Wednesday, July 18, 2007

Enforcement of Environmental Regulations

Evidence that supports the pollution haven hypothesis (the idea that the North relocates its dirty production to the South) is difficult to find for numerous reasons outlined in some of our papers HERE.

One problem with cross-country studies is that it is hard to measure the extent of a countries environmental regulations so that we can make cross country comparisons. This problem is exacerbated by the fact that a country may appear to have strict environmental regulations but these are not enforced.

We have done some recent work on China looking at this issue across Chinese provinces with a PhD student of mine Jing Zhang. This is one reason that we had to extend our analysis to also consider how well governed a province is and how much effort it makes to curb corruption. However, the problem is my no means restricted to China.

The following article from PlantArk emphasises the problem. My bold.

OECD Decries China Enforcement of Environment Rules
BEIJING - China's efforts at environmental protection have been ineffective and inefficient largely because the central government has been unable to implement its policies, the Organisation for Economic Co-operation and Development said.

Rapidly growing China is poised to overtake the United States as the world's top emitter of greenhouse gases, and Beijing faces rising international calls to accept mandatory caps on carbon dioxide emissions from factories and vehicles.
Beijing should consider making the State Environmental Protection Agency (SEPA) a ministry and strengthening its role in supervising local environmental protection bureaus, the Paris-based OECD, which groups 30 industrialised countries not including China, said in a report released on Tuesday.

In addition, environmental laws and regulations should be compiled into an environmental code so they can be more easily understood, local leaders should be made more accountable for environmental performance and China should extend the use of economic incentives and penalties, it said.

"The biggest obstacles to environmental policy implementation are at the local level," the report said.

"There is a need for much stronger monitoring, inspection and enforcement capabilities to establish a better mix of incentives and sanctions. In addition, environmental expenditure needs to be made more efficiently and environmental policy instruments need to be made more effective."

Chinese leaders acknowledge the huge challenges facing China, home to some of the world's 20 most polluted cities, as it struggles to meet energy efficiency goals in the face of unbridled economic growth.

About 460,000 Chinese die prematurely each year from breathing polluted air and drinking dirty water, according to a recent World Bank study.

The authorities are closing down dirty industrial plants, raising car fuel-efficiency standards and tweaking taxes to discourage energy-intensive production. China has also introduced higher drinking water standards, but state media reports severe pollution of China's vast lakes and rivers on an almost daily basis.

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