Person of the year: The man making China green

...and for 2007 we make our own nomination... <strong>Pan Yue</strong>

China 2006: a country which in a mere 30 years has achieved economic advances that took a century in the west. China could overtake Germany next year to become the world's third-largest economy; and as for it eventually displacing the US in the top slot, the question is not if, but when.

Yet there is a dark side to these rapid advances. All seven of the country's main rivers and 25 of its 27 major lakes are polluted by human waste and agricultural fertiliser. One-third of its land mass suffers acid rain. China is already the world's second-biggest producer of greenhouse-gas emissions, and the recent World Energy Outlook report predicted that the country would earn itself another, less welcome, first place in this category by 2009.

Against this ceaseless, all-out expansion, one man is shouting "stop". Pan Yue, vice-minister of the State Environmental Protection Administration (Sepa), is a rare, if not lone, public voice within the Chinese government warning that disaster threatens unless development is checked. "This miracle will end soon because the environment can no longer keep pace," he says. He estimates that environmental damage has cost China 8 to 15 per cent of GDP per year. "Which means," he wrote this month, "that China has lost almost everything it has gained since the late 1970s due to pollution."

He does not stop there, pointing out that the GDP losses do not include costs to health. "In Beijing alone," he told Der Spiegel, "70 to 80 per cent of all deadly cancer cases are related to the environment." The deserts are spreading, and the usable land area has halved in the past half-century. "In the future," he says, "we will need to resettle 186 million residents from 22 provinces and cities." The rest of the country, however, can absorb only 33 million people. "That means China will have more than 150 million environmental refugees."

Pan Yue does not just speak loudly; he also carries at least a medium-sized stick. Last year he ordered the closure of 30 projects for failure to conduct proper environmental assessments. Several of these were associated with the controversial Three Gorges Dam; total investment in the closed projects was $14bn. "Under normal circumstances these things would be rubber-stamped," said Robin Oakley, Greenpeace China's energy campaigner and spokesperson. "This guy has taken the environmental aspect of his work by the horns."

Such outspokenness is extraordinary among Chinese officials, but there is a growing realisation in the government that pollution has to be tackled, not just on grounds of green principle, but also to deal with political realities. "Environmental damage is causing popular discontent," says Jonathan Fenby, editor-in-chief of the Trusted Sources information website and a former editor of the South China Morning Post. "You're getting tens of thousands of localised protests each year. By allowing Pan Yue to speak out, the government is waving a rhetorical stick. So he has political protection in that way."

It is only since he was appointed to Sepa in March 2003 that 46-year-old Pan has come to international notice. His rank may not sound the highest, but it is of sufficient importance to give him a platform while also shielding him. But this son of a military engineer from Jiangsu Province, next door to Shanghai, has not just begun to speak out. He was vocal about the need to reform during his previous career as a journalist. "He often spoke out when he was vice-chief editor of China Youth Daily," says one grass-roots activist. "Many people attacked him for it. But many appreciated it." It helps that Pan is very much from the party elite - his wife, from whom he is separated, is the granddaughter of a hero of the communist revolution - but his stand is still risky. "His personal protection must be very good," comments a colleague.

Friends describe him as imaginative and determined; an informal, unstuffy figure, he is also a published poet. Last year he attended a leadership conference run by Oxford and Cambridge universities. "He came across Adam Smith for the first time," says a friend. "He was tremendously excited." His ambition is more for the cause than for himself. "He is trying to move a mountain rather than climb it," says Isabel Hilton, editor of the Open Democracy and China Dialogue websites.

But it is not only the environment that preoccupies Pan. Reforms tackling the environment and those that deal with the political process need to go hand in hand, he says: "At the root of the [environmental] problem lies a more significant cause - the lack of public participation in China." Only this can ensure that anti-pollution laws are properly implemented.

One should not mistake Pan for a western-style democrat, however. He states plainly that the "fundamental cause" of the global environmental crisis is "the capitalist system", and is given to praising "the wit and wisdom of the political ideas put forward by the Communist Party Central Committee". It is reform within socialism that he is seeking.

Yet there has been a shift of emphasis within the party. The Shanghai faction around the former president Jiang Zemin was deemed to be after increased GDP at all costs. "I don't think they knew what sustainable growth meant," says Fenby. "But the current prime minister, Wen Jiabao, would be behind this kind of clean-up."

The question is whether Pan Yue's campaigning, with discreet backing from the new leadership, is enough to overcome the interests of local governments and party chiefs who stand to gain from new construction. For them, environmental regulations are a hindrance, both to lining their pockets and to the more acceptable goal of raising general standards of living.

Some commentators doubt that he is actually having any effect at all. But Pan Yue has succeeded in raising the subject of "green GDP" - growth adjusted downward for environmental costs - and the Chinese government's new Five-Year Plan makes environmental protection a priority. Ma Jun, Deutsche Bank's chief economist for China, predicts that investment in environmental protection will grow at a rate of 16 per cent per annum up to 2010. The government promises spending on renewable power to reduce reliance on coal and oil, and the markets sense great opportunities for companies with expertise in water treatment. "The Chinese government is getting away from this slavish respect for GDP," says the environmentalist and former diplomat Sir Crispin Tickell. "Pan Yue deserves a lot of credit for this."

The crusade for which Pan is the most vocal cheerleader does seem to be gaining ground. But it remains to be seen how it will fare in dealing with the institutional graft at regional level. As the old saying goes: "If the Communist Party doesn't eradicate corruption, it's done for. If the Communist Party does eradicate corruption, it's done for." Not only Pan Yue, but the rest of a world that will soon have to learn how to deal with a new superpower, must hope that the joke applies to the past, and not to the future he is trying to forge.