* "Low carbon" policy in Baoding fails to clear air
* Northern city remains among China's most polluted
* Problems underline scale of task nationwide
* Government has made tackling smog a priority
By David Stanway
BAODING, China, May 14 Seven years ago, the Chinese city of Baoding launched an ambitious "low-carbon" plan using renewables like solar power to light its streets and heat residential buildings, putting it at the forefront of the country's battle to cut pollution.
In 2013, Baoding was still the third most polluted city in the country, with levels of harmful particles in the air more than 40 percent above those in the nearby capital Beijing.
Baoding's failure to clean up its act underlines the scale of the challenge facing China as it seeks to end an obsession with economic growth and make protecting the environment a priority nationwide.
Named one of China's first official "low-carbon pilot zones" in 2010, the city of 11 million people remains beholden to "dirty" industries like steel and cement production, and is not expected to see noticeable improvement for at least five years.
Baoding's fight against pollution also sheds light on the way local governments have viewed environmental protection as another source of growth, with its efforts to churn out thousands of megawatts of solar power capacity every year merely making the smog thicker.
"By just developing manufacturing facilities for clean energy, you aren't actually fixing your own environmental problems -- actually, you are making them worse by consuming energy and polluting more to manufacture the products," said Qi Ye, director of the Brookings-Tsinghua Center for Public Policy, who helped the city draw up its low-carbon strategy.
In March, China declared "war" on pollution. Choking smog blankets many cities and environmental degradation resulting from breakneck economic growth is angering an increasingly well-educated and affluent population.
On the face of it, the city of Baoding is better placed than most to survive Beijing's campaign to shut ageing plants.
It has spent more than 10 years nurturing high-technology sectors, and is home to the world's biggest PV (photovoltaic) manufacturer, Yingli Solar. Renewables generate around a fifth of local GDP, many times the national average. Baoding's long-term aim is to raise the share to 50 percent.
But dirtier industries like the manufacture of cars, steel and cement, as well as a profitable but low-tech recycling sector, still predominate.
Some experts believe it is time for Baoding to bite the bullet, however painful that may be for the economy and society.
"Baoding made a decision a decade ago to concentrate on renewable energy, and I think if it was a choice between steel and renewables, it is now the time to say they made the right decision," said Lei Hongpeng, senior associate at the World Resources Institute who was also involved in drawing up Baoding's low-carbon development plans.
"Now Baoding needs to shut down heavy-polluting factories and this will definitely bring challenges to its economy and society, but they must take care of it -- people are no longer at the stage where they need to pollute to survive," he said.
The city's location in Hebei, home to seven of China's 10 smoggiest cities, means its battle to reduce pollution levels cannot be fought in isolation.
"We don't look at this as just a Baoding problem but as a problem for the whole of northern China," said Liu Chongyuan, 26, a Baoding resident and member of staff at Yingli Solar, speaking to Reuters at the company's headquarters.
"Pollution is still very bad, but we can't run everything on solar, not with energy demand so high and the population so dense," he added.
Two years before being named a "low-carbon pilot zone", Baoding had already set a target to cut carbon intensity -- the amount of climate-changing greenhouse gas emissions per unit of growth -- by 52 percent by 2020, higher than the national goal of 40-45 percent.
Renewables offered Baoding a niche in a region saturated by traditional industries like cement, glassmaking and steel, and the city's initial focus was to use solar panel and wind turbine manufacturing to maintain rapid rates of economic growth to try to catch up with richer cities in the region.
But scholars have long complained that instead of tackling the sources of pollution, which could threaten growth, local governments preferred to invest in environmental treatment or reforestation projects.
Like Baoding, local authorities also hoped to kill two birds with one stone by nurturing big renewable energy manufacturers like Yingli through the use of tax breaks and the establishment of industrial parks.
But solar power manufacturing requires huge amounts of mostly coal-fired power from the grid to run its machinery.
It also discharges large volumes of wastewater, and the industry has been seeking to clean up production processes that have in some cases raised fluoride levels in Baoding's surface water more than 10 times higher than normal.
"We have paid a lot of attention to this because we cannot become real clean energy producers unless our manufacturing is clean too," said Liu at Yingli.
Baoding uses solar power to run outdoor lighting and a hotel, but compared to the energy its plants consume, generation is low. Yingli produced 3,200 megawatts of panels last year, but Hebei as a whole has only 461 MW of grid-connected solar capacity, 3.9 percent of China's total.
Sources close to the government said it will soon announce plans to build a huge solar-power generation project later this year. But how much renewable power the city actually consumes will ultimately be determined by the State Grid.
The Baoding authorities have made a public vow to cut PM2.5, or the number of harmful fine particles in the atmosphere, by four percent this year and said they would adopt measures to achieve a "turnaround" in the city's air quality in three years.
However, they said the impact would only be fully visible after five years.
The local government did not agree to an interview request, but admitted in a faxed statement that while it was "strongly pushing forward" with efforts to control pollution, little progress had been made so far.
The local government has already shut more than 4,000 small polluting enterprises since last year, and others have been ordered to "restructure".
The struggling Shenzhen-listed Swan Fiber was recently asked to move one of its chemical plants out of Baoding, while carmaker Great Wall Motors has vowed to clean up its manufacturing processes.
Near the PV-powered headquarters of Yingli Solar, many factories have been abandoned, their land put up to let. But scrap yards, workshops and low-end recycling plants abound.
The Communist Party chief of the city, Nie Ruiping, admitted in March that more closures were necessary, telling state media: "We cannot sacrifice the environment to make money."
Analysts say Baoding and other cities in Hebei have been trapped in a vicious circle, providing raw materials and low-end industry for the more prosperous Beijing and Tianjin.
Beijing has said it would shift some government functions to Baoding, leading to a spike in house prices last month. It is also in the process of moving some industrial firms to Baoding and other cities in Hebei province.
"In the last year, the government has announced some very ambitious policies about cleaning industry and switching to cleaner forms of energy, and maybe they will have an impact over the next few years," said Feng Jinlei, low-carbon programme officer with the Worldwide Fund for Nature (WWF), who has also advised Baoding.
"But pollution is still a regional issue and in the end it needs strong action from both Hebei and Beijing." (Editing by Mike Collett-White)