The Polluter-Pays Principle and its Implications for Environmental Governance in China

Abstract

The polluter-pays principle aims to correct market failure and its resulting social injustice by shifting pollution costs from the public at large to polluting enterprises, while at the same time reducing the amount of pollution produced. This article argues that China’s undoubted commitment to the implementation of the polluter-pays principle as a key instrument of pollution control in its domestic jurisdiction necessitates as a matter of legal principle a corresponding reliance on a nationally regulated system of verification of pollution data by private-sector firms operating at arm’s length from the government. Even though China has taken significant steps to implement the polluter-pays principle, to date there has been no provision for independent third-party verification of the monitoring-and-reporting practices of polluting enterprises. Instead, verification of the reported data is being carried out by the government itself, through site inspections by teams of government agents. In its eagerness to enforce environmental law in a society where violations by polluters are the norm more than the exception, China’s government is contravening the polluter-pays principle’s requirement of ‘independence’ in the verification of pollution data. For the principle to be implemented fairly, the legislature should facilitate the development of an industry of environmental verifiers in the country’s non-government sector.