts, and I am President and CEO of World Wildlife Fund U.S. 
For 50 years, WWF has been protecting the future of nature. WWF is the 
world's largest private conservation organization, working in 100 
countries and supported by 1.2 million members in the United States and 
close to 5 million globally. Our unique way of working combines global 
reach with a foundation in science, involves action at every level from 
local to global, and ensures the delivery of innovative solutions that 
meet the needs of both people and nature.
    The issues being considered by the subcommittee today--the 
environmental sustainability and food and water security of countries 
in East Asia and the Pacific--are of critical importance, not only to 
the countries in those regions and their citizens, but to all of us. 
The Obama administration's Rebalance to Asia comes at a time of growing 
recognition in that region of how the long-term prosperity of most 
Asian and Pacific countries is tied to wise management of their 
``natural capital,'' including their forest, marine, and aquatic 
systems and wildlife resources.
    Such recognition is in part a natural consequence of the region's 
rapid economic growth. It is common to see increased attention paid to 
environmental quality and the protection of natural areas as 
populations become more prosperous. But it is also a response to the 
increasing degradation of natural resources, which is a byproduct of a 
growth model that has often paid scant attention to environmental 
sustainability.
    Examples of such degradation abound. We have recently seen another 
bout of severe haze pollution in Southeast Asia from the use of fire 
for clearing tropical forests in Indonesia. Overfishing in the marine 
areas surrounding the ``Coral Triangle'' countries has led to declining 
local food security and threatens the most valuable tuna fisheries in 
the world. In the Mekong Basin, the planned expansion of large-scale 
hydropower schemes threatens to severely impact Cambodia's freshwater 
fisheries, undermine water supplies in Lao PDR, and disrupt the rich 
sediment flows upon which Vietnam depends for its Mekong Delta rice 
production. Throughout the region, the intensifying impacts of climate 
change are exacerbating and adding to these challenges. How countries, 
including the United States, respond to these challenges now and over 
the next few years will shape Asia's food, water, and environmental 
security for decades to come.
    There is much to be concerned about regarding the current state and 
trajectory of Asia's natural resources and the environmental impact of 
the region's rapidly growing economies around the globe, and I touch on 
a number of these concerns below. But there are also many reasons for 
optimism. I would like to recount a recent conversation I had with 
President Thein Sein of Myanmar during a recent visit of the President 
and his Cabinet to Washington. WWF had the opportunity to organize a 
dialogue with the President and senior staff focused on the role of 
sound renewable resources management in Myanmar's sustainable 
development. One might think that this issue would be a low priority 
for Myanmar's President, given the range of difficult issues facing the 
country. With the country's recent emergence as a fledgling democracy 
and still nascent integration into the global economy, were prepared to 
inform the President and his Cabinet on the need for Myanmar to wisely 
manage its rivers, forests, coasts and wildlife in order to create a 
sustainable economy and ensure the country's food and water security. 
But President Thein Sein demonstrated a profound understanding of, and 
appreciation for, these concepts and expressed his desire to put 
Myanmar's economy on a development path that takes advantage of the 
country's impressive natural capital while respecting it and protecting 
it for the future. He characterized Myanmar's wildlife and other living 
natural resources as the heart and soul of his nation.
    Like other Asian and Pacific leaders, President Thein Sein is 
seeking advice on how best to achieve truly sustainable development, 
actively investigating lessons to be drawn from experiences in the 
United States and other countries that have faced similar challenges. 
His willingness to devote more than 2 hours of his own time and that of 
his entire delegation to this subject during their short trip to 
Washington speaks to this desire and openness.
    We have seen similar political will among the leaders of the Coral 
Triangle countries of Southeast Asia and the South Pacific. Known as 
the ``Amazon of the Seas,'' the Coral Triangle is the most biologically 
and economically valuable marine ecosystem on the planet. Encompassing 
nearly 2.5 million square miles of coastal and oceanic waters in 
Southeast Asia and the Western Pacific, the region covers just 3 
percent of the globe but boasts more than half of the world's reefs, 76 
percent of its known coral species and the greatest remaining mangrove 
forests on the planet. The marine and coastal ecosystems of the Coral 
Triangle directly sustain the livelihoods of more than 130 million 
people and contribute an estimated $2.3 billion each year toward the 
region's economies. The health of the Coral Triangle is also important 
to global commerce and food security, including here in the United 
States. Eighty-six percent of the seafood consumed in the United States 
is imported, with a significant portion originating from the Coral 
Triangle. The region supports the nursery grounds for the planet's 
richest tuna fishery, worth over $1 billion annually.
    Pressures due to widespread poverty, rapid development and global 
demands have placed enormous strains on the Coral Triangle's natural 
resources: over the past 40 years, more than 40 percent of the region's 
reefs and mangroves have disappeared, leaving many habitats and species 
vulnerable to extinction. Overfishing, destructive fishing practices 
and pollution all threaten the future of this precious seascape and its 
inhabitants. In response to these growing challenges, in 2009 the heads 
of state of Indonesia, Malaysia, Papua New Guinea, the Philippines, the 
Solomon Islands, and Timor-Leste signed the Coral Triangle Initiative 
on Coral Reefs, Fisheries and Food Security (CTI), a landmark agreement 
to protect the region's marine and coastal resources and manage them 
sustainably.
    These are just a few examples demonstrating Asian and Pacific 
leaders' growing understanding of and receptiveness to the need to 
protect nature as the foundation of healthy and sustainable economic 
growth in their countries. Leaders of the region are looking to make 
smart choices as they seek to break free of unsustainable patterns of 
resource use and development. In many cases, they see opportunities to 
``leap-frog'' past the technologies and management systems employed by 
Western countries, especially with respect to their energy, transport, 
and telecommunications sectors.
    As they confront these sustainable development challenges they need 
sound advice and are actively seeking to learn from U.S. experience and 
draw upon U.S. expertise and technology. The United States clearly has 
an important role to play in assisting the region's transition to 
greener economic development. There are clear opportunities for such 
cooperation, and there are many effective approaches available to be 
shared. I would now like to highlight a few key areas that WWF believe 
to be priorities to ensure the sustainable development of the region 
and the health and integrity of its environment and biodiversity.
                                forests
    Deforestation is one of the great environmental challenges facing 
East Asia, where rates of forest loss in some countries remain among 
the highest in the world. Pulp and paper production and conversion to 
agriculture, including to monocultures such as palm oil, are among the 
greatest threats to the region's forests and associated wildlife and 
water resources. Illegal logging associated with these industries 
remains a serious problem in many countries. Earlier this year, WWF 
released a report \1\ on the state of the Greater Mekong Subregion 
(GMS), consisting of the countries of Myanmar, Thailand, Cambodia, 
Laos, Vietnam, and the Chinese provinces of Yunnan and Guangxi. WWF's 
report demonstrated that the countries of the GMS (excluding China) had 
collectively lost nearly a third of their forest cover between 1973 and 
2009, with the highest rate (43 percent) witnessed in Vietnam and 
Thailand. Large core areas of intact forest capable of supporting local 
communities and healthy wildlife populations declined across the GMS 
from roughly 70 percent in 1973 to only 20 percent in 2009. If 
deforestation continues at the same rate, the region risks losing more 
than a third of its remaining forests by 2030, with only 14 percent of 
the forest areas that are left comprising habitats capable of 
sustaining viable populations of wildlife requiring contiguous forest 
habitat. On the other hand, the report also demonstrates that, were the 
GMS countries to adopt a ``green economy'' framework with a 50-percent 
reduction in the annual deforestation rate and no further losses in key 
biodiversity areas, forest losses could be limited to 17 percent from 
2009 to 2030, core forest patches would remain intact, and all of this 
alongside continued improvements in human prosperity.
    The situation is a similar one in the rest of Southeast Asia. 
Unsustainable and illegal logging in Malaysia and Indonesia, 
particularly on the islands of Borneo and Sumatra, threatens the 
destruction of some of the world's most diverse rain forests and 
Southeast Asia's last intact forests, as well as the extinction of some 
of planet's most unique and beloved species, including Sumatran tigers, 
Javan and Sumatran rhinos, pygmy elephants and orangutans. The 
clearing, often through burning, of vast areas of rainforest 
representing huge terrestrial storehouses of carbon is also a main 
cause of regional air pollution and a significant driver of global 
climate change.
    Borneo and Sumatra (the world's third- and sixth-largest islands 
respectively) support diverse ecoregions that house thousands of unique 
species and massive rivers, which cut across the landscapes and provide 
freshwater and transportation for the islands' people. Borneo's forests 
alone are home to more than 600 bird species and 15,000 types of 
plants, as well as hundreds of indigenous communities that depend on 
the forests for food and shelter. Only half of Borneo's original forest 
cover remains due to increased production of palm oil--used in many 
products purchased every day by consumers around the world, from snack 
foods to soaps--and unsustainable logging for timber, paper, and pulp. 
Borneo's rainforests are being rapidly exported and turned into 
flooring, furniture, and plywood products found on store shelves in the 
United States and elsewhere.
    Economic development in Borneo is essential for poverty 
alleviation, but local communities fail to benefit when major companies 
clear their rainforests and ignore traditional land rights. Through 
efforts such as our Heart of Borneo Program, WWF is working with 
communities, companies and governments to support smart decisions that 
redirect the expansion of oil palm plantations onto degraded lands, 
enforce restrictions on the use of fire for land clearing, and set 
aside forest reserves to maintain local watersheds, support water 
security and forest livelihoods for surrounding communities, protect 
Borneo's unique wildlife species and secure the global carbon benefits 
of that the island's forests provide. All of this can be done while 
improving land tenure, so that local communities have a clear stake in 
sustainably managing their forests.
    Reducing illegality in the timber trade is essential to ensuring 
that Asia's forests can survive in the future as both a bastion of 
biodiversity and the basis of sustainable development. This is an area 
where the U.S. Government has played a critical leading role, both in 
its leadership with the 2008 amendments to the Lacey Act and 
development investments such as through Responsible Asia Forestry and 
Trade (RAFT), a 6-year program funded by USAID and the Department of 
State designed to improve forest management and bring transparency to 
the timber trade in Asia while also reducing deforestation and forest 
degradation. The program spans eight countries in Asia and the 
Pacific--Cambodia, China, Indonesia, Lao PDR, Malaysia, Papua New 
Guinea, Thailand, and Vietnam--and works with government, industry, 
intergovernmental organizations, international conservation NGOs 
(including WWF) and academic institutions to influence public policies 
and corporate practices. RAFT partners have helped bring nearly 3.2 
million acres of tropical forest in Asia and the Pacific under Forest 
Stewardship Council (FSC) certification, with 4.9 million additional 
acres on the way. Since 2006, the number of timber concessions has 
grown from 5 to 59. The program has introduced nearly 1,000 wood 
manufacturers in six countries to new legality requirements for 
products exported to the United States and European Union and helped 20 
factories achieve FSC chain of custody certification.
                               freshwater
    To get a sense of the critical importance of balancing development 
and conservation in Southeast Asia, one need only look at the Mekong 
River, the basin which contains one of the most productive and diverse 
river systems on Earth. Its connectivity and natural variability of 
flows support exceptional productivity, while sediments and nutrients 
sustain the landforms, agriculture, and marine fisheries of the Mekong 
Delta. The Mekong river system supports the world's largest and most 
productive inland fishery, at least 35 percent of which depends on 
migratory species. Despite long-term intensive human use of freshwater 
resources in the Mekong basin, the system has maintained connectivity 
throughout most of its area as well as much of its original ecological 
patterns and processes.
    However, the growing need for energy in the Greater Mekong 
Subregion has led to an unprecedented rate of dam building, with 
impacts on freshwater ecosystems, the Mekong River's connectivity and 
flow, and the people that rely on these. Eleven dams are currently 
planned on the Mekong main stem, and one key concern is the lack of 
appropriately coordinated planning among decisionmakers for the 
different portions of the basin. Recent controversy has centered on the 
disputed Xayaburi dam in Laos, which is not the largest dam planned on 
the main stem, but the approval of which would set a precedent for 
countries, undermine the Mekong River Commission and herald even more 
disruptive developments. Models indicate that although the loss of 
connectivity from existing dams has negatively affected fisheries 
production in various Mekong sub-basins, declines in productivity to 
date have not substantially affected overall fisheries output. This 
will change if planned developments go ahead, with major impacts 
downstream and on major freshwater resources, including: threatening 
the rich fisheries of Tonle Sap Lake in Cambodia upon which millions 
depend for their protein; undermining the water supplies to Lao PDR; 
and fundamentally altering the nutrient rich sediment flows southward 
to the Mekong Delta, which support Vietnam's southern rice bowl and 
recharge the delta to prevent land subsistence.
    Decisionmakers in the Mekong river basin face a difficult dilemma: 
Expansion of hydropower in the Mekong River Basin presents enormous 
economic potential, and could also reduce the subregion's carbon 
footprint, but how can countries that share the freshwater resources of 
the Mekong River profit from a renewable energy source such as 
hydroelectric power without at the same time degrading the fisheries 
and ecological services that support at least 60 million people? To 
produce energy through hydropower, up to 11 new dams are planned for 
the main stem of the Lower Mekong River alone. Their construction will 
negatively impact both wild fish populations and the many people who 
rely on wild fish as their major source of protein. For example, once 
built, a main stem dam would hinder movements of eggs and young fish 
downstream to the Lower Mekong floodplains to grow and those of adult 
fish moving upstream to spawn; harm wild fisheries in Laos, Thailand, 
and Cambodia by flooding upstream spawning grounds and altering 
nutrient input and replenishment of downstream habitats; reduce 
sediments and nutrients that build and feed the Mekong Delta's 
productivity; and degrade the functionality of the whole, 
interconnected ecosystem and risk exceeding thresholds that could lead 
to very large and rapid negative impacts. Although dams would bring 
substantial additional income to the region, they could negatively 
impact fisheries, increase inequality, contribute to poverty, and have 
long-term and detrimental environmental impacts.
    The question of hydropower on the Mekong is thus a representative 
microcosm of the larger dilemma facing East Asia and the Pacific--how 
to accommodate rapid development and support a rising standard of 
living without fundamentally undermining the environmental systems that 
are needed ensure the continued health, security, and prosperity of the 
region's people. Other major river systems in the region face similar 
challenges, and there are opportunities to benefit from lessons learned 
from experience in the Mekong Basin.
                   global resources and asian demand
    While these field-based and policy measures are essential, they 
will not be sufficient on their own. Attention also must be paid to 
demand-side-pressures from these fast growing economies, which are 
creating environmental challenges not just in the Asia and Pacific 
region, but globally. Rising wealth and urbanization--particularly in 
China, Vietnam, and Thailand--means that millions are being lifted out 
of poverty. It also means that these countries have an increasing 
desire for natural resources from abroad, which can lead to major 
impacts on ecosystems found far beyond Asia. China's expansion into 
Africa is well known, and its footprint there is significant and 
growing. Therefore, China's approach to development and whether or not 
it chooses to encourage or require that resource extraction be done in 
a legal and sustainable manner can have a significant bearing on the 
health of forests and rivers in Africa and around the world.
    Rising wealth and a growing middle class in Asia are also putting 
new and unsustainable pressure on a range of wildlife species, 
including many that are increasingly threatened with extinction. There 
is a growing appetite in East Asia for traditional wildlife products, 
such as carved elephant ivory, rhino horn powder, shark fin soup and 
tiger bone wine, access to which had until recently been limited 
primarily to a smaller elite class. Consumption or possession of these 
products is inherently a sign of status, and as the economic status of 
millions of Chinese and Vietnamese rapidly increases, many are turning 
to the purchase of ivory statues and trinkets and fad drugs made from 
ground rhino horn as a demonstration of their newfound prosperity.
    Unfortunately, the effect on these species has been dramatic and 
swift. In 2011, WWF officially declared Javan rhinos extinct in 
Vietnam, when the last surviving individual was found killed with its 
horn removed. With rhino populations critically endangered throughout 
Southeast Asia, the illegal trade in rhino horn has found its way to 
South Africa, which is home to 90 percent of the planets remaining 
rhinos. In the past 5 years, the number of rhinos killed illegally in 
South Africa has risen a shocking 5,000 percent--from just 13 animals 
in 2007 to 668 in 2012. This dramatic spike has been driven primarily 
by new demand in Vietnam, where the ground-up horn is being sold as a 
powder that is marketed to the rich and the desperate as variously a 
fad drug that can prevent hangovers or a miracle cancer cure. Pound for 
pound, rhino horn powder is selling for more on the market than heroin 
or gold. There is no medical evidence to support either claim, but that 
has not stopped those who traffic in these endangered wildlife products 
from creating a lucrative illegal market for these snake oil cures: 
pound for pound, the price of rhino horn has now eclipsed the price of 
gold and heroin on the black market.
    In China, it is the demand for ivory that has risen along with the 
middle class, with a legal internal market for ivory products (based on 
previous sanctioned sales of ivory stockpiles) now providing a 
smokescreen for the laundering of large quantities of illegally poached 
African elephant ivory. In 2012, the elephant population in Africa was 
conservatively estimated at 425,000 individuals, a reduction of at 
least 50,000 since 2007. In 2011 alone, the Convention on International 
Trade in Endangered Species (CITES) Monitoring the Illegal Killing of 
Elephants (MIKE) program estimated that 17,000 elephants were illegally 
killed across the sites that they monitor and extrapolated that this 
number was likely closer to 25,000 on a continentwide basis.
    Broken down on a regional basis, the situation is even more acute, 
with Central Africa experiencing the worst declines. Central Africa's 
forest elephant populations, including those in protected areas, have 
experienced reductions of more than 80 percent in the last 25 years, 
and 62 percent in just the past 10 years. Between 2004 and 2012, an 
estimated 11,000 elephants were killed in Gabon's Minkebe National Park 
alone, representing a population loss of 44 to 77 percent. In early 
2012, we saw the worst single massacre on record of African elephants, 
when at least 350 elephants were slaughtered by gangs of heavily armed 
ivory poachers in Cameroon's Bouba N'Djida National Park in just a few 
weeks, reducing the park's population by more than half. And just this 
past May, a poaching gang managed to infiltrate the Dzanga-Sangha 
National Park in the Central African Republic, part of the Sangha 
Trinational World Heritage Site, where they killed at least two dozen 
elephants.
    As would be expected, the rise in illegal killings is mirrored by 
the rise in seizures of ivory, most of which is intercepted en route 
from Africa to Asia. From 1996 to 2011, nearly 300 tons of ivory were 
seized, representing only a small proportion of the total illegal ivory 
being trafficked. From 2000 to 2011, there were 54 large-scale ivory 
seizures, and over half of these have occurred in the past 3 years, 
pointing to a surge in demand and a harbinger of the expanding 
participation in the illegal ivory trade by highly organized crime 
syndicates who see in the illegal trade in endangered species products 
the promise of vast profits and limited risks, given the dearth of 
enforcement and the meager penalties associated with it.
    The impact on African countries of the Asian demand for wildlife 
products is not just the rapid extirpation of Africa's unique wildlife. 
Heavily armed poachers working to feed to the demand for ivory, rhino 
horn and other wildlife products will frequently kill park rangers 
tasked with protecting their countries' wildlife, and flourishing 
wildlife tourism industries, which contribute significantly to the 
economies of many African countries, are being put at increasing risk 
by the surge in wildlife poaching as tourist areas become unsafe and 
the wildlife they have come to see become more and more scarce.
    A similar dynamic is playing out in other parts of the world: in 
wetlands and forests, emptied of rare reptiles and mammals that have 
wound up as delicacies on Asian dinner plates; and in the world's 
oceans, where shark species are in rapid decline, largely due to the 
growing trade in shark fins used to make shark fin soup. The latest 
research suggests that around 100 million sharks may be killed 
annually, often targeted for their fins.
    The United States has taken a leading role in pressuring countries 
such as China and Vietnam to curb demand for endangered species 
products, both through international fora such as the Convention on 
International Trade in Endangered Species (CITES) and APEC, as well as 
through bilateral discussions, including the U.S.-China Strategic and 
Economic Dialogue and State Department support for technical exchanges 
between Vietnam and South Africa. The heightened attention recently 
culminated in the President's newly announced Executive order on 
Combating Wildlife Trafficking, which came as extremely welcome news to 
us and demonstrates the seriousness with which the illegal wildlife 
trade is now being taken given the multibillion dollar criminal market 
it supports and its strong connections to transnational organized 
crime, corruption and financing for groups that pose security threats 
to the United States.
    We also need to work with individual countries in East Asia and the 
Pacific to strengthen policies and institutional capacities to address 
increasing demand pressures on their resources. There are emerging 
examples, such as China's experimentation with market-based incentives 
and other policies to encourage use of renewable energy. And in 
Thailand, Prime Minister Yingluck Shinawatra has shown bold leadership 
on wildlife conservation with her recent pledge to end ivory 
trafficking in her country. We need to do more to encourage these smart 
choices and ensure that Asian and Pacific leaders take a broad and 
constructive view of how their future development impacts global 
resources and environmental quality, as well as that in their own 
countries.
                             climate change
    Of course, overlaying all of the environmental and resource 
challenges facing the Asia and Pacific region is the growing threat of 
climate change and its impacts on food and water security and essential 
environmental systems. The Greater Mekong Subregion provides a powerful 
case study of how climate change will increasingly affect development 
in East Asia and the Pacific, with impacts on food, water, and regional 
security. The plight of Small Island States in the Pacific captures 
global sympathy. Several are already actively contemplating future 
refugee status for their citizens, facing the very real prospect that 
rising seas will inundate or make uninhabitable their islands in the 
near future, erasing their cultural heritage and making them stateless 
peoples. But mainland Asia also faces significant, imminent risks due 
to climate change.
    The Intergovernmental Panel on Climate Change has identified the 
Mekong Delta as one of the three most vulnerable deltas on the planet 
to climate change impacts, including sea-level rise, saline intrusion 
and increasingly severe storms that promise to erode coastlines and 
undermine coastal ecosystems. Changes to average temperatures and water 
availability from precipitation and runoff are also likely to have 
adverse impacts on the Mekong River and its ecosystems. Temperature 
changes can affect rates of growth and reproduction for individual 
species and can also alter species distribution and ecosystem 
processes, such as nutrient cycling. WWF predicts that climate change 
impacts will accelerate the extinction of some species, given the high 
rate of endemism and habitat fragmentation found in the Mekong basin. 
Changes in the seasonal flow pattern in the Mekong River basin will 
strongly influence future species composition and ecosystem 
productivity. Changes in temperature and precipitation in the basin may 
also affect the very nature of the region's wetlands--vital freshwater 
systems that are used for rice cultivation and freshwater fisheries, 
and which help to mitigate floods and erosion.
    Sea-level rise will have significant negative impacts in the Mekong 
Delta region because of the delta's high population density, which is 
supported by productive wetlands and estuaries that are in turn 
maintained by naturally fluctuating water levels and input of fresh 
water from the river. These upstream inputs of freshwater deliver much-
needed nutrients and sediments, which are critical for wetland soils to 
accumulate and prevent plants from being inundated.\2\ Sea level rise 
and saltwater intrusion threaten to upset this natural balance and 
undermine the Delta ecosystem. If hydropower development proceeds on 
the Mekong's main-stem, dams will block sediment that flows southward 
and rebuilds the delta. As sediment is trapped by dams, the reduction 
in the amount reaching the river mouth will decrease the capacity of 
the delta to replenish itself, making it even more vulnerable to sea-
level rise, saline intrusion, and erosion. With nearly a quarter of 
Vietnam's population located in the Mekong Delta, the combined impacts 
of the proposed main-stem dams and climate change will pose significant 
social and economic challenges.
    The human consequences of unmitigated climate change on the Mekong 
are hard to imagine. Projections across the Mekong basin show an array 
of climate change effects, including a potential sea-level rise of a 
meter by the end of the century. If unaddressed, a meter rise in sea 
level could submerge more than a third of the Mekong delta, home to 17 
million people and source of nearly half of Vietnam's rice.\3\ Already, 
we are witnessing erratic changes in flood patterns in the Mekong and 
other rivers of the region. Thailand's 2012 growth was all but wiped 
out by costs associated with its devastating flood. Combined with sea-
level rise, we can anticipate breakdowns of roads and other 
infrastructure, leading to the increasing likelihood of economic and 
social instability. Even the more modest predictions of how the region 
and its communities, ecosystems and economies may be altered suggest 
that, without significant steps to reverse course, the humanitarian 
impacts of accelerating climate change in the Mekong are likely to 
present new security challenges for both GMS countries and the 
international community in the 21st century.
                        environment and security
    Climate change is the most obvious threat to security of a region 
that is highly vulnerable to rising seas and extreme weather--Asia has 
6 of the 10 countries most vulnerable to natural disasters, with four 
of them in Southeast Asia, however there are numerous other connections 
between environmental degradation and regional security. Competition 
over declining fisheries contributes to resource conflicts in the South 
China Sea. Much of East Asia's population lives in coastal areas, and 
Pacific countries fear for their very existence in the face of 
increasing sea levels, as well as rising temperatures and acidity, 
which can exacerbate typhoons and droughts and threaten to undermine 
the marine food chain that supports the regions fisheries. Countries of 
the region need help to build their climate change resiliency, lest 
they risk even greater economic losses from disasters and the creation 
of environmental migrants who could spill across national borders. 
Improving environmental management also links closely with the 
promotion of democratic principles such as transparency, vibrant civil 
societies, and human rights, including access to water supply and 
indigenous peoples' use of forests.
                      u.s. role and opportunities
    All of this reinforces the importance of enhancing U.S. support to 
leaders in the region seeking to make smart decisions about the 
management of their environment for local and global benefit. Bilateral 
programs--through USAID, Millennium Challenge Corporation, State 
Department, or under targeted partnerships, such as the Comprehensive 
Partnership with Indonesia, or the Strategic and Economic Dialogue with 
China--offer good opportunities to cooperatively identify and agree on 
ways to effectively address environmental considerations in national 
development. As noted, there is a great receptiveness to and 
opportunity for U.S. cooperation with Myanmar to ensure that the 
country finds and follows a green economy path. Bilateral cooperation 
is complemented by legislative provisions under the Lacey Act and the 
Tropical Forest Conservation Act, which respectively enhance control of 
the global illegal wildlife and timber trade, and encourage innovative 
approaches to financing forest conservation.
    Beyond bilateral cooperation, the Rebalance to Asia should include 
increased attention to leveraging regional partnerships and 
organizations as well as making good use of multilateral mechanisms. 
Through the Lower Mekong Initiative--and in cooperation with others 
working to assist countries of mainland Southeast Asia in their 
development--we need to help ensure that smart choices are made on how 
to best use and conserve freshwater resources, including through 
integrated river basin analysis and planning, encouraging ecosystem-
based approaches to hydropower development, incorporating schemes to 
value and monetize the services provided by upstream forests and 
watershed ecosystems, and factoring in adaptation and resilience 
strategies for freshwater systems in the face of advancing climate 
change. Elsewhere in Southeast Asia and the Pacific, the U.S. 
Government--alongside WWF, the Global Environment Facility, the Asian 
Development Bank, and other partners--has backed the Coral Triangle 
Initiative through the Coral Triangle Support Partnership (CTSP), a 
unique consortium of U.S. Government agencies and the world's leading 
conservation NGOs, including WWF. CTI governments are now developing a 
regional framework for sustainable fisheries management, enforcement 
and improved management of Marine Protected Areas across the region. 
CTSP is winding down, and CTI countries are making smart choices 
regarding management of their marine resources. They continue to need 
U.S. support. Similarly, the tri-national Heart of Borneo Initiative 
offers opportunities for improved management of the region's largest 
remaining rainforest. APEC and ASEAN hold tremendous potential for 
improving understanding of and cooperation on the greening of 
economies. Activities supported by multilateral organizations and 
mechanisms--such as the Global Environment Facility, Climate Investment 
Funds, and Asian Development Bank--also contribute strongly.
    Finally, there remain unrealized opportunities to incorporate 
environmental provisions into the framework of the Trans-Pacific 
Partnership (TPP), which just concluded today in Malaysia its 18th 
round of negotiations. As part of the Executive order on Wildlife 
Crime, the President declared that ``the United States shall seek to 
reduce the demand for illegally traded wildlife, both at home and 
abroad, while allowing legal and legitimate commerce involving 
wildlife.'' As implied in this statement, there is an important legal 
trade in wildlife products--including commodity products such as timber 
and fish--and this legal trade, which is of great economic value to 
many countries, including the United States, is undermined by 
illegality throughout the supply chain. This is why it is critical that 
international trade agreements, such as the emerging TPP, incorporate 
strong conservation provisions to ensure that natural resources are 
legally harvested and traded and developed sustainably in source 
countries.
    Renewable resources and wildlife are highly traded among the 12 TPP 
partner countries, which represent major producers, exporters and 
importers of seafood, wood and other goods derived from natural 
resources. The TPP countries represent eight of the world's top 20 
fishing nations, contributing over 28 percent of the global marine 
catch, with almost 33 percent of global fish product imports and 24 
percent of exports. They account for 17 percent of global shark imports 
and 28 percent of global exports by value. They account for 34 percent 
of global timber and pulp production and 24 percent of total trade 
value worldwide. They also represent significant importing, exporting, 
and transit countries for legal and illegal wildlife products, and some 
countries, such as Vietnam, are the major global markets for CITES-
listed species.
    Where natural resources are poorly managed, the demand generated by 
TPP markets can drive illegal activities and unsustainable practices. 
This is why the TPP presents the participating countries, including the 
United States, with a unique and important opportunity to promote 
economic growth in the context of a far-reaching and ambitious 21st 
century trade agreement, while also recognizing the fundamental need to 
sustainably manage natural resources and protect wildlife from illegal 
trade. If executed along these lines, it can also serve as a strong 
model for future such agreements.
                               conclusion
    Mr. Chairman, Ranking Member, and members of the subcommittee, I 
believe that the East Asia and Pacific region--in fact all of Asia--is 
at a critical juncture with respect to incorporation of environmental 
considerations into future development. It will be in neither U.S. nor 
Asian interests for the region to continue with the current model, 
which has led to severe environmental degradation and depleted natural 
capital. There is widespread understanding of this among the region's 
leaders, who strive to make smart decisions regarding sustainable use 
of their natural assets for the benefit of their people and the planet.
    While much is known regarding the principles behind this transition 
to a more sustainable development path, each country must define its 
own way. This will require strong engagement from civil society, 
academia, the private sector, and public sector programs such as those 
supported by the U.S. Government to ensure that smart choices are made 
and resources wisely used. It is strongly in the U.S. interest to see 
that this scenario is realized. If we act together now, the region can 
lock in a new development model which will lead to continued expansion 
of its prosperity based in large measure on protecting and enhancing 
the value of natural capital.

----------------
End Notes

    \1\ Ecosystems in the Greater Mekong: Past trends, current status, 
possible futures. WWF. 2013.
    \2\ Mekong River Commission. 2010 ``State of the Basin Report: 
2010.'' Mekong River Commission, Vientiane, Lao PDR.
    \3\ Institute of Strategy and Policy on Natural Resources and 
Environment (Viet Nam) 2009 ``Vietnam Assessment Report on Climate 
Change (VARCC)."

    Senator Cardin. Thank you for your testimony.
    Dr. Economy.

  STATEMENT OF ELIZABETH C. ECONOMY, PH.D., C.V. STARR SENIOR 
   FELLOW AND DIRECTOR FOR ASIAN STUDIES, COUNCIL ON FOREIGN 
                    RELATIONS, NEW YORK, NY

    Dr. Economy. Thank you very much, Chairman Cardin. It is a 
pleasure to be here to have the chance to talk about China, and 
a pleasure, of course, to sit on the same panel with Carter 
Roberts.
    China's extraordinary economic growth over the past 30 
years has produced, I think by anyone's imagination, a crisis 
in the country's water resources. Skyrocketing demand, 
inefficiencies in the way China uses its water, and pollution 
have left 400 cities out of roughly 660 without sufficient 
water and 110 of them facing serious scarcity. About a quarter 
of China's land is seriously degraded or technically classified 
as desert. Desertification is advancing at a rate of about 600 
square miles per year.
    Just this past May, the Chinese Government announced that 
28,000 rivers out of 50,000 rivers have simply dried up since 
the 1990s. Meanwhile, there has been a serious deterioration in 
water quality. According to this year's report from the 
Ministry of Environmental Protection, about a quarter of the 
water that flows through China's seven major rivers and their 
tributaries is considered unfit even for agriculture or 
industry. About 90 percent of the groundwater is moderately or 
heavily polluted.
    For Chinese leaders what matters most, of course, is how 
this water scarcity and water pollution affects a range of 
additional challenges that they face in terms of public health, 
the economy, and social stability. In terms of public health, 
about 600 million people in China drink water that is 
contaminated and 190 million of those drink water that is so 
contaminated it is considered harmful to their health.
    Along China's rivers scientists have identified about 450, 
upward of 450, of what they call cancer villages, just villages 
where the rates of cancer are much higher than the norm. Water 
pollution causes about 60,000 premature deaths annually in 
China.
    In terms of the Chinese economy, numbers are very sketchy 
on this, but the World Bank in 2007 estimated that water 
scarcity and pollution cost the Chinese economy the equivalent 
of 2.3 percent of GDP. This is from lost agriculture, 
fisheries, and industrial output, as well as from missed days 
of work and hospital stays. In Beijing, for example, in 2009, 
49 factories were forced to close because of lack of water.
    Most important, however, is how the environment affects 
social stability, and you discussed this a little bit, I think, 
or hinted at it in the first panel. In 2010 China recorded 
180,000 protests. In 2012 the environment surpassed illegal 
land expropriation, land grabs, as the largest source of social 
unrest in the country. The Internet really has transformed 
people's access to environmental information and their ability 
to organize, and this is producing enormous bottom-up pressure 
on the Chinese Government.
    China's strategy for addressing its water challenge is 
twofold. First is going outside its borders to meet its food 
security, energy, and other developmental needs. China has 
become the third-largest investor in agricultural land overseas 
after the United Kingdom and the United States. It is the 
largest source of illegal, unreported, and unregulated fishing, 
and it is damming and diverting, as you've discussed, 
transboundary rivers in ways that are engendering concern in 
its downstream neighbors in Central, Southeast, and South Asia.
    Beijing is also adopting a wide range of measures at home, 
including planned construction of desalination plants along the 
eastern seaboard, large-scale river diversion projects within 
their own country, waste water treatment plans, and experiments 
with water pricing and water trading. Yet the political economy 
of the country in many respects undermines the government's 
efforts. For example, despite numerous laws and regulations on 
the books, an estimated two-thirds of Chinese factories simply 
dump their waste water untreated into nearby lakes and rivers. 
Beijing has been unwilling to move forward on what I think 
people in the United States and elsewhere would consider to be 
the pillars of effective environmental protection: 
transparency, official accountability, the rule of law, and an 
enforcement system of economic incentives to promote water 
conservation and recycling and disincentives to pollute.
    Because of broader political fears, Beijing also limits the 
role of the media and environmental NGOs, which are the most 
dynamic and progressive elements in Chinese environmental 
protection efforts today.
    Clearly, it is early days in the Xi Jinping and Li Keqiang 
era and rhetorically Premier Li has been a strong supporter of 
environmental protection. But his predecessor Premier Wen 
Jiabao was also quite supportive and did not accomplish as much 
as he would have liked. So I think we need to wait to see what 
this new government is able to accomplish.
    In terms of what the United States might do within the 
context of the rebalance, I have a couple of thoughts, which I 
will go through very quickly since my time is almost up. I do 
think we have an enormous array of agreements, memoranda of 
understanding, and other things with China already on the 
environment. I believe the United States ought to focus 
significantly on the fundamentals of good governance, for 
example a program on the rule of law, because I think this type 
of capacity-building is essential. It is at the heart of 
China's continued failure to improve its environment. Despite 
having access to scientific knowledge or to technology, year 
after year China misses its pollution reduction targets, and 
why is that? It is because of the governance issue.
    I also think we should be targeting areas that affect the 
United States directly--U.S. interests directly. For example 
development of shale gas is an area where the United States has 
moved forward relatively rapidly in recent years to develop 
environmental regulations. China is moving forward aggressively 
to develop its own shale gas reserves. It wants to become 
active, it already is active, in the United States. And yet 
they are talking about a 3-to-5-year lead time before they are 
going to have any regulations on the books. So I think this is 
an area that is ripe for cooperation.
    I also have a few other ideas, but I have gone past my 
time, so I will stop there.
    Senator Cardin. We will give you another minute or two if 
you would like to complete your statement.
    Dr. Economy. OK. I think the second thing is the Trans-
Pacific Partnership. I think here there are two steps to this, 
of course. The first is that the United States has to ensure 
that there is a strong environmental component with some 
enforcement mechanism and commitments on issues such as 
fisheries management. The second then is to bring China into 
the agreement, which will be a number of years in the making.
    But I think it will be one of the most effective ways to 
engage China, because if we look at something like the World 
Trade Organization that really is one of the most effective 
ways that we have of holding China to account and reining in 
some of their most egregious behaviors. I think that TPP has a 
similar prospect on some of these environmental issues of 
working with China.
    I think the third point is that we ought more often to 
think about working with China through a multilateral 
framework. Too often the United States approaches China just 
bilaterally, but I think in two distinct ways this is 
important. First, Japan, the European Union, and Canada are all 
very active as well in helping China in its environmental 
protection efforts, but we do virtually no consultation with 
our closest allies to try to make sure that we are reinforcing 
rather than replicating similar efforts. I think if we could 
work together there would be enormous synergy. So I think that 
is one thing we ought to do.
    Then the second I think is really to do more of the work 
that the first panel was talking about, as well as Carter 
Roberts here, about working with regional partners and helping 
develop their capacity, because from everything, the Mekong 
River, but as well looking at the development of fisheries in 
the South China Sea and the East China Sea and the potential 
for greater conflict to emerge, I think the United States has a 
very important role to play there.
    I will stop there.
    [The prepared statement of Dr. Economy follows:]

               Prepared Statement of Elizabeth C. Economy

    How China manages its water resources over the next 5 to 7 years 
has profound implications not only for the Chinese people but also for 
the Asia-Pacific region and beyond. Within China, water supplies--
already scarce in many parts of the country--are diminishing and 
contributing to a range of serious economic, health, and social 
challenges. Spillover effects, such as damming and diverting 
transnational rivers, a push to acquire arable land abroad, and 
increasing conflict over regional fishery resources are also being felt 
well outside the country's borders. China's leaders have adopted a 
number of measures to try to address the country's growing water 
crisis, but these have fallen woefully short of the task at hand. In 
the context of the U.S. Rebalance to Asia, China's water challenge, if 
not addressed, is a potentially destabilizing force within the region 
and suggests the need for targeted collaboration with Chinese actors as 
well as stronger cooperation with regional partners.
                      the nature of the challenge
    China's per capita water resources are just over one-quarter that 
of the world average, and compounding the challenge, within China are 
highly unevenly distributed. Northern China possesses approximately 40 
percent of the country's total population, half its agricultural land, 
and more than 50 percent of its GDP, yet receives only 12 percent of 
total precipitation. Southern China, in contrast, receives roughly 80 
percent of the country's total precipitation, but severe water 
pollution dramatically reduces its natural advantage.\1\
    Rapid economic growth has exacerbated China's water challenge. 
Water is consumed without consideration for future demand. Industry, 
which accounts for about one-quarter of China's total water 
consumption, uses anywhere from four to ten times more water per unit 
of GDP as other competitive economies. Water for energy is a 
particularly critical source of industrial water use--according to the 
Ministry of Water Resources, in 2010, China's coal mining, processing, 
and electrical-generating industries alone accounted for almost 20 
percent of all water consumed nationally.\2\ Agriculture demands the 
largest share of the country's water resources (about 60 percent), but 
household and industrial demand have increased dramatically over the 
past decade as individual wealth and the overall economy continue to 
expand. And as China urbanizes, the problem will only increase: urban 
residents use two and a half times more water than their rural 
counterparts.
    At least 10 provinces in China are below the World Bank's poverty 
level of 1,000 cubic meters per person per year; and according to Jiao 
Yong, vice minister of water resources, in 2012, China had more than 
400 cities that lacked sufficient water, 110 of which were facing 
serious scarcity.\3\ In Beijing, per capita water resources decreased 
to only 120 cubic meters per year in 2011 \4\; by comparison, the 
global annual average per capita is 1,385 cubic meters.\5\
    China's widespread pollution poses an additional challenge. Reports 
concerning levels of pollution vary widely, but none is positive. 
Overall, the Ministry of Environmental Protection reports that 
approximately one-fourth of the water that flows through China's seven 
major river systems and their tributaries is considered not even fit 
for agriculture or industry. A February 2013 report by the Geological 
Survey of China revealed that 90 percent of the country's groundwater 
was polluted.\6\ A year earlier, Vice Minister of Environmental 
Protection Wu Xiaoqing claimed that 40 percent of rivers and 55 percent 
of groundwater was unfit for drinking.\7\ Even water that is treated 
cannot be safely consumed from the tap. In late 2012, the Chinese 
newspaper, the Southern Weekend, featured an interview with a married 
couple, both of whom were water experts in Beijing. They stated that 
they had not drunk from the tap in twenty years, and have watched the 
water quality deteriorate significantly over just the past few 
years,\8\ even while state officials claim that more than 80 percent of 
water leaving treatment facilities met government standards in 2011.\9\ 
In rural China, a reported 320 million people do not have access to 
safe drinking water.\10\
    According to one report by Century Weekly, there are a number of 
reasons for differing assessments of the country's water quality: (1) 
the frequency of testing at treatment plants is too low, and only 40 
percent of the treatment plants in China's 35 major cities have the 
capacity to test for all 106 indicators in any case; (2) there are only 
a few independent water-quality monitoring bureaus, and most water 
testing is done in-house by the same water-treatment plant being 
evaluated; (3) there is weak transparency from local governments as to 
the results of the tests; and (4) no water testing accounts for the 
contamination that occurs from the aging and degraded pipes through 
which the water is transmitted to Chinese households.\11\
                  economic, health, and social impacts
    Most important to Chinese officials and to the Chinese people is 
what their country's water challenge means for their health, economic 
well-being, and social stability.
Impacts on Public Health
    Chinese scholars and activists as well as foreign analysts have 
started to document the linkages between the country's growing 
pollution and its rising public health challenges. According to Wang 
Zhangsheng, a professor at Tsinghua University's School of Environment, 
much of China's water contains organic compounds that can impair the 
immune system, affect fertility, cause cancer, or interfere with the 
nervous system. The impacts can take as long as 10 or 20 years to 
emerge.\12\ In 2010, Lee Liu, a geographer at the University of Central 
Missouri, reported in the magazine Environment that he had identified 
459 cancer villages--villages in which cancer rates were significantly 
higher than normal. Most were clustered around rivers with the lowest 
grade of pollution on the government's five-point scale. Some of these 
villages had cancer rates 30 times greater than the national 
average.\13\ In February 2013, the government-financed newspaper the 
Global Times took the unusual step of acknowledging the existence of 
these cancer villages and their link to pollution. Along with a map of 
cancer villages, the Weibo account of the Global Times stated that ``. 
. . because of chemical poisoning `cancer villages' and other serious 
[threats to] social health have begun to emerge in many areas.'' \14\
    The negative impacts of water pollution are not limited to China's 
water supply. Chemicals and pollutants that seep into rivers and 
groundwater also find their way into food crops and eventually onto 
Chinese tables. A consistent diet of cadmium-laced rice has caused bone 
softening and weakness in some southern Chinese villagers. And 
according to the China Economic Weekly, in 2011, as much as 12 million 
tons of grain--enough to feed 40 million people--were contaminated with 
heavy metals absorbed from the soil.\15\ Although the Ministry of 
Environmental Protection and Ministry of Land Resources completed a 5-
year study of soil contamination in 2012, other than reporting that 10 
percent of the land is contaminated with heavy metals, they have 
refused to release the results, calling the report a ``state secret.'' 
\16\
Economic Costs
    Measuring the economic costs of water pollution and scarcity is 
notoriously difficult. In 2007, the World Bank calculated the costs of 
China's water crisis to be 2.3 percent of GDP, of which 1.3 percent was 
credited to the scarcity of water and the other 1 percent to the direct 
impact of water pollution.\17\ In Beijing, for example, 49 factories 
closed in 2009 due to water shortage.\18\ And in one of China's leading 
economic centers, Chongqing, which sits on the banks of the Yangtze 
River, local officials estimate that dealing only with the effects of 
water pollution on local agriculture and public health at 4.3 percent 
of GDP.\19\
    These costs are only likely to rise as scarcity increases. In March 
2013, Beijing announced that more than half of Chinese rivers have 
``disappeared'' since the 1990s due to climate change, industrial 
development, and large hydroelectric projects.\20\ This changing water 
landscape will have significant impacts on future agricultural and 
industrial development.
Social Unrest
    In 2010, the number of reported social protests in China reached 
180,000 \21\; and in 2013, the environment surpassed land expropriation 
as the leading cause of social unrest in the country.\22\ The rule of 
law in China is only weakly developed, and without effective legal 
redress for environmental wrongdoing, victims of environmental 
pollution often resort to demonstrations to draw attention to their 
plight.
    The advent of the Internet has further contributed to the ability 
of the Chinese people to bring bottom-up pressure on officials: 
Internet petitions, water pollution maps demarcating polluting 
factories, and pictures of polluted sites or protesting Chinese are all 
central to civil society efforts to reform the system of environmental 
protection. Urban residents have also become skilled at using the 
Internet or cell phone texts to organize protests, most commonly 
against government plans to site factories or garbage incinerators near 
their communities. In July 2012, for example, in Qidong, north of 
Shanghai, thousands of people demonstrated violently in opposition to a 
waste water pipeline from a paper mill because they believed it would 
pollute their coastal waters.\23\ In response to the local government's 
unwillingness to listen to their concerns, the local citizens stormed 
local government offices and caused $20,000 in damage. Their protest 
was inspired by another demonstration earlier that same month in 
Shifang, Sichuan province, roughly 1,000 miles away, that the Qidong 
residents had tracked via the Internet. In both cases, the local 
governments halted the projects in the face of the citizen unrest.
                    regional and global implications
    China's need for water to fuel its growth and feed its people also 
has far reaching implications for the rest of the world. To meet its 
food security needs, China is seeking land abroad; to address its 
declining fish catch, it is pushing further into contested waters; and 
to meet its need to supply its factories, land, and people with energy 
and water, it is expanding its network of dams and large scale 
hydropower plants.
Fishing in Distant Waters
    In 2012, China's State Oceanic Administration completed its 8-year 
survey of marine resources and discovered that 90 percent of coastal 
cities suffer from intermittent water shortages; mangrove swamps have 
decreased by 73 percent and coral reefs by 80 percent since the 1950s, 
and coastal wetlands have shrunk by 57 percent.\24\
    Pollution has taken a severe toll. Three-quarters of discharges 
into estuaries fail to meet regulatory standards. The area of coastal 
waters that earned the worst official pollution rating increased by 
more than one-third from 2011 to 2012 from 44,000 square kilometers to 
68,000 square kilometers.\25\ According to Chinese fishermen, a decade 
ago, it was possible to catch fish about 90 nautical miles from the 
coast but now they have to go 130 to 160 nautical miles, and the catch 
has dropped by three-quarters during the same time period. In addition, 
the number of types of marine products with commercial value has 
dropped from 70 to 10 in recent years.\26\
    As fish stocks in Chinese coastal waters have become depleted, 
Chinese fishermen have become more deeply engaged in international 
waters. In 2011, 470 Chinese fishing boats were sent back by South 
Korean Coast guards for illegally entering South Korean waters. More 
than 90 percent of Chinese companies engaged in distant-water fisheries 
are private and small,\27\ yet according to some analysts, they are 
increasingly coordinated with Chinese maritime authorities. As Lucio 
Blano Pitlo suggests, ``In April 2012, Chinese fishermen in the Bajo de 
Masincloc (Scarborough Shoal) were about to be apprehended for illegal 
fishing but were able to radio Chinese maritime surveillance ships to 
intercede on their behalf. Fishermen have become securitized.'' \28\ 
While conflict is most regularly reported with China's neighbors, such 
as Vietnam, the Philippines, and Japan, according to some sources, the 
``most extreme'' illegal, unreported, and unregulated fishing by 
Chinese has taken place in West African waters. A 2013 report by 
scientists at the University of British Columbia estimates that the 
total catch of some 3,400 Chinese fishing vessels is 4.1 million tons 
(worth more than $11 billion), but that only 9 percent of China's total 
catch in Africa, as well as in other international waters, was reported 
to the United Nations, complicating efforts by African nations to 
manage their stocks.\29\ (These numbers are disputed by the United 
Nations Food and Agricultural Organization as too high.) Some of these 
catches may be legal, resulting from agreements between China and host 
countries that have not been made public, but the sheer magnitude and 
unreported nature of the catch is enough to raise alarm bells 
throughout Africa and the developing world.
Securing Food
    China has historically placed enormous importance on food security 
and food self-sufficiency. Increasingly, however, scarce water supplies 
and lack of arable land have driven China outside its borders to ensure 
this food security. According to one study published in 2013, China is 
responsible for about 7 percent of all cross-border land purchases 
(i.e., purchases by entities from one country of land in others), third 
in the world, well behind the United Kingdom and just behind the United 
States.\30\ However, the rate of its acquisitions is increasing 
rapidly.
    Chinese land and agricultural investments in different parts of the 
world take varying forms and serve different purposes. In African 
countries such as Zambia and Senegal, Chinese-invested farms are 
typically smaller-scale--generally under 5,000 hectares--and often 
serve local Chinese communities, such as those that emerge around 
particular resource or infrastructure investments.
    In other countries, such as Brazil and Australia, China has sought 
larger stakes, generally to meet needs in China. Chinese companies' 
preference is to own land outright to ensure ``product safety, lower 
production costs, and better profits.'' \31\ Where owning land outright 
is not possible as in Brazil, they are investing in infrastructure and 
processing facilities that allow them to purchase soybeans directly 
from Brazilian farmers, circumventing multinational grain 
companies.\32\ In a number of countries, such as the Philippines, 
Brazil, Argentina, and Australia, there has been pushback--particularly 
from local populations--where communities have either passed laws or 
rejected land purchases by Chinese companies. Concerns vary by country, 
but range from fears over the export of Chinese farmers to control of 
valuable arable land by Chinese state-owned enterprises.
Damming and Diverting
    China has more dams than any other country in the world, and 
between 2007 and 2020, it plans to triple its hydropower capacity. 
According to Ma Jun, director of the Chinese NGO Institute of Public 
and Environmental Affairs, many Chinese rivers simply will not be 
running in 10 years if China meets such hydropower goals.\33\
    China's hydropower plans and water needs also have significant 
implications for the country's neighbors. Several of Asia's longest and 
most important rivers begin in the Himalayas and the Tibetan Plateau, 
and China is a central player in many of the controversies surrounding 
shared water resources in Central, South, and Southeast Asia. Several 
of these conflicts, such as those centered on the water resources of 
the Irtyush, Mekong, and Brahmaputra Rivers are raising regional 
tensions as China develops plans upstream that may have dramatic 
impacts on the lower reaches. Damming of rivers to generate 
hydroelectric power alters the way that water flows; it can harm 
fisheries and agricultural activity downstream. When river waters are 
permanently diverted for irrigation, other energy production, or 
similar uses that permanently consume the water (unlike hydroelectric 
dams), they can harm those who share the water resources more. This 
potential for damage is often compounded by poor or nonexistent 
information sharing between China and others with which it shares 
rivers.\34\
    Across all three conflict areas--the Mekong, the Irtysh, and the 
Brahmaputra--China has been generally unwilling to discuss shared water 
rights--which it does not recognize--or even to share information 
concerning water levels, usage, or pollution. In each case, however, 
significant negative media attention and public pressure have brought 
China to the table. With regard to the Irtysh, for example, China's 
plans to divert significant amounts of water from the Irtysh through a 
series of canals contributed to significant negative publicity within 
Kazakhstan and eventually to the establishment of a 2011 Agreement on 
Water Quality in Transboundary Waters between China and Kazakhstan, 
obligating each side to monitor water quality.\35\ The two countries 
are also conducting scientific research on transborder river issues. 
The research is expected to be completed in 2014 with an eye toward 
informing later agreement. Still there is no agreement as to shared 
water rights, although Kazakhstan may be able to leverage Chinese 
interests in investing in and developing Kazakh oil and copper 
resources to make progress in this area.
                           beijing's response
    The Ministry of Environmental Protection's annual report released 
in June 2013 stated that the future outlook on the quality of China's 
water sources is ``far from optimistic.'' \36\ China's leaders face a 
daunting challenge: how to meet the needs of their rapidly growing 
economy and large population with a gravely threatened water supply. 
Beijing's answer more often than not has been to launch large work 
projects and campaigns reminiscent of the Cultural Revolution era. They 
also have plans to invest $650 billion on projects between 2011 and 
2020, but between 2006 and 2010, they spent $112 billion and the 
situation still has not improved.\37\
    The answer to China's water dilemma is not complicated in 
conception, but it is challenging in implementation. It rests in 
developing a system of incentives and disincentives that make it easy 
for officials and the Chinese people to do the right thing. Local 
environmental protection bureaus often lack the capacity to enforce 
laws and regulations, with too few human or financial resources to 
oversee the factories in their jurisidiction. Fines for polluting 
enterprises are often ignored or negotiatied such that continuously 
paying fines is still cheaper than following regulations. And 
corruption is also a significant problem. Of the 1.3 percent of GDP 
that Beijing currently spends on environmental protection (note: 
experts believe the percentage should be closer to 2-4 percent of GDP), 
half finds its way into other local priorities such as infrastructure 
development.\38\
    Pricing reform is one element of an effective policy response. 
Simply put, water in China is too cheap. Experiments are under way in a 
number of municipalities for tiered pricing to try to distribute the 
burden of price rises, and Beijing has asked local governments to 
``carry out a tiered pricing system for urban households by the end of 
2013.'' \39\ However, such efforts are highly sensitive politically. A 
recent proposal by the China Water Investment Corporation, which is 
owned by the Ministry of Water Resources and the China Power 
Construction Corporation, to increase water tariffs by more than ten 
times was the object of a scathing editorial in the investigative 
journal Caixin, which argued, ``More than half of the country's water 
companies are in the red. Low prices are not the major reason companies 
have suffered large scale losses--it is due to lack of government 
investment. They need to maintain pipes and other facilities. Public 
access to clean drinking water should be provided by the government. 
Not one Chinese city has said its tap water is suitable for drinking.'' 
\40\
    A sound Chinese water strategy also needs to strengthen those 
elements of China's political system that support good environmental 
policymaking. Yet such change is even slower to emerge than pricing 
reform. The most dynamic and creative forces in Chinese environmental 
protection are Chinese environmental NGOs and the media. They 
collaborate--often with international partners--on a wide range of 
issues such as publishing maps of polluting factories, pushing local 
officials to publish legally mandated pollution statistics, protesting 
excessive dam construction, developing building energy efficiency 
standards, and documenting the public health consequences of pollution. 
Yet Chinese officials remain concerned about delivering too much 
information and too much power to forces outside direct government 
control. Thus, the media are advised not to publicize water pollution 
disasters, and environmental activists may be detained and arrested if 
they overtly challenge local officials.
    The rule of law is also essential to effective environmental 
protection. Former deputy director of the State Environmental 
Protection Administration (now the Ministry of Enviornmental 
Protection) Zhang Kunmin, for example, has stated that the environment 
cannot truly be protected until people's legal rights are 
guaranteed.\41\ However, laws and regulations that promote transparency 
are often poorly enforced. For example, Chinese scholars have noted 
that although environmental impact assessments are perhaps the most 
important form of government-supported citizen engagement in the 
environment, the system is deeply flawed: only a small percentage of 
projects are subjected to compulsory public participation; the timing 
and duration of engaging the public is short; the method of selecting 
those who can participate is often biased; and the amount of 
information actually disclosed is often quite limited in order to try 
to prevent social unrest.\42\
    Moreover, recent draft revisions to the Environmental Protection 
Law take a step backward in accountability and the rule of law by 
placing sole authority for bringing public interest environmental 
lawsuits in the hands of the All-China Environmental Federation (ACEF) 
and its provincial-level branches. Previously, some cities, such as 
Hainan, had permitted a wide range of people, including individuals to 
bring cases; and nongovernmental organizations, such as the Center for 
Legal Assistance to Pollution Victims, have handled over 200 
environmental lawsuits for pollution victims. Since the ACEF is 
overseen by the Ministry of Environmental Protection, many 
environmental activists believe that it is unlikely to be very 
aggressive in bringing cases, and are protesting the draft 
regulations.\43\
           china's environment and the u.s. rebalance to asia
    The U.S. Rebalance to Asia reflects a renewed and broader 
commitment by the United States to the Asia Pacific region, first and 
foremost in the realms of security and trade and investment. Expanding 
the parameters of the rebalance to include issues such as the 
environment, which is integrally intertwined with both regional 
security and future regional economic growth, adds an important new 
dimension to this U.S. effort.
    The role of China in the original conception of the rebalance is 
somewhat complicated, recognizing both the enormous opportunities for 
growing U.S.-China cooperation but also the challenges posed by China's 
inreasing economic and military strength. Much as in the security and 
economic arenas, the U.S. focus in the environmental arena should be 
twofold: supporting targeted bilateral U.S.-China cooperation; and 
strengthening multilateral cooperation to enhance the efficacy of 
collaboration with China when possible and to bring pressure to bear on 
China when necessary.
Target the Fundamentals
    The United States has a vast array of environmental cooperation 
efforts underway with China. It should develop a clear set of 
priorities that focus most explicitly on those areas where China needs 
the greatest support. For example, given the structural weakness in 
China's environmental protection system, the United States could 
develop a signature program on the rule of law, utilizing public-
private partnerships with U.S. business, scholars, and NGOs. Building 
on the work of the American Bar Association and others, the program 
could help train judges and lawyers, as well as help develop 
regulations and standards where appropriate. For example, China is 
making significant investments in shale gas development both within 
China and, increasingly, in the United States. It plans to have the 
capacity to develop 100 billion cubic meters of natural gas annually by 
2020. Yet China's Ministry of Environmental Protection has said that it 
will need at least 3 to 5 years to develop the necessary 
regulations.\44\ Given the strong interest of Chinese oil and gas 
companies in U.S. shale gas development, U.S.-China cooperation on 
developing environmental standards would be beneficial to both sides.
Strengthen and Better Utilize the U.S. Embassy in Beijing
    The United States Embassy in Beijing achieved singular success in 
supporting environmental protection in China by Tweeting Chinese air 
pollution statistics and spurring the citizen activism that resulted in 
Chinese cities more accurately reporting local air quality. The Embassy 
should consider launching a broader environmental educational campaign 
via the Internet that would strengthen citizen awareness. The campaign 
could share best U.S. practices, provide a platform for the Ministry of 
Environmental Protection and Chinese environmental activists to share 
their work, and potentially even address sensitive issues such as food 
safety.
Encourage China's Participation in the Trans-Pacific Partnership
    The Transpacific Partnership (TPP) represents a unique opportunity 
to reinforce the linkage between trade and environment in a meaningful 
manner. Evading environmental laws and subverting norms undermines best 
trade practices. The United States should ensure that a strong 
environmental commitment on issues such as the illegal timber trade, 
trade in endangered species, and illegal fisheries that allows for 
binding commitments and international enforcement is incorporated into 
the TPP. China's accession into the TPP would then represent an 
important new vehicle for helping ensure China's adherence to 
environmental laws and regulations.
Work with Other Partners in the Region to Support Transparency and Best 
        Practices
    Bilateral U.S.-China cooperation can only accomplish so much. The 
European Union, Japan, and Canada have all been very active in 
developing Chinese environmental protection efforts. More attention 
needs to be paid to ensuring that cooperative efforts reinforce but do 
not replicate each other. To the extent possible, intellectual and 
financial resources should be combined to deliver the strongest 
support. At the same time, the work that the United States has 
undertaken throughout the Asia-Pacific region, such as the Coral 
Triangle Initative and the Mekong River Commission, are essential to 
strengthening the capacity of our partners to address their own 
internal monitoring and enforcement capacities, as well as that of 
China. The United States should look for additional means of enhancing 
its commitment to such regional agreements, as some analysts have 
proposed for example, by developing a system of fish import 
certification to reduce the proliferation of illegal fishing throughout 
the region.

----------------
End Notes

    \1\ Elizabeth Economy, ``China's Growing Water Crisis,'' in 
``Coming Up Empty: Tackling Resource Scarcity,'' World Politics Review, 
August 9, 2011.
    \2\ Keith Schneider, ``Coal is China's Largest Industrial Water 
Consumer,'' Grist.org, February 24, 2011, http://grist.org/article/
2011-02-23-coal-is-chinas-largest-industrial-water-consumer/.
    \3\ Ecns.com, ``China's water crisis a growing threat,'' March 26, 
2012, www.ecns.cn/2012/03-26/11135.shtml.
    \4\ Ibid.
    \5\ Mark Fischetti, ``How Much Water Do Nations Consume?'' 
Scientific American, May 21, 2012, http://www.scientificamerican.com/
article.cfm?id=graphic-science-how-much-water-nations-consume.
    \6\ Barry van Wyk, ``The groundwater of 90% of Chinese cities is 
polluted,'' Danwei.com, February 18, 2013, http://www.danwei.com/the-
groundwater-of-90-of-chinese-cities-is-polluted/.
    \7\ Wu Xiaoqing, ``Address at the Press Conference of the State 
Council Information Office,'' June 5, 2012, http://www.china.com.cn/
zhibo/zhuanti/ch-xinwen/2012-06/05/content_25566769.htm.
    \8\ Peng Liguo, ``Beijing family boycotts city's tap water,'' 
ChinaDialogue.net, January 16, 2013, http://www.chinadialogue.net/
article/show/single/en/5611-Beijing-family-boycotts-city-s-tap-water; 
for the original article in Chinese, please see: http://www.infzm.com/
content/84703.
    \9\ ``50 Percent Of Water In China May Be Unsafe To Drink,'' May 
17, 2012, http://www.ibtimes.com/50-percent-water-china-may-be-unsafe-
drink-698930.
    \10\ ``Report on China's national economic, social development plan 
(2010),'' NPC.gov.cn, March 16, 2010, http://www.npc.gov.cn/englishnpc/
Special_11_4/2010-03/19/content_1621704.htm.
    \11\ Gong Jing and Wang Haotong, ``What's coming out of China's 
taps?'' ChinaDialogue.net, June 7, 2012, http://www.chinadialogue.net/
article/show/single/en/4962-What-s-coming-out-of-China-s-taps-.
    \12\ Jing Gong and Hongqiao Liu, ``Half of China's urban drinking 
water fails to meet standards,'' ChinaDialogue.net, June 6, 2013, 
http://www.chinadialogue.net/article/show/single/en/6074-Half-of-China-
s-urban-drinking-water-fails-to-meet-standards.
    \13\ Lee Liu, ``Made in China: Cancer Villages,'' Environment, 
March/April 2010, http://www.environmentmagazine.org/Archives/
Back%20Issues/March-April%202010/made-in-china-full.html.
    \14\ David Wertime, ``China's State-Run Media Shares Powerful Map 
of `Cancer Villages' Creeping Inland,'' ChinaFile.com, February 22, 
2013, http://www.chinafile.com/china-s-state-run-media-shares-powerful-
map-cancer-villages-creeping-inland.
    \15\ Shi Jiangtao, ``Millions of hectares of farmland and 12m 
tonnes of grain contaminated,'' South China Morning Post, July 19, 
2012, http://www.scmp.com/article/738908/millions-hectares-farmland-
and-12m-tonnes-grain-contaminated.
    \16\ Christina Larson, ``Soil Pollution Is a State Secretin 
China,'' Bloomberg BusinessWeek, February 25, 2013, 
www.businessweek.com/articles/2013-02-25/soil-pollution-is-a-state-
secret-in-china.
    \17\ Jian Xie, ``Addressing China's Water Scarcity,'' The World 
Bank, 2009.
    \18\ Brooke Barton, ``Why water consciousness is a business 
imperative in China,'' GreenBiz.com, April 16, 2013, http://
www.greenbiz.com/blog/2013/04/16/water-business-imperative-china.
    \19\ ``Cost of Pollution in China: Economic Estimates of Physical 
Damages,'' The World Bank, 2007.
    \20\ Emily Ford, ``More than half of Chinese rivers have 
`disappeared' since 1990s,'' The Times, March 29, 2013, http://
dgrnewsservice.org/2013/03/29/more-than-half-of-chinese-rivers-have-
disappeared-since-1990s/.
    \21\ Tom Orlik, ``Unrest Grows as Economy Booms,'' Wall Street 
Journal, September 26, 2011, http://online.wsj.com/article/
SB10001424053111903703604576587070600504108.html.
    \22\ ``Chinese Anger Over Pollution Becomes Main Cause of Social 
Unrest,'' BloombergNews, March 6, 2013,http://www.bloomberg.com/news/
2013-03-06/pollution-passes-land-grievances-as-main-spark-of-china-
protests.html.
    \23\ ``China waste water pipeline scrapped after protest,'' BBC 
News, July 28, 2012, http://www.bbc.co.uk/news/world-asia-china-
19026464.
    \24\ Jane Qiu, ``Chinese survey reveals widespread coastal 
pollution,'' Nature, November 6, 2012, http://www.nature.com/news/
chinese-survey-reveals-widespread-coastal-pollution-1.11743.
    \25\ Qian Wang, High Tech Marine Sector Steams Ahead, China Daily, 
June 8, 2013, http://english.peopledaily.com.cn/202936/8277851.html
    \26\ An Baijie and Xu Wei, ``Overfishing depleting sea resources,'' 
China Daily, February 21, 2013, http://europe.chinadaily.com.cn/
business/2013-02/21/content_16241804.htm.
    \27\ ``Group formed to aid fisheries,'' Xinhua, May 30, 2013, 
www.china.org.cn/environment/2012-05/30/content_25515197.htm.
    \28\ Lucio Blanco Pitlo III, ``Fishing Wars: Competition for South 
China Sea's Fishery Resources,'' Eurasia Review, July 10, 2013, http://
www.eurasiareview.com/10072013-fishing-wars-competition-for-south-
china-seas-fishery-resources-analysis/.
    \29\ John Vidal, ``Chinese fishing fleet in African waters reports 
9% of catch to UN,'' the Guardian (April 3, 2013) http://
www.guardian.co.uk/environment/2013/apr/03/chinese-fishing-fleet-
african-catch.
    \30\ Maria Cristina Rulli, Antonio Saviori, and Paolo D'Odorico, 
``Global land and water grabbing,'' PNAS 10, no. 3 (January 2013): 895.
    \31\ Stephen Chen, ``Party cadre Zhu Zhangjin pins hopes of food 
security on overseas farms,'' South China Morning Post, March 24, 2013, 
http://www.scmp.com/news/china/article/1198218/party-cadre-zhu-
zhangjin-pins-hopes-food-security-overseas-farms.
    \32\ Elizabeth Economy, Interview with Brazilian Agricultural 
officials (March 2013).
    \33\ David Stanway, ``Water, CO2 the priorities for China's 5-year 
plan,'' Reuters, March 3, 2011, http://www.reuters.com/article/2011/03/
03/us-china-environment-idUSTRE72214Y20110303.
    \34\ Elizabeth Economy and Michael Levi,``By All Means Necessary: 
How China's Resource Quest is Changing the World'' (forthcoming Oxford 
Press, 2014).
    \35\ ``Conflict of Interest has Created Water Crisis,'' European 
Dialogue, April 13, 2011, http://eurodialogue.org/conflict-of-
interests-has-created-water-crisis.
    \36\ ``China moves to address drinking water woes,'' Xinhua, July 
21, 2013, http://news.xinhuanet.com/english/china/2013-07/21/
c_132559802.htm.
    \37\ David Stanway, ``After China's multibillion-dollar cleanup, 
water still unfit to drink,'' Reuters, February 20, 2013, 
www.reuters.com/article/2013/02/20/us-china-pollution-water-
idUSBRE91J19N201.
    \38\ Stephen Chen, ``Money for fighting pollution `wasted,' '' 
South China Morning Post, April 1, 2012 http://www.scmp.com/article/
698060/money-fighting-pollution-wasted.
    \39\ Zhao Li, ``Low water prices must be revised,'' China Daily, 
May 27, 2011, http://usa.chinadaily.com.cn/business/2011-05/27/
content_12592357.htm.
    \40\ Gong Jing, ``Closer Look: Why Idea to Raise Water Bills Is All 
Wet,'' Caixin, April 18, 2013, http://english.caixin.com/2013-04-18/
100515675.html.
    \41\ Meng Si, ``Seeking damages,'' ChinaDialogue.net, July 21, 
2011, http://www.chinadialogue.net/article/show/single/en/4422-Seeking-
damages.
    \42\ Yuhuan Zhang, Xiaowen Liu, Yunjun Yu, Guojian Bian, Yu Li, and 
Yingxian Long, ``Challenge of Public Participation in China's EIA 
Practice,'' South China Institute of Environmental Sciences: IAIA12 
Conference Proceedings, May 27-June 1, 2012.
    \43\ Luna lin and Zhang Chun, ``Amending environmental protection 
law a backward step, say NGOs,'' ChinaDialogue.net, June 28, 2013, 
www.chinadialouge.net/blog/6162-amending-environmental-protection-law-
a-back.
    \44\ Wang Xiaocong, ``Environmental Frets as Frackers Move In,'' 
Caixin, November 20, 2012, http://english.caixin.com/2012-11-20/
100462881.html.

    Senator Cardin. Well, thank you. I thank both of you. I 
think your testimony has been extremely helpful to our debate.
    Dr. Economy, let me just point out that the first hearing 
we held on rebalance dealt with good governance because we do 
think it is fundamental to the building blocks on all these 
issues, including how we deal with the environmental challenges 
in the region.
    Your suggestion on TPP is a really good suggestion. It 
gives us an opportunity to include, we hope, an environmental 
dimension in that agreement. We will have a debate about that 
when we deal with trade promotion authority. I also serve on 
the Senate Finance Committee. That will be an issue that the 
Senate Finance Committee will deal with, and also the trade 
agreement itself as to how it deals with environmental issues.
    As you point out, China's not a party to the TPP and it is 
not likely that they will be engaged with this type of a 
multilateral agreement including Western countries in the near 
future. So we still need to find a way to engage China.
    One way that could work--and I talked to President Park of 
South Korea about it, it is her initiative--is to establish a 
regional dialogue organization similar to the OSCE. Her idea is 
for Northeast Asia, but there are possibilities of expanding 
that mechanism beyond just Northeast Asia, to include not just 
China, North Korea, South Korea, and Japan, but also the United 
States and Russia.
    So there are ways that we think we can engage on a regional 
basis to advance sustainability.
    Mr. Roberts, you raise a very good point about 
sustainability. I was with former President Clinton when we 
named the EPA building after President Clinton and he made the 
point that his administration understood and supported the fact 
that a commitment to your environment is compatible with 
economic growth. In fact, he made the point that the only way 
you are going to get economic growth, is if you respect your 
resources.
    So as we are working with countries that still have 
valuable resources, but have not developed to the level that 
the industrial nations have, it is a point that is going to be 
difficult for us to make because we have already done our 
thing. But these nations' future economic growth very much 
depends upon the way they manage their resources today. The 
more that we can make that point, it is going to be yes, good 
for us because we want stable countries, but it is also good 
for that country.
    I know that is a difficult point to make when you are 
sitting in a position where you are a developed nation and you 
have already lost some of the diversity that we are trying to 
protect in other countries. But it is a point that I think we 
have to emphasize when we can.
    Well, I first want to get on the record the wildlife 
trafficking issue and whether there is more that you would 
expect the United States to do in leadership to promote 
management of wildlife, to preserve diversity, and to protect 
endangered species. Is there more that we should be doing?
    Mr. Roberts. Yes, absolutely. You know, the numbers are 
stunning. We lost 30,000 elephants last year alone. On the 
rhino trade, South Africa was losing about 20 a year for a 
long, long time. Three years ago it jumped to 150, then to 350. 
This year we are on track to break 650. The numbers are just 
growing. They are quite, quite huge. You rightly point out the 
connection between that and criminal syndicates and the rule of 
law and the rest.
    There is a lot of interest in our government, in the White 
House, in the State Department, in Interior, and in Congress to 
do something about it. We have been working with--in fact, this 
morning we had a meeting with the wider conservation community 
we hosted in our office, in responding to the new Executive 
order that President Obama signed just a few weeks ago.
    I think there is an opportunity for real legislation and we 
are working with the House Foreign Affairs Committee on several 
legislative options, including a moratorium on ivory trade in 
our own country, and also really making sure we have the 
resources to mobilize the right kind of action on the ground. 
It is not just enough to catch poachers.
    I was just in Nepal with my daughter in fact and we were 
tracking rhinos on the back of elephants, and we had the 
opportunity to dart one one-horned rhino and put a collar 
around the rhino to track the rhino. We were with a colonel of 
the army there. Nepal has reached the zero poaching level and I 
asked him: How did you get to zero poaching?
    He said: It was all about infiltrating the networks; it is 
all about intelligence. It is about going upstream. The 
poachers are just local guys who are following the money, and 
you have got to follow the money upstream by deploying the best 
available intelligence. That includes our resources available 
here, but working with other governments, too.
    So I think--then last but not least is demand. That is a 
diplomatic issue as much as anything. The Prime Minister of 
Thailand just committed to ending the ivory trade in her own 
country. She is going to need help. I believe there are real 
opportunities in China and Vietnam, which on ivory and rhino 
horn respectively are the two main drivers.
    So I think our government should do a lot more. It needs to 
start at home. There is some legislation that we have talked 
about. I think having a Senate hearing on this topic would be 
magnificent and would open up not only the crisis, but also the 
options that are in front of us, and help drive some things 
forward quickly that need to be done.
    Senator Cardin. Well, thank you. Thank you for that 
suggestion.
    On Myanmar, it is a young country from the point of view of 
reform. The President was recently here. I must tell you--and I 
think I express the sentiment of all those who had the 
opportunity to meet with him--that he is very impressive. The 
jury is obviously out on what is happening in that country, but 
it is a country that is struggling with civilian leadership--
and whether it will survive--we will see.
    I would welcome your thoughts as to Myanmar, because I 
think we do have inroads to impact some of their decisions. The 
President asked for transparency--he wants to do things very 
openly. I thought he was very sincere about that.
    So I think it would be helpful if you could perhaps give us 
help as to what should be on our wish list as they manage the 
resources of their country, things that we should try to 
promote, which might be useful.
    Well, we have mentioned China, which is obviously the 
country that gets the most attention. Dr. Economy, I would like 
you to tell us, knowing the current environment, how can the 
United States be more effective in bringing about leadership 
from China on environmental issues?
    Dr. Economy. Well, I think it is probably prudent to bear 
in mind that in most respects the United States leverage, 
impact, influence, on China is, if not marginal, it is limited. 
This is an enormous country. It is now the second-largest 
economy in the world and it will likely be the largest economy 
in the world in a decade or less. And it marches to its own 
drummer and it has its own sets of priorities.
    But I do think we have seen in the past 5 to 10 years some 
evidence of what it does take to move China. I think in some 
respects it can be rather surprising. For example, I think it 
is excellent that we have a new climate partnership, but the 
reality is that getting China to move on certain issues came 
about on the climate change issue much more because small 
island states and other small countries stood up and said: You, 
China, need to do more.
    There are certain things that matter to China. For example, 
still being considered a leader within the developing world 
matters a lot to China. It does not like to be called out on 
certain kinds of behavior. When developing countries unite and 
do ask China to change its position, sometimes that does bring 
about change.
    I think working with actors in China that are obviously 
supportive of doing the right thing, identifying them and then 
working with them is important as well. I think that requires 
operating at a number of different levels: certainly the 
central government, but also Chinese businesses now. There is a 
Green Entrepreneur Society that includes some of the powerful 
Chinese companies, that are the largest Chinese companies, that 
are out there today, that are very concerned about doing the 
right thing on the environment. I think working with some of 
them, having our business community work with them, is one 
possibility, developing partnerships at that level.
    And certainly NGOs. As I mentioned, they really are the 
most dynamic and I think creative force in China today. They 
are the ones who are pushing for the types of change that will 
bring about that good governance.
    So I think there are things that we can do to support them. 
Obviously, they cannot be overt, because the United States 
Government supporting Chinese NGO activity will not go over 
very well. But for example, there are many, many NGOs 
worldwide--World Wildlife Fund is certainly one of them, but 
NRDC, Environmental Defense Fund, and many others--who have 
been working in China, working with the Chinese for long 
periods of time. To the extent that the U.S. Government can 
support their activities and their partnerships with China, I 
think that is also really important, because supporting the 
people that are actually effecting the change from the bottom 
up I think is quite worthwhile.
    Senator Cardin. So we have talked about China, we have 
talked about Myanmar, we have talked about the countries along 
the Mekong. Are there other countries in Asia that we should be 
particularly concerned about on the environmental front or on 
preserving diversity, water security, et cetera, that you would 
want the subcommittee to pay attention to?
    Mr. Roberts. Obviously, Indonesia is at the top of the 
list. When we map all the priorities of the world in terms of 
fisheries and forests and rivers and the rest, Indonesia always 
comes out No. 1. It is where everything piles up. It is the 
world's richest forest pound for pound in terms of diversity of 
life per square kilometer. I do not know if you have seen the 
map of coral reef diversity in the world. It looks like a 
bull's eye. The center of the bull's eye is Indonesia.
    Yet it is a very complicated country because it is such a 
vast archipelago with so many different dynamics there. Yet it 
is also a country where the President has made the Coral 
Triangle Initiative one of his signature accomplishments. But 
it is where everything comes together in terms of food 
production, in terms of timber and pulp production, in places 
like Borneo and Sumatra, and where I think there is an 
opportunity. We talked about commodities and getting those 
right and we talked about fisheries management and getting that 
right, that Indonesia is more than any other a place where, if 
we can nail those kinds of models in a country that has real 
governance issues, that it will have an enormous impact just in 
that country and also beyond.
    So it has been already one of the priority programs for the 
U.S. Government. But just continuing that kind of work with the 
countries around Indonesia is enormously important.
    I do not know if you have any other suggestions.
    Dr. Economy. No, I focus on China. It keeps me busy, let me 
tell you.
    Senator Cardin. You want to get back to China.
    Dr. Economy. No, no. All I was going to say is actually, as 
I was just thinking about it, I am glad to hear that you are 
thinking about working with Japan and South Korea and the sort 
of Northeast Asia regional sort of forum. I know that had been 
floated even during the Clinton administration, and China was 
not interested at that point in time. So this I think 
represents a real step forward if in fact they are interested. 
This may be sort of a six-party talks comes to the environment.
    Senator Cardin. That is exactly right. The motivating 
factor for this is South Korea. They are the ones pushing it 
hard. China was interested because they thought it helped North 
Korea to be in this type of a regional discussion. Japan 
thought it was interesting that they could be in a regional 
organization with Korea and perhaps do something about their 
relationship. It is a complicated group. When you are in each 
country they have different priorities, but I think they share 
a lot in common.
    The good news about the Helsinki framework is that it is 
not that intimidating because it is a consensus group. So you 
do not have to worry about treaty responsibilities. You just 
sit down and talk. It is proven effective.
    The other advantage and what we are looking at is whether 
it could be put under the umbrella of OSCE, so they do not have 
to negotiate the commitments. The commitments are universal. 
They have already been agreed to under Helsinki.
    So there is interest in that and we are pursuing it. We 
expect to see whether that can be done, either formally or 
informally. Some of the countries already have affiliate 
memberships within OSCE.
    Mr. Roberts. Mr. Chairman, one thing I wanted to just touch 
on, and it is building off of your comments, is the whole 
notion of regional influence. On Myanmar, Myanmar is going to 
chair ASEAN in the coming year. I think if we can smartly work 
with Myanmar on a set of agenda items in the context of ASEAN 
that build off the kind of green economy principles that we 
ought to be building with Myanmar and the kind of smart choices 
that I talked about in Myanmar, that we could engage Myanmar 
also in their leadership in ASEAN in advancing those kind of 
principles throughout that region and use their influence.
    I never thought I would be talking about Myanmar's 
influence in the rest of Southeast Asia, but there you have it, 
because everybody is watching, they have the platform, and by 
giving the right technical assistance on mapping their 
biodiversity and giving them the right guidelines on technical 
choices and using ASEAN as a platform, is I think, a golden 
opportunity for us to engage with that country and have ripple 
effects far beyond.
    Senator Cardin. It is an opportunity. When nations want to 
take on leadership responsibility within regional 
organizations, they need to be a model in using that to advance 
the goals of those regional organizations. You are absolutely 
correct, we do have higher expectations if they want to step 
into leadership positions.
    I found this with Vietnam and now perhaps with Myanmar--
that they really do want to become more of a legitimate 
international player. And if that is the case, then they need 
to change and they need to show leadership. We are seeing that 
they are taking some steps to do that. Again, the jury is out. 
I am not trying to oversell this. But we have seen some signs 
of progress. Certainly I could get into human rights, which is 
one of my favorite subjects, and there are certain deficiencies 
there that are pretty fundamental that have to be dealt with.
    Mr. Roberts. When we look around in the world, we have all 
kinds of science that says these parts of the world are 
important and that prioritize different parts of the world, and 
then there are these unexpected openings when the biggest 
things happen. One of the proudest things we have ever done was 
when Namibia attained independence and the U.S. Government 
through USAID helped build one of the most powerful community-
based programs for conservation there--another country that 
almost has zero poaching.
    There are these moments when countries like Myanmar or 
Namibia or Nepal change governments and things happen, where 
shame on us if we do not provide the right technical assistance 
at the right moment and do so over an extended period of time, 
because success blossoms in the most unexpected places. I see 
that part of the world, Southeast Asia, including Myanmar, as 
one of the biggest opportunities we have in our work.
    Senator Cardin. Agreed.
    Well, let me thank both of you for your contributions to 
this hearing. I think this has been extremely helpful to us. 
The President's initiative on the rebalance gives the United 
States much greater visibility in the Asia-Pacific region, and 
that allows us to move forward on agenda items. We think very 
much that sustainability, the environmental front, the 
management of food and water resources is a critical objective 
for the United States in Asia. So we will continue to promote 
these issues, and you have helped us develop a workable 
strategy.
    Thank you all very much, and with that the subcommittee 
will stand adjourned.
    [Whereupon, at 2:22 p.m., the hearing was adjourned.]

                                  
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