Green Investment Climate Country Profile - China
Government could encourage different regions to provide greater environmental protection incentives for local governments. Many reports have for some time concluded that China is at an important crossroad, needing to rationalize the trade-off between the continued reliance on lowest cost energy to drive its industrial competitiveness and the consequences of environmental degradation. China’s concerted efforts demonstrate how tough the challenge is to overcome. Deeper EE improvements and scaling of commercial RE are needed. Going forward, the Government will need to continue strengthening the quality of its administrative programs and balance them more with market-based tools. One measure could be to explore options to explicitly price both local and global externalities in order to level the playing field for new entrants in green technologies. Besides continuing its efforts to make further improvements on the EE front, the Government has to find the right policy mix to significantly alter its primary energy mix and reduce its dependence on fossil fuels, especially coal. Moving forward on a national cap-and-trade regime, and imposing carbon tax and other resource taxes are options under consideration. Whatever the mix, China should ensure that RE, EE and carbon emissions policies are consistent and coordinated.
The World Bank – AusAID
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