cs51: policy study on market-based instrument for water pollution control by ge chazhong
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8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Meetin on Findin s of the Final Re ort of TA4967-PRC
Policy Study on MarketPolicy Study on Market--basedbased
ns rumen or a er o u onns rumen or a er o u on
ControlControl
Chinese Academ for Environmental PlanninChinese Academ for Environmental Plannin
May 19, 2010May 19, 2010
环境保护部环境规划院1
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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• Introduction
• Water Pollution Control In China
• Pollution Control In China
Pollution Control
• Design o Water Qua ity Tra ing in Tai La e
• Concluding Remarks
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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• With the development of market economy and
improvement
of
environmental
management, market approach for environmental management is getting more attention.
• The project is to look at the possibility of more role for MBIs in water pollution control in China.
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Water
Pollution
Control
In
China(1)• Water pollution is one of priority issues in China
env ronmen a pro ec on
• Improvement has been made in the past years
Water
between2001 and
SevenMajor RiverBasins
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8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Water
Pollution
Control
In
China(2)• The Chinese government has played a very
ac ve ro e an a en measures n wa er pollution
control
–
• Water pollution control law
• Dischar e standards
• Water quality standards
– Nationwide total load control
– Water pollution
control
planning
for
key
rivers
and lakes
环境保护部环境规划院
• ose own, c eaner pro uc on, rea men ac es
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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COD reduction by provinces over 2005-2008
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Changes of COD concentration at sections over 2005-2009
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8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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emphasized in environmental protection in China
Pollution liability insurance (1991)
Urban sewage treatment fees (1994)
Paid use of wastewater discharge facilities (1993)
Direct investment (1984)
Ecological compensation pilots (2008)
New discharge fee schemes (2003)
Water pollution rights trading (2002)
Pollution permits trading (1987)
Discharge fees (1982)
1980 1985 1990 1995 2000 2005 2010
Pollution compensation, fines (1979) Environmental and resource accounting(2002)
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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• The questionnaire survey reported 73% of the
respon en s g v ng a pos ve eva ua on o e
quality of
the
water
environment
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Pollution Control In China(1)
• Fee‐based MBIs
– Pollution levy
– Wastewater treatment
fee
– Environmental tax
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Media 2002 2003 2004 2005 2007 2008 2006
Total (billionyuan) 6.78 7.31 9.42 12.32 17.36 17.68 14.41
62.3 Na 36.4 29.6 20.3 16.0 23.6
water(%)
62.3 Na 36.4 29.6 20.3 16.0 23.6
Waste air(%) 23.8 Na 52.7 61.5 73.7 78.8 69.4
Noise(%) 8.6 Na 7.3 5.9 4.4 4.5 4.9
Solid
wastes(%)
5.3 Na 3.6 3.0 1.6 0.7 2.1
环境保护部环境规划院
regulation went into effect in 2003
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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• 475 cities out of 661 had introduced
wastewater treatment
fee
according
to
China
Water Network Survey in 2005;
• Wastewater treatment fee was 0.15‐
1.17 uan m3 and
cover
rate
of
8.33%
‐46.63%
with 120 city data;
•
to the operation。
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Market Based Instruments for Water
Pollution Control In China(2)
• Allowance‐based
MBIs
–
permits
–
• International experience
• Domestic piloting
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Market Based Instruments for Water
Pollution Control In China(3)
• ncent ve‐ ase s
– Environmental investment policies
• Channels of environmental investment
•Public environmental investment
– overnmen sca po cy
• subsidy
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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M rk B In r m n f r W r Pollution Control In China(4)
• MBIs and
Laws
– Current related laws do not explicitly sanction the use of
MBIs
• MBIs and
Institutions
– Main role of oversight agencies such as NDRC and MOF
– MEP only has recommendation right
• MBIs and
Technologies
– MBIs may induce changes of treatment technologies
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Market-Based Water Pollution Policy Framewor
Incentive-based MBI
and Policies
Fee-based MBI and
Policies
Allowance-based
MBI & Policies
Subsidy Policies Pollutant Discharge Fees Pollutant Discharge
Investment andFinancing Policies
Earmarked Funds
an axes
Ecological Compensation
Wastewater treatment
tariffs
PPP
Trading
……
环境保护部环境规划院
……. ……
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Design of Water Quality Trading in Tai
Lake(1)
Background on Tai Lake water pollution controlackground on Tai Lake water pollution control
Status of water environment: deteriorating water quality in Tai lake, total
discharge of main pollutants is remaining high periodic improvementsischarge of main pollutants is remaining high, periodic improvements
have been made; pressure for further improving remains.
Environmental economic policies have been widely practices as comparednvironmental economic policies have been widely practices as compared
to other areas: ecological compensation policy, payable use of allocation
of permits, emission trading.
Provincial regulations to guide the use of environmental economic policy for
water pollution control.
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Design of Water Quality Trading in Tai
General Consideration
Lake(2)
Objective: least cost to achieve the reduction target
Scope:(1)the same administrative area under province or city within the basin;(2)avoid
hot spot effect; (3)sufficient sources in the trading area.
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8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Design of Water Quality Trading in Tai
Selection of targeted pollutants
a e
Selection of targeted pollutants
– Main pollutants in the area
– Homogenous affect between different areasomogenous affect between different areas
– Difference in marginal abatement cost
– Measurable
– Currently, COD
– Total Nutrient and Total Phosphate to be included
– Combined Control
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Design of Water Quality Trading in Tai
Types of Trading
Lake(4)
yp g
Point sourcesTwo industrial point sources
urban wastewater treatment plant
Industrial point source connected to the pipeline and urbanwastewater treatment plant
Multiple sources
Point source and Non- oint source
环境保护部环境规划院20
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D i n f Wat r alit Tra in in Tai Lak 5
• Allocation – All sources to be allocated initial allowance (fare)
– Targeted sources
to
be
allocated
initial
allowance
(realistic)
– Grand fathering vs payable obtaining of initial allowances
• Allowance trading vs Reduction trading – Allowance Trading:
• Cap + Allowance allocation;• omogenous sources;
• Reduction to be decided by total emission and cap
– Reduction trading:
• Decide reduction;
• Difference sources;• Direct link to national reduction target
– Reduction trading may be more appropriated for water pollution
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Design of Water Quality Trading in Tai
a e
•Procedure
National Supervision Agency
Local Management AgencyTrading Management
StructureTrading Consulting Service Agency
•Marketmana ement
Pollution Rights Quota Allocation
Determination of Initial Price
Payment of User Fees
Quota Allocation
Subsystem
•PlatformPollutant Discharge
Rights
Selection of Trading Method
Trading Procedure
Trading
Subsystem
•Anticorruption
ay-per- se an
Trading
System
Environmental Monitoring
Quota Tracking
Trading Supervision
Subsystem
po cy anmechanisms
c egua on o ra ng n es
Participation of Other Stakeholders
Financing/Tax Policy AssurancesTrading Assurance
Subsystem
环境保护部环境规划院22
Framework Design of Pollutant Discharge
Trading System
Legal and Regulatory Assurances
Performance Assessment
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Concludin
Remarks 1• The current water pollution control policy in
na s s om na e y s w e s s
playing an
increasing
role.
Currently,
MBIs
in
taxes, but few of trading.
•
,
developed countries, have shown advantages
of MBIs a ainst C&Cs. Nevertheless water
quality trading
is
still
practiced
in
a limited
scale.
环境保护部环境规划院
8/3/2019 CS51: Policy Study on Market-based Instrument for Water Pollution Control by Ge Chazhong
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Concludin
Remarks 2• A framework for MBIs for water pollution control is
implementation
is
also
recommended.• There is a strong demand for use of MBIs for water u , y
developed areas with limited environmental
assimilation capacity
(e.g.
Jiangsu
province).
• Nationwide implementation of water quality
trading is not yet ready due to institutional capacity
constraints.
• Water quality
trading
policy
needs
to
be
introduced
in China through piloting in a phased manner.
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!
环境保护部环境规划院25
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