A June 2000 report from U.S. Embassy Beijing

China has adopted sweeping amendments to its air pollution control law with the intent to improve enforcement, address critical air quality problems in key urban areas and make broader use of market-based methods for cutting emissions. The changes take effect September 1. Penalties are stiffer, coverage is broader and lines of authority are clearer than under the current law. The amendments reflect a shift in strategy from controling the concentration of pollutants from particular sources to controling the total volume of pollutants entering an airshed. They also call for unspecified incentives for clean and renewable energy. According to the chairman of the committee that drafted the amendments, if the new provisions are faithfully implemented, by 2010 total pollutant emissions will be stabilized at 1995 levels, air quality in 34 of 47 key cities will meet national standards (up from 16 currently) and dust from construction sites in Beijing will be reduced 70 percent. The total cost, however, may top 1.5 percent of GDP in some areas. Additional environmental legislation is reportedly in the pipeline, including a new water pollution law, a clean production law, an environmental impact assessment law and a law to control desertification. Their success, as with past environmental laws, will depend importantly on enforcement and monitoring at the local level.

NPC Amends Clean Air Law

The Standing Committee of the PRC National People’s Congress (NPC) April 29 approved sweeping amendments to the 1987 Air Pollution Control law, last amended in 1995. The law was essentially rewritten from top to bottom. The number of sections was increased from 50 to 72, and most of the previously existing sections were substantially revised. The revised law will go into effect September 1.

Spring Dust Storms Provide Backdrop

In his remarks at the signing ceremony for the new law, NPC Standing Committee Chairman Li Peng drew attention to the recent spring dust storms that had afflicted Beijing and other parts of North China. The extraordinary frequency, intensity and extent of this year’s storms, he said, clearly demonstrated the urgency of dealing with China’s environmental problems.

Sandstorms the most severe in 50 years according to the State Forestry Administration  darkened skies over North China more than a dozen times this spring, prompting Premier Zhu Rongji to make an emergency inspection tour of desertified areas of Hebei Province and Inner Mongolia in early May. Although dust from local construction sites contributed to the storms in urban areas, the primary cause was soil erosion and deforestation in the countryside, aggravated this year by a severe drought. The new air pollution law is therefore unlikely to have a significant effect on the problem. But Li apparently sensed that the dust storms made passing new environmental legislation good politics.

Goals

In an interview in the May 2 China Environment News (Zhongguo Huanjing Bao), Qu Geping, chairman of the NPC’s Environment and Resources Committee, explained the rationale and objectives of the new law. He cited a 1998 World Health Organization air quality study of 272 cities concluding seven of the 10 most severely polluted were in China. According to China’s own evaluation, two-thirds of the 338 Chinese cities for which air-quality data are available are polluted, and two-thirds of those are considered moderately to heavily polluted.

Qu said that if the provisions of the revised law were implemented fully over the next 10 years, the following targets could be achieved:

• The total volume of air pollutants will be controled at 1995 levels; (According to SEPA’s latest annual report, 1999 emissions of SO₂ and soot and flue dust — the only two classes of pollutants for which total nationwide emissions were reported were already more than 20 percent below 1995 levels. This is probably attributable to the slowdown in industrial activity over the past two years and a consequent decrease in coal consumption. In the absence of direct monitoring, emissions are calculated based on coal use.)

• Sulfur dioxide (SO₂) emissions within the SO₂ and acid rain control zones (comprising 11 percent of national territory and accounting for 60 percent of total SO₂ emissions) will be controled at 10 million tons; (Nationwide emissions in 1999 were 18.6 million tons, according to SEPA; Qu told a visiting EPA delegation just before the revised law was approved that China would strive to cut its SO₂ emissions in half by 2010.)

• 34 of the 47 key cities designated by the State Council would achieve national level II (fair) air quality standards; 16 had achieved those standards as of the end of last year, according to SEPA; (The current “two targets” policy calls for all 47 to meet the standards by the end of this year; Qu’s statement implicitly acknowledges that this is not achievable.)

• Dust emanating from construction sites in Beijing (and presumably other cities) would decline 70 percent.

Price Tag

In the interview, Qu said reducing SO₂ within the control zones alone would cost RMB 180 billion (US$21.8 billion) — about 0.5 percent of the GDP within those zones. He said improving air quality of the 47 key cities would cost those cities 1.5 percent of their GDP.
 

Moving to Total Emissions Control

Perhaps the most significant change in the law is the shift of focus toward so-called “total emissions control” (TEC). TEC aims to limit the total volume of pollutants entering an airshed or water body as opposed to the concentration of pollutants in a particular location or from a particular source. China has applied TEC-type measures on a limited basis in certain areas, such as the Liaohe River and to some extent within the SO2 and acid rain control zones. The new law provides a legal basis for doing it on a much wider scale.

As a SEPA official explained at a recent workshop on reducing emissions of the utility sector, the old law imposed fines on enterprises only if their emissions exceeded the standards, whereas the new law will charge polluters on the basis of their total emissions. It further authorizes provincial-level governments (including “directly administered” cities: Beijing, Shanghai, Tianjin and Chongqing), with approval of the State Council, to establish TEC zones and issue pollution permits to enterprises within those zones. Any location that has not yet met national air quality standards may be designated a TEC zone. The State Council will issue specific regulations for the administration of the pollution permit system.

Emissions charges are to be set at a “rational” level, taking into account the goal of strengthening pollution control as well as national economic and technological conditions. Currently, the SO₂ emission levy within the SO₂ and acid rain control zones is just RMB 0.20 (about 2.5 U.S. cents) per kilogram. The marginal cost of abatement is estimated at five to six times that.
 

Expansion of Scope

Control measures under the old law focussed almost exclusively on industrial enterprises and power plants. The revised law includes specific provisions for automobiles, ships, domestic heating and cooking stoves and construction dust.

Newly manufactured or imported cars must meet national emissions standards (currently based on Euro I standards), and cars already on the road must be retrofitted to meet those standards. Qu described this as moving from current 1970s vehicle emissions technology to 1990s technology. Cars must pass annual emissions checks, and authorities are empowered to conduct random inspections in parking lots. Local governments may enact stricter vehicle emissions standards (for example, Beijing uses the Euro II standards) with approval of the State Council.

The manufacture, import and sale of leaded gasoline is to be prohibited (current law already calls for leaded gas to be banned as of July 1, and many cities have already banned it). The government is to encourage the production and sale of clean-fueled vehicles.

Cities are encouraged to replace individual household coal heating stoves with centralized district heat. No new coal-burning heating boilers are to be built in areas covered by district heat. Large and medium-sized cities are to establish timetables for food service establishments to convert from coal to natural gas, liquefied petroleum gas (LPG) or electricity and for household cooking stoves to convert either to clean fuel (i.e. gas or electric) or to coal briquettes.

Construction sites and other sources of airborne dust must take dust-control measures to be stipulated by local environmental authorities. Cities are urged to expand per-capita green space, pave over barren areas and control road dust. SEPA will conduct comprehensive audits of these local dust-control measures.
 

New Measures to Control Coal Smoke and SO₂

Priority cities may designate zones within which all burning of high-polluting fuel (i.e. coal) will be prohibitted (some cities have already done so). In all large and medium cities burning of crude lump coal is to be phased out. The government is to provide economic and other incentives for the use of high-quality, low-sulfur, low-ash coal. New or expanded SO2-emitting power plants or large and medium-sized industrial enterprises must install desulfurizing and dust-removal equipment or take other measures to reduce emissions. Existing enterprises within the SO2 or acid rain control zones must meet emissions standards by a timetable to be determined by the State Council or be fined RMB 10,000-100,000 (US$1,200-12,000).
 

Monitoring and Enforcement

The revised law contains numerous provisions designed to correct perceived defects in implementation and enforcement of existing environmental laws. Enforcement authority is more clearly stipulated. Where as the old law assigns enforcement authority vaguely to the State Council (roughly equivalent in U.S. law to authorizing the President), the revised law refers repeatedly to the “State Council’s environmental protection administrative bodies” (i.e. SEPA). This is most likely intended to help SEPA overcome resistance from sectoral ministries who have disputed SEPA’s authority to regulate industries under their control. Some responsibilities are assigned specifically to provincial, municipal or county-level governments. Fines and punishments for particular offenses are specified, ranging up to RMB 500,000 (US$60,000). There are also civil and criminal remedies for environmental accidents leading to injury, death or economic losses, identical to those under the old law. Officials misappropriating the proceeds from pollution levies (a widespread problem) are to be subject to administrative penalties.
 

Ozone-Depleting Substances

In fulfillment of China’s obligations under the Montreal Protocol on Substances that Deplete the Ozone Layer (ODS), the revised law says the state shall encourage and support the production and use of ODS substitutes and gradually phase out the manufacture, import and use of ODS. The State Council shall establish timetables for the phase out of ODS and implement a quota system in the interim. Those who illegally manufacture, import or use ODS or violate the quota regulations will be subject to fines ranging from RMB 20,000 to RMB 200,000 (US$2,500-25,000) and possible revocation of quota rights.

Support for Clean and Renewable Energy

The revised law promises support, encouragement and incentives for the production and use of clean and renewable energy, making specific reference to solar, wind and hydropower. There are no specifics. Embassy sources report specific incentive policies are still under study.

Comment: Proof of the Pudding is the Eating Thereof

As is typical of Chinese laws, the revised Air Pollution Control Law is essentially a statement of principles, leaving important details to be filled in through administrative regulations. To a large extent, the revisions merely ratify what many localities are already doing. The director of the municipal environmental protection bureau in Shenyang recently told us the revised law would have little impact there, because Shenyang was already doing (or at least trying to do) everything it called for. But the new legislation gives a stronger legal underpinning to such practices as total emissions control, pollution permits and emissions trading and should lead to an extension of these practices beyond the priority cities and SO₂ and acid rain control zones. More importantly, it indicates the central government’s vision for the future direction of Chinese pollution-control policy. That vision entails broader application of market-based measures and moving from a posture of trying to stem environmental deterioration to one of gradually and progressively improving air quality.

Ultimately the success or failure of the new law will depend on how effectively it is enforced, especially at the local level. Municipal environmental protection authorities, who bear the lion’s share of enforcement responsibility in China, are more beholden to local governments than to SEPA. Those local governments are often major shareholders of polluting enterprises, creating an inherent conflict of interest. Many local governments are also concerned about unemployment if they close down polluting factories or mines producing low-quality coal. There is a popular saying in China that where local and central interests conflict, local officials have an effective counter measure for every central government edict. Some localities may simply ignore the law, given the central government’s limited oversight capability (heaven is high and the emperor is far away, goes the traditional proverb). Experience with the existing laws shows that in those localities that have a political leadership committed to improving the environment and the resources to do it, or where the central government can bring effective pressure and resources to bear, there is progress. Elsewhere there is not.