The Ministry of Finance and the National Environmental Protection Agency have recently approved Jiangsu Province's pilot program for the paid use and trading of emission rights, focusing primarily on water pollutant discharge indices within the Taihu Lake Basin. This initiative marks a significant step in China's environmental policy, aiming to integrate market mechanisms into pollution control efforts.
According to recent reports, the pilot program includes four key components. First, it involves setting an initial price for major water pollutants in the Taihu Lake area, treating discharge permits as valuable resources for initial allocation. Second, in 2008, Jiangsu Province initiated the allocation of Chemical Oxygen Demand (COD) emission rights and established the first market for these rights. In 2009, the program expanded to include ammonia nitrogen and total phosphorus, introducing a paid system for their emission rights in the basin.
Third, from 2008 to 2010, the project gradually developed a dynamic digital platform for emission rights trading, forming a functional market for the main water pollutants in the Taihu region. Finally, the program also focused on developing total discharge control technologies and advanced management systems to support long-term sustainability.
It is reported that the pollutants involved in this trial—such as COD, ammonia nitrogen, and total phosphorus—are significant contributors to pollution from chemical and papermaking industries. According to the Jiangsu Provincial Department of Environmental Protection, the initial price set for companies to purchase COD emission rights was nearly double the cost of pollution control. This means that the upcoming emission trading will not only increase pressure on enterprises to reduce pollution but also ensure proper compensation for the use of emission rights. It reflects the core principle of environmental pricing: "What amount of environmental resources you use, you must pay for." This approach encourages more responsible resource usage and supports the broader goal of sustainable development.
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