Tuesday, November 18, 2008

Chinese Green Legislation, Part 3: The New Regulations

The Standing Committee of China's 11th National People's Congress (NPC) approved regulations that are designed to curb carbon emissions and promote the adoption of clean technologies. Signed by President Hu Jintao in September, these new Green laws will come into force at the start of next year. The Chinese government also announced a $586 billion stimulus package, some of which will go to the environment.

As reported in Business Green, "the Chinese government has set out a range of targets designed to shrug off its tag as the world's largest polluter, including goals to reduce energy consumption per unit of GDP by 20 percent, double renewable energy capacity and cut pollution levels 10 percent by 2010 compared to a 2005 baseline.Under their provisions, the government will step up environmental monitoring of carbon-intensive industries such as steel, power generation, oil refinery, construction and printing. Industries will also be required to introduce water-saving technologies and encouraged to switch to cleaner forms of energy, such as natural gas and renewables. Businesses and government departments will be required to install renewable energy technologies in new buildings, while industrial and rural sectors will be encouraged to make wider use of waste material, ranging from coal mine waste to livestock slurry. In addition, tax breaks will be introduced on energy efficient and clean technologies, and a number of inefficient products will be banned. Those companies and government departments that use prohibited products will face fines of 50,000 yuan to 200,000 yuan (about $7,313 to $29,250 U.S.). Government departments will also be required to develop their own plans for promoting energy efficiency and recycling, and stimulate investment in clean technologies."

Speaking to the Xinhua news agency in September, NPC Standing Committee member Ni Yuefeng said "the measures are intended to develop a recycling economy that could maximize economic efficiency while minimizing energy consumption and emissions." Although the average energy use per unit of production for carbon intensive industries is still on average 20% higher in China than in developed economies, according to Xinhua, there are some indications that the government's climate change efforts are already showing a modest effect. Official figures indicate energy consumption for every 10,000 yuan of GDP fell 3.66 percent in 2007 to 1.16 tonnes of coal equivalent.

The stimulus demonstrates China's willingness to join the community of nations and help rebuild the financial system. The Green earmarks, along with the new legislation indicate that the government is starting to get serious about joining the community of nations addressing climate change. Although China remains an important contributor of GHG, it is taking steps in the right direction.

World economies are poised to follow Japan and Germany into recession, and although the Chinese economy has slowed slightly, this growth is projected to fall to 9% in 2009, making China the envy of finance ministers everywhere. However, as we all know, there are significant environmental costs associated with such meteoric growth. China's economy is a growing environmental problem for the world, but the world also contributes to China's emission problems. One third of Chinese emissions are attributable to the manufacture of products for export, primarily to Western markets. This new Chinese legislation may begin to slow the tide of Western firms seeking to avoid domestic environmental regulations by exporting their carbon intensive operations to China.

No comments: