Translated by CDT from China Business News (第一财经日报):
Mr. Ma, a private entrepreneur from Tongxiang (桐乡) of Jiaxiang (嘉兴) City in Zhejiang, is excitedly expanding his silk processing plant with his engineer. But a few months back, he was still figuring out whether he could grow his business, as his new production line of cloth printing would need a sulfur dioxide emissions quota.
In September, Jiaxing’s environmental protection agency decided to start a pollution rights trading center, which made its debut on November 10, ending the “free pollution” history in the city. Some lauded this new regime as both encouraging pollution cutters to do more and heavy polluters to pay to pollute.
With this regime, businesses that need to expand capacity will need to buy pollution rights from the trading center. The rights purchases must be 1.2 times that of marginal pollution emissions; for heavy polluting industries such as chemicals, pharmaceuticals, leathering, dying and printing, and paper making, the purchased rights should be 1.5 times that of marginal emissions.
The city’s trading system will be based on an aggregate pollution control goal, or yearly reductions of 3.5% and 3.6% against the 2005 benchmarks of chemical oxygen demand and sulfur dioxide, respectively.
At the lower reaches of Lake Tai, Jiaxing has seen its water quality plummet in recent years. Since the 1990s, with increasing tapping of underground water, the water table has dropped 80 centimeters, and is still sinking by 2-3 centimeters a year.
With mounting environmental pressure, city officials have started to think about how to curb pollution with economic mechanisms. With the new trading system, or pollutant banking, the city hopes to prompt companies to save energy and cut emissions. Pollution rights are also money. And not everybody who wants some quota can get it. [Full Text in Chinese]
