Sunday, January 13, 2008

The environment and China's good intentions

All Roads lead to China is in a cheerful mood after reading a white paper giving extensive details on China's intentions in dealing with its environmental degradation caused by its energy usage by the State Council Information Office.
I have to resume my traditional role of the devil's advocate again, as I did earlier when the media across the board cheered about China's ban of plastic shopping bags. There is absolutely nothing wrong when you look at the intentions of the central government for many of China's key problems. The main problem is that when those good intentions have to be translated into rules and regulations, they tend to get watered down dramatically when they arrive on a local level.
On a macro-level the central government does have a few more or less effective tools, as it can set interest rates, tighten the leash of its banks or change visa-regulations to mention a few. The central government has those tools also for the energy market and by setting prices far below the market prices, it is doing exactly the opposite from what could be the start of an effective environmental policy.
Getting good intentions written down in white papers is still important, but not really an indication of what direction the country is going to take: the real work still has to begin.

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