Pollution Emission Trading: A Possible Solution to China's Enforcement Obstacles in Fighting against Air Pollution?

By Li, Jiangfeng | UCLA Journal of Environmental Law & Policy, Summer 2016 | Go to article overview

Pollution Emission Trading: A Possible Solution to China's Enforcement Obstacles in Fighting against Air Pollution?


Li, Jiangfeng, UCLA Journal of Environmental Law & Policy


I. INTRODUCTION II. OVERVIEW OF THE AIR POLLUTION PROBLEM IN CHINA III. ENFORCEMENT OBSTACLES IN AIR POLLUTION        REGULATION IN CHINA        A. Economic Reasons        B. Legal Reasons        C. Political Reasons        D. sociocultural Reasons IV. THEORETICAL FOUNDATIONS FOR POLLUTION EMISSION        TRADING AND ENFORCEMENT        A. Theoretical Foundations of Pollution Emission           Trading        B. Emission Trading and Enforcement        C. Performance of the United States' [SO.sub.2] Emission           Trading Program        D. Enforcement Assessment of the United States'           [SO.sub.2] Emission Trading Program           1. Participation Enforcement           2. Compliance Enforcement V. Pollution Emission Trading in China        A. China's Application of Pollution Emission Trading           1. The Starting Period (1987-2000)           2. The Experimental Period (2001-2014)           3. The Expansion Period (Post-2014)        B. Performance of China's Pollution Emission           Trading Practice        C. Enforcement Assessment of the Emission Trading           Programs in China           1. Participation Enforcement           2. Compliance Enforcement        D. Prospects of China's Emission Trading Programs          in Dealing with Enforcement Problems VI. Conclusion 

I. INTRODUCTION

In recent years, air pollution problems in China's major cities, such as the recurring serious smog and haze in Beijing, has reached a "crisis level," raising widespread public criticism of the government's sluggish response to this problem. (1) To manage the historic air pollution levels, the Chinese government "declared a war" against pollution in March 2014. (2) Additionally, in August 2014, China's central government announced that it would expand the application of its emission trading mechanism after experimenting with a market-based approach through several pilot programs beginning in 2007. (3) The announcement stated China's ambition to establish a nationwide emission trading market by the end of 2017. (4) However, since China has experienced serious enforcement problems with its previous environmental protection initiatives, (5) it is uncertain whether China's emission trading programs have actually succeeded and whether this market-based approach can really provide a solution to China's longstanding enforcement problems.

To shed light on these uncertainties, this paper will undertake a study of China's pollution emission trading programs and their actual performance with the goal of uncovering whether the emission trading programs have helped solve, or at least reduce, these enforcement obstacles. Since China's emission trading programs were developed in light of the United States' experience with such programs, emissions trading in the United States provides important context for understanding China's emission trading practices. This paper thus includes results from a comparative analysis of emission trading practices in both China and the United States.

This paper is composed of the following five sections. Section I provides an overview of the seriousness of China's air pollution problem. Section II discusses the major obstacles for China's environmental regulation enforcement. Section III introduces the theoretical foundations of pollution emission trading, the relationship between those foundations and enforcement, and how emission trading was adopted and enforced in the United States. Section IV presents an empirical study of the actual performance of the emission trading programs in China, with the goal of showing how these programs have responded to the enforcement problems. Finally, this paper will conclude with some policy implications.

II. OVERVIEW OF THE AIR POLLUTION PROBLEM IN CHINA

China's air pollution has become a nationwide problem that severely threatens public health and China's long-term economic development. (6) The negative externality of China's air pollution has also potentially impacted the air quality of neighboring or even distant countries. …

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