Editorial:

‘Polluter hurts’ principle

TWO separate but interconnected items in the July7-8 issue of China Daily provide a window to finding the proper balance between economic growth and environmental conservation.

In the first item, China’s central bank was quoted as saying that banks should stop lending to projects that “cause heavy pollution and waste energy.”

At the same time, it urged commercial banks to set up a long-term mechanism for using lending to stimulate technological innovation for cutting energy use as well as emissions.

To say the directive is timely is an understatement. More than most countries, China needs to move fast and substantially to stem the backlash of years of reckless disregard for environmental guidelines across the board, especially in those sectors that “delivered,” so to speak, in terms of sustaining its breathless, double-digit GDP growth for more than a decade. Hence, policy tools, such as a central bank directive to steer lending toward the more environmentally responsible business sectors, merit highest priority.

To be sure, most multilateral organizations have been using a similar approach to arrest environmental degradation around the globe: use money, i.e., official development assistance, as carrot to encourage desirable business practices, especially in the extractive industries and, lately, in terms of shaping energy development and use.

The second related item in the China Daily pertains, meanwhile, to the “stick” side. If lending were to be used as carrot to encourage the responsible businesses and the technological innovators in energy, the “polluter pays” principle has long been used as policy tool to discourage the reckless ones.

Yet, as a commentary in the Chinese paper indicated, the polluter—and here it is emphasized, whether local or multinational, whose governments preach green business—often prefers paying to complying with a whole tangle of regulations, which can be much costlier.

Writing in the paper’s “China Forum,” Chen Weihua cited as a classic example of such mindset the Carlsberg beer joint venture in Tianshui in Gansi province. Because the fine was so penny ante, the company, according to a recent news report cited by the author, was “simply willing to pay a fine twice a year for its lack of wastewater-treatment facilities.” And why not? The fine per slapping is 5,000 yuan ($657), and the cost of setting up a treatment plant is 3.9 million yuan ($513,000)—or more than 700 times more.

While at this, we draw attention to last week’s report of our local Department of Environment and Natural Resources, which boasted of having collected more than P34 million in pollution fines over a 16-month period.

Now, P34 million may be a big amount by itself, but in the context of how much certain industries and sectors have been polluting our air and waterways and soil, the sum is clearly small. That in turn validates the long-held suspicion that here in the Philippines, as in most parts of the planet like China, pollution fines and sanctions have not yet been carefully calibrated as to: one, truly serve as a deterrent to bad practice; and two, fully capture the extent of damage.

In setting fines, planners must include in the computation the true environmental cost of the degradation sought to be avoided, and the cost of implementing the regulation. Sadly, that’s not being done.

The bigger, more realistic cost of breaching regulations should be reflected especially in the context of globalization, where giant multinationals are linking arms with local companies. As some Chinese commentators have rightly lamented, it is so easy for the West to set high environmental safety standards and impose this on the developing world—while casting a blind eye to the practices when these involve companies of their nationals who have relocated their pollution to the south.

Indeed, the lesson in this age of climate-change anxiety seems one that’s relevant across the entire planet: if leaders must use policy tools to balance the environment with growth, they should first make sure the tools, either as carrot or stick, will do the trick. 

TWO separate but interconnected items in the July7-8 issue of China Daily provide a window to finding the proper balance between economic growth and environmental conservation.

A surfeit of liquidity has turned even conservative central banks in Asia into yield hogs.

IN four days, the antiterror law will be upon us. Despite assurances that the law contains adequate safeguards against misuse and abuse, the fact is—this regime operates above the law. 

It is laudable that the government is pushing the wider use of alternative fuel vehicles, or AFVs, particularly those with engines designed to run on a gasoline blend of at least 20 percent ethanol or a diesel blend of at least 10 percent biodiesel, or those that use blended fuel in combination with natural gas or even electricity.

Looking beyond the implementation of the Human Security Act, it is now necessary for the Supreme Court to designate a special division of the Court of Appeals to handle requests for wiretapping operations against suspected terrorists as provided for in Section 7 of this Act.

When the Electric Power Industry Reform Act (Epira), otherwise known as Republic Act 9136), was signed into law in 2001, many had reason to be hopeful that at last, the days of reasonable or cheaper power rates were well nigh at hand.

This is with regard to the column of Justice Secretary Raul Gonzalez, entitled “A Buyer’s Nightmare,” which came out in your July 2 issue.