Framework Design and Influencing Factor Analysis of a Water Environmental Functional Zone-Based Effluent Trading System

The efficacy of traditional effluent trading systems is questionable due to their neglect of seasonal hydrological variation and the creation of upstream hot spots within a watershed. Besides, few studies have been conducted to distinguish the impacts of each influencing factor on effluent trading systems outputs. In this study, a water environmental functional zone-based effluent trading systems framework was configured and a comprehensive analysis of its influencing factors was conducted. This proposed water environmental functional zone-based effluent trading systems was then applied for the control of chemical oxygen demand in the Beiyun River watershed, Beijing, China. Optimal trading results highlighted the integration of water quality constraints and different hydrological seasons, especially for downstream dischargers. The optimal trading of each discharger, in terms of pollutant reduction load and abatement cost, is greatly influenced by environmental and political factors such as background water quality, the location of river assessment points, and tradable discharge permits. In addition, the initial permit allowance has little influence on the market as a whole but does impact the individual discharger. These results provide information that is critical to understanding the impact of policy design on the functionality of an effluent trading systems.