ENV GLOBAL FORUM OCT 2016 - Session 4 - ShiJi Gao "Environmental and industrial policies"

1. OECD Global Forum on Environment
“Towards quantifying the links between environment and economic
growth”
Paris, 24-25 October 2016
Environmental and Industrial Policies
-- The Chinese Experiences
GAO Shi-Ji, Ph.D
Institute for Resource and Environment Policies
DRC， China
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2. China’s Environmental Governance in the
Context of Ecological Civilization
• An integrated and comprehensive approach:
To establish the strictest source protection system, process control
system, damage compensation system and accountability system.
• An effective regulatory system at the core：
To build and empower an effective environmental regulatory
system.
• Complementary policies:
Environmental + Industrial Policies
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3. Environmental Policies： Command &
Control and Market-Based
Command and Control type:
• Standards
• Environment Impact Evaluation
• Emission Quantity Control
• Emission Licensing
• Information Disclosure
Market-Based Policy Instruments:
• Emission Charge
• Emission Trade
• Green Pricing
• Green Taxing
• Green Procurement
• Green Financing
• Pollution Insurance
• Green Trade
• Ecological Compensation
• Ecological Labeling
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4. Industrial Policies： Traditional and Green
Traditional Industrial Policies: `
• For Declining Industries: supporting restructuring and rationalization of industries
to eliminate excess production capacities
• For Emerging Industries: supporting learning to acquire technological capability,
produce and capture knowledge spillovers
Green Industrial Policies:
• Greening Industries： incentives to improve resource productivity and
environmental performance in traditional industries .
• Green Industries: incentives to create green industries delivering environmental
goods and services in an industrial manner, and providing new green products for
green growth
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5. Environmental and Industrial Policies： Two
Cases in China
Case I: The Sudden Drop of SO2 Emission in China:
The carrot and stick policy worked: The “regulation plus subsidy” policy has
encouraged coal-fired power plants in China to install and use desulphurization facilities
(scrubbers), thus reduced total SO2 emission quickly.
Case II: China’s Solar Photovoltaic (PV) Industry
Industrial Policies have encouraged entrepreneurial action to accelerate the
development of China’s solar PV industry (designated as a strategic new industry).
• Government supports (national): “Brightness Project”; feed in tariff; “Golden Sun” & “Roof
program”; R&D Program; Poverty alleviation Program
• Entrepreneurial efforts: mobilizing resources globally; adjustment to global competition
• Local governments’ role important
Steep learning curve in the solar PV industry achieved! 5

6. Turning Points for Emission of Traditional
Pollutants Reached Earlier in China
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0
20
40
60
80
100
0
50000
100000
150000
200000
1973
1977
1981
1985
1989
1993
1997
2001
2005
2009
2013
Growthrateofelectricitycapacity(%)
ShareofCoalfiredpower(%)
SteelProduction(10,000ton)
InstalledElectricityCapacity(10MW)
China’ Steel Production and
Electricity Production
钢产量（万吨）
6000千瓦及以上电厂发电设备容量
电厂发电设备容量增速
火电发电设备容量比重
Data Source: World Bank, Wind, DRC calculations
China’s COD and SO2 emission peaked in 2007, with GDP per capita of USD2460, ammonia and NOx
peaked in 2012 with GDP per capital of USD 6076. In both cases, GDP per capital levels were much
lower than those of advanced industrial countries when they had their own emission peaked respectively.
Steel (10,000 tons)
6MW and above power plant
Growth of power capacity
Percentage of coal fired power plants
0.0
500.0
1000.0
1500.0
2000.0
2500.0
3000.0
Total SO2(10,000 tons)
SO2 Adjusted 1997
SO2 Adjusted 2011
Total NOx
Nox Adjusted 2011

7. Turning Points for Emission of Air Pollutants: China vs
Industrial Nations
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Data Source: Chen et. al, 2015, DRC
Pollutant
s
Peak (Turning Points)
GDP Per Capita
(current USD)
GDP Per Capita
（OECD data
2010）
GDP Per Capita
(1990 international
USD )
SO2
USA 1974 6948 23184 16491
UK 1968 1896 21160（1970） 10410
Europe 1970s － － 10195 (29 countries)
Japan 1965～1974 920～8954 － 5934～11145
China 2006 2069 5221 6303
NOX
USA 1994 26578 34549 24130
UK 1989 15057 22314 16414
Europe 1990s － － 15966(29 countries)
Japan 2002 31235 － 20517
China 2012 6188 － 8032（2010）
VOC
USA 1970 4998 21160 15030
UK 1990 17805 22058 16430
Europe 1990s － － 15966(29 countries)
Japan － － － －
China － － － －

8. 8China’s Industrial Policies Compared with Other Countries’
(From Zhang et. Al, 2016)

9. Thank you
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