policy solutions for sand storms and other regional air quality problems in northern china? an...
TRANSCRIPT
Policy Solutions for Sand Storms and Other Regional Air Quality Problems in Northern China? An Introduction to Market-Based
Instruments
ByJian XIE
Hong LANGuoqian WANG
Zhong MA
About the authors
Jian XIE, Senior Environmental Specialist, Environment and Social Sector Unit, East Asia and Pacific Region, the World Bank;
Hong LAN, Lecturer, School of Environment, Renmin University, Beijing, China;
Guoqian WANG, Junior Professional Associate, the World Bank Institute, the World Bank;
Zhong MA, Professor and Executive Vice Dean, School of Environment, Renmin University, Beijing, China.
Email correspondance: [email protected]
The paper is a work in progress. It reviews
the situation and causes of land degradation
and sand storms in northern China and
existing government efforts. It introduces a
few market-based instruments, aiming to
improve these efforts.
Desertification and Land Degradation in Northern China
The total area affected by desertification in China is 2.6 million km2, of which 1.6 million km2 is caused by wind erosion and 0.2 million km2 by water erosion, equivalent to over 1/4 of total land area of the nation and widely spread in 13 provinces in northern and northwestern regions.
About 20,000 km2 of China’s land is being degraded each year due to desertification, soil erosion, salinization and other factors
Desert areas are expanding 2460 km2 a year at an accelerated rate of expansion
Consequences Sand storms frequently occurred 7.7 million hectare of farm lands threatened by
desertification 105 million hectare of steppe, desert steppe and
pasture lands seriously degraded 430,000 km2 on the Loess Plateau suffer water
erosion Water conservation facilities and systems
malfunctioned Houses, machines, road systems and other
infrastructure damaged Disease spreading and more…
Number of Major Dust Storms in China, by Decade, 1950–99, with Projection to 2009
Decade Number
1950–59 5
1960–69 8
1970–79 13
1980–89 14
1990–99 23
2000–09* 100
* Preliminary estimate for decade based on more than 20 storms during 2000 and 2001.
Source: China Meteorological Administration, cited in “Grapes of Wrath in Inner Mongolia,” report from the U.S. Embassy in Beijing, May 2001.
A Recent Dust Storm
A huge sand storm occurred on March 18-21, 2004.
Covered 1.7 million square kilometers in over 10 provinces in northern China.
Affected a population of 150 million.
Human factors are becoming a major cause
Deterioration of vegetative cover due to overgrazing, wood cutting and burning
Wind and water erosion resulting from improper land management, and
Salinization due to improper use of water
Underlying Reasons
Population growth The pressure from economic development Poor awareness of ecosystem function Inadequate institutional arrangements for
protecting fragile land from overuse and degradation, such as
insecure property rights inadequate compensation system weak implementation, monitoring and
enforcement
Example: Market and Policy Failures in Grassland Areas
Property rights unclear (state or community ownership),
longer-term right of use not guaranteed to householders,
adjusting land allocation among households based on the
change in the number of household members
Competing uses of land (grain production)
Marginal benefit of overgrazing > Marginal share of cost, if
increasing usage
=> Tragedy of the Commons: depleting common pool resources
Major Government Interventions for Conservation (I)
“Grain for Green” project in northern and western China – i.e., the conversion of agricultural land into forests or grasslands Launched in 1999, plan within 10 years to convert 5.3 million mu (about ¼
hectare a mu) agricultural land into forestry land , reforest 8 million mu, control soil erosion areas of 36 million mu , and control desertified area of 70 million mu.
Subsidize local governments and farmers with grain Natural forests preservation
Launched in 1998 with logging ban; plan to invest 106 billion Yuan RMB (about USD12 billion) in 10 years to protect the forest areas in upper reaches of Yellow and Yangtze River.
Subsidize local government and logging industry
Major Government Interventions (II)
Grassland conservation Targeting 1/4 of total grassland; the government
subsidized local people grain and forage for their stopping breeding livestock on the grassland
Forest green belt development in northern China to control sand storms
The project duration is 73 years and it involves an area of 4 million square kilometers
Controlling sandstorm source areas around Beijing and Tianjin
Need for Government Financial Supports: The Case of Sichuan
Since the logging ban in Sichuan Province in 1998, the provincial revenues from timber industry reduced 740 million Yuan RMB, about 5.2% of total revenue.
Affected farmers lost on average 200 Yuan per person in their annual income (equivalent to 13% net income).
For those farmers whose agricultural land were converted into forests, their average lost of grain production is 48 kilogram per capita.
Sources of the Funding
1. Government BudgetIn the period of 1998-2001, the central government alone spent 42 billion Yuan RMB (about 5 billion USD) of government revenue income on these projects.
2. National Bond From 1998 to 2002, the central government issued 1 billion
Yuan RMB of national bond for environmental protection.
3. Transfers of the central government
The central government returns part of its tax revenue to
local government for conservation purpose.
Effectiveness of the Governmental Interventions
The worsening trends of desertification and soil erosion have not been reversed, however.
Frequency of sand storms keeps rising. Although the achievement of controlling deserts
and soil erosion has been observed in some demonstrative areas, the long-term effect of the programs is still too early to tell and may not be very promising.
Although the “polluters pay” principle, which has
been explicitly interpreted as “whoever cause damage
to eco-systems must compensate and whoever benefit
from ecological services should pay for” in the area of
natural conservation, has been widely endorsed by the
government, real implementation rarely exist,
especially at the community and individual levels.
Need for effective and comprehensive policy and legal framework to address the cause of
land degradation and sand storms
Possible Instruments
Well-defined property rights Users’ fees and eco-compensation deposit Establishment of markets – tradable permits Payments for environmental services Government transfers
Property Rights
Well-defined environmental property right itself can be a policy instrument
Remedy the “tragedy of the commons” The economy of scale and sustainability still
questionable Designing issues
Perfection may not be possible, but designing should be as close as possible
Quality Quality of the title Transferability
Types of Property Rights
In most cases, people confuse “open access” with “common property rights.”
Owner Example Access With-drawal
Manage-ment
Exclusion
Private Private Fee simple title to land
Controlled by owner
By owner By owner By owner
Common Group Common land Controlled by joint owners
By joint owners
By joint owners
By joint owners
Public State National park Controlled by state
None By state By state
Open access
No one Ocean fishery Uncontrolled Un-controlled
None None
Quality of the Property Right
Quality of the Property Right
China: Now and Future Trends
Clarifying property rights “Desertification Prevention and Control Law”
Lengthen the maximum tenure years Imposing further duties onto landholders
Eliminating open access Contracting public land to individual households
Encouraging self-governing association of households that share common lands improve the scale of economy
Market-Based Policy Instruments (2)—Establishing a Market
Tradable Permits (for use of public land) Clearly defining property rights is a
prerequisite Limit of trading Retirable?
U.S. retiring grazing permits on federal land
Potential pitfalls High transaction cost Ill-defined or enforced ownership Uncertainty and asymmetric information
Market-Based Policy Instruments (3)—Payments for Environmental Services
Source: Pagiola, S., World Bank, 2002
Market-Based Policy Instruments (3)—Payments for Environmental Services
Prerequisites Clearly defined property rights Established market Supporting legal and institutional
systems Costa Rican Experience and its Implications
Sound valuation of environmental goods and services
Government Transfers for Ecological and Environmental Services
A popular approach, well-received and used by government fiscal planning and budgeting agencies
Easily implemented at low transaction cost
Need to have the amount of transfers well based on market values of environmental services or costs
Implication to China Property rights
Further secure land ownership or the right of use, not limited to privatization , need to be flexible and cost-effective, improving the economy of scale
Government transfers to finance eco-protection Still an important means, need to scale up, based on market value,
with fair mechanism and monitoring system Establishing markets for environmental goods and services
Tradable permit for use of public land to improve efficiency Payments for environmental services
An emerging tool, can be tested in some areas with mature land ownership