The program, as part of the country's efforts to curb acid rain, will be put on trial by the State Environmental Protection Administration (SEPA), said Li Lei, director of SEPA's division of air and noise pollution control.

Enterprises will be given different quotas based on how much sulfur dioxide they usually emit. While the quotas are fixed, enterprises can buy or sell their pollution credits when fluctuations occur, the official was quoted as saying.

If successful, the pilot program will pave way for a nationwide emissions program with the ambitious goal of cutting sulfur dioxide emissions by ten percent from the 2000 level in three years.

The experimental program will first be launched in seven heavily industrialized regions, including Shandong, Shanxi, Jiangsu and Henan provinces and the cities of Shanghai, Tianjin and Liuzhou.

Sulfur dioxide creates acid rain, which has become a major environmental problem in China as a result of its heavy reliance on coal-burning electric power plants.

To model the trial program, SEPA has recently clinched partnership with the United States Environmental Defense (EDF), who pioneered the successful emissions trading program in the United States in 1990.

"Emissions trading will allow the Chinese to continue with economic growth while meeting national pollution limits," the paper quoted Daniel Dudek, a senior economist with EDF who was credited by the former US President Bush with breaking the impasse.

Dudek and attorney Joseph Goffman recently led a national workshop with 100 environmental authorities from participating cities and provinces to provide training, guidance and exchanges.

According to SEPA's schedule, the environmental protection authorities of the pilot provinces and cities should draw up a work plan this month, and emission quotas will be allocated from July to May 2003.

Enterprises involved in the program will be equipped with monitoring systems on sulfur dioxide emissions to ensure fair trading.

(People's Daily June 24, 2002)