Home » Feature » News Feature
New plans to tackle smog and acid rain
Print Edition
CHINA’S smog and acid rain have prompted authorities to draft guidelines to fix the pollution permit market after trials of regional pilot platforms were called into question.
Since 2007, China has set up more than 20 pilot trading platforms for the permits covering acid rain and smog pollutants such as sulfur dioxide and nitrogen oxide.
Shanghai is one of the pilot platforms for these pollutants and started a trial run in the Pudong New Area in 2008, according to Shanghai Environmental Protection Bureau. No results have been yet released. The city also has a separate platform for trading greenhouse gases, notably carbon dioxide.
On March 24, the finance ministry announced plans to strengthen the pollution permit market within three years. Ministries of finance and environmental protection said they had submitted draft guidelines for a national pollution permit market to the State Council.
The market would cap emissions of key pollutants from major facilities and force those that exceed their caps to buy permits, thereby providing economic incentives for polluters to invest in cleaner technologies.
The ministries did not provide details on how the market would work.
Not to be confused with carbon trading that targets greenhouse gases led by carbon dioxide, pollution permit trading allows industrial firms to buy and sell rights to emit pollutants like sulphur dioxide and nitrogen oxide.
China is years away from having a mature, market-based trading platform for reduction of both greenhouse gases and other pollutants.
The problems in both cases are massive pollution, lack of a mandatory trading system, lack of enforcement and lack of incentives to buy permits when companies can pollute with relative impunity. Further, equitable pricing and distribution systems have not been developed so buyers and sellers take a wait and see attitude.
“Since there is no compulsory regulation from the authorities requiring all companies to trade pollution permits, not many firms are willing to buy them,” said Wang Jin, general manager of the Tianjin Climate Exchange (TCX). Tianjin is part of both pilot schemes.
“If most firms can freely emit pollutants without permits, then why would anyone buy them?” asked Tian Yu from Tianjin Tasly Group, a traditional Chinese medicine maker.
Under the existing system, a region first sets the maximum amount of key pollutants the area can absorb during a certain period. That is then translated into pollution rights and made available to companies.
Publicity stunt?
In the primary market, companies are required to pay for the rights through auction or government-directed quotas. Firms with pollution rights can then trade permits in the secondary market.
Insiders say few pilot markets are working properly due to lax implementation, lack of fair pricing and legally binding regulations.
Take the markets in Beijing and Tianjin for example. Both cities set up pollution permit trading platforms in 2008, but the former has not seen a single trade.
Only one deal took place involving the Tianjing Climate Exchange, when Tianjing Hongpeng Logistics won permits to emit 50 tons of sulphur dioxide by bidding 3,100 yuan (US$500) per ton on December 23, 2008. No deals have taken place since then.
Mystery surrounds that 2008 deal. According to media reports at the time, Hongpeng was a suspected front company, fabricated to win an auction organized as a publicity stunt.
Researching this article, the writer telephoned Hongpeng and asked about the bidding.
“The company has already been deregistered. I know what happened at that time, but there is nothing I can tell you. I don’t want to make trouble,” a middle-aged man said before hanging up the phone.
TCX general manager Wang Jing dismissed questions, saying it happened five years ago.
Tian, who took part in bidding for Tianjin Tasly Group, said all participants were lobbied by their industrial park base, TCX or the government to help make the publicity stunt work.
Bao Jingling, head engineer of the Tianjin Environmental Protection Bureau, said that government “coordination” rather than trading platforms helps companies get pollution rights.
Labelling pollution permit bidding a “forced marriage” directed by authorities, insiders said the Hongpeng case in Tianjin is not isolated.
Both Wang and Tian point to many cases in which companies discharge much more key pollutants than their quotas allow but receive no punishment.
“The government’s goal is to control the overall amount of pollutants. The question of which company gets how many permits doesn’t seem to be so important,” said Wang Jinnan, vice head of the Chinese Academy for Environmental Planning under the Ministry of Environmental Protection.
The government itself decides the prices of the permits, “which do not necessarily have a very convincing basis,” he said. Further, the value of permits, largely determined by their effective period, varies from region to region, making cross-region trading impossible.
Even in the same region, values can change as the government tightens or loosens environmental protection measures, which could mean permits purchased at different times have different values.
Solutions
There is consensus that authorities should, above all, draw up and implement a nationwide regulation mandating firms to buy permits before emitting pollutants.
“It must be confirmed by the central government that pollution permits are valuable rights that companies must pay to obtain,” said Wang.
He called for legally binding regulation to force all companies to get their permits through auction and make emission without a permit illegal. The value and effective period of the permits should also be set and fixed for a uniform period, say five years, he said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
