ABSTRACT
Overview This chapter sets out the lessons learned from examining other countries’ experiences with environmental regulation across a history of economic growth and expansion, as well as the lessons learned from exploring the People’s Republic of China’s (PRC) own experience in this light. The international team of experts has worked with the Chinese experts to examine the experience of the PRC across the past 30 years of unprecedented growth, and to learn of the regulatory challenges that they face. The international team has also worked on matters dealing with environmental regulation in many parts of the developed world: the United States, the European Union, the Organization for Economic Co-operation and Development (OECD) and individual countries such as Norway and the United Kingdom. This breadth of experience has been brought to bear on the question of the best way forward for improving the PRC’s environmental regulation. In this set of policy recommendations, we set out what we have learned in the briefest format possible. First, we set out the basic or general principles of environmental regulation in a rapidly developing country. What is the point of environmental regulation in the context of rapid growth? What are the essential components? Why is it important, and when should it be implemented? Hence, we make the case for the basic role and importance of an environmental regulation framework within a rapidly developing country. We state here that a system of environmental regulation is the fundamental means by which a society’s competing demands for resources are aggregated, balanced and allocated. This is an essential mechanism for the efficient functioning of any society. We then show that regulation plays a fundamental role in leading the development process in the right direction, especially in regard to technological change. At the outset of any development process, technologies tend to be basic and the choices straightforward. Rapid economic change makes technological choice and transition an important part of the economic transformation, and regulation can play an important part in this in terms of market transformation (elimination of inefficient technologies), technology leadership (identification of leading technologies) and trade harmonization (disallowance of incongruent technologies). All of these are important roles for
the regulator to play in guiding industries toward the appropriate direction in terms of future growth opportunities. Next, we identify the important themes that emerged in the study of the sectors of air, water, ecosystems and institutional governance in the PRC’s Macro-Environmental Strategy. These common themes cut across experiences in environmental protection of other countries and international organizations as well. Thus, we also assess the strategies employed in the United States, the EU and international organizations, drawing core lessons on how to structure an effective regulatory system for environmental protection in a complex jurisdiction. Then, we focus on the recommendations to address the major problems brought about by the rapid economic growth in the PRC in each of the abovementioned sectors in the country’s Macro-Environmental Strategy, with particular emphasis on the regulatory measures to manage these problems. We consider the general problems of regulation – information acquisition, balancing of values and allocation of resources. In light of these considerations, we make very concrete and specific policy recommendations on how to proceed in the management of these problems. In sum, we outline here our policy recommendations on the importance of environmental regulation in the management of a rapid growth process, and the specific recommendations for the sectors identified in the PRC’s MacroEnvironmental Review. These recommendations are derived from both the accumulated experiences in developed countries’ regulatory processes and our (much less informed) estimation of the PRC’s recent economic history. In the succeeding section, we detail our recommendations in four parts:
1 general relation between economic growth and environmental regulation; 2 cross-cutting issues affecting the development of the PRC’s environmental
governance; 3 recommendations for institutional and sectoral change in the PRC based on
international experiences; and 4 recommendations of the Chinese experts on how to proceed in the develop-
ment of the long-run environmental strategy for the PRC.
