## The Developmental Trajectory of ETP in China
### Phase 1: Environmental Targets Banded with Local Municipalities, 1972-1989  
Problem streamChina's environmental target emerged from a water pollution crisis of Guanting reservoir, which is located in the Beijing suburb and is the major drinking water source for Beijing residents. In early spring of 1972, many dead fish appeared in this reservoir area, and the nearby residents were suffering from unexplained physical discomfort. Although this pollution event was not publicly reported, it still attracted the attention from the general public, and the leaders of the central government were greatly shocked due to this rather serious matter. The central government organized a broad scope investigation, and it was discovered that the water of Guanting reservoir had been heavily polluted by waste water from upstream factories [16]. This event made the central leaders in China realize that Guanting reservoir pollution was the epitome of the environmental condition of the 1970s' China where the ideology of \"production comes first and living comes later\" was prevailing across the country. A substantial number of industrial factories were constructed without installation of pollution treatment equipment [17]. Politics streamThe Guanting incident sounded the alarm for environmental protection in China. In August 1973, the central government convened the 1 st National Environmental Protection Conference (NEPC), which produced the Provisions on Environmental Protection and Improvement. The Provisions stipulated that all construction projects must draw up environmental impact assessment (EIA) reports and install pollution treatment equipment before operation. To enforce the Provisions, the central government established the Environmental Protection Leading Group (EPLG) taskforce in 1974. The EPLG was formally institutionalized as the Environmental Protection Administration (EPA) under the Ministry of Housing and Urban-Rural Development (MHURD) after the Third Plenary Session of the 11 th CPC Central Committee in 1982, and was administratively upgraded to an independent State Environmental Protection Administration (SEPA) after the 2 nd NEPC in 1984. The establishment of the environmental authority and the upgrade of the EPA's bureaucratic status step-by-step were gradual movements within the politics stream that sent out a clear signal of China's determination for environmental protection. Later in 1989, at the 3 rd NEPC, the participating ministries clearly perceived the strong political commitment to environmental protection, and jointly proposed the Environmental Targets Responsibility System, claiming that local municipalities should be responsible for formulating and monitoring annual environmental targets. Policy streamThe policy stream during this phase focused on enacting environmental laws and establishing standards from scratch. In 1977, the Constitution of China was amended by writing: \"the State protects the environment and natural resources against pollution and other damage\". This adjustment provided a great momentum to the births of China's Environmental Protection Law (trial) (EPL) in 1979, the Marine Environmental Protection Law (MEPL) in 1983, the Water Pollution Protection Law (WPPL) in 1984, and the Air Pollution Protection Law (APPL) in 1987. With the laws as a legal basis, and with specific features having emerged from a bureaucratic developmental process, a set of ambient environmental standards were established during the 1980s. Consequently, a combination of the Pollutant Emission Permit Approach and the Sewage Charge System was introduced by SEPA in 1989. Since then, the industrial factories have had to register and apply for the emission permits from local municipalities before discharging. _Coupling of streams and the crucial decision._ An event sequence graph of phase 1 is shown in Figure 3. In this phase, the Guanting water pollution first coupled with the 1 st NEPC in the politics stream in 1973.