A New Ecological Compensation Scheme

Xinhua has reported that the State Environment Protection Administration (SEPA) is setting up a pilot ecological compensation system in order to monetize the damage that industrial activity causes to state-level natural reserves, mineral resources, and rivers. According to the article, unspecified government departments would also establish an ¡°inter-regional coordinated mechanism¡± to protect river networks.

The article mentions the Y90,000 fine levied on director Chen Kaige for littering and the destruction of vegetation during the shooting of his film, ¡°The Promise,¡± which was used for the restoration of the scenic nature reserve on which it was shot. However, local authorities were unable to completely restore the previous state of the area using the funds provided by the fine.

Will the valuations of environmental destruction developed by SEPA be sufficient to redress the damages done by polluters? An alternative valuation of environmental destruction, the green GDP, has already been shelved by the authorities earlier this year, in part because some of its calculations showed the costs of environmental damage to completely negate the growth reported by regular GDP. Given China¡¯s resistance to considering the true costs of economic development, the penalties imposed by the new ecological compensation scheme may indeed fail to meet their mark.

1 Comment

  • 1. Emma Tang  |  September 24, 2007, 9:14 am

    Amercement can't thoroughly solve the severe environment polution problem in today's china.
    how to establish an efficient supervising mechanism and improve the environment protection consciousness of the whole nation are the keys which shall be considered by us.

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