The Ministry of Environmental Protection said a circular on the right to discharge pollutants - issued in August by the central government - aims to give full play to the market to drive enterprises to save energy and cut pollution discharge, and to upgrade the country’s industries.

According to the circular, 11 provinces that were selected to carry out a pilot program concerning payment for the right to discharge pollutants - including the Inner Mongolia autonomous region, Tianjin and Chongqing - are expected to set up a system to allocate and trade such rights by 2017.

In the circular, the central government asked that each of the 11 provinces must make sure that the quotas concerning pollutant discharge for different local regions do not exceed the amount of discharge as stipulated by the government.

Enterprises must also pay to get a right or quota to discharge pollutants - from the government or from other enterprises which wish to sell their quota.

And enterprises can transfer or mortgage their quota before it expires, according to the circular.

The pilot program will help change the notion that environmental resources are free of charge, and will help the economy develop in a sustainable and healthy way, Huang Xiaozeng, deputy director of the pollution emission control department of the Environmental Protection Ministry, , said in an on-line chat with Internet users on Sept 4. Huang’s department designed plans to reduce pollutant discharge

“We chose different regions in eastern, central and western China to take part in the pilot program - both developed and underdeveloped regions. Our goal is to provide models for different regions,” he said.

Huang also said the provinces have set different prices, and they should take into consideration their economic development and the capabilities of local enterprises - so that the pricing system is fair.

The market to transfer the right is not active, as not many enterprises are willing to sell their quota, he added.

And he said this is partly due to the fact the “requirement for environmental protection is becoming increasingly strict, and enterprises face great pressure to reduce pollutant discharge, so many enterprises want to keep the quota for their own use or for possible appreciation of the price”.

Another reason is that enterprises which discharge pollutants do not have particular expectations concerning the market to trade the quota - and the number of enterprises who have a quota from the government is small, which means the market to trade this quota among enterprises is inactive, he said.

Additionally, the various provinces in the pilot program achieve different results .

“For example, Zhejiang province has done a relatively good job and is the best in the country, but some other regions have not seen substantial progress - except coming up with a general plan to implement the program,” Huang said.

The accuracy of the statistics obtained from the monitor regarding the sources of pollution needs to be improved, and the authorities should establish specified guidelines regarding penalties for exceeding the quota to discharge pollutants, he added.