http://www.businessweek.com/articles/2014-04-22/after-declaring-war-on-smog-china-gets-around-to-updating-its-environmental-laws

China

After Declaring War on Smog, China Gets Around to Updating Its Environmental Laws


Smog flooding the air in Shenzhen, China

Photograph by Brent Lewin/Bloomberg

Smog flooding the air in Shenzhen, China

If there’s any country that needs new-and-improved environmental laws, it’s China. The pollution in Beijing and other cities is visible from space, and tourists worried about unbreathable air can now buy smog insurance. Pollution has left 16 percent of Chinese land unfit for use, according to a recent government report, and two-thirds of companies surveyed by the European Union Chamber of Commerce in China identify pollution as the biggest challenge in attracting foreign talent.

Chinese Premier Li Keqiang said last month that his country would declare war on smog. Unfortunately, when it comes to the legal system, China will be going to battle with outdated weapons. he country’s environmental protection law dates back to 1989 and—despite the worsening pollution—the government hasn’t amended it.

That’s finally about to change. As the official Xinhua news agency reported on Tuesday, the Standing Committee of the National People’s Congress—China’s legislature—is finishing work on revisions to the law. The new version, which lawmakers first considered in 2012, is finally “ready to be put to a vote,” according to Xinhua. The congress is also known as China’s Rubber Stamp Legislature, so there’s little doubt as to how the vote will go.

China’s track record when it comes to environmental protection doesn’t inspire much confidence about this new law, however, and Xinhua didn’t offer much detail about why changes will help clean the air. The legislation “places more responsibility on local governments and law enforcement departments, sets higher environmental protection criteria for enterprises and gives harsher punishments for wrongdoing,” the news agency reported. With Chinese citizens increasingly worried and angry about the smog they inhale, Xinhua made a point of emphasizing how the new law “provides smooth and orderly channels for the public to make appeals on environmental subjects.”

Even though the Chinese government has little to show so far for its pollution fight, there is reason to be hopeful the revised law will have some impact, according to IHS China economist Brian Jackson. In a note published on Tuesday, Jackson said comments by Chang Jiwen, vice director of resource and environmental policy at the State Council’s Development Research Center, show China is moving in the right direction. “The changes proposed would mark a considerable shift from existing law due to wide scope, stricter enforcement and harsher punishment, both for offenders and local officials with oversight responsibilities,” he wrote.

A crucial change: The new law will give more power to local officials to impose fines on polluters. That’s important because many local governments are struggling as China’s economic growth slows and their debt load increases. Going after polluters could be a nice way for them to raise funds.

“Local discretion in setting environmental fines combined with cash-strapped local governments could lead a sea-change in enforcement attitudes,” Jackson argued. “Inclusion of strict oversight and punishment for non-enforcement by local officials only amplifies that incentive, and is consistent with recent reweighting of officials’ evaluation criteria to emphasize environment and deemphasize growth at all costs.”

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Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.

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