Awareness of China's environmental problems is rising among policymakers at the highest level--reflected in a new package of right-sounding initiatives like a "green GDP " indicator to account for environmental costs. There is some cause for optimism, not least an influx of foreign technology and capital. But progress on pollution is unlikely to be as rapid or uniform as the government and environmentalists desire. Water and waste pollution is the single most serious issue. Pan Yue, deputy head of the State Environmental Protection Administration (SEPA), calls it "the bottleneck constraining economic growth in China". According to Mr Pan, the catastrophe on the Huai river that killed fish and wildlife occurred because too much water had been taken from the river system, reducing its ability to clean itself. Others say that numerous factories dump untreated waste directly into the water. According to the World Bank, China has 16 of the world's 20 most polluted cities. Estimates suggest that 300,000 people a year die prematurely from respiratory diseases. The main reason is that around 70% of China's mushrooming energy needs are supplied by coal-fired power stations. Combined with the still widespread use of coal burners to heat homes, China has the world's highest emissions of sulphur dioxide and a quarter of the country endures acid rain. In 2002, SEPA found that the air quality in almost two-thirds of 300 cities it tested failed World Health Organisation standards. Adding it all up, the World Bank concludes that pollution is costing China an annual 8-12% of its $1.4 trillion GDP in direct damage, such as the impact on crops of acid rain, medical bills, lost work from illness, money spent on disaster relief following floods and the implied costs of resource depletion.