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New Policies to Reinforce Environmental Protection
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China plans to adopt new economic policies to reinforce environmental protection procedures, said Pan Yue, vice minister of the State Environmental Protection Administration (SEPA), on September 9 during an interview with the Beijing News.


The former campaigns to crack down on environmental pollution activities have been successful. However, Pan said, the measures taken so far are not systemized and the final aim has yet to be achieved.


“As a result, seven new economic policies have been put forward to promote better environmental protection,” Pan said, adding that they are completely different from the original campaigns. The new procedures feature a broader framework and tougher measures. These newly proposed policies shift their focus onto more concrete and practical methods. Pan’s answers to the Beijing News questions are highlighted and listed below:


The Chinese government’s primary goal has been to establish a legal system that focuses on environmental protection. Beginning in early 2005, four large-scale law enforcement campaigns were enforced; together they have greatly benefited China’s environmental protection cause.


However, what has been achieved is far from what we anticipated. Due to various inherent drawbacks of the legal enforcement system, these campaigns have failed to form an integral whole. They have not been effective enough to enact fundamental changes toward protecting the environment. Their success has been only temporary: when one illegal activity is suppressed, a new one emerges in its place.


To turn the tide, new environmental policies have been proposed to set up a comprehensive legal system for relevant works. In the near future, to achieve these set goals, economic means will replace administrative means to regulate environmental protection works. Great efforts will be made to revise existing environmental laws.


In comparison with developed countries, China is faced with a more complicated situation regarding the construction of environmental protection system, because environmental problems here are always associated with various political, economical, social and cultural issues. It is, therefore, unrealistic to depend on one or two single policies to tackle our nation-wide problem.


When building up an environmental protection system, efforts shall be made to balance the interests of different sectors and readjust the functions of different departments. Relevant governmental institutions are now trying their best to meet zealous public expectations.


In the past decades, the SEPA has been working hard to build up a system for environmental protection despite existing difficulties. Departments engaged in macro-economic control and environmental protection will receive SEPA’s full support as they collaborate to set up an umbrella system to study new policies on energy conservation and pollutant discharge reduction.


In July of this year, SEPA, the People’s Bank of China (PBC) and the China Banking Regulatory Commission (CBRC) jointly launched the Green Credit Policy. The policy is regarded as the first one of its kind in the country.


A database is now in place with 15,000 pieces of information on activities in violation of environmental laws. This will make it easy for commercial banks and other financial institutions to identify companies with environmental offences and thus effectively ban them from obtaining bank loans.


So far, the CBRC has released a blacklist catalogued by SEPA to various banking institutions in China. Heavy polluters are disqualified from getting loans from any bank or financial institution. Meanwhile, foreign banks, such as the Standard Chartered Bank, are planning to work with the Chinese environmental protection departments to promote the Green Credit Policy.


According to Pan, however, it is still too early to reach a conclusion regarding the Green Credit Policy. China’s deteriorating environmental situation has left the country no spare time to work out a policy after careful consideration. Environmental policies must endure constant revision.


According to Pan, SEPA is currently working with the China Insurance Regulatory Commission (CIRC) to design guides to implement environmental liability insurance. Meanwhile, the two institutions are working to draw up plans for trial implementation and lay down corresponding technological criterion. In these plans, a series of issues, such as the insurance coverage, defining environmental pollution liabilities, compensation standards and the procedures to file compensation claims, are all stipulated in explicit terms. To date, specific provinces and industries that will pilot this policy have not yet been selected.


It was recently reported that the CNPC and Sinopec have held it improper to incorporate large chemical enterprises into the environmental liability insurance system. Pan Yue said he had not received any formal notice from the two oil giants. However he encouraged state-owned enterprises to enroll in the program, because such insurance would share their economic risks once serious pollution occurs.


Concerning the environmental tax, Pan said it is now the top agenda of the government works. The financial and taxation departments are working hard to define taxation measures that can benefit environmental protection. The establishment and implementation of an environmental tax is associated with a variety of issues, including the establishment of a taxation system, the relationship between environmental taxes and other taxes, the calculation of a just tax rate, the cost of tax collection and the impact of an environmental tax on the country’s economic and social development. It therefore takes years to develop.


( by Chen Xia, September 12, 2007)

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