A: Thank you very much for joining us, Professor, we appreciate it.

W: Thank you.

A: This is going to be the second time you talk about the“government failures”in the environmental protection during the two sessions, you use the term specifically“government failure”. Can you talk a little about what those government failures are?

W: The term,“government failure”is a special term used by economist, so it should not be understood as a general term.“Government failure”, that’s a big problem. But in terms of economics, government failure is a problem.

A: How big are the problems in the environmental protection in China?

W: The report of the National Committee of the Communist Party in the recent year said the cost of economic growth for environment and resources is too high. So this conclusion shows that the current pattern of economic growth is unsustainable. So this is a kind of market failure.

A: Can you give us a specific case of where government failure in the environmental protection area has come forward?

W: One recent example is the Taihu Lake, the Tai Lake; it’s a big lake near Shanghai. 2 years ago, because of the serious pollution, people along the lake lost their drinking water; they don’t have drinking water, because water there is so dirty. It’s kind of emergency for some of the cities and towns nearby the lake. I think that’s a good example of government failure in terms of regulation. If all of the local government along the lake is really serious about the water pollutant discharge long time ago, there will be no such kind of emergency or accident happen 2 years ago.

A: How did they get that serious? Did the local government not report the problem to the state government?

Local government priorities

W: I think the local government, they know the situation, but they just don’t have the motivation to control it, because the main leader of their government is focused on economic growth only, and also because if they want to control this kind of pollution, they need a lot of financial resources, they need money to put aside for that, but that is also something the local government don’t want to do, they want to use all of their money for economic purposes.

A: I would think economically even though, it would be a good idea to get a problem like that solved because then, in that instance, you get people who get sick and then and they are depending on the government for money then.

W: Now we have to spend much, much more money to solve this problem. Mostly government officials at local level or even at central level, the N.1 priority is to promote economic growth. So, usually they forget about the cost. They focus on to promote economy in the five year of their official term. And what is cost for the future long time? They largely ignored. So that’s why our research found out one of the reason for this problem is, in our law, there is no system or provision or legal system to check this kind of governmental mistake or governmental mistake or governmental failure. Our law is mostly focused on enterprises, business. Our law has many detailed provisions on controlling pollutant discharge or this kind of things. It seldom has a system or provisions about performance or behavior for government. I don’t think you can put all the blame on business; the government should take major part of this blame.

A: I read it in an article that you had written that there’s a lack of communication that seems from the state level to some of the local levels in implanting these changes.

W: Currently the top of our government has realized this problem and is really serious about it. But the lower level of the government, because officials at local level have got used to the old economic growth pattern and they are mostly still following the old pattern of economic growth.

A: Would you think that maybe there needs to be almost a new position created that is a person or a department that work with the state and the local levels?

W: The central government tried one way to establish more supervision from the central government to local government. For example, the environmental ministry of China has set up 6 regional centers, just like that in the US, 6 regional centers to supervise the local government performance in environmental protection. However, we need to do more than that.

A: What do you think needs to be done even more?

W: The local officials, they belong to the local government. So even thought the central government finds out some problem, or find out they didn’t follow environmental law, but the government have no direct control on local officials, even though the government has set up regional centers. So we need to find a way to let local officials be serious about environmental protection.

A: Do you feel like the government is taking it seriously, the issues in getting some protection out there?

W: The government has made important policies called“saving energy and reduce pollution”. That’s a national policy and national program. Now everywhere, every province has their compulsory target for reducing energy consumption and for reducing pollutant discharge. The data of last 3 years shows that the pollution and energy consumption, the curve’s little bit turning down. The situation of China is near the turning point, I would say.

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