Regional collaboration, green supply chain, stricter laws, market mechanism key to beating pollution

China has done well in terms of regional cooperation on the economic front, but it is time for tighter laws and more regional efforts to fight air pollution through market mechanisms such as the carbon trading system, said Fred Krupp, president of the US-based Environmental Defense Fund.

There have been calls for the government to revise its air pollution control laws, raise standards to reduce air pollutants and reduce coal burning, a top source of carbon dioxide emissions.

The concept of penalizing polluters on a daily basis for as long as the violation continues has been introduced to China's water laws, and could also be extended to air pollution regulations, Krupp said.

Real estate tycoon Pan Shiyi recently started a discussion on popular micro-blogging site Sina Weibo about whether the country should enact its own Clean Air Act. Most respondents said they supported such a national legislation.

The Clean Air Act was passed in 1963 in the United States for handling air pollution, and is credited with preventing 205,000 premature deaths in the 20 years after it took effect.

China has announced the implementation of stricter standards for diesel by the end of 2014 to reduce the amount of smog-causing sulfur.

"Certainly that's important, but equally important is to ensure the approach is balanced at mobile sources as well as the stationary sources," Krupp said.

Mobile sources of air pollution include motor vehicles and airplanes, while stationary sources include power plants, refineries, and factories.

According to Krupp, the market approach is very valuable to ensure every dollar spent reduces as much pollution as possible, and closer regional cooperation is also key because Beijing's air pollution is a combination of local and non-local pollutants.

"An emissions trade framework makes it easier for the region to cooperate," he said.

China plans to move to a national carbon emissions trading system by 2015. Pilot programs have been started in Beijing, Shanghai, Shenzhen, Tianjin and Chongqing, and two provinces, Guangdong and Hunan.

"These are not small pilot programs, these are pilot programs covering almost as many people living in the entire United States," Krupp said.

"It's a suitable time for China to be learning what works with Chinese characteristics under the Chinese context. But it does take time to figure out what the best rules are."

Countries such as China and Australia are in the process of developing their individual carbon trading systems, but some have also started exploring the possibilities of establishing a broader Asia-Pacific or worldwide carbon market.

"China should build one carbon market by itself, instead of linking to other places. That's the way to create the real situation, creating the infrastructure, the experience, the credibility... It doesn't need other people," said Daniel Dudek, vice-president of the Environmental Defense Fund.

China is a very diversified country, and developed and developing areas can trade on the principle of "common but differentiated responsibilities", he said.

Krupp said that apart from government legislation and regulations, the most effective thing companies can do voluntarily to curb air pollution is to create a green supply chain.