China’s State Council released an “Opinion Concerning Establishment of a Long-Term Mechanism for Early-Warning and Monitoring of Environmental and Natural Resources Carrying Capacity,” which will halt major projects in heavily polluted areas, according to a report from the official Xinhua news agency. The opinion also calls for authorities to use a new pollution alert system that tracks areas ranging from “green non-alert zones” that are the least polluted to “red zones”, where environment and natural resource pressures are greatest.
The opinion provides that in “red zone” areas, government authorities will suspend approval for projects. Companies responsible for environmental damage and local officials failing to implement the ban strictly enough will be held accountable, and could even be prosecuted for criminal liability. Conversely, the government may provide a financial reward for “green non-alert zones”.
The initiative is the latest development in China’s environmental crackdown, which has intensified this year, rattling the country’s ports, factories, and commodities markets, in particular. Economic analysts have suggested that China will sacrifice 0.2 percentage points in economic growth and approximately 40,000 jobs this year to achieve cleaner air in Beijing, Tianjin, and Hebei alone.
Teams of more than 5,000 inspectors launched environmental inspections across China in July 2016 under the direction of Ministry of Environmental Protection officials. The fourth and final round of inspections, which began in August 2017, will complete coverage of mainland China’s 31 provincial-level regions. Some 18,000 polluting companies have faced sanctions so far, with fines totalling more than 870 million yuan (US$132.2 million).
The Chinese government has remained true to its word since launching its “war on pollution” in 2014, and has prioritized environmental protection to ensure greener, more sustainable development. Although halting construction projects and centralising environmental inspections can be effective short-term measures, China’s ability to ensure long-term environmental protection will largely depend on how effectively the country implements the policy reforms it is currently developing with respect to issues such as emissions, project permitting, cap-and-trade, and soil pollution.
This post was prepared with the assistance of Tegan Creedy in the London office of Latham & Watkins.
