Yesterday, the National People’s Congress announced moves to reorganize the central government by creating five so-called superministries, including one responsible for environmental protection via the upgrading of the State Environmental Protection Administration (SEPA) to ministry status. But the NPC stopped short of creating a unified organ to oversee the contentious issue of energy policy.
The government streamlining, the sixth in three decades, is aimed at increasing bureaucratic efficiency and reducing the overlap of responsibilities among various agencies (i.e. reducing the turf wars). The elevation of SEPA to ministry status, in particular, is viewed as the increased importance that the central government places on environmental protection in the face of China’s growing economic strength.
While optimists are hopeful that the new Ministry of the Environment will be the beneficiary of an increased budget or staff capacity, others, like Charlie McElwee at China Environmental Law are more skeptical about the immediate impacts:
SEPA will not be wresting any environmental powers away from other ministries such as the National Development and Reform Commission or Ministry of Construction, but the existing patchwork of agencies with environmental portfolios does not differ significantly from many other countries. This move will have little immediate effect on the environmental enforcement ground game; SEPA is not slated to receive any greater control over local Environmental Protection Bureaus (EPBs).
Until a greater alignment of governance among the new SEPA and the local EPBs is realized, I agree that we will see few positive effects. The problem with environmental governance in China is not the lack of laws and regulations, for indeed there are dozens of comprehensive pieces of environmental legislation, but their lack of enforcement and administration.
In that regard, the recent white paper on Rule of Law offers promise that the central government is serious about building the necessary institutional capacity across its judicial and administrative ranks. Only with the necessary Rule of Law can the local officials be held accountable to the central government for local environmental performance, or harmed citizens seek recourse against polluting enterprises, or foreign companies fully protect the intellectual property of the green technologies that they bring into China.
Though it is difficult to eliminate any overlap of environmental governance amongst the various agencies, I am hopeful that clout of the new SEPA will grow and Rule of Law will take hold in meaningful and positive ways. However, any such gains would be undermined without cooperation with a more cohesive energy policy regulator.
Will Two Become One?
Contrary to earlier speculation, no new single energy ministry was formed. As I’ve made reference in an earlier blog posting, there have been indications from the government that such a move would not be imminent. Instead, the plan is to divide authority on energy matters amongst a new “high level” energy commission would develop national energy strategies, on the one hand, and an energy bureau under the central planning agency would control administration and oversight of the energy sector, on the other hand.
Such a division of authority is viewed simply as a political compromise, rather than any deliberate strategy, remarked Yang Fuqiang, director of the China Sustainable Energy Program, a Beijing-based think tank, to the New York Times. Indeed, I have read reports in the print edition of today’s Straits Times (ST 3/12/08 “China holds back on bureaucracy reforms“) that pressure by two major oil and gas state owned enterprises–Sinopec and PetroChina–has something to do with it. This piece by Forbes also paints the cast of disparate political actors in the China energy landscape. According to the New York Times, Yang predicts that the two energy agencies will eventually be merged into a full ministry in a few more years.
There are few industries as complex as the energy industry. Because the public goods nature of energy in the role of society is unquestioned, it is imperative that a competent, transparent and clear-visioned administrator is able to shepard the industry along and address any market failures and inefficiencies. However, as long as energy regulators continue to be beholden by the interests of the likes of fossil-fuel giants like Sinopec and PetroChina, I am concerned about the ability for clean and renewable energy in making the necessary inroads to propel China on its Green Leap Forward. All the (think) tanks and (green) technologies alone cannot put a green grid together.