The expected impact of the TA is the strengthened environmental sustainability in PRC. The outcome of the TA is a set of well-prepared policy advice and recommendations on how to utilize the market-based instruments to supplement and strengthen the existing water pollution management system. The TA is expected to help PRC to introduce and establish long-term and market-based mechanism, which will help the country to achieve the water pollution control target in a more effective manner.
The TA will have the following major components:
(i) Policy framework development. The TA will review the latest development in the environmental economics on application of market-based instruments in environmental management, including best practices available within PRC and abroad. Based on such comprehensive review, the TA is expected to (1) develop economics basis and guiding principles for the new mechanism, (2) identify feasible models suitable for water pollution control in PRC as the selected options for detailed assessment, (3) make recommendations, based on comprehensive analysis, for the recommended operational model(s) for detailed operational system design.
(ii) Operational system design. The TA will first review the lessons and experiences gained from the existing piloting schemes for water pollution management in PRC. The TA will also review the international practice available. Based on these reviews and the international best practice, the TA will provide support for designing the operational system for the recommended model(s) mentioned in item (i) above. This will include the design for the general operational system(s) for piloting and demonstration operation in the selected piloting cities. System design needs to cover (i) indicator selection and target setting, (2) compliance monitoring and verification, (3) market-based allocation and transaction of discharge allowance, certified discharge reduction, or other recommended instrument(s), and (5) associated facilities and the governance mechanisms for transaction management and supervision.
(iii) Legal and regulatory framework development. The TA will review the relevant laws and regulations in PRC to identify the need, if any, to introduce new laws or regulations, at national or local level, to provide and enabling legal framework for implementation of the intended new mechanisms. Based on this review, the TA will outline a roadmap for legal and regulatory framework development. The TA will also provide assistance to prepare the basic governance structure and regulatory mechanism for piloting and demonstration operations as part of the operational system design discussed in item (ii) above.
(iv) Consensus and capacity building. The TA will organize workshops and conferences for concept development, experience sharing and knowledge transfer, and participatory consultation. International experts who have experience in developing, operating, or managing the similar environmental management mechanisms will be invited as resource persons at these workshops or conferences to share their knowledge and experiences. The TA will also organize one study tour for selected officials from the concerned government ministries and piloting cities to visit internationally known operational scheme(s) to have consultation with the management and gain first-hand knowledge on how the market-based instruments are being utilized for environmental management in the industrialized countries.