Want to help China's smog problem? Some lessons learned from the U.S. Clean Air Act

Vehicle testing

Over the past two weeks, former CCTV reporter Chai Jing’s documentary “Under the Dome – Investigating China’s Smog” caused a sensation in China and the rest of the world. We were (naturally) especially interested in the parts of “Under the Dome” that deal with vehicle emissions. China’s vehicle emissions standards lag more stringent ones in more established vehicle markets, though China is catching up. Perhaps more importantly, the existing Air Pollution Prevention Law lacks strong provisions for enforcing standards. Even when manufacturers are found to be noncompliant, China’s environmental authorities have few options for enforcement. As Ding Yan, deputy director of the Ministry of Environmental Protection’s Vehicle Emission Control Center, says with a wry smile in Chai’s film: “I am reluctant to open my mouth for fear the industry will realize that I have no teeth.”

Ding Yan gets to the core of the issue. But China is at this very moment in the process of amending its Clean Air Law. The question is, will the amendments give environmental agencies the teeth they need?

The answer is, it depends.

The highly publicized extreme pollution events (“airpocalypses”) of the past few years have contributed to increased public concern about pollution, including emissions from vehicles and other mobile sources. The proposed amendments to the Air Pollution Law do respond to those concerns. They would significantly augment the provisions of the law related to on-road vehicles, and would for the first time regulate emissions from non-road mobile sources, like construction equipment. Environmental agencies’ compliance and enforcement powers are strengthened, and their authority more clearly defined.

This is all to the good. But the proposed amendments still leave flaws that may limit the effectiveness of the newly added enforcement provisions, and omit measures that would significantly improve China’s ability to control and reduce air pollution from vehicles. Specifically:

The Clean Air Law should require emissions control equipment to be designed to work for the full useful life of a vehicle, to balance responsibility for ensuring real-world emission reductions more evenly among government, automakers, and vehicle owners.

The draft law places a significant burden on the government (particularly the Ministry of Environmental Protection and local environmental bureaus) and car owners for inspecting and fixing in-use emissions violations, and assigns little responsibility to automakers. Instead, it should require manufacturers to design and produce vehicles and engines with durable emission control systems that remain effective throughout the full useful life of the vehicles/engines. Similarly, the law should require manufacturers to warranty key emissions control devices throughout the full useful life of vehicles and engines, instead of relying on car owners to fix in-use emissions problems caused by faulty equipment after some period of use.

Emissions control equipment degrades over time. The concept of full useful life compliance is therefore one of the US Clean Air Act’s bedrock principles. It underlies several key components in US EPA’s vehicle and engine emissions control program, such as durability requirements in the emissions standards, warranty, in-use emissions testing and surveillance, and recall programs. As a result, new vehicles in the United States are typically certified at one-third to one-half of the emissions limit, as manufacturers seek to ensure compliance over their full useful life. This substantial margin is a highly beneficial outcome of shifting the burden of in-use compliance onto automakers—who are demonstrably able to meet it, based on their track record under the CAA in the United States.

Give the Ministry of Environmental Protection the authority to require that manufacturers collect and report vehicle test data to demonstrate compliance.

Another important lesson that the US experience with the Clean Air Act imparts is that compliance and enforcement must be a shared undertaking between government and industry. In the US, manufacturers must conduct initial emissions tests of new models, various in-use emissions tests, and end-of-useful-life tests; they submit these test data, along with other information, such as defect reports, to the Environmental Protection Agency. Manufacturers test thousands of vehicles, and EPA conducts validation and surveillance tests on a smaller number. These tests and reports provide a large database that EPA can use to determine compliance and guide its actions.

The proposed revisions to the China Clean Air Law remain silent on the authority of the regulatory agencies to compel automakers and fuel suppliers to demonstrate compliance with emission and fuel standards—an easily remedied omission.

Strengthen the Ministry of Environment’s authority to bar noncompliant vehicles from being sold.

It is easier and more cost-effective to control emissions before vehicles are sold than after. China currently uses vehicle product catalogues to manage entry into its vehicle market. MEP currently issues catalogues of emissions compliant vehicles, but they are ineffective at keeping noncompliant vehicles out of the market. The reason is that China authorizes multiple agencies to issue vehicle product catalogues for various purposes: safety, fuel efficiency, etc. The industry and many local Public Security Bureaus (in charge of vehicle registration), by tradition, only refer to the catalogues issued by the Ministry of Industry and Information Technology, which are not necessarily in sync with MEP’s catalogues. The draft revised Clean Air Law would actually worsen the situation by withdrawing MEP’s authority to issue vehicle catalogues.

The Clean Air Law should, instead, be revised to provide clear authority to MEP over issuing, implementing, and enforcing a vehicle emissions compliance catalogue, with support from relevant government agencies.

Give local governments and environmental agencies authority to implement complementary policies that will push the market for clean vehicles.

The US EPA’s Blue Sky Engine Series is a voluntary program that certifies engines meeting emission standards at least 40% more stringent than the mandatory standards. These Blue Sky standards have been adopted for non-road gasoline and diesel engines, and marine engines.

China could adapt this concept and give local governments authority to implement a voluntary standard for environment-friendly vehicles and provide incentives to promote their purchase and use. An example to illustrate how such a program might work: Beijing and other severely polluted areas define a clean-vehicle standard that exceeds the national regulatory requirements; include these vehicles, the performance standards, and technologies in their environment-friendly vehicle catalogues; and assign blue stickers to the certified EFVs (China already has a label-based system of vehicle categories, to which the blue sticker would be a new addition). Then the regions could introduce fiscal incentives for manufacturers or consumers to produce and purchase the blue-sticker vehicles. The regions could also introduce nonfiscal incentives, such as differentiated road-use pricing for blue-sticker vehicles.

The new China Clean Air Law will be a significant improvement over its predecessor. But as the saying goes, God is in the detail. Explicitly requiring emissions compliance over a vehicle’s entire useful life, wisely shifting more of the compliance burden to car manufacturers, clarifying MEP’s authority to ban the production and sales of non-compliant models, and providing local environmental bureaus with stronger and more flexible powers are would make an improved law even better, and allow China to more aggressively and effectively address the problem of vehicle emissions.