4. Case study – energy policy
4.2. Coal fired power plants and energy policy in the governance theory framework
4.2.3. Outcome of the governance framework
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4.2.3. Outcome of the governance framework
Having analyzed the process of policy development and implementation as well as the allocation of resources, my focus shifts to the aspect of measuring the outcome of governance. I described the definition of the three dimensions in chapter 3.2.1.
Dimension “Selection and Monitoring”
As mentioned before, China is not known for its strengths in citizens‟ participation.
The fact that the at least in the English literature virtually no studies can be found related to citizens‟ influence on coal mining and coal-fired power plant decisions is a indicator of governance shortcomings. Much of the process depends on the Chinese Communist Party and how it manages its political, economic and social affairs.
The environmental and social threats from the coal industry are a growing risk as a destabilizing factor and the cause of a growing number of violent protests. In most of the protests are in the form of petitions and complaints, which are increasing at a rapid pace. In 2000 the Environmental Protection Bureau (EPB) received 247,741 complaints and petitions concerning pollution. Within only six years, complaints more than doubled to 616,122 in 2006. Air pollution accounts for about half of the cases.342 This statistic allows no further breakdown of the sources of air pollution. Since coal mining produces a lot of toxic dust and coal power-plants in China often operate with unfiltered emissions, a large proportion of air pollution complaints are most likely linked to coal. Protests are likely to become even more widespread. The growing urban middle class is increasingly aware of governance shortcomings which affect their health and quality of life and its willingness to take political action may grow.343 Protests are not a priori a negative indicator for the governance outcome. The fact that the resentments are expressed presents an opportunity to improve China‟s governance capacity to compensate the shortcomings in direct participation.
342 van Rooij, "The People vs. Pollution: understanding citizen action against pollution in China," 62.
343 Steinfeld, "Energy Policy", 15.
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Dimension “Efficiency”
According to the WGI, China performs best in the efficiency dimension, both in government effectiveness (GE) and regulatory quality (RQ).
Due to the nature of China‟s electricity industry, which is mainly based on coal, environment regulations play an important role. Environmental awareness is not only a critical factor that determines the future of energy policies, but as the citizens of China become more affluent, they demand better quality living and hence become more aware of environmental problems.344 It may harm the Chinese leadership‟s
“„harmonious‟ goals (i.e., environmentally friendly growth with some rudimentary social protection and effective political order) .”345 Nevertheless, legitimacy is derived from steady and rapid economic growth and job expansions. Measuring efficiency in energy and electricity governance shows two opposite results.
Given its primary economic goals, the outcome of China‟s energy policy is impressive as there are no complaints of electricity blackouts or ever rising prices which would harm economic development. Although „guanxi‟ (connections or personalized networks of influence) and corruption may have a negative impact, regulatory effectiveness in commercial transactions is still considered better in China than, for example, in India.346 The good results can be related to poor outcome under
„selection and monitoring.‟ The limited existence of democratic institutions gives the Communist Party a “greater capacity for making decisions, and also greater policy integration and coherence across a large society, despite continuing change347” which can explain its strengths in efficiency.
As far as secondary goals such as environmental protection are concerned, efficiency has to be considered as very weak. One of the causes for this is how performance in policy implementation in China is measured. It is policy compliance that is measured but rather than the actual outcome of implementing government policies. An illustration of this problem is that local officials have been required to maintain a certain rate of local economic growth regardless of whether such growth is efficient or
344 Wu, "Deregulation and growth in China's energy sector: a review of recent development," 1420.
345 Pranab Bardhan, "India and China: Governance Issues and Development," The Journal of Asian Studies, Vol. 68, No. 02 (2009), 353.
346 Ibid., 354.
347 Yongfei Zhao and B. Guy Peters, "The State of the State: Comparing Governance in China and the United States," Public Administration Review, Vol. 69, No. s1 (2009), 122.
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sustainable. As long as local officials accomplish the growth policy goals, however, little attention is paid to how they have achieved the results.348 “The massive tension between rapid environmental degradation and the strategic goal of maintaining high growth targets will undermine China‟s environmental basis and affect health and well-being.”349 A modification of environmental governance may be found in the growing relevance of grass-root level actors which the central level has empowered to a limited degree.350 Although Lo and Leung351 doubt any effective influence of major environmental organizations like Friends of Nature352 and China‟s Environmental Protection Foundation, they may have a positive influence in facilitating foreign assistance and mobilizing popular support for implementing the central-government‟s environmental policies.
Dimension “Respect”
The last dimension, „respect,‟ includes trust in the legal system (RL) and control of corruption (CC). According to the WGI, we can expect a moderate result with some good and some bad sides.
The size of China‟s electricity producing industry makes it one of the major global players. In that sense, issues concerning the legal system affect not only the domestic but also the global level. Since China is the world‟s largest emitter of carbon dioxide,
353without Chinas efforts, „governing‟ these issues will be much less effective. Coal burning in power plants accounts for most of the increasing emissions. The environmental problems in many cases affect not only one country but its neighbors and in the case of carbon-dioxide, the whole world. The negotiations on international treaties and agreements will move China even further into a process of global governance,354 where the issues relating to „respect‟ become even more important.
348 Jie Gao, "Governing by goals and numbers: A case study in the use of performance measurement to build state capacity in China," Public Administration and Development, Vol. 29, No. 1 (2009), 27-28.
349 Olivia Bina, "Context and Systems: Thinking More Broadly About Effectiveness in Strategic Environmental Assessment in China," Environmental Management, Vol. 42, No. 4 (2008), 731.
350 Lo and Leung, "Environmental Agency and Public Opinion in Guangzhou: The Limits of a Popular Approach to Environmental Governance," 678.
351 Ibid.
352 Guobin Yang, "Environmental NGOs and Institutional Dynamics in China," ibid.Vol. 181, (2005).
353 Steinfeld, "Energy Policy", 126.
354 Howell, "Getting to the Roots: Governance Pathologies and Future Prospects", 227.
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While protest (see „selection and monitoring‟) against environmental pollution is rising, legal action has remained at a relatively low level. “Civil litigation against pollution is limited: the number of cases has fluctuated, with 2,136 cases nationwide in 2006, compared to 4,453 and 1,545 in 2004 and 2005, respectively.”355 Although national and local rules, including rules on enterprise pollution, have improved, the legal system is not yet fully developed. “While this body of law has improved, studies show that existing rules continue to contain weak, unfeasible, unclear, and incomplete elements that limit citizen rights, and offer leeway for polluting enterprises and discretion to government institutions.”356
A problem in the legal system is the division of legislative power among central and local legislatures and powerful local governments, which has resulted in a “high degree of discretionary power at the local level.”357 In large infrastructure projects, which most coal and electricity projects are, power is often abused, a problem that has resulted in local protectionism and a misuse of the legal system. Corruption and uneven application of laws are often related to energy issues. According to official estimates, as much as 10 to 14% of all procurements costs are either wasted, overpriced or frauds.358 Moreover, emission fees paid by companies are collected without proper supervision or legal justifications, thus not only sowing the seeds of widespread corruption but also stoking popular discontent among the public.359 As in other countries, this is associated with land deals, construction projects, bank lending, social security funds, and other activities.360
355 van Rooij, "The People vs. Pollution: understanding citizen action against pollution in China," 61.
356 Ibid., 68.
357 OECD, OECD Reviews of Regulatory Reforms - China - Defining the Boundary Between the Market and the State (Paris: OECD, 2009c), 101.
358 Ibid., 164.
359 Kong, "China's Energy Decision-Making: becoming more like the United States?," 791.
360 Steinfeld, "Energy Policy", 14.
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