Financing Models for Soil Remediation in China

The report analyzes the current state of soil pollution in China and evaluates several financing models for remediation, including 'Remediation + Development', 'Polluter Pays', Public-Private Partnerships (PPPs), green bonds, industrial funds, and the 'land ticket' system. It highlights a significant funding gap, noting that while the market is growing, the costs of remediation—potentially reaching dozens of trillion yuan—far exceed current government allocations. The document identifies critical barriers such as unclear historical pollution responsibility, a lack of specialized soil pollution laws, and the high risk and low return of remediation projects. It recommends transitioning from purely government-funded models to diversified, mixed-fund structures that leverage social capital and innovative green finance instruments.

• A 2014 nationwide survey revealed that 16.1% of China's total soil is contaminated, with 1.1% being seriously contaminated. Pollution is more severe in southern China, particularly in the Yangtze River Delta, the Pearl River Delta, and the northeast old industrial base.
• There is a massive funding gap for soil remediation in China; while the '12th Five-Year Plan' allocated 30 billion yuan from the Central Government, total remediation needs may reach dozens of trillion yuan.
• The 'Polluter Pays' principle is often impractical in China because historical pollution responsibility is frequently unclear, and the costs of remediation often exceed the financial capacity of the responsible parties.
• The 'Remediation + Development' (R+D) model, based on the 'beneficiaries pay' principle, is effective for industrial sites where land value appreciation can fund cleanup, but it is rarely used for mining or farmland due to low value-added potential.
• Public-Private Partnerships (PPPs) are being used to share risks and attract social capital, as seen in the Yuetang Zhubu Port project, which estimated a total investment of 9.5 billion yuan over 3-5 years.
• China has become the largest green bond market in the world, with the scale of issued green bonds reaching 205.231 billion yuan by the end of 2016, though transparency and international recognition remain challenges.
• The 'land ticket' system in Chongqing has successfully incentivized the reclamation of unused rural construction land into cultivated land, generating 34.566 billion yuan from the sale of 172,900 acres of land tickets by December 2015.
• Foreign investment, particularly World Bank loans, provides advantages such as longer terms (up to 50 years for soft loans) and lower interest rates, but is hindered by complex regulatory requirements and slow approval cycles.
• China's soil remediation technology and engineering experience lag approximately 40 to 50 years behind developed countries, though progress has been made in phytoremediation and bioremediation for farmland.

APA

Dong, Z., Qu, A., Duan, Y., Li, H., Yuan, Z., & Guo, Z. (2018). Financing Models for Soil Remediation in China. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/financing-models-soil-remediation-china.pdf

Chicago

Dong, Zhanfeng, Aiyu Qu, Yunting Duan, Hongxiang Li, Zilin Yuan, and Zhixin Guo. Financing Models for Soil Remediation in China. International Institute for Sustainable Development, 2018. https://www.iisd.org/system/files/publications/financing-models-soil-remediation-china.pdf.

Wikipedia

{{cite report |last1=Dong |first1=Zhanfeng |last2=Qu |first2=Aiyu |last3=Duan |first3=Yunting |last4=Li |first4=Hongxiang |last5=Yuan |first5=Zilin |last6=Guo |first6=Zhixin |title=Financing Models for Soil Remediation in China |publisher=International Institute for Sustainable Development |date=August 2018 |url=https://www.iisd.org/system/files/publications/financing-models-soil-remediation-china.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{dong2018financing, author = {Dong, Zhanfeng and Qu, Aiyu and Duan, Yunting and Li, Hongxiang and Yuan, Zilin and Guo, Zhixin}, title = {{Financing Models for Soil Remediation in China}}, institution = {International Institute for Sustainable Development}, year = {2018}, month = aug, url = {https://www.iisd.org/system/files/publications/financing-models-soil-remediation-china.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }