Michael Livermore, Water Pollution and Regulatory Cooperation in China, 44 Cornell Int’l L.J. 349 (2011) (with Hong Lan & Craig A. Wenner)
Abstract: Government authority in China, while constitutional organized as a unitary sovereign, is, in practice, a complex system of informal and formal divisions of authority between national, provincial, and local political actors. In the context of water pollution control, an issue of considerable interest in China, both central and subnational authorities have key roles. The incentives faced by some officials, however, are ill-aligned with environmental protection, predictably leading to inefficiently high levels of pollution.
Recent changes in China’s water pollution regime have the potential to create a more successful cooperative arrangement between the national and subnational governments. There reforms impose stronger economic and bureaucratic discipline on subnational authorities for environmental outcomes, yet preserve large degrees of discretion for achieving central targets. This approach maintains a largely decentralized system while helping to counteract some of the problems that have undermined China’s water pollution efforts in the past. Although these reforms have strong potential, they can be improved with stronger environmental incentives for national officials, less intra-bureaucratic tension, expanded river basin planning, and experimentation with compensation mechanisms and trading to reduce regional disparities. In addition, information collection, the creation of more proportional penalties for non-compliant subnational actors, and an expanded role for cost-benefit analysis can help alleviate some of the shortfalls of the existing law.