Taihu Lake Basin Pilot Emissions Rights Paid Use

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, with a focus on water pollutant discharge indices in the Taihu Lake Basin. This initiative marks a significant step forward in environmental management, aiming to integrate market mechanisms into pollution control efforts. According to reports, the pilot program includes four key components. First, it involves setting an initial price for major water pollutants such as chemical oxygen demand (COD), ammonia nitrogen, and total phosphorus in the Taihu Lake Basin. These discharge indicators are treated as valuable resources for initial compensation. Second, in 2008, Jiangsu initiated the allocation of COD emission rights and established the first market for these rights. In 2009, the program expanded to include paid use and trading of ammonia nitrogen and total phosphorus emission rights. Third, from 2008 to 2010, the pilot project gradually progressed, leading to the development of a dynamic digital platform for emission rights trading. This platform helped form a functional market for the discharge of major water pollutants in the Taihu Basin. Finally, the program emphasized the development of total discharge control technology and advanced environmental management systems to support long-term sustainability. It is reported that the pollutants involved—such as COD, ammonia nitrogen, and total phosphorus—are largely linked to emissions from chemical and papermaking industries. According to the Jiangsu Provincial Department of Environmental Protection, the initial pricing for purchasing COD emission rights was nearly double the cost of pollution control for many companies. This indicates that the upcoming emission trading system will not only increase pressure on enterprises to reduce pollution but also ensure that the cost of using environmental resources is properly accounted for. This approach reflects the core principle of environmental pricing: "What amount of environmental resources is used must be paid for." By introducing market-based mechanisms, the program aims to promote more efficient resource use and encourage sustainable industrial practices in the region. The success of this pilot could serve as a model for other areas facing similar environmental challenges.

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