The Shenzhen municipal government plans to allow polluters to be able to "trade" their sewage discharge quotas in a bid to curb environmental pollution in the city.

In a similar way that Western countries have adopted carbon emissions trading schemes to help the worst polluters minimize their impact, the result should be a win-win situation for both the government and local enterprises, Li Shuisheng, head of the legal department with the municipal environmental protection bureau, said recently.

However no timetable has been set for the introduction of the measure.

Under the new system, the city government will give up some of its quota transaction rights while enterprises which have achieved good results in the treatment of sewage and industrial waste can sell their discharge quotas for profit.

At present, only a few cities in China, including Suzhou City in east China's Jiangsu Province, are trialing the new mechanism.

Realizing the importance of turning pollution management into a market-oriented behavior, the Shenzhen municipal government stated clearly in its No. 1 paper for this year that it will speed up promulgating policies related to the transaction of sewage discharge.

However, Li admitted that much research needs to be done as the authorities in the city lack experience in this field. Obstacles facing the city government include how to set sewage discharge quotas, how to distribute the quotas in a scientific and fair way and how to set the price for quota transaction. Relevant laws and regulations also need to be drawn up, Li said.

In Western countries where pollution quotas are tradable, discharge rights can be auctioned off in the primary market and then traded in the secondary market.

(Shenzhen Daily January 9, 2007)