On Saturday 28th December, we go to Chengdu to have a meeting with Jing Xu, an economy teacher who specialized in environmental economy during her PhD.

About her: Jing Xu did her PhD in the Universidad Autonoma de Barcelona, in Spain, during 5 years, about environmental economics. She applied Game Theory on whether private companies would accept some environmental policies. Now, in China, she will work in another subject, more related to the government and the policies. She also teaches Economy in the South West University of Economy and Finance in Chengdu.

How to implement environmental policies? For environmental policies, there are two questions that need to be asked (and that are under study in the Chinese government):

  • Who makes the laws? The central government is the one who has strength and less corruption, but the local governments knows better the local situation. Probably a combination of both should be better, with some general figures to obtain set up by Beijing, and the local government thinking how to locally best implement it.
  • Who will collect the money from the taxes? The environmental agency that was created has the knowledge to do the inspections, but they don’t have the power to enforce the responsible to pay. And the tax collectors can enforce the payment, but they lack the expertise for inspection.

Another question, linked to the previous ones, is where the collected money should go. If the money is collected by a normal tax collector, it goes to the normal budget and so cannot go to improve the environment.

Also, in China, the tax collectors need incentives to do an efficient job. A moral appreciation is not enough, the collector must receive part of the money he collects so that he is motivated.

Efforts in the industry: Even though it is not visible, in China, a lot of things are changing, at least at political level. For example, now, all the coal power plants must have a filter to prevent the sulphuric gas from being rejected. And it had good results, since the acidic rains, caused by these gases, have decreased a lot. However, even though the filters are installed, they are not always used. Next to the obligation to install this sulphuric gas filter on the new plants, an economic incentive has been used so that old power plants get one installed too: the electricity coming from plants without filter is much more expensive for the consumer.

However, Jing is quite pessimistic for the implementation of environmental policies: there is always a way the polluter can negotiate, or dodge around the laws: if the inspections are during the day, the factory can reject the trash at night, and the local inspector pretends not to know about it.

Recycling: For recycling the waste, a lot has still to be done. In the incineration factories, the main problem is to separate the waste that can be burnt from the rest. This is because at consumer level, there is nothing done yet to separate the waste: even though there are separated trash bins, people do not respect it (not knowing what to put or not caring), and sometimes, the separated holes for the trash bin lead to the same containers.