Friday, December 19, 2008

Environmental Enforcement in China

So far, CGS hasn't commented on environmental enforcement in China, and as China celebrates the thirtieth anniversary of reform and opening, it is high time to do so.

It's common wisdom that while the Ministry of Environmental Protection (
MEP) takes enforcement of environmental regulations quite seriously, local agencies often fail in implementing them. This common wisdom is well-founded, but also tends to obscure the potential for cooperation to enhance the effectiveness of environmental regulation. In this post, CGS strives to present a more balanced view of environmental enforcement in China.

The Good:

A report from the Chinese Academy for Environmental Planning noted that in 2004, "China's legal framework for environmental management include[d] 9 laws on environmental protection, 24 laws on natural resources management and environmental related provisions, 34 administrative rules and regulations and some 427 standards for environmental protection." The central government, according to the report, uses a variety of environmental quality metrics to assess local government performance on air and water quality, as well as waste management. Moreover, some legislation, such as the National Renewable Energy Promotion Law, is quite progressive. Article 6 of the Law states that
"The Government lists the development of utilization of renewable energy as the preferential area for energy development." Washington,for one, has so far failed to express any such preference, either in spirit or in law.

One event last year further illustrates the innovative approaches that MEP sometimes adopts to environmental regulation and enforcement. According to an article on the government-run Xinhua news website, MEP in 2007 launched an initiative to persuade banks to bar lending to companies proven to have violated environmental regulations. This "green credit policy" was said to have resulted in the denial of loans to 12 violators, and the withdrawal of some 1 billion RMB in loans already granted to malfeasant debitors. For these unfortunates, environmental enforcement was no slap on the wrist.

The Bad:

Now, the other side of the story: the article went on to quote Pan Yue, now Vice-Minister of MEP, as saying that

"Many of the high-energy consuming and polluting industries are at the same time the most lucrative industries in some areas, and some local governments refuse to order to cut off loans. Moreover, a number of these companies are turning from banks to social groups for financing, which is not within the jurisdiction of our policy."

The green credit policy, then, nicely illustrates both what is promising and lacking about environmental regulation in China. The "governance gap" between the center and local environmental protection bureaus often leave regulations lightly enforced, or suboordinated to economic development priorities. The root causes of this governance gap, which concern corruption and the political power structure in China, are beyond the immediate remit of CGS. Suffice it to say, the center faces great difficulties in implementing and enforcing its environmental policy, no matter how well-conceived or intentioned. A 2006 OECD report perhaps puts it best:

China's environmental policy suffers from "a lack of coherence among environmental regulations, conflicting interests at different levels of the administration, and insufficient technical capacity and resources available to environmental institutions to carry out their duties. The general policy framework favouring development over the environment compromises the work of enforcement bodies at the subnational level and results in widespread non-compliance with environmental requirements."

A poignant example of this incoherence was provided in Charles McElwee's post on "A New Environmental Enforcement Unit?": the penalty under Chinese criminal law for "
causing a serious environmental pollution accident which leads to the serious consequences of heavy losses of public or private property or personal injuries" is the same as for "desecration of national symbols." Not to disrespect China's national symbols, but to equate the (hypothetical...) actions of a drunken graffiti artist with one who discharges radioactive materials into the water supply?

The Future:

So, what's to be done? The OECD report proposes a number of excellent recommendations, including increasing the size of the relatively tiny MEP, but CGS would like to focus on the last of them:

Promoting public participation in environmental decision-making should continue to be one of the key objectives of the state and local environmental authorities. By enhancing environmental awareness, encouraging environmental associations and providing training, the public can become an active implementation agent. Studying mechanisms for public participation in OECD countries can help to adapt the best approaches to the Chinese context.
CGS has noted before the apparent willingness of the Chinese government to enhance public participation in environmental enforcement- a rare opportunity, it asserts, to strengthen civil society without provoking Beijing's distrust. Moreover, it's cheap and relatively easy to do so. An Asian Development Bank report entitled "Growth and Environmental Regulation: reports on international experiences and their importance for Chinese regulation" provides a number of promising suggestions for enhancing citizen participation in environmental enforcement.

First, replicating the US Toxic Release Inventory (TRI) would provide citizens with a means to reliably track hazardous materials discharge in their communities (p. 51). Second, creating the post of "environmental omsbudsman" would present a less politically-charged channel for citizens to bring environmental grievenences to the attention of local officials (p. 129). Third, financing the use of inexpensive environmental monitoring equipment by citizens' groups (called "bucket brigades" in America) can help to supplement the monitoring capabilities of local officials.

All of these initiatives attempt "secondary enforcement": ensuring that primary, national-level policy is implemented and enforced on the local level. It's important to be clear that secondary enforcement is no substitute for a coherent national environmental policy, or indeed for a robust rule of law system. The Growth and Environmental Regulation report notes, for example, that perhaps the most effective secondary enforcement mechanism possessed by the US Environmental Protection Administration (US EPA) is its ability to withold federal highway funding from any state which fails to comply with national environmental regulations (p. 126). Nonetheless, focusing on participatory secondary enforcement has the advantage of being less dependent on systemic reform, and hence less likely to antagonize Beijing.

In closing, it's worth noting that although these recommendations target citizen participation in China, they offer opportunities for international cooperation. Replicating the TRI would be best facilitated by technical cooperation between the US EPA and MEP, while the establishment of environmental ombsbudsmen and bucket brigades would be a worthy goal of NGOs like Natural Resources Defense Council and Greenpeace. The ultimate message, then, will be familiar to CGS regulars: China's environment is in peril, but there are plenty of opportunities for foreigners to aid in its rescue.

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