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JOURNAL OF ZHEJIANG UNIVERSITY  2025, Vol. 55 Issue (3): 128-143    DOI: 10.3785/j.issn.1008-942X.CN33-6000/C.2024.08.291
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The Regulatory Dilemmas and Institutinal Responses in Private Sector Environmental Governance in China
He Xiangbai
Guanghua Law School, Zhejiang University, Hangzhou 310008, China

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Abstract  Developing a modern environmental governance system is an inherent requirement for China to achieve its ecological civilization, especially given China’s severe environmental challenges. Both the CPC and the State Council have emphasized that this environmental governance system should be Party-led, government-driven, enterprise-focused, and inclusive of public participation. Current studies mainly focus on the rationale and methods for building a modern environmental governance system, with insufficient attention paid to the legal challenges and normative dilemmas it faces. The participation of private entities such as market and social forces in environmental governance is the most significant difference between the modern environmental governance system and the traditional government-led environmental regulation system.After analyzing the evolution of China’s environmental governance from government-led regulation to a more collaborative approach, this article argues that private environmental governance needs to be grounded in the environmental rule of law. Without a robust environmental rule of law, effective public environmental governance cannot be achieved. Environmental rule of law can establish a framework for private environmental governance, balance diverse interests, enhance the predictability of private governance behaviors and outcomes, and prevent governance pitfalls such as power abuse, resource misallocation, and corruption.Through normative analysis of relevant laws and comparative analysis of government-led environmental regulation versus private environmental governance, this article concludes that China's current environmental legal system, which is based on the deterrent and adversarial relationship between regulators and the regulated entities, and focuses on strengthening the government’s regulatory powers and corporate environmental obligations, is not yet fully equipped to provide sufficient normative basis and effective institutional support for private environmental governance. Private environmental governance, which relies on the interaction and cooperation among multiple actors, and is implemented through mechanisms such as autonomy, negotiation and regulation authorization, faces three normative dilemmas: lack of governance rules, difficulties in holding private entities accountable for their governance behaviors, and unclear boundaries between government intervention and private environmental governance.To address these normative dilemmas, China’s environmental legal system must first establish clear rules for private environmental governance, and clarify government’s role in setting up framework, providing incentives, coordinating efforts and ensuring accountability. The ongoing codification of environmental code in China presents a valuable opportunity to institutionalize pluralistic environmental governance. Meanwhile, the essence of private environmental governance lies in achieving administrative objectives through private mechanisms, which involves balancing private interests with public interests, and reconciling economic efficiency with public responsibility. Therefore, it is necessary to delineate the scope of private environmental governance and establish accountability mechanisms to ensure that private environmental governance achieves its public administrative goals.A notable contribution of this article is the proposal of five criteria to determine whether governance should be conducted by private entities or through government administrative intervention (1) the level of environmental risk and its potential for widespread impact. For example, severe and irreversible risks may require greater regulatory intensity; (2) the maturity of private entities and the competitiveness of the market. The more competitive the market is, and the greater the number of social organizations, the more self-regulation, cooperative governance or third-party governance can be deployed; (3) the level of specialization and technical complexity of the environmental issues and fields involved. If it involves highly specialized or emerging technologies, the government can encourage enterprises to use their own technological advantages for self-regulation or co-regulation; (4) the potential consequences of direct government regulation, such as corruption or high regulatory costs; (5) the direct correlation between environmental regulation/governance and environmental public interests, including the severity of environmental damage and the urgency of protecting public environmental interests.
Key wordsprivate environmental governance      self-regulation      cooperative governance      government intervention      accountability     
Received: 29 August 2024     
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He Xiangbai
Cite this article:   
He Xiangbai. The Regulatory Dilemmas and Institutinal Responses in Private Sector Environmental Governance in China[J]. JOURNAL OF ZHEJIANG UNIVERSITY, 2025, 55(3): 128-143.
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https://www.zjujournals.com/soc/EN/10.3785/j.issn.1008-942X.CN33-6000/C.2024.08.291     OR     https://www.zjujournals.com/soc/EN/Y2025/V55/I3/128
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