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北京大学环境学院(环境科学中心) 张世秋 Zhang Shiqiu College of Environmental Sciences, Peking University Beijing 100871 Zhangshq@ces.pku.edu.cn zhangshq@pku.edu.cn tel: 86-10-62764974 http://www.ces.pku.edu.cn; Or 162.105.78.83 Zhang Shiqiu

CES, Peking University

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Research Areas • 研究领域

• Research Areas

– 环境经济学 – 环境政策

Zhang Shiqiu

– Environmental Economics – Environmental Policy

CES, Peking University

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目前主要研究方向和研究课题 Current research focus • 环境影响经济分析 到定价政策研究 (全社会成本定 价,以及定价策 略) – 环境经济政策,特 别是排污收费以及 排污权交易 Zhang Shiqiu

– Economic assessment of environmental impacts to pricing policy study • pricing based on overall social cost

– Market based instruments, especially pollution charges (levy) and emission trading

CES, Peking University

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目前主要研究方向和研究课题 Current research focus • 经济发展与环境: 贫 困与环境问题 – 脱贫政策环境效果分 析 – 环境政策的收入分配 影响分析

Zhang Shiqiu

• Economic development and environment: poverty alleviation and environment – Environmental effects analysis for the poverty alleviation strategy and policies – Distribution effects of environmental policies

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目前主要研究方向和研究课题 Current research focus • 全球环境问题:履约 决策支持

Zhang Shiqiu

• Global environmental agreements

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通过环境经济分析、环境管理与政策 推进区域污染防治效率及有效性 Innovation of Environmental Management and Policy for Improving Cost-Effectiveness of Environmental Management 张世秋 北京大学环境科学中心 ZHANG, Shiqiu Center for Environmental Sciences Peking University Zhangshq@ces.pku.edu.cn Zhang Shiqiu

CES, Peking University

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Key Contents • Challenges facing China’s Environmental Protection • Weakness of Existing Environmental Management and Policy • The way to innovate the China’s and regional Environmental Management and Policy Zhang Shiqiu

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Challenges Facing Environmental Protection in China • New features of environmental pollution • Huge damages caused by environmental pollutionHuge damages caused by environmental pollution • Declines of the environmental policy effects: policy design and enforcementDeclines of the environmental policy effects: policy desig... • balance GROWTH AND ENVIRONMENT: how to maintain environmental quality under the context that to short the income gap, poverty alleviation and urbanization • Shortage of environmental investment, and its inefficient utilization • Undeveloped environmental industry Zhang Shiqiu

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Huge damages caused by environmental pollution – 3~8% of GNP – Health effects is getting serious, and is major part of the damages

Zhang Shiqiu

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Environmental Regulatory System has been set up, however • “one of the most comprehensive environmental regulatory system in the world” • Environmental situation in some areas has been getting worse • Failures existed: Why and where? – – – –

Policy design? Enforcement? Right policy tools? Right policy targets?

Zhang Shiqiu

CES, Peking University

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Declines of the environmental policy effects: policy design and enforcement – Management and policy Context changes—transition from planning economy to market economy – Target group changes: SMEs and residential – Effective and efficient policy instruments is in question – Sunman, Munasinghe, Zhang Shiqiu. Economics, Environment, and Industry in China. A Publication of the China Council (CCICED). Aileen International Press. Maryland U. S. A 1999

Zhang Shiqiu

CES, Peking University

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Weakness of existing environmental management and policy • Weak academic support especially environmental economic analysis, for example, TEC , damages valuation, especially health, priority identification • Cost effectiveness is in question – Command and control basis – Weak incentives • Low charge rate compared with reduction cost (SO2, for example); and damage cost • Charge rate: 200 RMB/ton, reduction cost: arround or exceed 8001200 RMB/ton, damage cost: over 1800 RMB • Zhang Shiqiu, Duan Yanxin, Marginal Cost Pricing for Coal Fired Electricity in Coastal Cities of China: The Case of Mawan Electricity Plant in Shenzhen 1999

Zhang Shiqiu

CES, Peking University

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Weakness of existing environmental management and policy • Bias of Target groups: coverage of the policies in practice – Focusing on large scale enterprises, but not – TVIEs and municipal – Rural Environment

• Hard to address the Trans- boundary pollutions: – Weakness of provincial and city based management system Zhang Shiqiu

CES, Peking University

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Weakness of existing environmental management and policy • Lack concern on Reconciling with macro economic policies---institutional arrangement problems – Policy priority concerns: – Energy, water, land • Guiyang, energy conservation for small-medium size boilers, 10% energy conserved, 30% of the ground ambient concentration reduced • Zhang Shiqiu

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How to balance the poverty alleviation (economic growth) and environment – Urbanization process – Implications on environment • By poverty, and • By the people who is getting rich – Environmental impact on various income groups • Poor are affected most, however they may not be the biggest benefitiary of the environmental quality improvement

Zhang Shiqiu

CES, Peking University

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Changes of per capita GDP and poverty population 1978-1999 changes of poverty population and per capital GDP in China (1978-1999) 7000

Per Capi t a GDP ( RMB)

6000 5000 4000

pover t y popul at i on, 0. 1 mi l l i on )

3000 2000 1000

19 7 19 8 7 19 9 8 19 0 8 19 1 8 19 2 8 19 3 8 19 4 8 19 5 8 19 6 8 19 7 8 19 8 8 19 9 9 19 0 9 19 1 9 19 2 9 19 3 9 19 4 9 19 5 9 19 6 9 19 7 9 19 8 99

0

Zhang Shiqiu

CES, Peking University

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Per capita income changes in rural and urban China Per Capi t a i ncome changes i n r uban and r ur al Chi na 6500 6000 5500 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0

ur ban r ural

1978

Zhang Shiqiu

1980

1985

1990

CES, Peking University

1995

2000

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How to balance the economic growth and environment • Opening economy and western development strategy: pollution heaven? COMPETIVENESS CONCERN –WTO • Pollution transfer problems – Urban to rural – Eastern to western areas – FDI—foreign and abroad to domestic

• Zhang Shiqiu. “FDI and Environment: situation and challenges in China” • Zhang Shiqiu and AN Shumin. Poverty and Environment in China. CCICED, 2001 Zhang Shiqiu

CES, Peking University

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Urbanization process in China

Zhang Shiqiu

CES, Peking University

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Low development of Environmental Industry • Low development of environmental industry – Trade of the environmental market in the world: 356 billion USD in 1993 and 600 billion USD in 2000, projected 7.5% increase annually – Net output value of environmental industry: 6.3 billion USD for China (1997), 1.1% of world total (550 billion)

Zhang Shiqiu

CES, Peking University

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Key Problems for address the regional sustainable development • Cost effectiveness—least cost strategy-- of the various solutions – – – –

Technology alternatives Strategy standards Policy: command and control; MBIs; voluntary; and 社会制衡型政策

• Cost and responsibility sharing – equity issue – policy effects and its distribution – Victim – beneficiary

• Policy solution • Management system: institutional related issues—local based Zhang Shiqiu CES, Peking University 21 to regional based


Innovation of Environmental management

• Fundamental basis: establishment and allocation and trade of the ecological/environmental rights and interests • 3 key elements • Environmental policy: market creation and market scope • Environmental investment: improve development of environ. Industry and to make the potential market being realistic • Public awareness: demand on environmental quality, products, and environmental policy

Zhang Shiqiu

CES, Peking University

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Key issues should be concerned with • Improve the enforcement and costeffectiveness of environmental policy – Use of economic policies/MBIs—get the price right • Key policy: pollution levy and emission trading

– Combination of command control and MBIs—further 社会制衡 Zhang Shiqiu

CES, Peking University

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Chinese and regional Context Reduction responsibility increasing over time Public awareness of environmental problems and demand for environmental protection are increasing Costs will increase over time unless flexible policies are used Zhang Shiqiu

CES, Peking University

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Why economic instruments? • •

• •

Changes of social and economic contexts. Changes of the polluters, targets groups due to changes of the social and economic contexts---more flexible policy and instruments are needed Highly demanded on human and financial resources (management cost) by traditional c-c instruments Fund raising function of MBI’s is helpful to solve the problems of shortage of environmental investment constrained by capital supply and investment mechanism Geographical, economic, social differences in China can not rely only on uniformed C-C instruments to solve the environmental problems

Zhang Shiqiu

CES, Peking University

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Why economic instruments? • The cost effective implementation of TEC require right policy – Emission trading—key obstacles and problems needs to be solved • Base year? • Allocation of the allowance • Conflicts and reconciling with existing policies • Compliance cost: Transaction cost? • Monitoring and data reporting, supervision • Market operation? – References: Zhang Shiqiu. • Tradable Quota System for ODS • Bidding system for ODS • Emission trading for SO2 for electricity generation sector. (On going project)

Zhang Shiqiu

CES, Peking University

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Academic findings and achieves are highly needed for an effective regulatory system • How to define the environmental/resources right or interest (property rights) • Valuation and economic analysis for environmental damages/benefits, especially for health impacts – technology transfer approach? • Distribution effects, environment policy, environmental changes… • •

Cost effective analysis of alternative and solutions Develop policy tools; Emission trading for example—especially for SO2 – Regional – Electricity transfer – Future policy initiatives regarding renewable energy quota assignment

Zhang Shiqiu

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