Mori Fund Report(Academic Year 2015)

 

Current Industrial Wastewater Policy in China and its Future Improvement Potential

                           -Case study at Paojiang industry park of Shaoxing

 

Keio University

Graduate School of Media and Governance

                                                      Li Dan

 

Since the 1970s, China began implementing environmental related policies to address the increasing signs of environmental damage and pollution.  However, the industry participation and operation efficiency were often not satisfactory.

 

From the clothes on our backs to the curtains in our homes, thousands of everyday items we rely on are produced by the world¡¯s textile industry. With the textiles industry now centered in countries with developing environmental regulatory systems, such as China, Bangladesh, India, and Vietnam, these countries are often under the risk of heavy environmental damages without strict policies. Dyeing and finishing one ton of fabric can result in the pollution of up to 200 tons of water with a suite of harmful chemicals, in addition, the consumption for fuel and electricity are also very high. By value of goods produced, in 2012 China was ranked number 1 in the world for textile and fabric export, with market value of $288billion USD, making China one of the most affected countries from the pollutions of the textiles industry.

 

The aim of this study is to examine the effect of China¡¯s pilot cap-and-trade program in Shaoxing. The study is followed by an exploratory analysis using the wastewater trade data, cost of treatment, and cost of recycling data from Shaoxing to identify plausible explanations for the current market response by marginal cost and benefit model.

 

Shaoxing Paojiang Industrial Park in Zhejiang Province is taken as a case study.  Data of 38 factories in the industry park, including the contribution in GDP, water consumption, and energy consumption is used to profile how the textile industry is performing.  In order to get the information as well as the data for research, personal interviews to government officials, industry companies and local resident were conducted as first hand opinions of stakeholder of the policy.

 

Here is the map of my research area named Shaoxing, paojiang industry park.

 

 

 

 

 

 

 

 

 

 

 

 


This study used both qualitative and quantitative approach.  The qualitative approach was used to obtain a snapshot of feedbacks from the stakeholders of the policy, the qualitative approach consisted of questionnaires and interviews; this approach was used to gather the responses from government officials, factory managers, and local residents.  On the other hand, the quantitative approach was used to analyze the data of companies in the region to obtain a snapshot on the energy consumption, water consumption, and GDP contributions for these factories.  The data were obtained from both local government and official documents.

 

The relevant data and studies on the cap-and-trade program in Shaoxing are very limited at the current stage as the program first proposed in 2011. In addition, the market trend and policy details of Shaoxing were not deeply investigated, thus the result of this study can only be considered as a preliminary reference. The economic market model was able to provide a potential explanation; it is not a conclusive result due to the limited market activity. Further study will be required to confirm the model¡¯s fit and data needed to support this claim.

 The figure below shows the overall methodology process flow.

 

 

 

 

 

 

 

 

 

 

 

 


Data requirement for this research are:

1)    Current industry situation of Dyeing and Finishing industry and its impact to environment: Preliminary analysis of the environment current situation of Dyeing and Finishing Industry in China by documentary data by reading the official document and news.

2)    Research Site Condition: Observed by survey in the region during fieldwork

First time: August 16th of 2014 - September 1th of 2015

Second time: October 3rd of 2015 - October 14th of 2015

3)    Research object (38 factories) related data: All the data (Electricity consumption: Water consumption; Water recycle volume; Industry production capacity, etc.) were obtained from local government of Paojiang industry park.

4)    Detail information of Dyeing and Finishing production related data: It was collected from the interview with one factory¡¯s superintendence of 38 factories.

5)    Wastewater treatment cost: Information was collected from Shaoxing Wastewater Management Company

6)    Current environmental policy implement information of Shaoxing were obtained by the interview with superintendence of Shaoxing Environmental Supervision Association

7)    Current environmental policy implement information of Paojiang was obtained by the interview with superintendence of Paojiang Environmental Management Office 

8)    Current cost and problem of deep industry wastewater treatment data was collected from the interview with superintendence of Shaoxing Full Wastewater Treatment Company

9)    Attitude to current living environment and attitude toward local industrial policy: These quantitative approaches had been collected by performing interviews with questionnaire with the local resident people. Figure 1. Images from Shaoxing during fieldwork

 

Findings and Discussion :

Through data collected from the fieldwork questionnaire and government agency, as well as interview results with factory representative and wastewater treatment plant, the following discussion points were identified.

 

Cap-and-trade program is a more complex policy compared to environmental tax, due to the fact that it require additional understanding by the participants as well as monitoring from a third party to manage the transactions, to confirm fairness, and to support trade transparency.  From the company interviews it was found that cases where available credits were not put on sale exist due to the fear that the companies will need them in the future after policy changes, in this sense the government was unable to obtain the trust of company to participate, which the future targets were not made clear for the participants to plan ahead. 

 

Also, only considering the cap and reduction of COD will not include the power consumption and material cost consideration that if the policy overlooks other consumptions such as electricity, the marginal abatement cost can be unexpectedly too high for companies to survive the reduction quota. 

 

Recommendation

Further actions in technology investment support or incentives in recycling water could be considered by the government to further promote and sustain the cap-and-trade program. The transparency of the trading platform and information availability for future policy direction can be strengthened to increase the trust of program participants. Lastly, the next phase should also be carefully studied with regards to market trends, treatment prices, energy use, and actual effluent reduction data prior to the design and execution of the new cap level.