China Environmental News Digest

Daily updated Environmental news related to China

Monday, February 05, 2007

Who and how to protect China's environment?

(China Daily)

Updated: 2007-02-02 07:11

All is change, especially here in dynamic China. Sometime ago, a question dominating Chinese policy discussions involved feeding China's large population. There was fierce debate at the time, but the controversy mostly has died down.

Today, the really big question facing the nation is "Who will protect China's environment?"

2006 was a tough year for the environment in China so this question rises to special prominence at the beginning of a new year. A little over a year ago, the nation suffered the shock of chemical pollution of the Songhua River. This dramatized the problem of toxic chemical use near major waterways and population centers.

Now, a year into the 11th Five-Year Plan (2006-10), the plan's environmental goals had to be radically adjusted in the face of the failure to achieve those set for the 10th Five-Year Plan (2001-05).

The seriousness of these failures was reflected in the rising number of mass incidents of protest over environmental insults as people struggled to protect their rights.

So, who will protect China's environment?

Environmental non-governmental organizations (NGOs) have multiplied in number as Chinese citizens themselves rise to address environmental challenges. Premier Wen Jiabao in his report on the work of the government to the National People's Congress last year recognized that government cannot solve all of society's problems and that the wider society needs to be engaged in adding their resources and energies to finding solutions.

However, this is a new idea in China and the environmental NGO sector is young and has meager resources. China does not yet have a tradition of philanthropy that could harness the great wealth being accumulated for the greater public good.

What about business? Business, in fact, is responsible for the vast bulk of the decisions that affect environmental quality. Whether to invest in emissions control, how much, and how soon are questions that each business has to address. Should I use a cleaner production process? Will my customers care whether I use environmentally-friendly production practices or inputs? More to the point, will they cover any extra cost? How much of my time should I spend thinking about the environment rather than growing my business?

The reality is that business finds itself locked in a highly competitive globalized market. There may be some environmental innovators out there but can we hear their voices? Do we know their stories? Are they leading Chinese business figures? Unfortunately, I am afraid that we cannot look to business, which is too busy looking to itself.

This leaves us with government. But government is seriously challenged to establish an effective environmental management system. We have the record of the 10th Five-Year Plan as testimony to the difficulties faced. In short, the general problems of environmental governance in China are: weak government capacity, reactive and inconsistent policies, and a failure to tap resources outside government.

There are a variety of legal and structural institutional issues which hamper effective government management of environmental problems.

At the national level, these include the problem of coordinating actions with environmental implications across ministries and the lack of an environmental mandate or focus center in each ministry.

Problems from the national to provincial and local levels are much more commonly understood and reported. Local officials are revealed regularly to protect local polluting industry by failing to enforce environmental laws and regulations.

However, local officials aren't completely to blame. There are legal problems as well. For example, the maximum penalty that can be levied for noncompliance under China's Law of Protection of the Atmosphere is 200,000 yuan (US$25,727). This is a trivial financial sum for most industrial plants. Air pollution control is much more expensive. So, the company does the economically rational thing. It pays the penalty and keeps on emitting. Why then should we be surprised when emissions continue to rise?

Arguably, the ability to shut down the violating company resides with the local government. Clearly, this is a noncompliance consequence much more likely to have real financial traction with companies.

However, it puts the local authorities in a difficult position. If they shut down the local polluting plant, they are also shutting down the local employer and the local cash cow. The government has either the fly swatter of low fines or the neutron bomb of the shutdown.

One immediate remedy would be to raise the legal cap on the maximum penalty to remove any financial benefit from noncompliance. This issue was raised directly with Premier Wen on November 10 last year in a meeting with the China Council on International Cooperation on Environment and Development.

His response was to say that "we need a strict system of penalties and rewards not only legal ones, but economic as well. When polluters are assessed fines, they should not be too low."

So perhaps the answer to "Who will protect China's environment?" lies with the government.

China stands at a major crossroads in its development. Will sulphur dioxide emissions, up 7 percent at the end of August last year, rise to 35 million tons per year? Or will the 10 percent reduction to 23 million tons in the 11th Five Year Plan period be met? Will China meet the goal of reducing energy consumption? Or will the future be a China ravaged by climatic changes from rampant greenhouse gas growth?

What should be done? There is a pretty straightforward answer given the above. Raise the legal cap on penalties for noncompliance. And then enforce the law. This simple, but highly effective, remedy is readily within the government's reach to cure the nation's environmental ills.

Perhaps the government will protect China's environment. Only time will tell.

Daniel J. Dudek is chief economist of the Environmental Defense Fund, with headquarters in New York City

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