Policies for environment protection by regulation and economic incentives.

access and environmental standards for new projects amid efforts to rein in the rapid expansion of energy-gorging industries including power, steel, oil refinery, chemicals, construction materials, and metals.

"Restrictions should be imposed on exports in these sectors as soon as possible…We will continue to curb the energy-guzzlers by further adjusting exports rebates, levying more exports tariff, and reducing exports quotas… China will cancel preferential policies on the industries like lower tax, electricity and land costs.

"Outmoded production methods must be eliminated at a faster pace and how this policy is implemented by local governments and enterprises will be open to the public and subject to social supervision… The ten nationwide energy saving programs, such as developing oil alternatives, upgrading coal-fired boilers and saving energy indoors, will save China 240 million tons of coal equivalent during the 2006-10 period, including 50 million tons this year…”

Note that Premier Wen’s policy statements for environmental protection include (1) restricting the quantities of outputs, especially those that are environmentally polluting and high-energy consuming, by tightening land use and credit supply, (2) setting environmental standards for production, especially in new projects,  and (3) improving method of production to make it environmentally friendly.  Category (1) includes the restriction of export production that affects the environment by means of “adjusting exports rebates, levying more exports tariff, and reducing exports quotas.”

Policies for environment protection by regulation and economic incentives.

China has set up a system for monitoring the discharge of pollutants but it is far from perfect because it relies on local government officials to implement the system. We will discuss the difficulties of implementing environmental policies in section 4. For now we continue to examine the polices for environmental protection introduced, given the monitoring system, however imperfect.

To reduce the amount of sulfur dioxide emitted from the burning of coal in the factories, the Chinese government has imposed heavy penalties to such emissions and encouraged the building of equipment to capture sulfur dioxide. However the use of such equipment