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Author: Gan Lin, a senior researcher at the Center for International Climate and Environment Research at the University of Oslo, writes for the environmental website “Dialogue between China and Abroad” (Dr. Gan Lin is a senior researcher at CICERO, the Center for International Climate and Environment Research at the University of Oslo). “\"China Dialogue\" (http://www.chinadialogue.cn/) is a bilingual Chinese-English website dedicated to environmental issues; headquartered in London, it is an independent non-profit organization. China is currently in a period of rapid industrialization, accelerating its integration into the world economy, but it is paying a high price for this: the overexploitation and use of fossil fuels and other natural resources have placed enormous strain on the environment. At the same time, the gap in living standards between cities and rural areas, as well as between the east and west, continues to widen, and the unemployment rate is rising rapidly. Many people are concerned that increasing social inequalities, as well as conflicts arising from environmental pressures and ecosystem degradation, will undermine China’s long-term prosperity. It is estimated that the number of unemployed people will reach a new high of 100 million in 2010, with the majority coming from poor areas in the west, where farmers struggle hard to make a living and improve their family’s standard of living. Clearly, China needs practical solutions for agriculture, on which 900 million farmers in difficult circumstances depend for their livelihoods. Over the past twenty-odd years, the growth rate of agriculture in China has been far lower than that of industry, leading to a rapid widening of inequality between urban and rural residents. Migrant workers move from rural areas to cities mostly for economic reasons, including low incomes from agricultural production, land loss due to urban expansion, and the development of mechanization in agriculture. The main challenges facing sustainable development in rural areas of western China are: farmers’ incomes being far lower than those in coastal areas, fragile ecosystems, and persistent poverty. Moreover, most farmers rely on burning crop straws, firewood, and coal for cooking and heating, which causes indoor air pollution and severely affects health. Most importantly, at present farmers hope to improve their lives by engaging in the extraction of minerals and fossil fuels, but this not only fails to make them wealthy, it also pollutes their living environment and destroys the land on which they depend for their livelihood. China **has recognized the urgency of finding a practical solution. Guided by the vision of building a \"harmonious society,\" **efforts are being made to find new solutions for the sustainable development of rural areas, to make more efficient use of resources, and to give priority to new and renewable energy technologies that have broad market potential. China has a vast territory with diverse geographical features, and agricultural and forestry waste contains substantial reserves of biomass resources. China also has large areas of unused land that can be used to develop bioenergy, such as small-scale and decentralized cogeneration, the utilization of biomass for household use, and the production of biofuels. Developing bioenergy has become an urgent priority for China, and the Renewable Energy Law of China was enacted in January 2006. The current focus of work is to generate electricity using excess agricultural waste. It is estimated that agricultural waste amounts to 200 million tons per year. **The long-term goal is to establish 30 million kilowatts of biomass power generation capacity by 2020, which requires billions of dollars in investment. Given energy security, **there is a growing interest in developing biofuels such as biodiesel and ethanol. Its purpose is to reduce oil imports, which currently account for 46% of China’s total oil supply. This is enough to explain a surprising announcement by China: to import 1 million tons of ethanol from Brazil each year, which will undoubtedly create new business opportunities for both China and the world. However, this policy has too narrow a scope, and poor and vulnerable social groups remain neglected. Although biomass power plants can help improve the quality of life for poor people living in remote areas without electricity access, current efforts focus on building a large number of demonstration biomass power plants in economically developed regions, such as Jiangsu and Shandong provinces in eastern China. Only by developing bioenergy in the areas where rural residents live and taking into account their daily needs can they benefit from it. In some areas, household coal use has had a severe impact on farmers’ health. In the rural areas of Guizhou Province, fluorosis or endemic fluorosis is a common health problem. Among the 19 million poor farmers who were affected, the majority were women, children, and the elderly from ethnic minority areas. Most farmers in the western regions still use biomass energy as a daily fuel through traditional methods, especially in poor and remote areas. However, in the richer coastal areas, farmers are switching to commercial energy sources such as coal and natural gas. Traditional fuel combustion wastes a large amount of energy, as the thermal efficiency of typical household stoves is only about 5% to 8%. In the Tibetan areas of northwestern Yunnan, a rural family I interviewed uses 14 to 16 tons of firewood per year on average, most of which is high-quality logwood, thus causing significant damage to forest resources. In contrast, the thermal efficiency of modern domestic biomass burners can reach 30% to 40%. Using this type of furnace is beneficial for protecting the global environment, improving residents’ health, conserving resources, and increasing the income of rural enterprises. As part of its strategies for sustainable rural development, China needs to significantly change traditional practices regarding the use of biomass and fossil fuels, and promote modern biomass energy technologies. Such an unconventional leap requires **policy support**. Farmers can benefit in the following ways: improved health and living conditions, reduced use of fossil fuels, job creation, and increased income. Today, most agricultural waste in rural areas is burned in the fields, polluting the air and wasting resources. If an equal amount of funding is invested in utilizing household biomass as compared to that used for biomass power plants, it will not only yield environmental and social benefits, but it will also create 5 to 10 times more employment opportunities for rural residents, as well as 5 to 9 times more revenue for small companies. Supporting the technological development and market application of domestic biomass energy can not only alleviate the pressures caused by rapid urban development but also significantly improve the living conditions in rural communities. To date, China has paid far too little attention to these issues, especially regarding how to make more effective use of biomass resources to promote sustainable social development. To ensure the sustainable development of rural areas, strong policy incentives should be established to create favorable investment conditions for innovators and small enterprises, thereby encouraging a shift in societal attitudes and technological innovation. Sustainable energy policies that benefit rural areas and poor farmers can play an important role in mitigating the impacts of climate change, controlling regional environmental pollution, and reducing coal consumption. On an international scale, biomass energy has become a new driving force for industrial development. **Enterprise, institutional, and individual investors all view China as an investment hotspot full of opportunities. By integrating the reduction of greenhouse gas emissions with the sustainable development of rural energy systems, China can set an example for other developing countries rich in biomass resources, creating a win-win scenario for both social development and environmental protection.