As more and more provincial administrative regions in China are implementing local regulations to improve air quality (most of which are VOC emission related), Shandong province, one of the most important industrial provinces, passed the Regulation on Prevention and Treatment of Air Pollution, providing a powerful legal basis for the enforcement of the measures of air quality improvement. The regulation will go into effect from Nov 1st 2016.
One of the notable features of the regulation is the “environmental compensation” system. If the air quality of one city or district improves on a yearly basis, then the provincial government will award the city or district with financial compensation. Conversely in cities or districts where the air quality worsens compared with the previous year a special compensation to the provincial government must be paid.
The compensation is designated for air quality improvement use only. This system has been implemented for more than 2 years since 2014 as a temporary measure. During this period, the provincial government has granted 418 million RMB of environmental compensation to lower governments and received 32.7 million RMB from all over the province.
The contrast in the compensation paid out and received by government points to an improvement in the overall air quality. Now this temporary measure has been written into the regulation. It will reassure the local governments that the higher authorities are determined to improve the air quality and prepared to pay the price within certain limits. Also it’s a deterrent for the local governments that only prioritized economic growth to the detriment of the local environment.
One of the major pollution problems that all Northern provinces in China have is the central heating system in winter. It is operated by the government and provides the heating service for most of the residences in north China. As a result, the air quality of north China is always worse in winter than the rest of the year, due to extra coal consumption.
Shandong is a northern province that has the second biggest population in China. So the heating system is a particularly serious problem for Shandong. In order to balance the extra pollution in winter, the Regulation requires that government authorities (higher than county level) should encourage and organize the industry to adjust production and avoid increasing the pollution, especially for industry associated with excessive discharge of pollutants and with larger production capacities. This is the first time that a provincial government requires production adjustment in winter for the sake of air quality. It can be expected that more northern provinces will follow the lead in the future.
The Regulation also stipulates that the head of the city or district will be criticized publicly if the city or district fails to accomplish the annual goal of air quality improvement or exceeds the emission limits. If the head official is criticized for two successive years, then he will be punished. This is a harsher and more effective incentive for the officials than environmental compensation. After all, it is their political careers that are at stake. The flipside of this issue is that it may encourage data fraud. Higher authorities should pay attention to the transparency and authenticity of the data gathering process to ensure the integrity of the regulation.
Besides the environmental compensation and the production adjustment, the Regulation also contains features that are stipulated within the revised Environmental Protection Law, such as daily fines without any cap on the total for the enterprises that seriously violated the environmental protection regulations, etc. The Regulation is regarded as the toughest environmental protection regulation that Shandong province has ever seen. As a province that has an enormous petrochemical industry and a huge population, the Regulation brings challenges for both the authorities and the industry. If the Regulation achieves a good result on both air quality improvement and economic development, then it will be a perfect example for other provinces in China.
