Amending China's Air Pollution Prevention and Control Law

174 Pages·2009·1.4 MB·English

AMENDING CHINA’S AIR POLLUTION PREVENTION AND CONTROL LAW:
RECOMMENDATIONS FROM THE INTERNATIONAL EXPERIENCE

Natural Resources Defense Council
Regulatory Assistance Project
Richard Ayres/Ayres Law Group
Chris James
David Novello
Jessica Olson
Art Williams
Michael Walsh

Supported by:
The Energy Foundation, China Sustainable Energy Program

July 2009
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TABLE OF CONTENTS
PREFACE....................................................................................................................................................................I
CHAPTER ONE: AIR QUALITY REGIONS AND REGIONAL OFFICES........................................................................6
CHAPTER TWO: NATIONAL AMBIENT AIR QUALITY STANDARDS......................................................................12
1. SUMMARY OF RECOMMENDATIONS.............................................................................................................12
2. INTRODUCTION...................................................................................................................................................13
2.1. Ambient Air Quality Standards and Human Health Protection as the Foundation..........................................13
2.2. Harmonize Ambient Air Quality Standards with Other Important Chinese Regulatory Tools, such as Total
Emissions Control...................................................................................................................................................13
2.3. Establish Clear Consequences for Failure to Meet Ambient Air Quality Standards........................................14
3. U.S. EXPERIENCE WITH NATIONAL AMBIENT AIR QUALITY STANDARDS..........................................15
3.1. Benefits of NAAQS.........................................................................................................................................15
3.2. History and Background of NAAQS...............................................................................................................16
3.3. Legal Framework for NAAQS.........................................................................................................................17
3.4. Air Pollution Health Standards Comparison....................................................................................................19
3.5. Process for Adopting or Revising a NAAQS...................................................................................................22
CHAPTER THREE: COMBINING AIR QUALITY STANDARDS WITH TOTAL EMISSIONS CONTROL (TEC)..........26
1. SUMMARY OF RECOMMENDATIONS.............................................................................................................26
2. INTRODUCTION...................................................................................................................................................27
3. AIR QUALITY-DRIVEN PROGRAMS IN THE U.S...........................................................................................27
4. EMISSIONS-DRIVEN PROGRAMS IN THE U.S................................................................................................28
4.1. New Source Performance Standards................................................................................................................29
4.2. MACT standards for Hazardous Air Pollutants...............................................................................................30
4.3. The Acid Rain Control Program......................................................................................................................30
5. EVALUATION: ARE AIR QUALITY-DRIVEN AND EMISSIONS-DRIVEN REGULATIONS
COMPATIBLE?..........................................................................................................................................................32
CHAPTER FOUR: STATE IMPLEMENTATION PLAN PROCESS...............................................................................34
1. SUMMARY OF RECOMMENDATIONS.............................................................................................................34
2. INTRODUCTION...................................................................................................................................................35
3. STATE PLANNING IN U.S. CLEAN AIR ACT...................................................................................................36
4. THE STATE IMPLEMENTATION PLAN PROCESS..........................................................................................38
4.1. Clean Air Act requires the EPA to establish air quality standards...................................................................38
4.2. States are required to monitor NAAQS pollutants...........................................................................................38
4.3. EPA classifies areas as attainment or nonattainment.......................................................................................38
4.4. EPA makes formal designation and notifies state Governor(s)........................................................................39
4.5. State-federal planning process is initiated........................................................................................................40
4.6. Three offices at EPA work with state authorities to develop, approve, and enforce plans..............................42
4.7. Plans are continuously re-evaluated.................................................................................................................44
4.8. Air Quality Improvement Has Been Impressive..............................................................................................45
5. LESSONS FOR CHINA..........................................................................................................................................47
CHAPTER FIVE: REQUIREMENTS IN U.S. “NONATTAINMENT” AREAS................................................................49
1. SUMMARY OF RECOMMENDATIONS.............................................................................................................49
2. INTRODUCTION...................................................................................................................................................50
3. GENERAL REQUIREMENTS FOR NONATTAINMENT AREAS.....................................................................52
4. NONATTAINMENT “NEW SOURCE REVIEW” PERMIT PROGRAM............................................................56
4.1. Applicability....................................................................................................................................................56
4.2. Obtaining Emissions “Offsets”........................................................................................................................57
4.3. Installing Controls Representing the “Lowest Achievable Emissions Rate”...................................................58
5. FAILURE TO ATTAIN NATIONAL AMBIENT AIR QUALITY STANDARDS..............................................59
6. CONCLUSION.......................................................................................................................................................59
CHAPTER SIX: THE TITLE V OPERATING PERMIT PROGRAM.............................................................................61
1. SUMMARY OF RECOMMENDATIONS.............................................................................................................61
2. INTRODUCTION...................................................................................................................................................62
3. GOALS OF THE TITLE V OPERATING PERMIT PROGRAM.........................................................................64
4. APPLICABILITY...................................................................................................................................................64
4.1. Who Must Obtain a Permit?.............................................................................................................................64
4.2. What CAA Requirements Must Be Included in the Permit?............................................................................65
5. STATE PERMIT PROGRAMS AND EPA REVIEW OF PROGRAMS...............................................................65
5.1. State Program Requirements............................................................................................................................66
5.2. EPA Review of State Programs.......................................................................................................................66
6. PERMIT APPLICATIONS.....................................................................................................................................67
6.1. Timely and Complete Applications.................................................................................................................67
6.2. Content of Applications...................................................................................................................................67
6.3. Insignificant Activities and Emission Units.....................................................................................................67
6.4. Compliance Plans, Schedules, and Certifications............................................................................................68
6.5. The Process of Applying for a Permit..............................................................................................................68
7. PERMIT CONTENT...............................................................................................................................................69
7.1. Permit Terms....................................................................................................................................................69
7.2. General Permits................................................................................................................................................70
8. PERMIT ISSUANCE, JUDICIAL REVIEW, RENEWALS, AND REOPENINGS..............................................70
8.1. Public Involvement in Permit Issuance............................................................................................................70
8.2. Judicial Review of Permit................................................................................................................................71
8.3. Permit Renewals..............................................................................................................................................71
9. PERMIT REVIEW AND EPA OVERSIGHT OVER STATE PROGRAMS.........................................................71
9.1. Review of Permits by the EPA and Neighboring States..................................................................................71
9.2. EPA Oversight Over State Permit Programs...................................................................................................72
10. PERMIT FEES......................................................................................................................................................72
11. DIFFERENCES WITH NEW EU MULTIMEDIA PERMIT PROGRAM..........................................................72
12. CONCLUSION.....................................................................................................................................................73
CHAPTER SEVEN: THE ROLE FOR AIR QUALITY REGIONS AND REGIONAL OFFICES IN CHINA’S AIR QUALITY
MANAGEMENT SYSTEM..............................................................................................................................................74
1. SUMMARY OF RECOMMENDATIONS.............................................................................................................74
2. INTRODUCTION...................................................................................................................................................75
3. FUNCTIONS OF REGIONAL OFFICES FOR AIR QUALITY MANAGEMENT..............................................76
4. POTENTIAL BENEFITS OF REGIONAL AIR QUALITY MANAGEMENT IN CHINA.................................76
5. REGIONAL APPROACHES IN THE UNITED STATES.....................................................................................77
5.1. Federal EPA Administrative Functions...........................................................................................................78
5.2. National Air Pollution Issues...........................................................................................................................78
5.3. State-initiated Regional Efforts........................................................................................................................80
6. CASE STUDY: THE CLEAN AIR INTERSTATE RULE....................................................................................82
6.1. Background......................................................................................................................................................82
6.2. EPA’s Clean Air Interstate Rule......................................................................................................................83
6.3. Determination of Demonstrated and Available Technologies.........................................................................84
6.4. Determination of Cost-effectiveness of Available Technologies.....................................................................84
6.5. Apportionment of Allowances.........................................................................................................................84
6.6. Applicability to China......................................................................................................................................86
7. REGIONAL MECHANISMS IN THE EUROPEAN UNION...............................................................................86
8. REGIONAL APPROACHES IN CHINA...............................................................................................................87
CHAPTER EIGHT: REDUCING AIR POLLUTION THROUGH TECHNOLOGY STANDARDS: COMPARING THE U.S.,
E.U. AND CHINA..........................................................................................................................................................90
1. SUMMARY OF FINDINGS AND RECOMMENDATIONS................................................................................90
2. INTRODUCTION...................................................................................................................................................90
3. U.S. MECHANISMS..............................................................................................................................................91
3.1. U.S. Technology-based Requirements for Industrial Emitters.........................................................................91
4. EU TECHNOLOGY MEASURES.........................................................................................................................94
5. CHINA’S INDUSTRIAL ENERGY EFFICIENCY STANDARDS......................................................................95
6. COORDINATING ENERGY AND ENVIRONMENTAL REGULATION..........................................................97
CHAPTER NINE: MOTOR VEHICLE POLLUTION CONTROL IN THE UNITED STATES...........................................98
1. SUMMARY OF RECOMMENDATIONS.............................................................................................................98
2. INTRODUCTION...................................................................................................................................................98
3. DEVELOPMENT OF THE U.S. PROGRAM........................................................................................................99
4. CONCLUSIONS...................................................................................................................................................103
CHAPTER TEN: INTEGRATING ENERGY AND ENVIRONMENTAL POLICY..........................................................104
1. SUMMARY OF RECOMMENDATIONS...........................................................................................................104
Recommended Policy Reforms.............................................................................................................................104
2. INTRODUCTION.................................................................................................................................................104
3. BACKGROUND...................................................................................................................................................105
3.1. What does it mean to integrate energy and environmental priorities?...........................................................105
4. FOUR RECOMMENDED POLICY REFORMS.................................................................................................109
4.1. Multi-pollutant Strategies for Air Quality Management................................................................................109
4.2. Technology Standards for Reduced Industrial Pollution...............................................................................109
4.3. Output-based Generation Performance Standards.........................................................................................110
4.4. Environmental Dispatch Using Continuous Emissions Monitoring Systems (CEMS)..................................111
CHAPTER ELEVEN: MULTI-POLLUTANT CONTROL POLICIES: AN INTEGRATED POLICY FRAMEWORK FOR
MORE EFFECTIVE AIR QUALITY MANAGEMENT....................................................................................................112
1. SUMMARY OF RECOMMENDATIONS...........................................................................................................112
2. INTRODUCTION.................................................................................................................................................112
2.1. Why use a multi-pollutant approach?.............................................................................................................114
2.2. Where have multi-pollutant approaches been adopted?.................................................................................115
2.3. How might China implement a multi-pollutant approach?............................................................................116
CHAPTER TWELVE: INFORMATION GATHERING & TRANSPARENCY..............................................................118
1. SUMMARY OF RECOMMENDATIONS...........................................................................................................118
2. INTRODUCTION.................................................................................................................................................118
2.1. Environmental Impact Assessment................................................................................................................119
2.2. Policymaking.................................................................................................................................................120
3. BACKGROUND...................................................................................................................................................120
4. EPA’S INFORMATION-GATHERING AUTHORITY.......................................................................................120
4.1. Requirements for State Information-Gathering Programs..............................................................................121
4.2. EPA’s Broad Authority to Require Emitters to Disclose Information...........................................................121
4.3. Information Gathering Authority for Motor Vehicles and the Acid Rain Program.......................................122
5. TOXIC RELEASE INVENTORY REPORTING.................................................................................................123
6. DISCLOSURE IN THE EIA PROCESS...............................................................................................................123
7. EPA’S GENERAL TRANSPARENCY OBLIGATION IN POLICYMAKING..................................................124
7.1. Transparency Requirements of the Clean Air Act.........................................................................................126
8. CONCLUSIONS...................................................................................................................................................127
8.1. Information Disclosure from Emitters...........................................................................................................127
8.2. Transparency..................................................................................................................................................128
CHAPTER THIRTEEN: ENFORCEMENT OF THE U.S. CLEAN AIR ACT.............................................................129
1. SUMMARY OF RECOMMENDATIONS...........................................................................................................129
2. INTRODUCTION.................................................................................................................................................130
3. BACKGROUND...................................................................................................................................................132
4. FEDERAL ENFORCEMENT UNDER THE U.S. CLEAN AIR ACT................................................................133
4.1. Industrial Sources of Pollution.......................................................................................................................133
4.2. Enforcement Options.....................................................................................................................................134
4.3. Acid Rain Cap & Trade Program...................................................................................................................138
4.4. Motor vehicles...............................................................................................................................................138
4.5. Motor Vehicle Fuels......................................................................................................................................139
5. STATE ENFORCEMENT AUTHORITY............................................................................................................140
6. CITIZEN SUITS....................................................................................................................................................141
6.1. Citizen Suits against the EPA........................................................................................................................141
6.2. Citizen Suits against Emitters........................................................................................................................142
CHAPTER FOURTEEN: U.S. CLIMATE POLICY.................................................................................................144
1. SUMMARY OF FINDINGS AND RECOMMENDATIONS..............................................................................144
2. INTRODUCTION.................................................................................................................................................145
3. DEVELOPING U.S. APPROACHES TO REDUCING GREENHOUSE GAS EMISSIONS.............................145
4. FUNDAMENTAL POLICY CONSIDERATIONS..............................................................................................147
4.1. U.S. Demand for Electricity is Inelastic.........................................................................................................147
4.2. Cost-based Dispatch of Power Plants............................................................................................................148
4.3. Consumers’ Inability to See Full Price Signal from Higher Energy Prices...................................................148
5. FEDERAL AND STATE INITIATIVES..............................................................................................................149
5.1. Proposed Federal Legislation.........................................................................................................................149
5.2. Regulation by Northeastern States.................................................................................................................150
5.3. California Regulation (Assembly Bill 32).....................................................................................................151
6. FUEL EFFICIENCY STANDARDS FOR MOTOR VEHICLES........................................................................151
7. CAP AND TRADE REGULATION OF CARBON EMISSIONS FROM INDUSTRIAL EMITTERS..............152
8. MAJOR ISSUES IN DESIGNING A CAP & TRADE SYSTEM TO CONTROL GREENHOUSE GAS
EMISSIONS..............................................................................................................................................................153
8.1. Reduction Targets & Baseline.......................................................................................................................154
8.2. Scope of Regulation.......................................................................................................................................154
8.3. Point of Regulation........................................................................................................................................154
8.4. Allocation of Allowances..............................................................................................................................155
8.5. Lifetime of Allowances..................................................................................................................................155
8.6. Use of Proceeds from an Auction..................................................................................................................155
8.7. “Safety Valve” Proposals...............................................................................................................................157
8.8. Offsets............................................................................................................................................................157
9. CONCLUSION.....................................................................................................................................................158
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PREFACE

In November 2008, China’s Ministry of Environmental Protection (MEP) invited a number of
U.S. air pollution experts to a workshop in Beijing to discuss the proposed amendment of
China’s Atmospheric Pollution Prevention and Control Law (“Air Pollution Law”) and lessons
that might be learned from the U.S. air pollution regulatory system, the 1970 U.S. Clean Air Act
and the Clean Air Act’s subsequent amendments. China’s Air Pollution Law has not been
amended since 2000, and many provisions of the Air Pollution Law need to be amended to
respond to the demands presented by a China that has changed dramatically in the span of less
than ten years.
Following the November workshop, a team led by the Natural Resources Defense Council, the
Regulatory Assistance Project, and the Energy Foundation’s China Sustainable Energy Program
prepared a set of written recommendations for the Air Pollution Law revision. The team was
composed of some of the leading experts in air pollution regulation in the U.S., including former
federal and state environmental officials, energy utility regulators, participants in the original
drafting of the U.S. Clean Air Act and its amendments, and top experts in environmental law.
These recommendations were delivered to MEP and other stakeholders in December 2008.
Based on subsequent conversations with Chinese government officials and research institute
leaders, it became apparent that a more in-depth analysis of international experience in air
pollution regulation was necessary to enable Chinese legislative drafters to better understand the
history and context surrounding air regulation in the U.S. and other jurisdictions, and to learn
about successful practices that China might utilize, and also failures that China should be careful
to avoid. The international experience, all parties agreed, contained important experience that
could benefit China, and understanding the best practices and past mistakes of the developed
countries would ideally allow China to “leapfrog” to an advanced stage much more quickly.
Chinese officials and experts all noted, however, that an authoritative resource of air regulatory
practices in the U.S. and elsewhere, at a level of detail that would allow Chinese drafters to
properly assess how to adapt international practices to Chinese circumstances, did not yet exist.
This volume attempts to provide such a resource in the Chinese language for the first time. The
fourteen chapters herein cover key topics raised at the November 2008 Beijing workshop as the
most important issues for the amendment of the Air Pollution Law. The content of these
chapters benefits from the more than 45 years of combined China experience of the three
sponsoring organizations—the Natural Resources Defense Council, the Regulatory Assistance
Project, and the Energy Foundation, China Sustainable Energy Project—as well as the
participation of some of the leading experts on air pollution regulation in the U.S. The
biographies for the research team members are listed after this preface.
We hope this report will serve as a useful source of information for the current revision of the
Air Pollution Law, but also remain an unparalleled resource in the future for Chinese legislators,
air pollution regulators, and researchers who want to understand how international experience in
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air regulation—both good and bad—can contribute to the strengthening of China’s framework
for air pollution control and environmental protection in general.
Natural Resources Defense Council
Regulatory Assistance Project
Energy Foundation, China Sustainable Energy Project

Beijing, China
July 2009

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