By Pan Yue (China Daily)
Updated: 2007-09-19 07:22

A policy based on economic leverage such as prices, taxes, and insurance is called for in a bid to control the behavior of economic entities to ensure that there is harmony between economic growth and environmental protection.

Compared with the traditional regulating mechanism based on government command, a new economics-environmental policy is geared to readjusting the economic interests of entities in environmental protection and resources distribution and, in turn, introducing a set of incentives and restraining mechanisms needed in the tapping of resources in a sustainable way.

The new mechanisms boost the development of environment-protection technologies, sharpens the competitive edge of economic entities, reduces the cost of environmental protection and lowers government expense in supervising environmental projects.

Experience in developed countries shows that this kind of environmental-economic policy is by far the most effective way in tackling environmental problems in the long term.

In China, there is a scarcity of such environmental-economic means and no complete set of policies in this regard has taken shape. The root cause lies in the failure to calculate the costs sustained by those who do not implement environmental measures and the costs born by those who do. In the absence of the calculation, the decision-making lacks the support of scientific data.

The pressing situation, however, does not allow us to take time to effect ideal environmental-economic policies when everything is ready. We have to simultaneously calculate the costs, conduct research, launch pilot projects, sum up experience, and mobilize the forces of all sides concerned. All this serves to push for the establishment of the framework of China's own environmental-economic policy.

China's environmental-economic policy involves seven aspects.

First, a "green taxation" regimen needs to be introduced to reward those who do right in environmental protection and punish those who do wrong.

Second, rigorous enforcement of fee collection is needed to redress the situation that doing wrong costs little while doing right needs a lot of money.

Third, a "green-capital market" ought to be introduced to cut off the channels through which the polluters obtain capital.

Fourth, ecological-compensation pilot projects should be launched to explore the way for a sustainable-development strategy.

Fifth, a discharge-right exchange market ought to be set up in order that market forces help achieve the environmental-protection goals and optimize discharge quotas.

Sixth, we need to largely promote "green trade" in the context that Western countries are setting up "green" trade barriers.

Seventh, we need to strengthen environment-risk management through market means in order to provide a policy platform for enterprises, the public and the government.

All the seven policies are not new, but they are slow in being adopted by China.

Why? Because they involve power distribution between different government departments and realignment of interests between various sectors, regions and economic entities.

In view of this, this author, in his capacity as a senior official of the State Environmental Protection Administration, would like to make it clear we will lend our unconditional support to all authorities that take it upon themselves the responsibility of implementing the environmental-economic policy. We will try our best to help them. On condition that the work gets done, we have no "sectional interests" to speak of.

Environmental problems are very pressing ones and we cannot afford to wait for the problems to be settled, because involved are not only China's image among the international community, but also the country's stability, the harmony of the Chinese society, the nation's sustainable development and people's health.

The State Environmental Protection Administration can formulate a package of environmental-economic policies in one year, complete primary pilot projects in two years, and China's environmental-economic policy take shape in four years.

The new environmental-economic policies can become an important milestone in China's road toward modernization.

The "green-oriented" market economy will be a mature market to nurture a large number of environmentally friendly enterprises.

The "green-oriented" society will be mature one to cultivate a large number of "green-consciousness" citizens.

The "green-oriented" government will be a mature one to turn out a large number of officials committed to "green administration".

In this scenario, a "green China" is close at hand.

The author is vice-director of the State Environmental Protection Administration.

(China Daily 09/19/2007 page10)