Using the market to cut pollution

As China carries out a sustainable development strategy that ties the economy with the environment, the country is putting more emphasis on market instruments and incentives to foster environmental protection and curb emissions.

Over the years, China has developed a relatively comprehensive environmental protection apparatus that largely employs conventional command-and-control policies.

However, the regulatory effort has been fraught with difficulties, particularly the lack of financial resources and independence of the regulatory agencies. Having encountered considerable difficulties with administrative regulation, China has been keen to experiment with other types of regulatory policies.