THERE is no perfect way, environmentally or financially, to dispose of the two million tonnes of sewage and industrial effluent dumped into local waters each day. The Government's solution is to spend $6.8 billion over the next three years to install new sewers and a primary treatment works on Stonecutters Island, and then build a 35 km outfall to carry the semi-treated sludge into the South China Sea. And that is particularly unsatisfactory - or so said an Irish scientist, Professor Geoffrey Hamer, at an international conference on sewage disposal at Chinese University. His message reinforces many of the fears of local environmentalists: similar methods have caused huge pollution problems in the North Sea and elsewhere. Until the outfall is completed, the sludge (along with ammonia released during treatment, toxic metals and other industrial effluents unaffected by the process) will continue to be dumped in Victoria Harbour. The Government says the scheme will abate 70 per cent of the pollution in the harbour by 1997. But that depends on how pollution is measured. Meanwhile, the future of the outfall is uncertain. No environmental impact assessment has been undertaken, the authorities in Zhuhai are outraged at the threat to their waters, and preliminary discussions in the Joint Liaison Group have produced no agreement. Similar outfall schemes have been tried elsewhere, particularly in Australia. But the experience has been generally unhappy. With relatively short early pipelines some sewage returned to the beaches. Experiments with more distant outfalls have left beaches clean but raised concern over the ocean's long-term ability to cope. In Hong Kong, where even distant outfalls will open into Chinese waters, there is the added problem of dumping our waste on someone else's doorstep. Environmentalists, some Chinese spokesmen and Britain's Trafalgar House (which has a pet project of its own to sell) prefer biological treatment schemes. These would be more expensive to build and operate but would be more efficient, in theory eliminating the need for a distant outfall. In the long term, despite an estimated extra yearly cost of $100 for every resident, biological treatment must be the preferred option. Ultimately the environment would benefit and the scheme would set an example for China's coastal cities. In the short term, the Government's objections cannot be ignored. Cost is only part of the problem. A biological treatment plant would require more space; and until the exact mix of waste arriving at the Stonecutters plant is known, the correct biological process cannot be decided. A better solution might be to build the primary treatment now and defer the decision to build a distant outfall or a biological plant. But the danger with interim solutions is that they tend to become permanent: further work is too often put off. Under pressure from Chinese and local objections, the Government has rightly agreed to a six-month, $6.7 million review of all the options now available. This will be one occasion when the cost of a consultancy is money well spent. But even if the most efficient option turns out to be a distant outfall, China's legitimate concerns may still decide the matter in favour of biological treatment.