The Chinese government has begun implementing emissions-trading schemes starting from 2013 and seeks to launch the scheme on a national level in 2017. This contrasts sharply with the United States, which fails to implement a market-based policy instrument despite being a market economy. The paradox relates to larger questions about the effectiveness of democratic regimes and the responsiveness of authoritarian regimes to their citizens.
With the steady implementation of seven pilot emissions trading projects in China, the authoritarian regime announced, in 2015, that a nationwide emissions trading scheme will be launched in 2017. This is not unprecedented in the global effort to reduce emissions pollution. In the United States, the Obama governance attempted to launch a nationwide scheme in 2010 but was unsuccessful. China’s ability to launch a nationwide project using data collected from the pilot projects highlights the larger paradox—democratic regimes that aim to represent a wider populace often wind up yielding legislative results that do not necessarily benefit the larger population.
The emissions-trading scheme, also known as the cap-and-trade scheme, sets a limit on the amount of emissions private companies can release within a certain time frame. Companies that do not fully use up their designated number of pollutant permits can sell the unused permits to other companies. The emissions-trading scheme thus depends heavily on the supply and demand of emissions permits and is subjected to the unpredictability of free market. The effectiveness of the emissions-trading scheme in reducing pollution level is controversial, but the irony remains that the US, a self-asserted market economy, cannot implement a market-based policy instrument while China, a command economy, succeeds in doing so.
The United States, in fact, pioneered the cap-and-trade scheme. The Clean Air Act of 1990 has reduced sulfur dioxide emissions up to 80 percent below legal requirement, according to data collected in 2013. In 2010, the US Congress failed to pass a nation-wide emissions-trading scheme under the Maxman-Markey bill partly due to lobbying efforts by coal and oil companies. The bill was also too complicated for the public to understand, not to speak of support. As Debbie Wasserman, the former chair of the Democratic National Committee, said: “citizens wouldn’t support an approach they couldn’t understand to solve a problem our leaders refused to acknowledge.” The US legislative process, vulnerable to political impasse and conflicts of interests, along with the public indifference that stems from ignorance, makes the democratic process onerous to efficient policy making.
China’s attempt to launch a nation-wide trading scheme, in contrast, is less burdened by public ignorance or conflicting political interests. Starting from 2013, China’s central planning agency has implemented variants of emissions-trading schemes in seven distinct cities, the performance of which will shape the national scheme to be implemented in 2017. The Chinese government’s ability to test out policy instruments and then consolidate the nationwide implementation is striking. It is practically infeasible, if not unprecedented, in the US where politicians systematically respond to public concerns.
China’s launch of a market-based emissions reduction scheme may have a larger implication in the global political landscape. The co-existence of an authoritarian governance and a market economy in China offers a sound alternative to transitional democracies that are still vulnerable to dictatorship or a one-party rule. China’s example may send out the message that democracy is not a prerequisite to economic success. Instead, it could even be a roadblock to effective policy making. Angel Hsu, a Professor of Environmental Science at Yale-NUS College, writes that “when China is anticipated to peak emissions in 2030…it will achieve a per capita emissions much lower than many European countries and the United States.” Environmental policies in China, then, do appear more effective as compared to the United States. The frequent political gridlock in US Congress only further strengthens this impression.
One may thus boldly conclude that being responsive to citizens only slows decision making and may even yield policy decisions that fail to benefit the wider population. After all, the Chinese government appears insusceptible to public angst and can thus make policy decisions swiftly.
Yet, even authoritarian regimes like China are not completely unresponsive to public opinion. Indeed, Alex Wang, an Assistant Professor of Law at the University of California Los Angeles, writes that the Chinese government has gradually prioritized environmental policy “to limit risks to the party-state’s hold on power.” Because environmental issues relate to economic growth and social stability, both of which influence the government’s legitimacy, the Chinese government must control pollution level to maintain its legitimacy.
Experts also said that China’s pollution control scheme accords with its larger plans for economic development. Sam Geall, a research fellow on China’s Low-Carbon Innovation at the University of Sussex, writes that the Chinese government intends to transition from energy-intensive industries to innovation and services sectors as the basis of its economic growth. This explains why China has been committing to new climate negotiations and stricter environmental policies. As high-quality economic growth is closely related to how much Chinese citizens trust, and, thereby, comply with the government, it is in the Chinese government’s interest to implement climate-friendly policies. In Geall’s words, an environmentally friendly stance “[addresses] rising public concern about air pollution [and position] the country as a leading exporter of clean technologies.”
It may thus be premature to conclude that authoritarian regimes necessarily prevails democracies in implementing environmental laws on the grounds of their respective accountability to citizens. Authoritarian regimes may still be driven by the interests of citizens, as long as those interests affect the state legitimacy.