Analysis of total amount allocation and emission trading potential in a watershed
流域容量总量分配及排污交易潜力分析

The analysis of equitable allocation of waste load and the potential for emission trading is currently a research focus of watershed management. The demographic and economic equity of waste load allocation at the watershed scale is calculated based on an integrated method of cross-feedback of analytic hierarchy process (AHP) and Gini coefficient. An optimal model is developed for emission trading optimization without considering transaction cost. The Lake Qionghai watershed is taken as a case study to seek minimum total phosphorus (TP) reduction cost with and without an emission trading program. Comparison of the minimum costs with and without emission trading shows that there will be a 22.35% decrease of cost when including emission trading in the model. It should be mentioned that the results cannot be used directly to support the feasibility of emission trading of the waste load in the Lake Qionghai watershed since the transaction cost is not included in the model. However, the maximum and feasible transaction cost threshold of emission trading in Qionghai can be obtained from the model as 156 million yuan per year. It is possible for emission trading to be cost-effective if the costs for information collection, negotiation, management and monitoring are lower than the threshold. The optimization model presented in this paper, therefore, can provide emission trading information and has the potential to reduce transaction costs.