Policy conflict and the feasibility of water pollution trading programs in the Tai Lake Basin, China

Water pollution trading (WPT) is considered a cost-effective policy instrument for controlling water pollution. Since the late 1990s the Chinese government has piloted WPT programs at different levels in an attempt to reduce water pollution. However, the implementation of WPT programs has not achieved the results expected. Policy overlap, or conflict, is thought to be one of main factors blocking the deployment of effective WPT projects in China. This research takes the WPT pilot program in the Tai Lake Basin as a case study to assess the problem of incoherent policies in this area and to explore the general feasibility of WPT programs in China. We review and analyze the water pollution control system in the Tai Lake Basin as well as the regulation and practices of the WPT Tai Lake pilot program. The results of this study indicate that the WPT program in the Tai Lake Basin conflicts fundamentally with other environmental regulation regimes, such as the Environmental Impact Assessment system and the Five-Year Plan target, and that the prospects for WPT in China are not optimistic. Finally, we outline suggestions for reforming China’s WPT mechanism to eliminate these conflicts. <br><b>Keywords:</b> water pollution trading, policy conflict, feasibility, policy system