Environmental Politics, Vol. 15, No.

2, 149 170, April 2006

Chinas Environmental Governance in Transition

ABSTRACT In the face of unprecedented economic and industrial growth levels, China is rapidly developing its system of environmental governance. Coming from a conventional command-and-control approach to environmental policy, which tted well its centrally planned economy, transitional China is swiftly reforming and diversifying its environmental approaches, instruments, arrangements and legal regulations. This article aims to grasp and assess the direction, extent and speed of change in Chinas environmental governance. New relations between state, market and civil society, and an opening up towards the outside world characterise new modes of environmental governance that try to turn Chinas development path in more sustainable directions.

Introduction China has been witnessing an almost unprecedented period of continuous high economic growth during the last 15 years. The modernisation and transition process set in motion in the mid 1980s, started to accelerate and mature in the early 1990s, showing average national economic growth percentages of around 8 per cent and more (Figure 1). During the same time frame the Chinese economy opened to the global market, resulting in increasing international trade, growing Foreign Direct Investment inows (and recently also outows), and greater international travel by Chinese citizens. Economic development has been quite uneven, both sectorally and regionally. The eastern provinces and the industrial sectors have made the most contribution to the countrys economic acceleration, while economic development in the agrarian sectors of the west has been much less pronounced and in places is even stagnating. Modernisation patterns and technological innovations dier signicantly between regions and between sectors. At the same time, not all groups in society have proted to the same extent from these developments. In general, a
Correspondence Address: Neil T. Carter, Department of Politics, University of York, Heslington, York YO30 7AA, UK. Tel.: 01904 433558; Email: [email protected] ISSN 0964-4016 Print/1743-8934 Online/06/02014922 2006 Taylor & Francis DOI: 10.1080/09644010600562765

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Figure 1. Economic and industrial growth percentages in China, 19962004. Source: World Bank data.

growing inequality can be witnessed in the country, where a new rich upper middle class has proted from economic development and access to the global economy, while signicant parts of the Chinese population have suered from rural marginalisation, the closing of inecient state factories and reductions in the state bureaucracies. As Shapiros (2001) impressive study illustrates, neither imperial nor Maoist China avoided environmental degradation, and the repression of human beings at least paralleled violence by humans towards nature. But rapid economic and industrial modernisation and development ushered in a new phase of continuous pressure on the environment. In this new phase there is no simple mono-causal and one-directional way in which economic development relates to the environment. On the one hand, economic growth, industrialisation (including some agricultural sectors), further urbanisation caused by a migrating rural population, increasing consumption levels, accelerated extraction of minerals and ores, and growing air and car transportation have resulted in increases in resource use and higher pollution levels. The increases (and predicted trends for the next decade) in car ownership, the penetration of durable consumer goods such as televisions, mobile phones, refrigerators and personal computers, and energy use are regularly reported in western journals and newspapers. On the other hand, technological and management innovations and developments, the entry into global markets, the increasing capacity of environmental state institutions, the commitments to international environmental treaties and the growing environmental awareness of Chinas new middle class and ruling elites1 have contributed to increased eciencies in resource use, the adoption of environmental technologies, cleaner products, lower emission intensities per unit of product, and the closing down of some inecient (and thus heavily polluting) factories. The overall impact of these contrasting tendencies diers, as can be expected in such an enormous country, between provinces and regions, between economic sectors, and among the social groups confronted with the positive and negative economic, environmental and social consequences of these

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developments. As in many countries, there is no one clear tendency in China. We can observe neither an overall tendency towards environmental decay jeopardising the global sustenance base, nor a general trend towards greening the economic, political and social institutions and practices. Understanding and interpreting current environmental developments in China in terms of a national environmental Kuznets curve, makes little sense. To evaluate the way that China is currently dealing with environmental problems and challenges, and the successes, failures and dilemmas it faces, we are in need of much more detailed analyses and insight into various institutional developments and social practices. These analyses are further complicated by the fact that Chinas system of environmental governance is both very much in the making and under constant change and transition due to a uid social environment, both nationally and internationally. This introduction sets the stage for such dynamic analyses by rst describing the historic development of what we might call Chinas environmental state, including its successes and failures (some of which will be further elaborated in other contributions). The subsequent sections introduce the developments in those Chinese institutions that aim to contribute to diminishing the environmental burden produced by Chinas unprecedented economic growth path. The Birth of Chinas Environmental State In the birth period of environmental management (in the 1970s and early 1980s) Chinas environmental protection system showed characteristics similar to those of other centrally planned economies, such as those in Europe before the fall of the Berlin Wall in 1989. These included limited citizen involvement; no independent environmental movement or NGOs; little response to international agreements, organisations and institutions; a strong focus on central state authority and especially the Communist Party of China (CPC) with restricted freedom of manoeuvre for both decentralised state organisations, para-statals and private organisations; an obsession with large scale technological developments (in terms of hard technology); problems with coordination between state authorities and departments, together with a limited empowerment of the environmental authorities (see Ziegler, 1983; DeBardeleben, 1985; Lothspeich & Chen, 1997). The further development of Chinas environmental reform strategy was not a linear process; there was no simple unfolding of the initial model of environmental governance invented thirty years ago under a command economy. Two main factors are behind a certain degree of discontinuity in Chinese environmental reform. First, the economic, political and social changes that China witnessed during the last two decades also aected the original model of environmental governance. Economic transformations towards a market-oriented growth model, decentralisation dynamics, growing openness to and integration in the outside world, and bureaucratic reorganisation processes have shifted Chinas environmental

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governance model away from those common to centrally planned economies. Second, China also witnessed the ineciencies and ineectiveness of its initial environmental governance approach, not unlike the state failures (Janicke, 1986) that European countries witnessed in the 1980s before they transformed their environmental protection approach. The start of serious involvement by the Chinese government in environmental protection more or less coincides with the introduction of economic reforms in the late 1970s. Pollution control was initiated in the early 1970s, especially following the 1972 United Nations Conference on the Human Environment in Stockholm. In 1974 a National Environmental Protection Oce was established, with equivalents in the provinces, although its main development occurred after the enactment and implementation of the environmental laws and regulations since the late 1970s, with particularly rapid acceleration in the 1990s. Following the promulgation of the state Environmental Protection Law in 1979 (revised in 1989), China began systematically to establish her environmental regulatory system. In 1984 environmental protection was dened as a national basic policy and key principles for environmental protection in China were proposed, which include prevention is the main, then control, polluter responsible for pollution control (already introduced in the 1979 environmental law), and strengthening environmental management. Subsequently, a national regulatory framework was formulated, composed of a series of environmental laws (on all the major environmental sectors, starting with marine protection and water in 1982 and 1984), executive regulations, standards and measures. At a national level China has now some 20 environmental laws adopted by the National Peoples Congress, around 140 executive regulations issued by the State Council, and a series of sector regulations and environmental standards set by the State Environmental Protection Agency (SEPA). Institutionally, the national regulatory framework is vertically implemented through a four-tier management system, i.e., national, provincial, municipal and county levels. The latter three levels are governed directly by their corresponding authorities in terms of both nance and personnel management, while SEPA is only responsible for their substantial operation. The enactment of the various environmental laws, instruments and regulations through the last two decades was paralleled by a stepwise increase of the bureaucratic status and capacity of these environmental authorities (Jahiel, 1998). For instance, the NEPA, was elevated via the National Environmental Protection Bureau to the National Environmental Protection Agency (in 1988), and in 1998 it received ministerial status as SEPA. By 1995, the environmental state had over 88,000 employees across China and by 2004 it had grown to over 160,000 (see Figure 2).2 Jahiel (1998: 776) concludes on this environmental bureaucracy: Clearly, the past 15 years . . . has seen the assembly of an extensive institutional system nation-wide and the increase of its rank. With these gains has come a commensurate increase in EPB authority particularly in the cities. Although the expansion of the environmental state sometimes met

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Figure 2. Governmental sta employed for environmental protection in China. Source: China Environment Statistical Report (19912004).

stagnation (e.g. the relegation of Environmental Protection Bureaux (EPBs) in many counties from second-tier to third-tier organs in 199394), over a period of 20 years the growth in quantity and quality of the ocials is impressive (especially when compared with the shrinking of other state bureaucracies). Besides SEPA, the State Development Planning Commission (SDPC) and the State Economic and Trade Commission (SETC) are crucial national state agencies in environmental protection, especially since the recent governmental reorganisation in 1998. In between State Successes and State Failures Arguably, these administrative initiatives have contributed to some environmental improvements, although the widespread information distortion, the discontinuities in environmental statistics and the absence of longitudinal environmental data in China should made us cautious about drawing any nal conclusions.3 Total suspended particulates and sulphur dioxide concentrations show an absolute decline in most major Chinese cities between the late 1980s and the late 1990s (Lo & Xing, 1999; Rock, 2002), which is, of course, remarkable given the high economic growth gures during that decade. By the end of 2000 CFC production decreased 33 per cent compared to mid 1990s levels, due to the closure of 30 companies (SEPA, 2001). It is reported (but also contested) that emissions of carbon dioxide have fallen between 1996 and 2000, despite continuing economic growth (Sinton & Fridley, 2001, 2003; Chandler et al., 2002). Most other environmental indicators show a delinking between environmental impacts and economic growth; for example, water pollution in terms of biological oxygen demand (World Bank, 1997). Many absolute environmental indicators (total levels of emissions; total energy use) show less clear signs of improvements (see Zhang & Chen, 2003, on air emissions; ASEAN, 2001; SEPA, 2005). More indirect indicators that suggest similar relative improvements are the growth of Chinas environmental industry, indicated by the proportion of sales

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to GDP: an increase from 0.22 percent in 1989 up to 0.87 percent in 2000. This is even more spectacular when taking into account the rapid economic growth over these years (average 9.4 per cent annually). Also the increase in governmental environmental investments is astonishing, rising from 0.6 per cent of GDP in 1989 to 1.0 per cent of GDP in 1999 and 1.4 per cent in 2004 (see Figure 3). The increase of rms certied with ISO14001 standards, from nine (in 1996), to around 500 (in 2000) to over 8800 (in 2004) (http:// www.iso.ch/iso/), and the closing of heavily polluting factories following inuential environmental campaigns during the second half of the 1990s (Nygard and Guo, 2001) point in a similar direction. Obviously, these positive signs should not distract us from the fact that overall China remains heavily polluted, that emissions are often far above (and environmental quality levels far below) international standards, that only 25 per cent of the municipal wastewater is treated before discharge (although 85 per cent of industrial wastewater according to SEPA data; SEPA, 2001), and that environmental and resource eciencies of production and consumption processes are overall still rather low. While relative improvements can certainly be identied, absolute levels of emissions, pollution, resource extraction and environmental quality often do not yet meet standards. Environmental Governance: State and Market How is contemporary China dealing with these current and prospective environmental threats and risks? What mechanisms, dynamics and innovations can we identify in Chinas system of environmental governance? In setting the research agenda for such an analysis we have to bear in mind that

Figure 3. Governmental environmental investments, 19812004: absolute (in billion RMB) and as proportion of GDP. Source: China Statistical Yearbook (19812004).

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we are trying to understand a moving target, quite unlike the more stable contemporary (environmental) institutions of European and other OECD countries. We will group our analyses of innovations and transitions in Chinas environmental governance system in four major categories: political transitions, and the role of economic actors and market dynamics (this section), emerging institutions beyond state and market, and processes of international integration. Transitions in the Environmental State The state apparatus in China remains of dominant importance in environmental protection and reform. Both the nature of the contemporary Chinese social order and the character of the environment as a public good will safeguard the crucial position of the state in environmental protection and reform for some time. Environmental interests are articulated in particular by the impressive rise of Environmental Protection Bureaux (EPBs) at various governmental levels. However, the most common complaints from Chinese and foreign environmental analysts focus precisely on this system of (local) EPBs. The local EPBs are heavily dependent on both the higher level environmental authorities and on local governments. However, as little importance is given to environmental criteria in assessing the performance of local governments, they often display no interest in stringent environmental reform, yet they play a key role in nancing the local EPBs (see Lo & Tang, this volume). There are also poor (nancial) incentives for both governments and private actors to comply with environmental laws, standards and policies. Not surprisingly, therefore, there is a signicant level of collusion between local ocials and private enterprises which employ them in order to get around strict environmental monitoring. Finally, local EPBs are criticised for their poor environmental capacity (in both qualitative and quantitative terms) and, more generally, for the lack (and distortion) of environmental information. Yet the environmental state in China is clearly undergoing a transitional process that elsewhere is labelled political modernisation (see Janicke, 1993; Mol, 2002), where traditional hierarchical lines and conventional divisions of power are transformed. Although processes of political modernisation in Chinas environmental policy have dierent characteristics from those that are found in European countries, the direction of those reforms is nevertheless similar: greater decentralisation and exibility whilst moving away from a rigid, hierarchical, command-and-control system of environmental governance. Increasingly local EPBs and local governments are given and taking larger degrees of freedom in developing environmental priorities, strategies, nancial models and institutional arrangements (Lo & Tang, this volume). This parallels broader tendencies of decentralisation in Chinese society, but it is also specically motivated by state failures in environmental policy. The tendency is one towards larger inuence and decision-making power by the local authorities and diminishing control by Beijing, both by the central state

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structures and by the CPC (for instance, on decentralisation in energy policy (Andrews-Speed et al., 1999)). Decentralisation and greater exibility may result in environmental policies that are better adapted to the local physical and socio-economic situations. But, in China, as elsewhere, decentralisation does not automatically result in better protection of the environment, as local authorities typically give preference to economic growth and investments over the progressive development of environmental policies and stringent enforcement of environmental regulation and standards. As both an active civil society and accountability mechanisms are poorly developed, decentralisation in Chinas environmental policy is weakened by the absence of critical correction mechanisms.4 But a larger degree of freedom for local authorities does result, for better or for worse, in a growing diversity amongst the Chinese provinces and towns in how they deal with local and regional environmental challenges. It also contributes to dierences in success and failure, which divide not only along lines of economic prosperity, where the richer eastern provinces and towns are systematically more concerned with, and prepared to invest in, environmental reform, but also within the eastern part of China, where environmental prioritisation diers among towns (Zhang, 2002). Not unlike other countries, decentralisation tendencies in China come along with counter tendencies. Environmental protection projects, for instance, are increasingly nanced centrally. The central state has also responded to the growing relative autonomy of local authorities by rening their system of evaluating towns and town governments, and including environmental indicators in it, such as the Urban Environmental Quality Examination System and the National Environmental Model City (Rock, 2002; Economy, this volume). Via such mechanisms, local leaders are no longer only judged according to political and economic criteria, but also according to environmental results. Mayors are often required to sign documents guaranteeing that they meet certain environmental targets. A second transition in environmental governance follows the separation between state owned enterprises (SOE) and the line ministries and local governments (in the case of Town and Village Enterprises) that were originally responsible for them (see Shi and Zhang, this volume).5 There is a slow but steady process of transferring decision-making on production units from the political and party inuence to economic domains, where the logics of markets and prots are dominant.6 Although local level governments in particular are often reluctant to give up direct relations with successful enterprises because of the linkages to nancial resources, there is an unmistakable tendency for enterprises to secure growing autonomy from political agents. This development opens opportunities for more stringent environmental control and enforcement as the protection of these SOEs by line ministries and bureaux at all government levels is less direct. It also sets preferential conditions for the stronger rule of environmental law (see below). But it does not solve one of the key problems of environmental governance: the low priority given to

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` environmental state organisations vis-a-vis their economic and other counterparts. The progress in strengthening and empowering Chinas environmental authorities is ambivalent, as is common elsewhere around the world. While the national environmental authority in Beijing has strengthened its ` position vis-a-vis other ministries and agencies, this is not always the case at the local level, where more than incidentally the EPBs are part of and thus subservient to an economic state organisation (see Vermeer, 1998; Zhang, 2002; Lo & Tang, this volume). Also, at the central level interdepartmental struggles continue to fragment environmental authority (Jahiel, 1998; Lo & Xing, 1999). For instance, the State Economic and Trade Commission (SETC) is the primary responsible party for the new 2002 Cleaner Production Promotion Law, rather than SEPA. The former is also responsible for energy conservation policy (Chen & Porter, 2000). The Ministry of Science and Technology won the battle over the coordination of Chinas Agenda 21 programme from SEPA, despite heavy inuence and lobbying from UNDP (Buen, 2000). And Keeley reports in this volume on the struggles around GMO regulation. Lastly, the strengthening of the rule of law can be identied as a modernisation in environmental politics, closely tied to the emergence of a market economy. The system of environmental laws has led to the setting of environmental quality standards and emission discharge levels, and the establishment of a legal framework for various implementation programmes.7 But usually the environmental programmes themselves, the administrative decisions related to the implementation of standards, and the bargaining between administrations and polluters on targets have been more inuential for environmental reform than the laws and regulations per se. Being in conict with the law is usually still less problematic than being in conict with administrations and programmes, and most of the massive clean-up programmes were not so much derived from environmental laws (although they were not in conict with them), but rather based on administrative decisions taken at the top.8 The same is true for enforcement of national environmental laws at the local level. The rather vague laws are interpreted in very dierent ways by EPBs, often under strong administrative inuence from the local mayors oce (see Ma & Ortolano, 2000). Courts have been marginally involved in enforcement and EPBs use them only as a last resort to enforce environmental laws to which polluters refuse to adhere (Jahiel, 1998). More recently, there are signs that the rule of law is taken more seriously in the eld of environment, which has been triggered by the opening up of China to the global economy and polity. This is paralleled by stronger (nancial) punishments and legal procedures initiated by, for instance, environmental NGOs such as the Centre for Legal Assistance to Pollution Victims (CLAPV) in Beijing. One of the potential threats to the environment is, of course, the institutional void that can emerge when the administrative system loses its power over environmental protection, while the rule of law has been only weakly institutionalised in the eld of environment.

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Market Incentives and Economic Actors Traditionally, centrally planned economies did a poor job in setting the right price signals for a sustainable use of natural resources and a minimisation of environmental pollution. With a turn to a market-oriented growth model one would expect this to change. In contemporary China, environmental interests are indeed being slowly institutionalised in the economic domain of prices, markets, and competition, in three ways. First, subsidies on natural resource prices are increasingly being abandoned and prices for natural resources tend to move to cost prices (see Aden & Sinton on energy, this volume). That these changes dier regionally is shown by the example of water prices: in 1996 it cost 0.843 yuan to supply a ton of water, while the average price of water in Hebei province was 0.60.9 yuan/ton, 0.637 yuan in Beijing and only 0.013 yuan in Hetao region (Lo & Xing, 1999; see also Nickum and Lee, this volume). To date, we have only witnessed relative improvements, as the cost prices rarely include costs for repair of damage and environmental externalities (and we know from the major ooding caused by forest felling that these externalities can be quite signicant in monetary terms). Second, clear attempts are being made to increase environmental fees and tax reductions9, so that they do inuence the (economic) decision-making of polluters. In particular, discharge fees (on water and air), rst introduced in the 1980s, have become more common, both because they are an important source of income for local EPBs and a signicant trigger for the implementation of environmental measures, albeit not to the same extent everywhere. Wang and Wheeler (1999) found that the fees are higher in heavily polluted and economically developed areas and that they do inuence air and water emission reductions within companies. Fees are often only paid for discharging above the standard (see Ma & Ortolano, 2000). Notwithstanding the rhetoric of pollution prevention pays and cleaner production that have entered modern China since the 1990s, fees are still so low and monitoring is so weak that many enterprises risk payment, rather than installing environmental protection equipment or changing production processes. Many small and rural industries, in particular, have managed to escape payment due to lack of enforcement. The introduction of higher fees is by no means a smooth process. In 1992 NEPA proposed an increase of 0.20 yuan per kg of discharged sulphur dioxide following coal burning (an increase of less than 1 per cent), to cover at least part of the environmental costs of desulphurisation.10 Implementation was postponed rst to 1996 and then only introduced as a pilot programme, which in an extended version was still the situation in 2000. Third, market demand has started to take the environmental and health dimensions of products and production processes into account, especially in international markets that have increased so dramatically in the wake of Chinas accession to the WTO (see Shi & Zhang, and Jahiel, this volume). As far back as 1990 the import of Chinese refrigerators to the EU was restricted due to the use of CFCs as a cooling agent (Vermeer, 1998), but that was still an

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exception. Today, these kinds of international (especially European, North American, and Japanese) market trends towards greener products and production processes are felt in many more product categories, pushing for instance to higher levels of ISO certication, and growing interest for cleaner production, eco-labelling systems and industrial ecology initiatives (Shi, 2003; Shi et al., 2003). Like most developing economies, the Chinese domestic market still poorly articulates environmental interests, and green or healthy labelling is underdeveloped. SEPA (2003) reports, however, on the establishment of eight organic food certication institutions and there is labelling of GMO products. In general, domestic economic actors hardly articulate environmental interests. Insurance companies, banks, public utility companies, business associations, general corporations and others do not yet play any signicant role in environmental governance. Sometimes they even impede environmental improvements. For instance, local banks are not eager to lend money to polluters for environmental investments, according to a World Bank study (Spoord et al., 1996). There are three major exceptions to the absence of economic actors in the ecological modernisation of the Chinese economy: large Chinese rms that operate in an international market, the environmental industry and R&D institutions. . Large Chinese and joint venture rms that operate for and in a global market articulate stringent environmental standards and practices, but also try to pass these new standards and practices on to their customers and state organisations, pushing the domestic level playing eld towards international levels (Jahiel, this issue; Shi & Zhang, this volume). The Chinese petrochemical company Petrochina, for instance, is currently investing in several countries and has joint venture operations in China with several western oil multinationals. It strongly feels the need to acquire international recognised environmental management knowledge, standards and emission levels, allowing it to compete on a global market. The involvement of the multinational Shell in the development of the eastwest oil pipeline resulted in signicant environmental and democratic improvements, also aecting its Chinese counterpart (Seymour et al., 2005). The expanding environmental industry presses for the greening of production and consumption processes, as it has a clear interest in growing environmental regulation and reform (Sun, 2001; Liu et al., 2005; Figure 3). Also, foreign environment and utility companies and consultancies (such as the French water company Vivendi) are increasingly entering the Chinese market, bringing about an upward push towards more stringent environmental standards. Research and development institutions, from the ones linked to universities to those related to the line ministries and bureaux, are increasingly focusing their attention on environmental externalities, and articulate environmental interests among decision-making institutions within both the economic and

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A. P. J. Mol & N. T. Carter the political domains. In universities a growing number of environmental departments, centres and curricula were established in the late 1990s.

Beyond State and Market: Civil Society Besides an emerging NGO sector and increasing local activism and complaints, civil societys contribution to environmental reform is to be found in two other arrangements: the rise of critical environmental coverage in the media, and the importance of unwritten social norms, rules and codes of conduct. Environmental Protests and (GO)NGOs China has a very recent history of environmental NGOs and other social organisations that articulate and lobby for environmental interests and ideas of civil society amongst political and economic decision-makers (see Qing & Vermeer, 1999; Ho, 2001; Guobin Yang, 2005; Martens, this volume). As the rst environmental NGO was only established in the mid 1990s the history of this sector is rather short. For a long time Government-Organised NGOs, such as the Beijing Environmental Protection Organisation and China Environment Fund, dominated the environmental civil society sector.11 They had, and still have, more freedom of registration and manoeuvre due to their close links with state agencies. Through closed networks with policy-makers and their expert knowledge, these GONGOs articulate environmental interests and bring them into state and market institutions. In doing so GONGOs play a role in bridging the gap between NGOs and civil society on the one hand and the state on the other, thus becoming an important, non-state arena for Chinas environmental politics (Wu, 2002: 48). Recently, these GONGOs have gained more organisational, nancial and political independence and autonomy from the state, and are (thus) evaluated more positively by Western scholars. At the same time, environmental NGOs are developing rapidly, although these NGOs remain embedded in the Chinese state. Figures on the number of NGOs are unreliable. Economy (2005) estimates around 2,000 registered NGOs and an equal amount of unregistered ones, while Guobin Yang (2005) provides more moderate (though rapidly increasing) numbers.12 These mostly local or provincial NGOs are often not very adversarial or confrontational, but rather expert or awareness-raising organisations, such as Global Village. The political room for a western-style environmental movement still seems limited, but compared to a decade ago this room is expanding. While in some of the Central and East European centrally planned economies environmental NGOs played a role in articulating environmental and other protests against the ruling social order, in China environmental NGOs have been marginal until now in pushing for environmental reform of the Chinese economy or polity. International NGOs such as Greenpeace and WWF have invested major eorts in further stimulating the environmental movement in China, with ambivalent successes.

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Together with economic liberalisation, decentralisation of decision-making and experiments with local democratisation there is also growing pressure from often unorganised citizens on local (environmental) authorities to reduce environmental pollution. Dasgupta and Wheeler (1996) estimated that local and provincial authorities responded to over 130,000 complaints annually in the period 19911993, while Chinese data show lower gures for these years but a sharp increase from the mid 1990s onward, to over 600,000 in 2004 (Figure 4). In most of the cities and towns systems of complaints and hotlines have been installed, albeit with varying levels of use and eect.13 In China, this system of complaints and the growing attention of (state-owned and statecontrolled) media to environmental pollution and environmental mismanagement are more important than NGOs in inuencing economic and political decision-makers. But the complaints system is a poor form of participation by civil society in environmental governance, as Martens (this volume) explains in more detail. It focuses only on (sensible) monitoring after pollution has happened, at a time where the expropriation of the senses needs a preventive and precautionary approach. A more systematic involvement of citizens and civil society in the stage of project development with full access to information is largely missing, although the recent revision of the Environmental Impact Assessment regulations seems to enable larger participation by the public. Media and Environment In an interesting analysis De Burgh (2003) explains the recent major changes in Chinese journalistic practices and media. After decades of state-ownership and full control, parts of the media have been given economic independence, whilst some competition has emerged between newspapers (but not yet on television). These changes created new pressures to secure a major share of newspaper funding from advertisements (up to 60 per cent in newspapers) and more attention to consumer preferences.14 Media sta are increasingly recruited

Figure 4. Environmental complaints by letters and visits to EPBs. Source: China Environment Statistical Reports (19912004).

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outside party control and nancial incentives are used to attract good professionals (Fang, 2002). In addition, state controls have been relaxed somewhat and reporting freedom has increased, although state and party control remains tight, especially over more sensitive issues.15 The Chinese media clearly serve two masters, the Party and the market (Hong Lui, 1998; Latham, 2000), and seem constantly to test the limits of what the Party will allow (Li Junhui, 2005), which seems to be a moving target. Within this transitional state the global media, such as satellite TV, are still very much dependent on the Chinese authorities, and can only broadcast and sell under specied conditions for certain markets (Sparks, 2005). Environmental issues are increasingly considered non-sensitive issues, which has turned the reporting of environmental accidents, disasters and routine cases of pollution breaching standards into a more regular practice in China.16 Research by Li Junhui (2005) on newspaper reporting on dams, arguably one of the most sensitive environmental issues in China, and of Wang (2005) on industrial parks, illustrate that local newspapers in particular feel the pressure from local state authorities to refrain from reporting critically, while national bans on reporting emerge when minority issues and national (security and economic) interests are involved. Based on several sources Guobin Yang (2005) concludes that environmental NGOs and their campaigns have been treated favourably in the Chinese newspapers from their emergence in the mid 1990s onwards. There are close ties between the Chinese conventional media (newspapers, radio, television) and environmental NGOs (Hu Kanping, 2001; Xie & Mol, 2006), and, perhaps not coincidentally, several green NGOs are led by (former) professional journalists. These close ties arise also from the fact that environmental NGOs are a source of news, and pollution victims and environmental NGOs need the media to build up pressure.17 While this freedom has caused greater uncertainty among journalists and media decision-makers about what is and what is not allowed, by the same token most journalists and media are decreasingly willing to accept simple topdown Party directions. Especially since SARS the scope for revealing environmental information has expanded.18 The emerging investigative journalism also focuses on scrutinising authority, although journalists and media seldom touch upon Chinese leaders in action or challenge the (local) state legitimacy, unless it is allowed from above. Transparency has increased in environmental governance, but governmental control is still felt and transparency in environmental governance through these media is a far from routine matter. The Internet has further expanded the possibilities for free media access and production, but here also the state is present. The Chinese government tries to remain in control of the Internet, for instance by monitoring Internet use of consumers, requiring registration at local security agencies and limiting links or gateways between national and international networks. It puts cameras in internet cafes, imposes temporary bans on them and requests identication from users. It closes websites, limits access to and production of news sites and

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weblogs, blocks access to undesirable websites, intimidates actual and potential users, imposes restrictive policies on internet service providers. Not surprisingly, the government strongly backs international calls for further state control of the world wide web, for instance at the Tunis UN World Summit on the Information Society in November 2005.19 Social Norms, Rules and Codes of Conduct Informal social norms, rules and unwritten codes of conduct play an important role in structuring human action. These rules are strongly anchored in Chinese civil society, rather than in the formal institutions of state and market, and may play an important role in environmental reform. Ma and Ortolano (2000) mention three major non-formal rules: respect for authority and status even if it conicts with the formal institutions; the social connections or guanxi that play a major role in organising social life in China; and the moral authority and social capital that is included in the concept of (losing, maintaining or gaining) face. With the growing importance attached to environmental protection, these and other informal rules and institutions are put to work for environmental goals and rationalities. Guanxi and face play a role in environmental protection, where informal networks of social relations are formed around environmental programmes and dispute resolutions, and social capital is built via environmental awards, prices, and media coverage. If we are to understand environmental reform dynamics in China, we have to understand how and to what extent these informal institutions, networks, and connections articulate environmental rationalities via, for instance, the inclusion of environmental norms in social capital and moral authority and the increase of the status of environmental authorities. These dynamics of course do not operate either in the same way or with equal strength in a rich modern metropolitan city such as Shanghai, as they do in poor western rural regions. Global Integration The increasing (especially economic, but also political) integration of China in the world has its inuence on domestic environmental governance. But compared to the signicant inuence of foreign pressure and assistance that is sometimes exerted on national environmental policy in other Asian countries, China has been reluctant to accept assistance under stringent environmental conditions. The Three Gorges Dam is a clear example, where China ignored both foreign pressure against the dam and threats to withhold international loans for this project.20 Moreover, in international negotiations for Multilateral Environmental Agreements, Chinese authorities are often hesitant to support stringent environmental policies that could rebound on domestic eorts (see Johnston, 1998; McElroy et al., 1998; Chen & Porter, 2000), although China has signed and ratied most of the important MEAs.

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However, on less controversial issues foreign assistance programmes have made a clear contribution to and/or inuenced Chinas environmental policies and programmes. Between 1991 and 1995 US$1.2 billion foreign capital was invested in environmental protection in China (Vermeer, 1998). More recently, China has become an object of considerable international attention as well as environmental funding, via several MEAs and multilateral institutions such as the World Bank, Asian Development Bank (ADB) and the Global Environment Facility (see Huq et al., 1999) and the United Nations Environment Programme. By the end of the 1990s the World Bank and the ADB together provided US$800 million for environmental loans in China annually. AsukaZhang (1999) illustrates the signicance of Japanese environmental ocial development assistance (ODA) and environmental technology transfer to China. It is estimated that by the end of the 1990s around 15 per cent of Chinas total environment-related spending originated from bi- and multilateral lending and aid (Tremayne & De Waal, 1998). Foreign projects and international experts had a signicant inuence on the development and introduction of ISO 14001 certied environmental management systems and of cleaner production, resulting nally in the 2002 Cleaner Production Promotion Law (Mol & Liu, 2005). The phasing-out of CFC use following the Montreal Protocol has been another example. Directly after the Montreal Protocol negotiations (1987) China increased its CFC production by some 100 per cent between 1986 and 1994 (Held et al., 1999) becoming the world leader in CFC production and consumption in 1996. Then, in response to international aid and potential trade bans by OECD countries, from the mid 1990s it stabilised CFC production and saw consumption fall, before production began to decline in 2000.21 The recent growing openness to and integration in the global economy and polity will only increase international inuence on Chinas domestic environmental reform. For instance, Chinas membership of the WTO will enhance the importance of the ISO and other international standards in international, but also increasingly in domestic, business interactions (see Jahiel, this issue). And it will make China more vulnerable to international criticism of its domestic environmental performance. But international integration will also result in a growing role for China in setting the agenda and inuencing the outcomes of international negotiations and agreements, including those aecting the environment. China will become increasingly important in international environmental negotiations and will exercise increasing power in directing the outcomes of these negotiations, for better or for worse. This Volume It is against the background of immense (national and global) environmental challenges, a future world hegemonic power in transition and a national system of environmental governance that is still in development, that this issue should be placed. All the contributions brought together start their analysis from the huge environmental challenges China and the world are facing, following

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Chinas ongoing economic development. But instead of reinforcing the apocalyptic environmental portraits that seem to have become dominant in the international policy and scientic circles (see Liu and Diamond, 2005), this volume focuses on and analyses the unprecedented dynamics in environmental governance that China is developing today. Whether or not these institutional, social and economic innovations and transformations in environmental governance will form a sucient answer to the current and future environmental challenges cannot yet be answered. But the various contributions in this volume illustrate the signicant level of reexivity that has become institutionalised in todays modern world. The times of denying or trivialising environmental challenges have passed. Having said that, a whole set of new questions emerges: on successful forms and institutions of environmental governance in a transitional economy, on the democratic underpinnings of major environmental transitions, on the international interdependencies of environmental reform programmes, on the changing power relations that come along with a programme of ecological modernisation, both domestically and internationally. These kinds of question form the heart of the analysis in the various articles. The rst three contributions deal with the institutional changes in the economy, the politicaladministrative system and civil society, respectively. Elizabeth Economy analyses how innovative economic mechanisms and institutions are being developed in China to deal with environmental challenges. Carlos Lo and Shui-Yan Tang look into the changes in local systems of environmental authorities and institutions, taking Guangdong province as a case study area. Susan Martens investigates the various Chinese environmental frames through which citizen consumers are, and will be, involved in environmental reforms. Subsequently, four articles assess environmental governance developments in four major areas or sectors. Through a comparative analysis of two major watersheds, James Nickum and Yok-Shiu Lee investigate the similarities and dierences in water governance in China. Nathaniel Aden and Jonathan Sinton analyse one of the major environmental challenges of China: the greening of its energy system to cope with greenhouse gas emissions and ever growing natural resource demands. Han Shi and Lei Zhang report on the industrial transformations of what is often labelled the worlds workplace: the ongoing modernisation and environmental reform of what used to be one of the most inecient and backward industrial systems in the world. In the last sectoral analysis, James Keeley looks at one of the key environmental challenges of the future: genetic modication. Finally, Abigail Jahiel sets developments in China into a wider context by investigating what the ongoing liberalisation of the Chinese economy, and especially its inclusion in the World Trade Organisation scheme, means for the environment and environmental institutions. In the concluding article, we bring the various contributions together to assess the major developments that are currently taking place or are in development with respect to Chinas environmental governance.

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Acknowledgements The authors would like to thank Richard Edmonds for his helpful comments on an earlier version of this paper.

Notes
1. See amongst others the various polls that are regularly organised in China on environmental awareness and problem denitions: Fang (1999); SEPA (1999); Stockholm Environmental Institute (2002); Lee (2005). 2. In 2000 there were over 80,000 environmental sta at the county level (in more than 7000 institutions), 35,000 sta at the city level (in 1700 institutions), almost 11,000 sta at the provincial level and some 3000 sta at the national level (together in some 300 institutions) (SEPA, 2001). 3. The annual Report on the State of the Environment in China by SEPA usually contains data on emissions and environmental quality, but there are major inconsistencies in data presentation between 1997 and 2004 (see: www.zhb.gov.cn/english/SOE for the various annual national environmental reports and the related statistics). The voluminous annual China Environment Statistical Report provides more detailed environmental data (and appears from 2005 onwards also in English). 4. One can, however, witness increased opportunities for public involvement in policy making processes, such as the new Environmental Impact Assessment Law of 2003. Nevertheless, these levels of, and opportunities for, public involvement fall far short of western practices and standards (see Wang et al., 2003). 5. From research on steel enterprises, Fisher-Vanden (2003) reports that within Chinese stateowned enterprises decentralisation in rm management improves the incorporation of new and more energy and environmentally ecient technology. 6. By the end of the 1990s many state owned enterprises had full decision-making power for production, sales, purchasing and investments. But in most cases relations between these enterprises and state authorities are still intricate and local agencies still succeed in extracting funds from protable enterprises for public works or other purposes, in subsidising inecient enterprises and in inuencing decisions at enterprises. This is also valid in the case of TVIEs, as Zhang (2002) has shown for counties in Anhui and Jiangsu provinces. 7. The major eight national environmental programmes are: environmental impact assessment; three synchronizations; pollution discharge fee system; pollution control with deadlines; discharge permit system; assessment of urban environmental quality; centralised control of pollution and the environmental responsibility system. The rst three date from the late 1970s, the last three were implemented later to manage problems the rst three could not handle (for further details see Ma & Ortolano, 2000). 8. Most sinologists who aim to understand the state environmental protection system pay only marginal attention to environmental laws and the enforcement of environmental laws, preferring to concentrate on administrative measures and campaigns (see Jahiel, 1998; Vermeer, 1998; Ma & Ortolano, 2000). 9. Tax reductions are sometimes oered if environmental goals are reached, such as in the case of energy saving in steel plants and other heavy energy consuming industries (cf. Chen & Porter, 2000). 10. Notication on Implementation of Pilot Programme of Levy on Industrial Sulphur Dioxide Pollution by Coal Burning. State Council Letter (1996#24) agreed on the pilot implementation via SEPAs Report on Pilot Programme of Sulphur Dioxide Discharge Fee. 11. There are many kinds of GONGO, including foundations, education centres, research institutions, and industry associations. They are able to play a major role due to their less restrictive institutional structure, their expertise and the personal connections.

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12. In China, NGOs need to be registered. Registration can be in dierent forms, but usually it means that these NGOs function under the umbrella of another, existing organisation (a governmental organisation, a university, a research institute or a private business). 13. Dasgupta and Wheeler (1996) show that the average number of environmental complaints of major cities and provinces in one year ranges from 55.0 per 100,000 inhabitants in Shanghai to 1.7 per 100,000 inhabitants for the northwestern province Gansu. According to Chinese ocial sources most provincial EPBs respond to over 80 per cent of these (telephone, letter and faceto-face visits) complaints (China Environment Statistical Reports, 19912004). 14. In 2002 there were some 2100 newspapers in China, some of them organised in groups (data from the World Association of Newspapers, 2003; http://www.wan-press.org/). Few are national newspapers. Most are either regionally restricted (provincial, major cities), for special target groups (e.g. Youth League) or published by special organisations and agencies (such as for instance SEPA). 15. As Fang (2002) and Li Junhui (2005) explain Chinese news media are regulated and controlled via ve mechanisms, of which the rst two are the most important: government administrative system; Party committees; the legal system; social surveillance of other parties and social groups; (self)regulation from associations in the news industries. 16. A survey by the Chinese NGO Friends of Nature amongst a signicant number of national, provincial and local newspapers showed that coverage of environmental items in these newspapers especially increased in the second part of the 1990s (Friends of Nature, 2000). This seems no dierent in the other traditional media. 17. Shang Hongbo (2004) studied how pollution victims in four cases of industrial pollution in dierent parts of China used the media to build up pressure once the (local and national) authorities proved unreceptive to their complaints. Alongside these strategies of informational governance, litigation, protesting and mediation with the polluters are other strategies used by these victims. 18. Interview Tsinghua University professor, October 31, 2005; interview deputy director EMC, November 4, 2005; interview Chinese Academy of Sciences division head, November 3, 2005. 19. See for instance Sinclair (2002); Wilson (2004); Downing (2005). 20. Of course, China is big enough to shift international loans to less environmentally and socially controversial projects, setting free national nances for the more controversial ones. 21. Data from the Ozone secretariat of UNEP: http://www.unep.org/ozone

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