An Analytical Approach for Initial Allocation of Discharge Permits with Consideration of the Water Environmental Capacity and Industrial Technical Feasibility

The tradable discharge permit is an efficient marketing twist to deal with negative externality of water pollution, and initial allocation discharge permits (IADP) is a tough prerequisite for a health tradable discharge permit system. However, the allocation rules focusing on both water environment quality attainment and economic-technical feasibility have not been achieved. Therefore, a three-tier analytical framework including control units, industries, and enterprises has been established for satisfying the requirements of water environment quality attainment and technical feasibility. The framework includes three calculation modules and one justification module. A case study of the framework is carried out in the Changzhou City of Taihu Lake, China. Through comparison of the results of industry IADP, the technology-based initial allocation discharge permits scheme in control unit 7 is adopted as the final initial allocation discharge permits scheme, and the reduction plan chemical industry is carried out in control unit 8; finally, the initial allocation discharge permits results after reduction are employed as the final initial allocation discharge permits scheme. This three-tier analytical framework could ensure environmental protection, equality, efficiency, and make the scheme be more acceptable for enterprise stakeholders. In addition, it could support for optimization of industrial layouts and industrial structure upgrading to some degree