Environmental economic impact assessment in China: Problems and prospects

The use of economic valuation methods to assess environmental impacts of projects and policies has grown considerably in recent years. However, environmental valuation appears to have developed independently of regulations and practice of environmental impact assessment (EIA), despite its potential benefits to the EIA process. Environmental valuation may be useful in judging significance of impacts, determining mitigation level, comparing alternatives and generally enabling a more objective analysis of tradeoffs. In China, laws and regulations require the use of environmental valuation in EIA, but current practice lags far behind. This paper assesses the problems and prospects of introducing environmental valuation into the EIA process in China. We conduct four case studies of environmental economic impact assessment (EEIA), three of which are based on environmental impact statements of construction projects (a power plant, a wastewater treatment plant and a road construction project) and one for a regional pollution problem (wastewater irrigation). The paper demonstrates the potential usefulness of environmental valuation but also discusses several challenges to the introduction and wider use of EEIA, many of which are likely to be of relevance far beyond the Chinese context. The paper closes with suggesting some initial core elements of an EEIA guideline.