Enterprises need to take more efforts to embrace sustainable development as environmental protection was high on the agenda of the roadmap for China’s economy in 2018 rolled out by the nation’s top leadership, according to experts.

Although such measures may be painful in the short term, enterprises will gain benefits in the long run by reducing their environmental impact, experts said.

Environmental protection was listed as one of key tasks in order to achieve high-quality growth, according to the statement released after the Central Economic Work Conference which closed on Dec 20.

The statement gives an overview of China’s key economic tasks for the next three years.

The great importance that the leadership attaches to environmental protection has already led to policy changes and enhanced government supervision.

Smokestack industries that supported China industrialization will have to improve their production efficiency and adapt to new economic development trends, experts said.

The central government will improve mechanisms and send more inspection teams to encourage enterprises to cut pollution, according to Bie Tao, head of Policy and Law Department at the Ministry of Environmental Protection.

“The central government’s moves will change local government’s incentives to spur growth, relying less on the economic contribution from highly polluting enterprises,” said Zhang Ning, an economist with UBS Investment Bank.

“Enterprises will have to scale back production of highly polluted products to meet emission standards, otherwise they will be shut down.”

Some economic policy tools play similar roles to encourage enterprises to reduce pollution, such as the environmental protection tax to be collected starting from next year.

From Jan 1, large chemical and energy firms will end up paying several times more than before for causing pollution.

While the government may make adjustment to policies to prevent cutting into enterprises profits that may drive down growth, the tightened regulation on environmental protection is expected to become a “new normal,” which means the government will not lose grip on regulating environmental protection, according to Zhang.

In the meantime, introducing a nationwide carbon market added urgency for enterprises to adapt to the new economic development trend, according to Zou Ji, president of Energy Foundation China.

Enterprises producing 26,000 metric tons of carbon dioxide or more annually will be included in the nationwide carbon market, where firms are able to trade an allowance for emissions to minimize their costs.

Some enterprises in low-carbon and clean energy industries are expected to soon receive benefits from the national trading scheme, according to Zou.