BOFIT Viikkokatsaus / BOFIT Weekly 2017/03

In what has become an annual wintertime ritual, waves of Chinese red alerts over poor air quality began to signal in December. Over 20 cities, mostly in northern China (including Beijing), declared highest-level air quality emergencies due to gagging air quality. The bad air quality has continued this month.

Red alerts trigger numerous responses such as school closings, production shutdowns at factories and restrictions on automobile use. Large numbers of scheduled commercial flights are also cancelled. The Chinese, who use coal extensively for space heating and electrical power generation, see heating demand rise in winter. Also rain and wind conditions matter. China's air problems have not gone away despite efforts to move coal-fired power plants and industrial production away from cities and rapid adoption of environmentally friendly renewables such as wind turbines and solar.

Poor air quality has long-term health consequences. The International Energy Agency (IEA) estimates that China's toxic air shortens the average human lifespan by about two years. Last year the city governments of Beijing, Tianjin and Hebei were sued over air pollution.

China's environmental problems extend to degradation of soil and water quality. Measurement data published last year by the water resources ministry show that 80 % of Chinese groundwater used for water supply has been tainted by industrial and agricultural runoff and is unfit for human consumption. In addition, a large share of China's surface waters is polluted and unusable. China's groundwater and soil protection rules are quite loose and poorly enforced.

Numerous plans to deal with China's pollution problems have been proposed over the years. A programme announced last summer is supposed to end soil contamination by 2020. In December, the comprehensive 2016–2020 programme on the environment set forth targets for reducing air pollution and improvements in water quality. Despite these ambitious goals, the programmes fail to specify measures by which the targets will be met, leaving implementation largely to local decision-makers.

The environment ministry claims the comprehensive 2016–2020 environmental protection programme gives more possibilities to tackle problems. Regulators will also have more independence from local administrators in dealing with polluters. Falsification of air quality measurement data has been criminalised. The government last month approved the introduction of an environmental protection tax at the start of 2018. The tax partly replaces the web of environmental fees, which have a reputation of lax collection by local administrations.