China Environmental Law

I’m sure you already have plans or I’d invite you over to celebrate the April 1 effective date of the new, improved amended version of China’s Energy Conservation Law (now added to “Laws & Regulations” in the right sidebar). Originally promulgated in 1997 (with an effective date of January 1, 1998), the law was largely ignored for years. China’s increasing dependence on foreign oil and its need to restrict the growth of pollution discharges, however, has prompted a recent revitalization of its energy conservation efforts. There is plenty of room for improvement, Chinese companies consume a much greater amount of energy per unit of production than the world average.

The 11^th Five Year plan (bolstered by a constant drumbeat of public pronouncements from the national leadership, e.g. here and here) sets a national goal of reducing energy use per RMB10,000 of GDP by 20% by 2010.  Each province and provincial-level city has been assigned an energy reduction target ranging from 30% to 12%. China failed to achieve its conservation goals in 2006 (1.23% reduction) and 2007 (3.27% reduction) if the goal is annualized evenly at 4% over the five year period, but some of the efforts to meet the goal (including the Energy Conservation Law amendments) are just starting to kick in so there is still sufficient time to meet the 2010 target.

Since energy conservation does not threaten any major entrenched interests and generally saves money, at least over time, it is a relatively easy sell. Nevertheless, a number of programs have been instituted to increase energy efficiency including the “Top 1,000 Enterprise Energy Efficiency Action Plan” and “10 major energy-saving projects.”   There are also some regulatory initiatives such as the one I wrote about in the January 2007 China Law Reporter (see “Articles & Presentations” in the right sidebar).

One of the major efforts is the amended Energy Conservation Law.  Like the amendments to the new Water Pollution Prevention and Control Act amendments, the Energy Conservation Law now explicitly provides (Article 6) that the State

will implement a system of accountability for energy conservation targets and a system for energy evaluation whereby the fulfillment of energy conservation targets is taken as one part of the evaluation of local people’s governments and their responsible persons.

In additon to making achievement of energy efficiency goals a component of the performance evaluation of local cadres, the importance of energy conservation as a national policy has also been bolstered. The original version of the Energy Conservation Law provided (Article 4) that

Energy conservation is a long-term strategy for national economic development.

The amended version ups the ante and urgency considerably (Article 4):

Energy Conservation is a basic policy of China. The State implements an energy strategy of promoting conservation and development concurrently while giving top priority to conservation.

We will work our way through this law like we’re doing with the new Water Pollution Prevention and Control Act amendments. Come back soon.