The United States government and many other governments across the globe see the importance in protecting international environmental concerns. When US companies expand abroad, incentives and regulations attempt to prevent environmental abuse. Corporate social responsibility is a priority for companies hoping to please investors and customers.
An issue companies face when trying to improve environmental corporate governance is that many times environmental integrity is not profitable. Chinese companies specifically have had a reputation for setting aside environmental concerns in the pursuit of profits. The smog that plagues China is not a secret. Chinese Communist Party leaders are finally reacting to public pressure to rebalance priorities and reduce air pollution however.
The Chinese State Council issued an Action Plan on Prevention and Control of Air Pollution in 2013. The Plan, “serves as the guidance for national efforts to prevent and control air pollution for the present and the near future.” Many provinces have followed in the National Plan’s footsteps. The most polluted province in China is Hebei and this past 2013 year, thirty five factories were closed in Pingshan County, Hebei. The closure of these cement factories lead to 3,780 layoffs and subsequently a hit to the economy.
In order for a plan like this to work, it is important to adjust incentives. The Chinese Cabinet seems to recognize this and is offering 1.6 billion dollars in funding to incentivize the prevention and control of air pollution.
Will China’s new focus on environmental recovery provide a positive effect on the country? How will thousands of job losses be recovered? Is it too little too late? Should countries continue to have sovereignty over the environmental hazards in their own territories? Don’t air and water pollutants effect the globe as a whole and not just the country in which it originates?
Cites:
The National People’s Congress of the People’s Republic of China http://www.npc.gov.cn/englishnpc/news/
Ministry of Environmental Protection: People’s Republic of China http://english.mep.gov.cn/News_service/infocus/201309/t20130924_260707.htm
APnews http://apnews.myway.com/article/20140306/DACC55U82.html
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CBC
http://www.cbc.ca/news/world/china-to-cough-up-283-billion-to-clean-up-air-pollution-1.1324866
I do not believe it is too late for China to clean up the pollution in the air. The United States and other now developed countries during the Industrial Revolution were polluting the air without thinking of the consequences. Of course science has helped us with better understanding and China is polluting in the 21st century and not the 19th, but things like this seem to always be ahead and the law eventually catches up to right the wrong. Just like the United States and others having laws protecting against air pollution.
Providing incentives shouldn’t be because their is only one environment, but countries need these companies as well as the public needs clean air. It is a good move by the Chinese government to get companies motivated to help stop polluting the air because their obligation is to the people that invest in the company. I believe that it should be left up to country to deal with these types of issues even if air pollution does effect the rest of world because eventually the proof that air pollution is not sustainable and hazardous to human health will make governments change their ways like the Chinese government has done.
I believe that China’s new focus on environment policy will provide a positive effect for their country. While I believe that businesses should have the opportunity to be profitable, there are limitations to this, and factories should be required to adhere to domestic environmental standards. Policies should be rolled out gradually to allow the factories adequate time to implement them. Unfortunately in China this environmental push has come at a particularly bad time. China’s rate of GDP growth has slowed substantially, due in no small part to rising wages which have resulted from their aging population. Rising wages are, of course, great for the Chinese worker, but bad for foreign investors. Adding expensive environmental regulations on top of this may force companies to look elsewhere. That said, not all companies are trying to shirk their environmental responsibilities to bolster their bottom line; many companies take these responsibilities seriously (if only to avoid international censure). While I agree that environmental damage is globally harmful, I do not believe it justifies invading the sovereignty of a nation – this is an issue that can be legally dealt with by the international community through treaties and through the power of the almighty buck.