Summary Report of the Task Force on Financial Mechanisms for Environmental Protection, the Third Phase of CCICED

Amongst many fundamental factors affecting environmental protection, such as environmental policy, investment and technology, environmental investment has been the bottleneck for long constraining the development of environmental protection in China. Current situation in three aspects has highlighted the bottleneck problem. Firstly, China is still facing a severe environmental status. It takes great sum of investment to accomplish environmental objectives set down for the Tenth Five-Year Plan period. Secondly, whilst China is entering the era of constructing a well-off society in an all-around way, its ecological environments will face greater pressures. Economic growth and social development need sustained support from a sound ecological environment. At the same time, public’s need for a better living environment is increasingly growing. Thirdly, after three decades of tireless efforts, China has established comparatively holistic environmental legislation and policy systems. In this context, environmental investment is gradually becoming a critical factor for the implementation of environmental policy, research and development of environmental technology, solution of outstanding environmental problems, improvement in overall environmental quality, and achievement of sustainable development. The Chinese Government has incisively identified the bottleneck problem of environmental investment and prioritized it in governmental agenda. There is urgency in finding the solutions to this problem. In this context, under the financial support of the Japanese Government, China Council for International Cooperation on Environment and Development (CCICED) has approved the establishment of a Task Force of Financial Mechanisms for Environmental Protection in China in the first year (2002) of its third phase activities. The objectives of such Task Force are, to identify key problems faced by the environmental financing in China, to find innovative approaches to the solution of those problems regarding the