November 17, 2015, by Editor
Preventing Smog Crisis: New Thinking for Energy Policy-Making in China
Written by Jingzheng Ren and Liang Dong.
China’s smog crisis and air pollution has become an inescapable topic once more. Almost in the same period as the Indonesian haze made the headlines, China has also been suffering from severe smog, in which straw burning is one of the culprits, despite local governments’ efforts to provide environmental-friendly guidance, financial support and drafted strict regulations to guide the recycling of straw. However, many farmers in China still chose the cheapest and crudest way to dispose of straw, burning it rather than recycling for sustainable use, e.g. power generation, bioethanol production and biogas production, because compared with burning, straw recycling is more expensive and labour intensive.
Subsidies from the local governments exist, but they far from sufficient, even if the bioenergy companies are ready to purchase agricultural waste. It is also difficult for the local governments to give enough financial support to the farmers for straw recycling due to the limited fiscal budget. What is more, the farmers will also suffer from declining soil fertility without burning straw. Therefore, the policies for promoting biomass to energy face a bottleneck and innovative policies design is required.
The above case calls for a rethink in China’s policy-making for promoting the development of renewable energy. The policy-makers lack in-depth understanding of the key points for promoting straw to energy: improving the recycling efficiency and lowering the recycling cost. To some extent, straw recycling suffers from a dilemma: It is rather difficult for the farmers to balance the environmental and economic gains and trade-offs. Policy makers need to take more effective fiscal incentives and measures to resolve the bottleneck, such as subsidies, tax exemption and low interest credit to encourage the large energy enterprise to participate in the recycling of straw for sustainable development, and improve the consciousness of environment protection of Chinese farmers to cooperate with the large enterprise for collecting straw on a large scale.
Meanwhile, strict supervision is needed to guarantee effective and efficient policy implementation. The critical questions include: is there the new thinking that can be used for policy-making in China for making it more effective? According to our investigations, there are two problems in China’s energy policy-making: (1) the policy-makers cannot fully represent the stakeholders in policy-making; (2) the policy-making cannot achieve democratic or judicial decision-making.
The purpose of energy policy-making is to promote the industry development, and the stakeholders are the key actors in the value chain. The experts in China are usually top scholars or high-level administrators who have abundant knowledge and experience, and their technical judgements may be accurate and objective for addressing the energy security and climate change problems, but they cannot represent the real preferences and willingness of the stakeholders.
The straw recycling case highlights that in practice, policy effectiveness and efficiency is far beyond pure technical factors, the social factors should also be taken into consideration, especially in countries like China, which have large regional disparities and gaps between rich and poor regions. Therefore, the policies made based on the technical judgments of the experts sometimes will deviate from the original goals of the policy-makers, and cannot effectively incentivise the stakeholders.
The experts of bioenergy may not completely understand the preferences of these farmers due to the difference in preferences. Sometimes, China’s policy-makers may feel surprised that China’s farmers insist on burning straw rather than collecting it for utilization in a sustainable way even if the government sets various policies for supporting them, but they do not really know the income of the farmers well, so the subsidy determined in the policy is far away from the requisite level. We suggest that the experts in China’s policy-making need to put themselves in the shoes of the stakeholders and consider the preferences of the stakeholders when providing the technical judgements.
Meanwhile, policy-making is a complicated science in China, a politics-dominated country with vast regional disparities and development gaps, and the results should benefit both the development of energy and the public. We would also like to emphasize that diverse policy-makers/decision-makers should be incorporated to assure that the judgements are convincing and judicial to the public. Effectiveness, efficiency as well as social equity should be taken into consideration at the same time. Although there is usually a panel of experts participating in China’s policy-making, the correctness and justice of the results are still questioned due to the limitation of the diversity of the experts.
For instance, some Chinese people doubt scientific judgements that the nuclear power industry is secure because most scientists in China work directly or indirectly for the government. They suspect that research outcomes are dominated by political priority. We argue that the diversity of experts should be increased to avoid black-box operations in China’s policy-making and should incorporate multiple experts in terms of nationality, affiliation, profession, age and preference for energy policy-making in China.
Dr. Jingzheng Ren is Assistant Professor at Department of Technology and Innovation, University of Southern Denmark. Dr. Liang DONG is current a researcher at CML, Leiden University. Image credit: CC by Josh/Flickr