The Green Leap Forward 绿跃进

                                                Source:  umassmag.com

A friend of China is a friend of mine 

Dan Dudek, Chief Economist at Environmental Defense , the chief architect of the U.S.’s sulfur dioxide emissions trading program in the 1990s that has served as the model for carbon emissions trading, and a “National Friend” of China, sees in his op-ed in China Daily five platforms off which China can take its Green Leap Forward (the words are Dan’s but the links are mine):

These include: environmental criteria for government officials’ performance reviews, reform of the penalty structure, implementation of market-based policies, public disclosure of emissions data and continued leadership from the top.

Each of these five levers are oriented toward getting the incentives right, the single most important environmental policy challenge in China.The first of these incentives, pointing government officials in the “good and fast” direction for development, is under way via new government regulations. Alluding to the new Energy Efficiency Law and its accountability provisions, Premier Wen [Jiabao of China] said: “Government officials have learned GDP, they are now learning energy efficiency and SO2 (sulfur dioxide), and soon they will have a new word to learn - COD (chemical oxygen demand).”

The second lever concerns current penalties under China’s main environmental laws, which are artificially capped at ridiculously low levels and create a financial incentive for noncompliance. The Water Pollution Control Law amendment is currently being debated in the National People’s Congress. The premier should throw his substantial authority and prestige behind the reform of the penalty to at least become a daily cap to ensure that polluting is not more rewarding than compliance with the law.This precedent would send a strong, clear signal to enterprises of the government’s commitment to environmental protection and of the financial peril they face if they ignore it.

Sticks are not enough to effectively control pollution. In China, as elsewhere, rewards are more effective and here is another powerful lever - market forces. China has the opportunity to turn pollution control on its head. Rather than being an unfortunate cost of doing business, market-based policies like emissions trading create rewards for those that control emissions beyond the minimums required by government. Emissions trading converts enterprises into environmental entrepreneurs who receive both additional income from extra pollution control and reduced compliance costs. This is one of the most important paths to an innovation society. Waiting in the wings are draft SO2 emissions trading regulations developed under the State Council’s December 2005 decision on the environment.  [Julian:  Dudek himself, as mentioned above, led the team that designed the first emissions trading scheme and is responsible for introducing it to China.] The premier could hustle up a review of that plan and get it promulgated before the Spring Festival so that key sectors like the electric utilities will understand their responsibilities and get busy on the 11th five year plan goal of reducing SO2 by 10 percent.

The premier could also turn up the heat on polluters by disclosing to the public emissions data within each community in the nation [Julian:  see e.g. the China Water Pollution Map and the China Air Pollution Map]. Empowering the people with information will allow them to shoulder some of the responsibility locally for controlling pollution. While some may worry about data quality, this is a self-correcting problem. Public disclosure will cause enterprises to be ever more vigilant in reporting their emissions accurately. Premier Wen has previously stated that the government cannot solve all of the problems that China faces and that civil society must take an increasing role in assisting in the work of the government. Providing basic environmental information to the public would go a long way toward that end.

Most important, the premier needs to continue his unswerving focus on China’s environmental problems [Julian: read about Beijing's commitment to build an "ecological civilization"]. His steadfastness in raising awareness of the severity of these issues, their priority for the government and the challenge of solving them has been unusual and refreshing for a world leader. He could cement this dedication institutionally by surrounding himself with an environmental cabinet that would include the State Environmental Protection Administration.

Tags: disclosure, governance, policy