International Business Lawyer, Business Attorney, Fukuda Law Firm, San Francisco, California

China Environmental Law

China has evolved rapidly into a major economic powerhouse over the past 2 decades. Certainly, China is the fastest growth economy worldwide. This rapid growth has improved income and and other eoncomic factors, this growth has been at the expense of the environment and other concerns. Coal pollution is seen throughout the coast, extending to the Great Wall. Human health has suffering greatly due to air and water pollution.

In recognition of these problems, China has enacted new regulations to begin to curb environmental impacts. Policies have been adopted by the State Environmental Protection Administration (SEPA), formed in 1998 and approved by the State Council. SEPA is charged with the responsibility to create a Chinese environmental policy and regulations and to provide technical advice regarding international and national environmental problems.

To date, pollution continues to increase. China enacted the Clean Production Promotion Law in 2002. This law created programs for remediation of industrial and urban pollution.

Air Pollution
The World Health Organization (WHO) noted in 1998 that 7 of the 10 most polluted cities in the world are in China. The 2 most common air pollutants are sulfur dioxide and dust from coal combustion. These pollutants generate acid rain which is dispersed on roughly 1/3 of the Chinese land mass. Boilers and furnaces constitute the principal source of metropolitan air pollution.

In 1999, Beijing required city buses to convert to liquefied petroleum and natural gas. Within 4 years, Beijing owned the largest number of buses fueled by natural gas throughout the world. Other transportation systems are being converted. The Air Pollution laws in China were significantly revamped in 2002. However, a year later, SEPA still indicated its pessimism regarding the prospects of significantly reducing air pollution. Energy Emissions
China's industries are the most serious polluters throughout the Far East. China consumes one half of the energy requirements of the Far East (excluding Japan). China accounted for almost 10 percent of world energy consumption in 2001. Forecast indicate that China will be increase its energy consumption in the next decade sustantially relative to other countries throughout the world.

Over 60% of China's energy is derived from coal, 1/4 from oil and 10% from hydro power and natural gas. Industrial usage is continuing to lead the consumption trends in China.

China is the second largest emitter of carbon dioxide (behind the U.S.) i.e. 12% of the world's emissions. Forecasts reveal that China's carbon dioxide emissions will increase by another 5% by 2025. Mitigation methods include technology designed to reduce emissions from industrial boilers and machines. China is also working on improving efficiency of theis vehicles. The government has committed to additional improvements to transportation infrastructure. This will increase energy consumption by over 5% per year. This rapid growth without commitment to new technology will certainly increase carbon emissions substantially.

China has made strides in developing cleaner fuels such as natural gas, methane and hydropower. China has developed natural gas and methane infrastructure by installing a number of heat and power plants and developing renewable energy sources, including wind and solar and photovoltaic electric energy.
China has not agreed to emissions reductions in the Kyoto Protocol. China's domestic energy policies are focused upon reducing energy costs and local pollution.

Energy Efficiency
China has reduced the amount of energy and carbon consumed for its industrial output. The Chinese government has passed energy efficiency measures and industries have adopted modern energy efficient industrial equipment. China has attempted to reduce coal and petroleum subsidies. However, coal consumption has continued to rise.

Per Capita Energy Consumption
Although China is second in total energy consumption behind the U.S., its per capita energy consumption and carbon emissions are lower than the world average. Overall China's energy consumption and carbon emissions are substantial because of the country's large population and heavy coal usage. Renewable Energy

Renewable energy e.g. hydro power accounts for the 2nd largest share of China's electricity generation. China is working with the United Nations and the U.S. on a renewable energy strategy to reduce pollution. Wind energy can be generated in the northern and western regions and on the coast.

Solar energy usage in China includes household consumption, television relays and communications. Solar consumption is increasing steadily. For example, solar kitchen range usage is critical because pollution from indoor coal burning is a major detriment to the environment and human health.

Hydro electricity will increase significantly in China. For example, in 2009, the completion of the 3 Gorges Dam will be an significant source of energy for China's growing electricity needs and a method of controlling the Yangtze River floods. However, there are related environmental impact from the flooding behind the dam. The contentious dam also could create environmental problems. In particular, the government has not addressed concerns regarding the accumulation of toxic materials and other pollutants from low-lying industrial locations that will be inundated by the dam.

In the next 20 years, nuclear power is projected to constitute 4% of China's electricity generation.

China after Year 2000
Energy consumption and carbon emissions will be certainly impacted by myriad factors such as business development, population growth, industrial mix, improved energy efficiency and the new methods of energy generation. China is an unpredictable mixture because of its rapid industrialization. It is expected that continued rapid industrial growth, population increase and improved living standards, energy consumption will continue to grow rapidly with its related repercussions, i.e. carbon emissions.

It is imperative for China to reduce energy generation via coal. China has adopted measures to promote cleaner fuels, including taxes on high-sulfur coals, and coal free zones in Beijing. There are new plans to install natural gas pipelines. Other Chinese cities are undertaking related measures.

In the wake of China's rapid industrialization, its society needs to remedy critical environmental problems. Major issues include air and water pollution and monitoring emissions. China's State Environmental Protection Administration may implement laws requiring remediation by polluters. This may create funds for pollution abatement. Following the lead of western countries, China needs to adopt policies motivating business to reduce pollution and requiring polluters to reduce pay for all abatement expenses. At the same time, China must seriously enforce these laws.

Certainly, there are many other programs that can be implemented in regard to environmental protection. Chinese entities that implement environmentally sensitive measures may be offered tax benefits and subsidies based upon their pollution treatment measures and other environmentally friendly efforts. This is the next critical step in China's modernization efforts.