Evolution of environmental policy for China's rare earths: Comparing central and local government policies

Abstract

Rare earths (REs) are important critical mineral resources in China and play an important and irreplaceable role in social and economic development. However, REs production is associated with serious environmental pollution problems. As a major producer, China has introduced a series of environmental policies from the central and local governments for the environmental pollution caused by REs production, and many policy tools have been used to rectify these environmental issues. In this study, a content analysis method is used to investigate the structure and function of China's environmental policy for REs based on policy tool theory. The results show that an increase in level has occurred from local policy to the comprehensive policy of the central government. In terms of policy tools for REs, the central and local governments use basically the same types of mandatory and direct-provision command-control tools, while economic incentive and social autonomy tools are considered supplementary. The policy tools involve all aspects of the REs value chain but mainly affect mining and smelting processes. The local governments of provinces with serious environmental problems tend to adopt more command-control types of tools, while provinces with more-developed economies tend to use more flexible economic incentive tools. Moreover, provinces with stronger demand for technological development and industrial transformation tend to use economic incentive policy tools. Based on the historical development trends of existing policy tools, our study predicts that command-control tools will continue to be the main types of tools used for the environmental regulation of REs over the next 10 years and that the use of financial expenditure and tax tools will increase. In addition, property exchange and private market tools will gradually be applied.