Full Text: Integrated Reform Plan for Promoting Ecological Progress

VIII. Improving the Market System for Environmental Governance and Ecological Conservation

41. Fostering market entities for environmental governance and ecological conservation

Systems, mechanisms, policies, and measures that encourage energy efficient and environmentally friendly industries will be adopted. Regulations and practices that hinder fair competition and the creation of a nationally unified market will be discontinued, and all types of investment will be encouraged to enter the environmental protection market. Non-government investors may participate in the development and operation of any environmental governance or ecological conservation program where cooperation between government and non-government investment is viable. By means of government procurement of services and other methods, more support will be provided for third-party governance of environmental pollution. The transformation of organizations in charge of the operation and management of wastewater and refuse treatment facilities into companies that exercise independent accounting and management will be accelerated. Companies that take investment from or are operated with state capital will be set up or created through reorganization in order to encourage greater investment of state capital into environmental governance and ecological conservation. Support will be given to state-owned firms in fields of ecological and environmental protection to reform toward a mixed-ownership system.

42. Promoting the trading of energy-use rights and carbon emissions rights

Combined with efforts to see that major energy-consuming organizations increase energy efficiency and to subject new projects to energy reviews, the trading of energy saved on projects will be allowed, and will progressively move toward the trading of energy-use rights based on the cap system for energy consumption. A trading system and a measurement and verification system for energy-use rights will be established. Energy performance contracting will be promoted. Trials of carbon emissions rights trading will be deepened, a national exchange for carbon emissions rights will be progressively created, and a national plan for setting the total trade and quota allocation of carbon emissions rights will be formulated. The carbon trading registration system will be improved and a regulatory system will be established for the carbon emissions rights exchange.

43. Promoting the trading of pollution rights

On the basis of the cap system for enterprise pollution emissions,improvements will be made as quickly as possible to the granting of initial pollution rights, and coverage will be expanded to include more pollutants. Working from the foundations provided by the current mechanism for granting pollution rights to administrative regions, and on the basis of the best industry-wide levels of pollution emissions, the mechanism will be gradually strengthened to ensure the cap system for enterprise pollution emissions is implemented and the trading of pollution rights creates incentives for emissions reductions at the level of the individual enterprise. In key river basins and key areas for air pollution, implementation of pollution rights trading across administrative regions will be carried out as appropriate. Trials for the payment-based use and trading of pollution rights will be expanded to include more areas where conditions are appropriate. Efforts will be stepped up to improve the pollution rights exchange. Regulations will be developed on granting pollution rights, collecting and using pollution rights use fees, and setting trading prices.

44. Promoting the trading of water rights

Combined with efforts to establish an effective mechanism for compensating the expenses of water ecosystem protection and conservation, water-related rights will be appropriately defined and allocated and ways of trading water rights between regions, between river basins, between the lower and upper reaches of rivers, between industries, and between water users will be explored. Research will be conducted into formulating regulations concerning the trading of water rights, to clearly define the scope and types of tradable water rights, the trading entities and time frames, the mechanisms for determining trading prices, and the rules for the operation of the exchange. An exchange for water rights will be developed.

45. Establishing a green finance system

Green credit will be promoted, with research being undertaken into adopting methods such as government interest subsidies to boost the level of support. All types of financial institutions are encouraged to step up grants of green loans. Requirements for the due diligence of borrowers as well as their legal responsibilities concerning environmental protection will be clarified. Efforts will be stepped up to further develop the systems related to capital markets. Research will be conducted to explore the establishment of a green stock index and the development of relevant investment products, and studies will be undertaken to explore the issuance of green bonds by banks and enterprises, encouraging the securitization of green credit assets. Support will be given for the launch of multiple types of green development funds, the operations of which will be market-based. A mechanism will be established for the mandatory release of environmental protection information by listed companies. Guaranty mechanisms for energy-efficient, low-carbon, and environmentally friendly projects will be improved, and the level of risk compensation increased. A compulsory liability insurance system for environmental pollution will be established in sectors involving high environmental risks. A green rating system as well as a non-profit system for calculating environmental costs and evaluating environmental impact will be established. Cooperation of all types with other countries will be promoted in green finance.

46. Establishing a unified system for green products

Products that are licensed as environmentally friendly, energy-efficient, water-saving, circular, low-carbon, recyclable, or organic will be uniformly classified as green products, and standardized green product standards, certifications, and logos will be established for them. Improvements will be made to policies on fiscal and tax support and government procurement for the research and development, production, transport, delivery, purchase, and use of green products.