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Soil Remediation

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The legacy of environmental problems stemming from earlier phases of China’s industrial developments must be addressed.

Estimates suggest nearly 20 per cent of farmland is contaminated in China, with total remediation costs for land and water estimated at six to nine trillion RMB in the next five years for farmland, groundwater and industrial site rehabilitation. It’s expected only about 15 per cent of these funds will be from public sources; the rest will have to be raised from private sources, leveraging capital markets or through public-private partnerships.

If a reformed, “green” finance system is to realize its potential in China, one of its most urgent priorities will be to ensure adequate funding for greener forms of development such as green urban infrastructure, renewable energy, clean industrial technology, public transport and more.

The challenge may seem daunting, but so are the consequences of not addressing the issue. The future stability of the society, and the very legitimacy of the government, is closely linked to building confidence both in the urgency attributed to the issue and visible progress in addressing the worst of the problems.

This is why we’re working on financing models for soil remediation in China.

Our work focuses on the financial vehicles available to attract investment to environmental rehabilitation of degraded land, and the financial reforms needed to make these vehicles a viable and desirable means of investing in land rehabilitation in China. We draw on best practices worldwide in funding environmental rehabilitation, with special focus on the design and use of financial mechanism to attract private investors, share the risk and offer a clear benefit from the rehabilitated land.

We cover the entire spectrum from models that leverage public funding to create financing at scale right across to new social entrepreneurship models and community-based mobilization of funding. We look at the policy framework of incentives and disincentives and identify both policy, regulatory and institutional gaps to be filled.

The project is supported by the Norwegian Ministry of Foreign Affairs, and is carried out in partnership with the Chinese Academy of Environmental Planning (CAEP) under the Ministry of Environmental Protection (MEP) and with the Green Finance Committee, and with both the Norwegian Institute for Water Research (NIVA) and Center for International Climate and Environmental Research – Oslo (CICERO) in Norway.

Learn about other areas of our green finance work.

  • Blog
    Soil Remediation in China: How a huge pollution problem is putting the green finance movement to the test

    Soil Remediation in China: How a huge pollution problem is putting the green finance movement to the test

    IISD, with Chinese and international partners, is testing the potential of the entire spectrum of green finance approaches to deal with China’s legacy of toxic soils and the urgent need to restore them to health and productivity. Read More