Economic policies should be used to solve environmental issues, said a signed article in Southern Metropolis Daily. The following is an excerpt:

Environmental economic policies are measures to adjust and affect market behaviors through tools such as price, taxation, credit, fees and insurance aimed at realizing the coordinated development of the economic construction and environmental protection.

Compared with traditional administrative measures that produce external restrictions, environmental economic policies are a kind of internal restriction power. They are the most effective long-term method of solving environmental problems. China, which faces a serious environmental situation, has a pressing need to implement environmental economic policies.

Here are the policies we should first consider:

The traditional collection of environment-related fees should continue.

The capital chain of polluting companies should be cut directly or indirectly in the green capital market.

Fees for ecological compensation should be charged.

The environmental department can set a total emissions volume according to regional environmental quality standards, situations, pollution sources and economic technological levels and establish a market for emission trade. The biggest advantage of emissions trading is that the total cost of pollution reduction can be controlled while the initiatives of polluters in pollution control can be aroused. For example, authorities can gradually reduce the total emissions quota on the market so that companies will have increased drive for pollution control.

Green trade should be promoted. The export of high-polluting, high-energy-consuming and low-added-value mineral products as well as the import of waste should be strictly restricted.

Green insurance, or ecological insurance, is important. For example, the environmental pollution responsibility insurance means that once accidents happen the insurance company will compensate victims. Therefore enterprises will not go bankrupt and the government's financial burden will be reduced.

The above seven policy measures have been repeatedly discussed in academic circles and related departments but have not been put into practice. A main reason is because it concerns the adjustment of power and interests among various departments, industries and regions.

Once the environmental economic policy system is implemented, it will be significant for our environmental protection cause and provide solid institutional support for the realization of China's scientific development concept. It will be an important landmark on China's road to modernization.

(China Daily September 29, 2007)