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China Adopts Fiscal Tools and Market-Based Instruments in Environmental Governance Shift

By Paul Davies and Andrew Westgate

China Business Law Journal


In recent decades, the US and Europe have introduced a variety of market-based incentives as instruments of environmental policy and reduced their reliance on command-and-control style regulation. Examples include fees on the discharge or emissions of pollutants — such as the UK’s Climate Change Levy — and tradeable credit programs — such as the acid rain program in the US — and carbon-trading programs, including the EU emissions trading system (ETS) and the California Cap-and-Trade program.

Until recently, China employed a predominantly command-and-control style approach to environmental regulation, whereby regulators specified both the standards that must be achieved and the technology and pollution control strategies to be employed by potential polluters. This approach was exemplified by the Environmental Impact Assessment (EIA) system in China. For many years, the EIA system provided the only method by which pollution control requirements were imposed on companies by incorporating the requirements into the EIA. EIAs have not, however, proved an effective basis for discharge permitting, from either a regulatory or a business perspective. As China has sought to modernize its environmental governance, the country has also shifted its environmental policy emphasis, and increased its use of fiscal and market tools in environmental governance.

Soil Pollution Prevention Law Officially Adopted

By George Zhu

Jun He Bulletin


In recent years, China has accelerated the development of environmental protection legislation and at the same time strengthened enforcement of relevant laws. This follows on from a number of soil and groundwater pollution incidents, including a “poisonous land” case involving a foreign language school in Jiangsu, and a farmland sewage and groundwater contamination case involving a chemical company in Hebei, which have drawn attention to the need to optimize and strengthen legislation and law enforcement practices for soil protection and pollution prevention. It is in this context that the Soil Pollution Prevention Law has recently been adopted.

Xiaomi Supplier Accused of Environmental Failings

By Emily Feng

The Financial Times


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Chinese smartphone maker Xiaomi has been accused by prominent environmentalists of failing to disclose environmental transgressions by a supplier, which could impact the company’s upcoming $10bn public offering, said investors.

Two Chinese environmental organisations — the Institute of Public and Environmental Affairs (IPE) and Luse Jiangnan — said they found that copper-laced acidic wastewater had been discharged from a circuit board factory in the city of Suzhou. The factory indirectly supplies Xiaomi, said IPE.

Green and Mean

By Paul Davies, Bridget Reineking and Andrew Westgate

China Business Law Journal


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China has made rapid strides in developing a robust, modern environmental regulatory system in the past decade. This progress includes a policy framework overhaul triggered by the Environmental Protection Law (EPL) in 2014, an ongoing reform of emissions and discharges permitting a new draft Soil Pollution Law to impose liability for remediation of contaminated land, and the launch of the world’s largest emissions trading system in 2017.

Managing Environmental Protection and Economic Considerations Under Select U.S. Environmental Laws and Permitting Systems

By Scott Fulton, John Pendergrass, and Christopher Ibrahim

Environmental Law Institute

March, 2018

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In response to growing concerns over increased air and water pollution, by the early 1970s the United States Congress had begun enacting a series of statutes that continue to shape environmental law today, more than four decades later.  The laws authorize federal agencies to regulate air quality, water quality, the management and disposal of solid and hazardous wastes; and to protect threatened or endangered species of plants and animals. Congress, in enacting these environmental laws, knew that it was imposing significant compliance costs on regulated sectors of the economy.  In some instances, Congress allowed the regulating agency to consider economic feasibility; in other cases, economic costs are not to be considered at all.  This report analyzes how the United States has balanced economic considerations and environmental protection through the lens of arguably the four most significant environmental statutes applicable to private actions: (i) the Clean Air Act; (ii) the Clean Water Act; (iii) the Resource Conservation and Recovery Act; and (iv) the Endangered Species Act.

Environmental Protection is Enshrined as Official Ideology in China Amid Major Reforms

By Paul A. Davies, Bridget R. Reineking and R. Andrew Westgate

Latham & Watkins Client Alert Commentary


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President Xi announces a comprehensive, 14-point reform policy that has long-term implications for companies with business interests in China and formalizes a national commitment to strengthening environmental protections in China.  Aggressive environmental enforcement actions and the development of new permitting rules and a national emissions trading scheme are a few of the recent indications of the country’s changing environmental priorities and policies.

China's Move to a Low-Carbon Economy

By Paul A. Davies and R. Andrew Westgate

Bloomberg BNA: International Environment Reporter


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This article addresses one of the most far-reaching global anti-pollution measures seen: China’s nationwide carbon emissions trading system, to be launched in 2017, that will be the largest in the world. China’s ETS will expand the scope of worldwide GHG emissions covered by such systems from 9 percent to 16 percent.