Abstract: This paper describes China’s energy and environmental degradation problems in terms
of air pollution, water pollution, CO2 emission and shortage of energy. It discusses the laws,
agencies established and policies introduced to solve the energy-environment problems as well as
the practical difficulties in the implementation of government environmental policies. Finally it
presents three major issues to be resolved. Contact: fax 609-258-7315; gchow@princeton.edu.
Acknowledgements: The author would like to acknowledge financial support from the Gregory C.
Chow Econometric Research Program and the Center for Economic Policy Studies of Princeton
University in the preparation of this paper and the congenial atmosphere of the Department of
Economics and Finance of the City University of Hong Kong in which the paper was completed.