Another step
By LI JING (China Daily)
2008-09-01
In its battle against environmental woes, China has added an additional green law to its expanding arsenal of legal weapons.
Last Friday, the Circular Economy Promotion Law passed the third and final review by the Standing Committee of the National People’s Congress (NPC), China’s top legislature, and will take effect beginning next year.
The law will provide a framework for promoting a new model for economic growth, which requires that resources be used with higher efficiency and reused and recycled when possible.
The alteration of the law’s name features the biggest change in the third review by the lawmakers: “promotion” is inserted after the circular economy, as experts suggest this economic model is still at the initial stage in the country.
Cheng Jinpei, vice-minister of Science and Technology, says that it is urgent for China to switch to a circular economy, and to have a legal norm to guide the change. As a result, the bill at the moment will mainly focus on basic principles, rather than concrete restrictive rules.
Wang Jianzeng, deputy director at the China Association of Resource Comprehensive Utilization (CARCU), denies that the change of the law’s name suggests reluctance by the central government to promote the circular economy, because “the content remains the same”.
But Wang admits that it is difficult for the country to realize the new development model in a short term.
“China has been focusing its attention on economic development through massive exploitation of natural resources in the past decades. It will take time to change, ” Wang tells China Business Weekly.
The Circular Economy Promotion Law is expected to push the change, as the country is now legally bound to saving resources and protecting the environment.
The law stipulates that governments at all levels should make plans on the development of the circular economy, establish systems to control energy use and pollutant emissions, strengthen management of companies with high energy and water consumption, and make policies to divert capital into environmentally friendly industries.
It also introduces reward and punishment systems for companies, encouraging them to develop a recycling economy and making them responsible for the recycling of their products.
The law requires the government to allocate special funds for supporting technological research, key projects, education, capacity building and the establishment of an information network.
Incentives, such as favorable tax and investment policies, will also be offered to organizations that take an active role in China’s circular economy.
But the new green law has missed the chance to integrate a market-oriented measure to optimize the utilization of resources.
During the second reading of the draft law in June, a progressive pricing system for household use of water, electricity and gas in urban areas was deleted from the draft.
The progressive pricing method regulates that people pay higher bills when they consume over a government quota.
However, after researches and pilot projects, members from the Standing Committee’s Legal Affairs Commission decided that it is still too early to implement progressive pricing nationwide.
This is because it is difficult to determine a reasonable and fair quota for each household, especially for some large families. Low-income families, which are sensitive for the price fluctuations, may face pressures from the increased bills, according to the lawmakers.
Currently prepaid-card meters for water, electricity and gas have been installed in many cities. It will require a large amount of investment, as well as technology support to alter the meters to fit with the new pricing system, which is also considered a major obstacle.
The Circular Economy Promotion Law retains the market-based idea, which says, “the country will adopt a pricing policy conducive to save resources, and guide the whole society and individuals to make better use of resource products such as water, electricity and gas.”
The draft law was submitted for the first reading one-year ago, but China’s efforts to develop a circular economy was much earlier than that.
Inspired by Japan and Germany’s recycle economies, China designed its own version based on the widely accepted 3R principle – “reduction, reuse, and recycle” in late 1990s.
The average energy consumption per unit product for energy intensive industries, such as steel, electric power and cement in China is 20 percent higher than in the developed countries, according to Feng Zhijun, vice-chairman of the Environmental and Resources Protection Committee of the NPC.
“But the overall recycling rate of mineral resources is 20 percent lower than the international level,” Feng says.
The country’s top leaders have realized that continuing this unsustainable model of development is simply not possible.
The concept of the circular economy was officially raised as a target for China’s future growth in 2004. The State Council, or China’s cabinet, issued a file about promoting it in July 2005, making it a key guideline in the 11th Five-Year Plan (2006-2010).
Since 2004, the country started to sponsor a series of pilot projects of the new economic model in specific sectors, such as coal and chemical production, electricity generation, building materials and recycling of household appliances.
A total of 10 cities and provinces, such as Beijing, Shanghai, Shandong, Guiyang, also experimented with building a circular economy.
Lessons and experiences drew from such practices have provided useful references to the legislators when drawing up the draft law on circular economy.
In the past several years, China has strengthened its efforts to further improve its environmental and ecological situation through the adoption of more forceful green legislation.
The enacting of Energy Conservation Law on April 1 this year, and Law on the Promotion of Cleaner Production in 2003, as well as other environment related laws and regulations, established a legal framework for China’s green measures aimed at sustainable development.
“Although these laws share the same goal, their contents have a different emphasis, for example, on recycling of resources through a new model of economic development and on energy conservation in all walks of life,” says Wang Jianzeng from CARCU.
“Together they make a sound legal system to guide the green efforts,” says Wang.
