for example taxes can incentivize new investments while lowcost loans facilitate behaviour change given one third of chinas territory is reported to be affected by acid rain and local air pollution affects major cities across the country reducing sulfur dioxide and nitrogen oxide emissions has been the key environmental target in china while initially only newly built installations were to be equipped with such facilities subsequently also most of existing coal power plants needed to be retrofitted the payment scheme is supported by other policies for power plants equipped with flue gas desulfurization fgd that give priority to them for connections to grids permission to operate longer than plants that do not install desulfurization capacity and priority dispatching in shandong and shanxi provinces