Pollution of the Upper Nanpan River

designated as water for industrial and agricultural use. However, the instream water quality is unsuitable for any use. Industrial discharges and municipal sources contribute significantly to the river's pollutant loads which are much higher than the total maximum loads allowable (TMLAs). Substantial efforts have been made to correct the situation, but the water pollution is still out of control. At present, it appears that environmental management instruments must be improved, and more capital must be invested in water pollution control. Among several environmental management instruments implemented in the upper Nanpan river catchment area, the current non-tradable permits system for water pollution must be improved first through the development of a tradable discharge permits (TDP) system for water pollution. By providing flexibility to the dischargers, the trading system is assumed to be more cost-effective in attaining specific effluent reduction targets than the non-trading system. This report provides information on and analysis of point/point source effluent trading, an explanation of the theory underlying trading, an examination of international experiences to date, and an evaluation of the lessons learned. It also focuses on evaluating the applicability of a practical TDP system to the upper Nanpan river. With regard to the necessary conditions for point/point source trading, the catchment appears good. Since the trading program is developed on the basis of the current non-tradable permits system for water pollution, the catchment generally meet