Grizzled observers of China’s environmental policy development will not get too excited at this news.  The idea was floated at least as early as October 2007, when Pan Yue (remember him?) was quoted as saying “[w]e are actively promoting this idea [of an environmental tax].”  Exactly one year ago, Xinhua reported

Chinese government departments of tax and environment will try to work out a taxation plan to promote environmental protection in 2008 and the candidate plans are now under appraisal.

The environment tax, one of the key taxation policies China plans to push forward this year, is going through careful study and appraisal by the Ministry of Finance, State Administration of Taxation and State Environmental Protection Administration.

So, reports of the pending enactment of environmental taxes must be viewed with at least a pinch of skepticism.  If and when these taxes are imposed, what would they look like?  The Xinhua article of a year ago, noted that “three candidate plans of collecting environment tax” were advanced:

• “pay according to profits:” the government collects tax from companies in accordance with how much they earn from the products which consume resources or pollute the environment. 
• “pay according to pollution:” companies would pay tax according to how much pollutants they discharge (including sulfur, carbon dioxide, sewage, solid waste and other forms of pollutant). 
• “pay according to consumption:” consumers of polluting products, such as fossil fuel ¹, ozone-consuming commodities, fertilizer and pesticide, would pay the tax.

A year ago Xinhua quoted a “Chinese political advisor” as saying that conditions for environmental tax legislation were “basically ripe.”  Given the economic downturn, the conditions may not be quite so “ripe” today, but you never know, 2009 could turn out to be the year of the environmental tax in China.

Vice Minister Zhang also set forth “six fields [that] should be focused” in 2009 to achieve the energy-saving and pollutant reduction targets of the 11^thFive -Year Plan.  In the middle of December, MEP Minister Zhou chaired a meeting of the MEP Party Group and set forth 8 measures that the environmental protection department should carry out in 2009.  We’ll review China’s 2009 environmental plan that emerges from these pronouncements tomorrow.

China makes a lot of the world’s light bulbs.  In 2007 it produced:

• 4.44 billion incandescent lamps (about-one third of the world’s total), of which 2.98 billion were exported.
• 3 billion highly-efficient impact fluorescent lamps last year (about 80 percent of the world’s total), of which 2.2 billion were exported.

China has already initiated efforts to subsidize and promote the use of energy efficient lighting.  In January of 2008, the NDRC and the Ministry of Finance launched a nationwide campaign to achieve a target of 150 million energy-efficient bulbs in use by 2010 (a target set for the 11th Five-Year Plan period (2006-2010)).  These efforts includes a “30-percent subsidy on wholesale purchases and 50 percent on retail sales of energy-efficient bulbs.”  Achieving this goal “could save 29 billion kilowatt-hours of electricity each year and reduce emission of carbon dioxide by 29 million tons and sulfur dioxide by 290,000 tons annually.”

The complete elimination and replacement of incandescent bulbs would “save 48 billion kilowatt-hours of electricity per annum.”  This sum is equal to (take your pick as to which sounds more impressive):

• 60 percent of total electricity generated by the massive Three Gorges Dam each year, or
• Tianjin’s total annual electricity consumption.

They both sound impressive to me, and producing the necessary bulbs will employ a lot of people.

Postscript: as too frequently occurs in news stories involving officially provided numbers, the reporter didn’t bother to check the figures provided by the government.  Every story reporting the phase-out plan noted that

Lighting now accounts for about 12 percent of China’s total electricity consumption, and the use of fluorescent bulbs could reportedly cut consumption by 60 to 80 percent.

OK, they did say “reportedly,” but how hard would it have been to check the number.  The quoted passage implies that use of fluorescents would cut total electricity consumption by 7.2 to 9.6% (60 to 80% of 12%).  China’s total electricity consumption in 2006 was 2.859 trillion kWh (it was probably at least 10% higher in 2007).  7.2 to 9.6% of this number produces as range of 205 to 274 billion kWh-numbers far greater than the 48 billion kWh savings predicted by a complete incandescent light phase out.  How hard is it to do the math?

Back to the world of China’s environmental and energy issues tomorrow.

For those of you who may have just discovered CELB, we’ve reviewed the 2008 archives and present you with our Top Nine posts (in no particular order).  They could all use at least one more edit, but hey this is what you get in the blogsphere. 

1. China’s Environmental Laws & A Fish Tale

2. April Fools

3. Just Another Day At The Office

4. Tiger Wine; Tiger Wine, What Tiger Wine?

5. Where is Pan Yue?

6. Grandson of Godzilla?

7. Beijing is all fogged up

8. The Buddha of Recyclers

9. Water Pollution Act Amendments (Introduction); Water Pollution Act Amendments (Chapters I-III); Water Pollution Act Amendments (Chapters I-III)(Again)

During this holiday season I know you are probably thinking wouldn’t it be nice if there were a book on China’s Environmental Laws to give as a thoughtful gift to a loved one or business associate.  Not this year I’m afraid, but you may want to suggest to that someone special with a wink and a nod that there could be a hefty volume for them under the tree in 2009.  We’ll have more to say on this topic soon.

For now, thanks for making this the best year in CELB’s history!  We couldn’t have done it without your readership, comments, and payments for product placements.  See you in 2009.

There are a number of factors that account for the delay, not the least of which is that the agency tapped to take the lead in formulating the Catalogue-the Ministry of Industry and Information Technology (MIIT)-has undergone a major restructuring.  There was some progress in October; Procedures for Formulating the Key Management Catalogue with Respect to Electronic Information Product Pollution Control were released.  CELB has finally had these Procedures translated and now makes them available to our readers, as a Christmas gift, under the “Laws & Regulations” sidebar on the right.

Here are the highlights:

• In determining whether a product is to be included in the Key Management Catalogue, the following principles shall apply:
  • To select products and materials that are mass produced with extensive application and contain toxic or hazardous substances constituting considerable threats or damages to the environment and human health;
  • To select products that contain toxic or hazardous substances which can be replaced by non-toxic or non-hazardous substances or low-toxic or low-hazardous substances without technical obstacles and with commercial feasibility;
  • To select products that contain toxic or hazardous substances which cannot eliminate or replace toxic or hazardous substances, but can achieve the requirements for limitation of such substances in a technologically feasible manner.
  • To select products that should be restricted due to severe pollution under any international convention. (Article 5).
• The proposed product lists will be delivered to the Expert Consultation Committee for evaluation with respect to compulsory technical, economic and product certification. The Expert Consultation Committee will submit an evaluation report to the MIIT. (Article 9).
• The MIIT will prepare a draft of the Key Management Catalogue and solicit public opinions on the draft on the website of the MIIT, in accordance with the evaluation report from the Expert Consultation Committee and upon consultation with the Authentication Supervision Committee. The public opinions will be solicited for a period of one month. Hearing will be organized for key products that have extensive influence. (Article 10). 
• Under normal circumstances, the period between the issuance of the Key Management Catalogue and the implementation of any required restrictions or prohibitions on toxic or hazardous substances for any given product shall not be less than six months. Temporary control measures may be taken against relevant products that cause severe pollutions to the environment. (Article 15).
• The Key Management Catalogue will in principle be supplemented or updated once every year. In the event of any special needs, it may be supplemented or updated from time to time subject to the provisions under these Procedures. (Article 16).

There may be a few other China RoHS related items coming out in the new year including further guidance on the Environmentally-Friendly Use Period (EFUP) and product certification criteria, but don’t hold your breath for the Key Management Catalogue.

North China (Beijing)

Northeast China (Shenyang)

Northwest China (Xian)

East China (Nanjing)

South China (Guangzhou)

Southwest China (Chengdu)

The centers are to work in cooperation with Environmental Supervision Bureau within MEP to handle the following functions: 

• supervise the implementation of national environmental policies, laws, regulations, and standards in the region within its jurisdiction;
• undertake investigation of major environmental pollution and ecological damage cases;
• undertake the coordination and settlements of major environmental disputes in trans-provincial areas and river basins;
• participate in the supervision of emergency responses to and handling of major environmental accidents;
• undertake or be involved in the inspection of environmental law enforcement;
• supervise the implementation of the “three simultaneities” system of major pollutant sources and construction projects approved by the State;
• supervise environmental law enforcement in national-level nature reserves (scenic spots, and forest parks) and national key eco-function protection areas; and
• be responsible for the acceptance, coordination and settlement of visits and complaints regarding environmental pollution accidents and ecological damages cases in trans-boundary areas and river basins of the region within its jurisdiction.

At the opening ceremony for the North China regional center, MEP Vice Minister Zhang Lijun acknowledged  many of the challenges facing MEP and the regional centers in performing the function set forth in the first bulleted point above. 

“Central governmental standards on environmental protection are not being met as a result of local protectionism.”

At present, central government’s three key objectives are maintaining economic growth, adjusting structures, and enhancing people’s quality of life. However, according to the latest reports [latest reports? More accurately, "every report"], some local governments are following the principle of maintaining economic growth while neglecting the two other objectives.

“Failure to properly address the issue of environmental protection is a result of two factors. One is that some local governments have eased pollution controls in order to favor GDP growth. The other is that as an administrative authority, the Ministry of Environmental Protection lacked effective supervisory capacity over the relevant local departments.”

In addition to the above reasons, some insiders [and all outsiders] suggest that under the present system, officials of local environmental protection departments are appointed by local government, which means that the head of a local environmental protection bureau has no actual powers to enforce environmental management.

It has been found that pollution standards have already been exceeded in some areas, but that local governments have implemented policies to hinder environmental protection. For example, in some regions polluting enterprises are being protected by local government, and inspection is not possible without authorization from the Mayor.

According to Xiong Yaohui, director of the new North China Supervision Center, they have already inspected over 200 polluting enterprises in the six provinces under their jurisdiction and have established “that most of businesses inspected were involved in some activity or another that contravened regulations. He concluded that weak enforcement by some local environmental protection departments was encouraging certain polluting enterprises to illegally discharge contaminants into the environment with impunity.”

Thus, renewed effort is needed by the centers to “supervise[e] local government and local departments of environmental protection, to prevent administrative inaction, corruption or dereliction of duty in the process of environmental management.”

Another specific task assigned to the regional centers involves data verification.  As we have mentioned repeatedly at CELB, the 11th Five-Year Plan requires the reduction of the emission of major pollutants by 10 percent (over 2005 levels) by the end of 2010. “In some areas, the performance of local officials has already been linked with the achievement of this target.  A specific new function of the centers will be to prevent local departments from submitting false data, a core task assigned to the six regional environment supervision centers is to verify pollution emission reduction figures reported by local government.”

The regional centers’ promise of more effective supervision of local environmental authorities remains largely unfulfilled.  Two issues have hampered full realization of the regional office potential: 1) lack of staff (a perennial complaint when it comes to national environmental enforcement functions), and 2) unclear issues of authority vis-a-vis local environmental protection bureaus.  US EPA and the Asian Development Bank have been aiding MEP with the establishment of these regional centers, and there is a real hope that they will be able to become effective components of MEP’s governance and enforcement structure in the future.

Xinhua reported that the “benchmark” retail price for fuel, presumably Grade 93 gasoline, was slashed approximately 14% from “6.37 yuan (0.93 U.S. dollar) per litre to 5.46 yuan.”  The wholesale benchmark price was reduced by a similar percentage.

The pictures which accompany the fuel cut stories suggest that pump prices have actually been set below the benchmark price.  This picture taken in Shanghai shows a price of 5.06/liter of Grade 93 gasoline, and a picture from Qingdao shows a price of 5.10/liter. 

The announced retail price decrease (.91 yuan) is about the same amount as the new ”gasoline consumption tax” which will move “from the current 0.2 yuan per liter to one yuan per liter.”  However, the tax will not be imposed until January 1, 2009.

I assumed that China would decrease fuel prices by the amount of the tax so that there would be no noticeable effect on prices at the pump, but

The National Development and Reform Commission (NDRC) made it clear Thursday that domestic fuel prices would remain unchanged on Jan. 1, 2009, when the fuel tax is expected to kick in.

Fuel producers will reportedly be required to “lower the factory gate price again to offset the tax” so consumers will not see a price boost on January 1.

There are certainly market reasons for lowering fuel prices; “Chinese drivers are paying much more than those in many other countries because domestic fuel prices have been unchanged since June despite tumbling global prices.”  But a further reason for lowering fuel prices now is to “help revitalize companies and factories eking out in a slowed-down economy.”  It will also make help mollify China’s increasingly restless taxi drivers.

Last month in Chongqing, 100+ police investigated 873 suspects over 10 days before issuing warrants for the arrest of two people.  Chongqing’s top communist official, Bo Xilai, “a rising political star and son of the late revolutionary and military leader Bo Yibo”, ordered the massive manhunt.  What heinous crime had the dangerous miscreants committed?  Poisoned the drinking water of their rural neighbors; dumped toxic chemicals into the fields of the local farmers, emitted air pollutants that sickened the children in the adjacent school; all of the above?

Uh no.  These two (are you seated?) damaged four flags, “a national one and others representing organs of the Communist Party,” at a cemetery for communist martyrs by throwing ink-filled eggs at them.  It does not appear that the arrestees intended to make a grand political statement, but were simply taking out their frustrations with the “local land departments” in a “dispute over land issues.” 

China is free to make desecration of its national symbols a crime, and it has shown restraint by making the maximum possible sentence no more than “three years in prison.” 

Coincidentally, three years in prison is also the same maximum penalty that applies to most environmental crimes.  Whoever

in violation of the regulations of the State, discharges, dumps or treats radioactive waste, waste containing pathogen of infectious diseases, toxic substances or other hazardous waste on the land or in the water or the atmosphere, thus causing a serious environmental pollution accident which leads to the serious consequences of heavy losses of public or private property or personal injuries.

China Criminal Code, Article 338.

What do we learn from this incident?  Nothing that we didn’t already know.  When a high official wants something done, it usually gets done.  Thus, no more excuses about lack of resources.  If Chongqing can commit 100 police officers for 10 days to catch some egg throwers, it should be able to stop every illegal discharger.  So, now that these two scofflaws have been apprehended, take these 100 police officers and make them the nucleus of a new environmental enforcement unit (like the one recently established in Kunming and several other locales) with a mandate to get tough.  That effort will burnish the the imagine of the country and the party.

dedicated to providing the progressive perspective on climate science, climate solutions, and climate politics. It is a project of the Center for American Progress Action Fund, a nonprofit, nonpartisan organization.

It is edited by Joseph Romm, a Senior Fellow at the Center for American Progress.  He was acting assistant secretary of energy for energy efficiency and renewable energy during the Clinton Administration.

Read all the posts and subscribe to the feed, but readers of this blog may be most interested in this post by Robert Collier : “Can China go green?“   Here’s the opening paragraph:

After Saturday’s sputtering end of the U.N. climate talks in Poznan, Poland, it’s clearer than ever that the fate of the post-Kyoto negotiations will depend on whether China can be coaxed to adopt some sort of carbon emissions limits. But as this tug of war plays out in the next year and beyond, what’s most important is not what China says on the diplomatic front but what it does on the home front.

The whole article is well-worth your time (and don’t miss the nice reference to CELB). 

An interlineation by Joseph Romm raises a good point and one that we touched on in our last post.

I would add that China’s energy intensity target is no more meaningful than Bush’s carbon intensity target (see “Bush Touts Meaningless Greenhouse Gas Targets While Making his Double-U-Turn on Climate“). So what if China reduces its annual energy use per unit GDP by 4% if its GDP is rising 8% to 10% a year and the resulting 4% to 6% growth in energy is met primarily by coal?

As we noted in yesterday’s post, the expert commentators on Shanghai’s 4^th environmental three-year plan were in “unanimous agreement that intensity targets are wholly inadequate to achieve pollution reduction tasks.  Some experts called for Shanghai to set a ceiling on the consumption of energy.” 

As Robert Collier notes those in positions of responsibility in China are “no longer ignoring” the problem of climate change.  The issue we all should be addressing is how to develop a post-Kyoto solution which doesn’t spook China into thinking that its economic growth (and thus political stability) will be imperiled, but results in real carbon emissions limits.

It continues, however, to face the pressure of rapid (though perhaps slowing) growth, and the need to continue to work on getting the fundamental (and expensive) environmental control infrastructure in place.  The conference highlighted these particular challenges:

1. Energy consumption is increasing along with economic and population growth, making it hard to fulfill the national pollution reduction targets.
2. By 2008, total vehicle volume in Shanghai will reach 2.6 million resulting in vehicle emission and noise problem in the city.  Perspective Note: Although Shanghai has at least a million more people than Beijing, it has 25% fewer cars (Beijing has 3.5 million vehicles).  This difference must be due in part to the fact that Shanghai has made it significantly more expensive (through its license plate cap and auction system) to own a car in Shanghai than in Beijing
3. Relatively weak environmental management in rural areas, causing big differences between rural and urban areas, especially in industrial zones in suburban areas.  Great amounts of environmental infrastructures are also needed in suburban areas to meet the needs of the rapid urbanization process
4. Air quality is behind other international mega-cities (PM10 is about 3 times the level found in Tokyo, New York, or London, although NOx emissions are similar).  More attention should be paid to global issues such as eutrophication, ozone, etc.

To meet these challenges, the draft 4^th three-year environmental action plan will focus on four primary objectives:

1. Emphasizing quality development as well as pollution prevention at the source;
2. Improve urban environmental safety and environmental structures;
3. More attention to global environmental issues when improving the local environment;
4. Develop an innovative institutional mechanism and policy framework for environmental management.

Director Zhang of the Shanghai Environmental Protection Bureau told China Daily that “The new round of the environment protection plan emphasizes on the promotion of circular economy and low carbon economy, with noise pollution control being the first priority,” he said.  The city will eliminate 900 noise-sensitive sites along freeways, urban arteries and railway lines.

Some of the additional specific action items include:

• Implement FGD projects in all coal-burning power plants and initiate denitrification projects in some power plants.
• Add sewage treatment capacity of 2.9 million m3/day, complete urban sewage collection network, and achieve domestic sewage treatment rate of 90%.
• Achieve 85+% domestic waste safe disposal and 100% safe disposal of hazardous waste.
• Cleaner energy replacement for industrial boilers with greater than 10 tons/hour capacity.
• Methane power and wind projects for Laogang Landfill site; methane projects in suburban large-scale livestock farms.
• By 2010, the total mileage of local metro lines reaches 400 km.  Mass transit accounts for 65%+ total travel volume.  By way of comparison, the best US city, New York City, reports about 55% of its workers use public transportation to commute to work; the next best US cities, Washington, DC, Boston, and San Francisco are in the 30 to 40% range.
• By 2011, 45% of buses and all taxis must meet National III or higher emission standards.
• Promote pilot projects of circular economy and demonstration parks of eco-industry.
• Add 1500 hectares (1 hectare = 10,000 square meters or 107,639 sq ft) Of public green space, with 13.1 m² per capita and 38.2% greenery coverage; encourage three-dimensional greenery, e.g., promote greenery on roof and wall.
• By 2010, total volume of SO2 emissions and COD discharges will be controlled to level of 380,000 tons and 259,000 tons respectively.

In total more than 200 projects with total investment of 80+ billion RMB (US$11.6 billion) are proposed.

EXPERT RECOMMENDATIONS

As I previously noted, the chief purpose of the conference was to solicit comments from experts on the proposed 4^th three-year plan.  Most comments were submitted in writing, but a few experts were invited to speak.  I found the comments of the Shanghai academics the most interesting and progressive.  These included the President of East China University; Professor Zhu Dajian, director of the Department of Public Management in the School of Economics and Management of Tongji University; and Professor Huang Zhen Dean of the Energy Research Institute at Shanghai Jiaotong University.

Among the more significant comments were the following:

• There was significant support for increasing the suite of parameters monitored and, where applicable, controlled, particularly on the air side.  The additional parameters included PM10, NO_X, ozone, air toxics, and VOCs.
• Environmental protection should not be a back office operation, must be elevated to status of decision-making process.  Break down the silos and bring in larger group of stakeholders into the environmental planning and implementation process.  More human resources should be trained and employed to meet the needs of environmental progress.  “Move from the 1.0 to 2.0 generation.”
• There was unanimous agreement that intensity targets are wholly inadequate to achieve pollution reduction tasks.  Some experts called for Shanghai to set a ceiling on the consumption of energy.
• Adding carbon control as an explicit component of the plan will help Shanghai become a leader in environmental planning.  A majority of commentators called on Shanghai to adopt international climate change commitments.  Note: it would probably be very difficult for Shanghai to to get out in front of the central government on carbon while the Copenhagen round of negotiations is in full swing, but the encouragement Shanghai is getting to initiate carbon controls may make it a willing candidate for the “developed urban area” caps proposed by Scott at China Greenspace. 
• Reform the penalty system, specifically lift the penalty caps in the national legislation and make it cheaper to comply than to pollute in Shanghai.

As Daniel Dudek, Chief Economist at Environmental Defense Fund, noted in the concluding remarks at the conference, Shanghai is to be commended for its “commitment and ambition.”  Much remains to be done, but it is easy to loose sight of the fact that in the face of unparalleled growth and the resultant huge environmental challenges, much has been done.