Effective management of water resources is central to China’s economic prosperity. Despite significant investments in water management and infrastructure, more tangible innovative policies and incentives are required to strengthen and better integrate water management at both national and regional levels. Providing more water for environmental uses, expanding the use of market mechanisms to driver water efficiency and adopting transformational approaches to fight water pollutions are among the key tasks for the rapidly growing economy. In facing these challenges, the Chinese experience will make important contributions to the global discourse, says a new a report jointly launched by the World Bank and the Development Research Center (DRC) of China’s State Council today.
The joint study Watershed: A New Era of Water Governance in China closely examines the key water management issues in the context of China’s rapid development and recommends a new approach to the governance of water. This is aligned with the goals of the ecological civilization and its aims to balance economic growth against increasing water demand under conditions of water scarcity.
“China’s water governance faces a rapidly changing context with increasingly serious challenges, with more complicated problems and more ambitious goals,” said Wang Yiming, Vice Minister of the Development Research Center. “The study makes an important contribution to enhancing the framework for China’s water management and provides a practical set of tools and policy guidance. We believe these recommendations will be substantially helpful to further enhance the level and capacity of China’s water governance.”
“Water is key to the realization of China’s sustainable development. This study leverages the Chinese experience to combine with the Bank’s global knowledge in providing a framework for enhancing water governance in support of sustainable social and economic development,” said Victoria Kwakwa, World Bank Vice President for East Asia and the Pacific. “The Chinese experience in managing the development of water resources also has important lessons for other transitioning economies and informing efforts to address global risks to economic progress, poverty eradication, peace and security, and sustainable development.”
Despite being the world’s second-largest economy and being home to 21 percent of the global population, China has only 6 percent of the world’s freshwater resources. In the past 50 years, China has made significant investments in water management and infrastructure, which has led to significant achievements in water supply, irrigation, flood control and hydropower generation. However, the country is still facing acute challenges with respect to both water quantity and quality. Rapid urbanization is driving increasing demand for water from all sectors. Water pollution poses significant risks to human health. Ecosystem services are under severe pressure from urbanization and growing water demands. Drought and local water scarcity affects large parts of the country due to the uneven distribution of water resources and variable rainfall. Small and medium sized cities and rural areas remain unevenly served by water supply, sanitation, and flood protection infrastructure.
China has implemented a series of reforms and pilots in recent years. These have been designed to address the many water-related challenges, including water scarcity, water pollution, ecological degradation, and increased risks and impacts of floods and droughts. The Strictest Water Resources Management System established three major control objectives, known as the Three Red Lines Three Red Lines, and the construction of an “ecological civilization” has become one of the government’s highest policy priorities. The 19th Party Congress in October 2017 further highlighted the goal of building a “beautiful China” to meet increasing public demand for improved environmental quality.
As China pursues a new growth model within the context of an ecological civilization, the report recommends a new water governance strategy that built around five key water governance reform priorities:
Enhance the legislative foundation for water governance. The Water Law, which was last revised in 2002, should be updated to reflect the new principles and challenges. China has established many water quality standards but more work is needed for enforcement and addressing cross jurisdictional issues. The market has an important role to play. As one of the world’s most important and active arenas for public-private partnerships (PPPs) in the water sector, China would benefit from further strengthening and codifying the existing regulations concerning PPPs.
Strengthen national and basin water governance. Reflecting the cross-sectoral nature of water, China could consider creating a high-level, inter-agency mechanism with representatives from the primary ministries concerned with different aspects of water governance. This would help contribute to coordinated policy efforts, reach consensus, identify national strategic priorities and provide guidance to river basin planning. The river basin agencies provide an integrated management for water resources, water ecological environment and the catchment landscape, and should be given enhanced authority and clarity in the key areas of planning, coordination, implementation, enforcement, and financing. Formally linking provincial River and Lake Chiefs with the river basin agencies will help to institutionalize the River and Lake Chief System.
Improve and optimize economic policy instruments. The further development and implementation of economic instruments, such as water pricing and water rights trading, will promote more sustainable and efficient water use. More empirical evidence is also needed to assess the effectiveness of these instruments and adapt. The report suggests four ways to improve target setting of the Three Red Lines to strengthen the effectiveness of China’s Most Stringent System for Water Resource Management. Innovative financing mechanisms can also be better aligned to help sub-national areas meet national targets.
Strengthen adaptive capacity to climate and environmental change. Already faced with scarce water resources, the prospects of global climate change increase the sense of urgency in implementation. China should expand the use of green infrastructure approaches for flood management and experiment with water pollutant discharge permit trading. The report highlights the need to sharpen policy focus on non-point source pollution and explore alternative financial mechanisms, and suggests to explore the development of the Red Line targets for ecological water flows.
Improve data collection and information sharing. The establishment of a national water information sharing platform will help to foster coordination and collaboration including water resources and water ecological environment across agencies and support entrepreneurship, innovation, and scientific discovery in the water sector. The report calls for a greater role of public awareness and participation, which will not only help ease the task of monitoring water quality but also contribute to the goal of a “water-saving society”.
The study was jointly produced by World Bank and the Development Research Center of the State Council, with active involvement of domestic and international research institutions and great support from the relevant government ministries.
Read the Policy Brief of Watershed: A New Era of Water Governance in China
COVID-19 has reshaped last-mile logistics, with e-commerce deliveries rising 25% in 2020
COVID-19 has shifted the way people buy goods, accelerating the rise in online shopping and e-commerce deliveries. According to a new report from the World Economic Forum, this has led to a 25% rise in consumer e-commerce deliveries in 2020.
The new report, Pandemic, Parcels and Public Vaccination: Envisioning the Next Normal for the Last-Mile Ecosystem, explores changes seen over the last year which will greatly influence last mile deliveries in the future. For example, it’s expected that 10%-20% of the recent increase in e-commerce deliveries will continue after the pandemic and the lifting of COVID-19 restrictions.
“Covid-19 shutdowns have completely reshaped how we live and of course this includes how and what we’re buying,” said Christoph Wolff, Head of Mobility, World Economic Forum. “Leaders must consider and respond to the effects COVID-19 has had on e-commerce deliveries and what impact these changes will have on their cities and communities.”
Beyond rising demand, the past year has also seen a large shift to greener delivery options, with wider spread EV across the industry and more stringent carbon emission rules from cities expected to shape delivery networks in the near future.
Overall, the report finds six main structural changes to the delivery and logistics sector that are expected to last:
Six structural changes
The pandemic has caused an increase in last-mile deliveries that are likely to persist.
In 2020, business-to-consumer parcel deliveries have risen by about 25%. The report suggests that part of this increased demand will be durable, with at least 10%-20% of the growth remaining post-pandemic.
Consumers increasingly buy new types of products online and consider environmental and health impact when buying.
As consumers continue to buy a wider array of goods online, they are also becoming more ecologically aware. For example, 56% of millennials cite environmental protection as the reason for choosing alternatives to home delivery.
Decarbonization of last-mile deliveries has accelerated.
Companies and cities have ramped up commitments to make emission-free deliveries, while many pandemic-related economic stimulus packages, especially in the European Union and China, contain provisions to support green mobility and goods transport.
Faced with budget challenges and increased transport needs, cities steer last-mile transitions.
Many cities, like Seattle and Boston, have started to repurpose kerb space to designated delivery pick-up. Others, including Santa Monica and Amsterdam, are taking bold action on cleaner delivery with “zero-emission delivery zones” and electric vehicle charging infrastructure.
Proven technologies are fuelling the last-mile ecosystem revolution.
While disruptive new technologies, such as drones and delivery robots, will continue to emerge, the last-mile revolution is happening now as proven technologies scale up. The likes of parcel lockers and data sharing for load pooling are being adopted around the world as the costs of implementation decrease
New business models emerge to meet increased demand for sustainable delivery vehicles.
Certain logistics companies are now offering services to online retailers, which will help them identify the delivery routes most suited to make the immediate transition to electric delivery vehicles.
Last mile for vaccines
While ensuring equitable access to COVID-19 vaccines remains the most pressing issue in global vaccine distribution, effective last-mile delivery is another critical issue for countries. The key challenges are cold storage, second vaccine dose needs, and a disconnect between the vaccine and patient journey.
“Governments and logistics companies could think about teaming up with players who are experienced in managing very local, capillary demand and with integrating a large number of local retail outlets,” says Anja Huber, Engagement Manager, McKinsey & Company. “Examples include large online retailers, eGrocery giants and technology platform players”
Potential solutions countries can implement for efficient vaccine delivery include real-time logistics planning, data integration, centralized management of delivery strategies at the national level and many more.
There are also early examples of countries that have handled this challenge particularly well. While there are many factors in vaccine distribution success, broadly speaking, countries with tight integration of healthcare and logistics stakeholders seem to show the highest national vaccination rates two months into 2021.
These include Israel, the UK and Chile outperforming other countries with more decentralized healthcare systems, like the US and Germany, which had slower initial vaccine rollouts.
Clearly, much still needs to be done to ensure developed countries overcome operational issues with vaccine delivery. However, mobility solutions should not overshadow an even larger ethical challenge in the differences of vaccine access between the global north and global south, which is a priority for greater equity.
Future of the last mile
The impact of COVID-19 on the last-mile delivery has accelerated existing trends across the sector, leading to six structural changes expected to shape the future of last mile deliveries.
These will be part of a broader urban mobility transition, driven by public policy and company actions. As cities and logistics leaders continue the sustainable urban delivery transition, close public-private coordination will be critical. Zero Emissions Urban Fleets (ZEUF) network, for example, provides a relevant dedicated stakeholder platform for this work.
Asian Ports Dominate Global Container Port Performance Index
Asian container ports are the most efficient in the world, dominating the Top 50 spots according to the new global Container Port Performance Index (CPPI) launched by the World Bank and IHS Markit. The report scored ports against different metrics, making the efficiency ranking comparable around the globe by assessing and standardizing for different ship sizes and container moves per call. The CPPI is intended to identify gaps and opportunities for improvement that will benefit stakeholders from shipping lines to national governments to consumers.
More than four-fifths of global merchandise trade by volume are carried by sea, and approximately 35 percent of total volumes and over 60 percent of commercial value is shipped in containers.
“The development of high-quality and efficient container port infrastructure is a key contributor to successful, export-led growth strategies both in developing and developed countries”, said Martin Humphreys, Lead Transport Economist and Global Lead for Transport Connectivity and Regional Integration in the World Bank. “Efficient ports also ensure business continuity and improve the resilience of the maritime gateways as crucial nodes in the global logistical system.”
“Inefficient port operations have a very direct impact on supplies across the country and their populations. During the COVID-19 pandemic we saw port delays causing shortages of essential goods and higher prices. Over the longer term such bottlenecks can mean slower economic growth, higher costs for importers and exporters and even resulting in less employment,” added Turloch Mooney, Associate Director, Maritime and Trade at IHS Markit.
East Asian ports dominate the CPPI, led by Yokohama in Japan ahead of King Abdullah Port in Saudi Arabia and Qingdao in China.Algeciras in Spain is the highest ranked European port, in 10th place. Colombo in Sri Lanka is the top-ranked port in South Asia at 17th place and Mexico’s Lazaro Cardenas leads the Americas at 25th. Canada’s Halifax is the only other North American port in the Top 50. Djibouti, in 61st place, is the top-ranked African port.
Key port performance metrics such as minutes per container move show large discrepancies in global port efficiency, with top performers such as Yokohama taking just 1.1 minutes on average to load or unload a container in a standard port call while the average for equivalent workloads in African ports is more than three times that at 3.6 minutes.
The Container Port Performance Index is based on total port hours per ship call, defined as the elapsed time between when a ship reaches a port to its departure from the berth having completed its cargo exchange. Greater or lesser workloads are accounted for by examining the underlying data within ten different call size ranges. Five distinct ship size groups are accounted for in the methodology given the potential for greater fuel and emissions savings on larger vessels.
Labour market disruption & COVID-19 support measures contribute to widespread falls in taxes
The COVID-19 crisis has resulted in the largest decrease in taxes on wages since the global financial crisis of 2008-09, according to a new OECD report.
Taxing Wages 2021 shows that declining household incomes coupled with tax reforms linked to the pandemic are driving widespread declines in effective taxes on wages across the OECD.
The report highlights record falls across the OECD during 2020 in the tax wedge – the total taxes on labour paid by both employees and employers, minus family benefits, as a percentage of the labour cost to the employer.
The tax wedge for a single worker at the average wage was 34.6% in 2020, a decrease of 0.39 percentage points from the previous year. This is a significant fall, but is smaller than the decreases seen in the global financial crisis – 0.48 percentage point in 2008, and 0.52 percentage points in 2009. The tax wedge increased in 7 of the 37 OECD countries over the 2019-20 period and fell in 29, mainly due to lower income taxes.
The drop in the tax wedge was even more significant for households with children, bringing tax rates on these family types to new lows. The average tax wedge for a one-earner couple at the average wage with children in 2020 was 24.4%, a decrease of 1.1 percentage points versus 2019. This is the largest fall and lowest level seen for this household type since the OECD started producing Taxing Wages in 2000.
Between 2019 and 2020, the tax wedge for this household type decreased in 31 countries, and rose in only 6. It decreased by more than 1 percentage point in 16 countries. The largest decreases were in Lithuania, the United States, Poland, Italy, Canada and Korea. The only increase over 1 percentage point was in New Zealand.
The gap between the OECD average tax wedge for the single average worker (34.6%) and the one-earner couple with children (24.4%) has widened by 0.7 percentage points since 2019, reflecting policy changes that provided additional support to families with children during the COVID-19 crisis.
The falls in country tax wedges for the single worker, the one-earner couple with two children, and the single parent resulted predominantly from changes in tax policy settings, although falling average wages also contributed in some countries. By contrast, increases in the tax wedge were almost all driven by rising average wages, offset only slightly by policy changes.
Of the ten countries where specific COVID-19 measures affected the indicators, support was primarily delivered through enhanced or one-off cash benefits, with a focus on supporting families with children.
The report shows that labour taxation continues to vary considerably across the OECD, with the tax wedge on the average single worker ranging from zero in Colombia to 51.5% in Belgium.
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