growth of the middle class has contributed to the fast rise in solid waste, a trend which is likely to increase with the arrival of approximately 16 million new urban residents per year (OECD, 2009). Land use patterns and urban design in Chinese urban Cities have often been evaluated as inefficient and unsustainable (Wei and Zhao, 2009; Lichtenberg and Ding, 2000; Ding, 2009). The poor environmental conditions in urban cities have spurred debate about barriers that give rise to the local environmental implementation gap.

# **3. Local Institutional Barriers**

Institutional factors are one particularly significant reason why national environmental policies are often not well implemented at the local level. (e.g., World Bank China 2030 Report). While it is not possible to analyze all dimensions of these institutional challenges here, the following pages analyze the principal aspects: shortcomings in China’s planning system and policy instruments; weak economic and political incentives for local implementers; low levels of public participation and private sector involvement; and insufficient implementation capacities of local agencies in charge of policy implementation.

# _3.1 Shortcomings in China’s Green Planning System and Policy Instruments_<sup>_3_</sup>

China has employed a mix of top-down command and control methods and market-based mechanisms to propel the switch to a resource-efficient and low carbon growth path.<sup>4</sup> Since 1972, the central government has very noticeably deployed more and more administrative instruments to enhance compliance with national environmental rules and standards. In the last four decades, more than 28 environmental and resource laws, 150 national administrative environmental regulations, 1300 national environmental standards, and 200 departmental administrative regulations have been issued (Chang, 2008 quoted in He et al., 2012, p.31).

More recently, China has also experimented with a variety of market-based instruments to supplement existing command and control tools, including piloting a dozen sub-national voluntary emission cap-and-trade schemes, rolling out a three-tiered electricity pricing system, promoting energy service companies (ESCO) and introducing numerous payment for ecosystem services to improve water, air, forest, and soil management (Kostka and Shin, 2013; Liang and Mol, 2013; Shin, 2013; see also Section 5.1 of this report). Yet the majority of these market-based instruments have not scaled up to nation-wide programs due to the lack of market preconditions and excessive state intervention in emission trading formats, allocation methods, and pricing approaches (Lo, 2013; Shin, 2013). With market-based instruments still in their infancy, China’s environmental governance system continues to rely primarily on top down command and control instruments.

Among the many different command and control instruments, setting binding environmental targets has become the key environmental management tool in China. Environmental targets are incorporated into the target responsibility system ( _mubiao zeren zhi_ ), wherein the central government sets a national target for a policy or program and then assigns specific targets for particular areas. Central leaders’ priorities are communicated by differentiating between “soft”,

> 3 This section draws on Kostka (2014).

> 4 For a list of various top-down regulatory and market-based environmental management instruments used in China since 1972, see He et al. (2012, p. 31).

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