China's Environment and Sustainable Development

Author: Li Yining
Publisher:
Publish Date: 2005-03-01
Features: This book is a summary of the research findings of the Environmental Economics Working Group of the China Council for International Cooperation on Environment and Development (CCICED), as well as a summary of the group's work over the past decade. CCICED was established in 1992, and the Resource Accounting and Pricing Policy Working Group was one of its working groups during the first phase (1992-1997). From 1997 to 2002, this working group was renamed the Environmental Economics Working Group. China's market-oriented reforms have, in some aspects, been beneficial to environmental protection. For example, resource prices have been adjusted, and the market system helps reflect the true economic costs of resources. Improving the efficiency of clean resource utilization has also contributed to environmental benefits. Therefore, the Environmental Economics Working Group began its research by formulating pricing principles for key resources and applied these general principles to research and policy recommendations on industrial pollution control, biodiversity conservation, and environmental tax reform. However, the role of the market in environmental economics has unavoidable limitations, one example being the issue of environmental externalities. Optimal pricing, formulated from an environmental perspective, cannot automatically emerge within the market system. Income distribution issues also cannot be adequately resolved spontaneously within the market system. Therefore, achieving environmental goals requires government intervention. This intervention generally takes two approaches: government regulation or economic incentives.