outlined in their individual responsibility contracts but effectively put off the difficult matter of economic restructuring (Eaton and Kostka, 2014).

Local cadres also behave very strategically in terms of how to fulfill binding environmental targets. For example, in one municipality in Hebei province, municipal government officials gave leaders in the municipal Bureau of Garden and Green Management the task of planting gingko trees despite the fact that these type of trees are unsuitable to the municipality’s climatic and soil conditions (Shin, 2014). According to municipal leaders, the trees “looked good” and “greenifying” ( _lvhua_ ) the city landscape would help with fulfilling the forest coverage targets. Other local governments purposively did not implement or report all possible energy savings and emission reduction (ESER) measures in order to “leave room for next FYP”. For example, one locality in Hunan had actually over-fulfilled its COD reduction targets

# **Box 4: Strategic and cyclical behavior of local leaders**

Incentives embedded in the cadre evaluation system can aggravate cyclical behaviors among cadres in charge of policy implementation, leading to suboptimal policy outcomes. As the end of the evaluation period approaches, this generally intensifies the pressure on local cadres, which may lead to manipulated statistics or short-sighted responses. This can be illustrated with the example of **lastminute implementation approaches** to meet energy intensity targets at the end of the 11<sup>th</sup> FYP. By the end of 2009, national energy intensity levels had been reduced by merely 14.4%, far short of the expected progress and with only one year left to meet the national FYP target of 20%. As a response, many sub-national governments undertook drastic measures to meet their energy intensity goals in ways harmful to the public interest. For example:

- In one county in **Hebei** province, the local government cut off electricity to homes and rural villages, even to the extent that one hospital was forced to close once every four days.

- In Wenzhou in **Zhejiang** , one district government implemented a “work-5-stop-10” power rationing practice for large enterprises, which was equivalent to working only 10 days per month. This power rationing reduced the production for local entrepreneurs and local employees could earn only a third of their usual wages.

To make matters worst, some companies facing electricity rationing switched to diesel-operated generators, which actually increased pollution. These short-sighted implementation methods in Hebei, Zhejiang and other regions forced the NDRC to issue an emergency note in September 2010 which banned short-term electricity cuts and production limitation methods that affect residential areas and public services. In contrast, after the completion of the 11th FYP targets in 2010, many localities went back to “business as usual” and, at the beginning of the 12th FYP in 2011, they thought of creative ways of easing their new burden. For example, they worked to attract outside companies in the hopes of boosting local growth as a means of manipulating the energy intensity ratio since energy intensity = energy consumed/GDP.

_Source: Kostka and Hobbs (2012); Kostka (2014)_ for the 11th FYP but only reported the minimum COD reductions necessary in order to save the remaining reductions for the 12th FYP (Kostka, 2014).

The existing cadre incentive system is also somewhat problematic as tensions between environmental and competing targets result from the different weights allocated to targets in the cadre evaluation forms ( _kaohebiao_ ). Generally, economic targets significantly outweigh social and environmental targets. For example, in one county in Shanxi province, government officials could obtain a maximum of 28 points for meeting economic targets in the 2011 evaluation forms, while just 14 points were allocated to resources and environment targets (Eaton and Kostka, 2013).

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