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Editor’s note: The State Environmental Protection Administration (SEPA)
is taking on polluting manufacturers from a new angle.

SEPA is trying to shift from unenforceable administrative orders to a
policy approach based on economic incentives to encourage environmental
protection and sustainable use of resources.

Pan Yue, deputy director of SEPA, spoke to Sun Xiaohua about the
environmental watchdog’s new policy direction.

Q: Three new policies have been launched recently - green credit,
insurance and securities - that are expected to have a broad impact on the
country’s economy and environment. How effective do you think they will
be?

A: Frankly, I don’t expect them to produce a dramatic impact in the
short term because any new policy will run up against conflict with
locals, industry and government.

Also, it’s unlikely the new policies will meet the public’s high
expectations.

So really these new policies are just the beginning of a shift in
environmental management from administrative orders to market-based
instruments.

However, I hope the public recognizes the promise and resolution made
by SEPA, which has been trying to set up a long-term, effective system.
I also hope SEPA has the public’s confidence.

Q: What are the main obstacles in the way of the green credit,
insurance and securities policies?

A: Every environmental-economic policy faces difficulties. But they all
have something in common - the established distribution of interests
will be rearranged. It will spark conflicts between locals, government
and industry. They will try their utmost to protect vested interests.
And that’s the core problem.

Other problems include a lack of information-sharing between local and
central governments, which is needed for policymaking and assessing
enforcement.

Basic scientific research is not enough to assess the environmental
damage caused by manufacturing and consuming various products.

The effectiveness of government administration will also decide the
consequences of these policies.

Q: How did SEPA work with economic departments to create these new
policies?

A: The economic departments were the driving force behind the new
policies. Without them, this policy shift would never have happened. I would
like to extend my personal gratitude for the support of all the
economic departments involved.

For example, the China Banking Regulatory Commission and the People’s
Bank of China, the central bank, backed the green credit policy,
incorporating social and environmental issues in project financing.

The China Securities Regulatory Commission listed environmental
information disclosure as a prerequisite for initial public offerings of
shares.

The Ministry of Finance and the State Administration of Taxation are
looking into an environmental tax and the possibility of trial
eco-compensation projects.

The National Development and Reform Commission is pushing forward the
reform of pollutant discharge fee collection.

And the Ministry of Commerce has strengthened environmental inspections
of exporters.

Eco-friendly policymaking and implementation is systematic work and
requires the cooperation of all departments.

SEPA wants to offer its help across the board.

Q: Implementing new policies depends on cooperation at the local level.
How will SEPA train staff to make sure these policies are enforced?

A: These new policies are a new direction for the environmental
watchdog. Those working on the ground need to understand them and translate
them into action.

SEPA recently invited experts in economics and held several training
programs for local environmental protection bureaus.

Only when they understand the new policies can the policies produce the
desired outcome.

Q: Is SEPA considering legislating these policies to make them
enforceable?

A: Legislation is the next step. SEPA will closely watch the trial
enforcement of the new policies and improve them before we try to get them
passed into law.

I believe in administration in line with the law. In recent years,
action on environment protection has been taken in accordance with the law
and we have pushed forward green legislation. For example, the
environmental impact assessment policy gave rise to legislation in that area.
Public hearings on pollution of the lake in Yuanmingyuan Park led to
regulation of public participation in environmental impact assessment and
information disclosure measures.

SEPA will join forces with legislators in the future to strengthen
punishment for breaches of environmental laws and to clarify legislation
and regulations.

Q: How do you respond to criticism that the current economic climate is
not suitable for these policies?

A: Although there are some doubts about the maturity of China’s
economic climate, we can’t wait any longer to tackle the nation’s severe
environmental problems. SEPA must take the initiative.