Putting Price On or Cutting Price Off?

Almost everyone in the world knows the air quality in China has gotten terrible. As a Chinese national who lived in Beijing for 22 years, I feel deeply upset about this. People’s lives are truly harmed by the smog. Parents worry over their children’s health; elderly people get sick more easily; young people have no choice but to breathe this air on their way to work every day.


I believe that the Chinese government is trying to change the situation. Back in 2008, when the government first started to restrict car usage by alternating the licenses that could go out different days, the main goal was to reduce traffic. Now, this policy is more about controlling the air pollution. Additionally, the government has started to shut down some of the factories around big cities. Hebei Province, one of the biggest manufacturing cities near Beijing, is going through lots of reform. They have done a lot, but we all know China still has a long way to go.

What the Chinese government is doing now can be summarized as putting a price on pollution and cutting the price on energy-efficient vehicles. I feel that both actions are helpful, but there is one precondition: implementing the action effectively.

For instance, even though the Chinese already drafted an environmental tax, it has proven hard to implement. Many small industrial boilers have not installed pollution control equipment, and large coal-fired power plants were not operating their pollution control units properly. The problem has many causes. First, it’s difficult to catch non-compliance, especially among small polluters. Every day, we hear on the news that the government has punished many of the small, non-compliant factories, but there are always more. Second, there is no governmental department that collects national pollution data . Since China has a large population and large land area, there is a need to create a database and a specific department to issue corrections. Lastly, but most importantly, it is cheap and easy for polluters to violate environmental regulations. They sometimes just have nothing to lose, or they can pay a bribe to a “governor” to avoid the fee. If China wants to make this environmental tax real and effective, they must to figure out a way to prevent these kinds of behaviors.

When talking about cutting the price, I mean that there need to be tax exemptions on purchases of “new-energy” vehicles and vessels. China introduced 10% tax exemptions on new-energy vehicles in 2012, but in 2013 announced further tax cuts on domestic purchasing by 50%. However, experts widely recognize that cutting car emissions alone won’t be enough to solve the nation’s pollution issues. I think this is a meaningful step, not only because we care about air quality, but because it shows China’s support of world sustainability.

Air pollution will continue to be a long-term problem for China if further steps are not taken to mitigate pollution. Here are a few more ideas China should consider:

  1. Improve manufacturing technology. Most of the pollution is caused by inefficient processing methods.
  2. Set harsher punishments to both governors and factories who violate environmental policies.
  3. Advocate green industries & green transportation.

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