Special Economic Zones and Improved Environmental Management in China

This paper discusses how SEZs might play a leading role in the development and promotion of improved environmental management policies in China. SEZs have several important characteristics that will assist in this process. First, the people living in SEZ areas are relatively affluent and well educated, giving them a higher demand for environmental quality and a willingness and ability to pay for environmental improvements. Second, SEZs can utilize their strong international ties to help them import and adopt advanced environmental management knowhow and technology from abroad. Third, SEZs have relatively new and well developed infrastructure and planning that can facilitate the adoption of new technologies in areas such as transportation and water treatment. And finally, SEZs history of experimentation with regulatory, legal and institutional structures will facilitate the development of new, innovative programs and policies to support environmental management.

Examples of advanced environmental management policies and programs that SEZs might develop include:

• Investment incentives to encourage existing and new companies to adopt or develop green technologies, such as those that enhance energy efficiency;
• The adoption of economic incentives, such as environmental taxes, subsidies and tradable discharge permits, to control water and air pollution, encourage green building and the efficient use of water and energy, mitigate habitat loss or meet other environmental goals;
• Implementing resource recovery systems in sewage and solid waste management;
• The use of community based social marketing techniques to create grassroots support for environmental initiatives such as recycling, solid waste reduction, reductions in car usage and other programs.