Water Quality Control of the South-to-North Water Diversion (SNWD) Middle Route Project (MRP)

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Case Description
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Geolocation: 32° 36' 0", 111° 35' 60"
Total Population 11.9811,980,000 millionmillion
Total Area 9500095,000 km²
36,679.5 mi²
km2
Climate Descriptors temperate
Predominent Land Use Descriptors agricultural- cropland and pasture, industrial use, urban
Important Uses of Water Agriculture or Irrigation, Domestic/Urban Supply, Industry - consumptive use, Industry - non-consumptive use

Summary

Natural, Historic, Economic, Regional, and Political Framework

Governance Framework

To understand the political framework of the topic of interest, we need to first take a look at the political framework of Chinese government system, as shown in Figure 3. The top administrative organization is called the State Council, followed hierarchically by provinces and Municipalities, cities, counties or districts, and villages. There are also Autonomous Regions (e.g. Xinjiang and Tibet), as well as Special Administrative Regions (e.g. Hongkong and Macau), which are at the same level as provinces. Ministries, such as Ministry of Environmental Protection, Ministry of Finance, and Ministry of Water Resources, etc., are executive bodies under the direct lead of the State Council. Departments of similar functions (environmental protection, water resources, etc.) take responsibility at the provincial, city, and even district level; they report to their superior organizations up to ministry level.

As an inter-basin water transfer project, SNWDP involves a number of provinces and municipalities. To coordinate among different provinces, an institutional body – the South-to-North Water Diversion Project Office (SNWD Project Office) was created in 1979 to oversee the planning, design, construction and operation of the SNWDP. A committee led by the Vice Prime Minister sets the goals and policy of the Project Office. The board members of the committee include all relevant ministers, provincial governors, and municipality mayors. There are also sub-offices at the provincial and municipal levels in charge of the construction projects within their jurisdictional boundaries. In short, the central government endorses SNWD Project Office to perform a coordinative role in all issues related to the South-to-North Water Diversion Project.


Water Quality Related Regulation

To assure good water quality the SNWD Project Office created the Reservoir, the Water Pollution Control & Soil and Water Conservation Plan (hereafter referred to as “the Plan”) in 2005. According to the Plan, the Danjiangkou Reservoir and main Han River should achieve water quality of Category II, and the tributaries flowing into Danjiangkou Reservoir should be better than Category III4. Eighteen control zones were created at the watershed of the reservoir (Figure 4). These control zones span across Shaanxi, Hubei and Henan Provinces. Three of the eighteen zones are within 5km of the Reservoir peripheral and are therefore defined as the Water Source Area Security Zone. Three zones on the far left side are the sources of Han River. The soil and water conservation in these zones are essential to the water quality in the Reservoir, so together these zones are defined as the Ecological Conservation Zone. The other eleven zones in between are collectively called the Water Quality Impact Zone (Figure 5). The Plan computed the environmental capacity of each control zone, based on the water quality condition of the river stretch in that particular zone. By comparing the current pollution loadings with the environmental capacity of the control zones, the Plan computed the amount of loading reduction needed for each control zone.

The Water Source Area (WSA) of the Middle Route spans across Hubei, Shaanxi and Henan province. The Water Receiving Area (WRA) includes Beijing, Tianjin, Henan and Hebei provinces (Figure 2). Henan province is both WSA and WRA.

Table 1 summarizes the economic indicators for the provinces and municipalities of the water source area and water receiving area. As the table shows, the GDP per person of Beijing and Tianjin are about three times of the other provinces. It is obvious from the figure that water source area is generally much poorer than the water receiving area.


Tables 1a and 1b: Economic facts of the Water Source Area (WSA) and Water Receiving Area (WRA) provinces/municipalities source5 Table 1a WRA

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Issues and Stakeholders

Government expenditure on water quality related infrastructure projects

NSPD: "Water Quantity (allocation, competitive use, climate influence/uncertainty)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Water Quality (quality for a given purpose, quality from the viewpoint of a stakeholder)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Assets (specific human or economic assets)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property.
Stakeholder Types: Federated state/territorial/provincial government, Non-legislative governmental agency

As previously mentioned, the costs of the short-term and long-term projects are huge. Among the 43 counties in the water source area, 26 are National Impoverished Counties and 8 are Provincial Impoverished Counties. The tax revenues of those counties are obviously insufficient to pay for the expensive infrastructure projects required by the Plan. Although the Ministry of Finance (representing the central government) has provided some funding assistance since 2008, the assistance was via a general purpose fiscal transfer instead of a special purpose transfer (for water quality control). The details of the assistance and how the funding was used are unclear. In this sub-issue, the stakeholders are mostly government bodies and the variables are Governance, Assets and Water Quality.

Stakeholders

  • SNWD Project Office (ministerial level government)
  • Ministry of Environmental Protection, Ministry of Water Resources, Ministry of Finance
  • Water Source Area governments and their levels
    • Henan Province (河南省)
      • Nanyang City (南阳市):Xixia County (西峡县), Xichuan County (淅川县)
      • Luoyang City (洛阳市): Luanchuan County (栾川县), Sanmenxia City (三门峡市), Lushi County (卢氏县)
    • Hubei Province (湖北省provincial government)
      • Shiyan City (十堰市): Zhangwan District Bailin Town (张湾区,柏林镇), Zhuxi County (竹溪县), Zhushan County (竹山县), Yun County (郧县), Fang County (房县), Yunxi County (郧西县)
      • Xiangyang City (襄阳市): Xiangzhou District Huanglong Town (襄州区,黄龙镇)
      • Danjiangkou City (丹江口市)
    • Shaanxi Province (陕西省, provincial government)
      • Ankang City (安康市, city government): Shiquan County (石泉县), Hanyin County (汉阴县), Ziyang County (紫阳县), Langao County (岚皋县), Xunyang County (旬阳县), Pingli County (平利县), Zhenping County (镇坪县), Baihe County (白河县), Ningxia County (宁峡县)
      • Shangluo City (商洛市): Shangzhou District (商周区), Zhen’an County (镇安县), Zuoshui County (柞水县), Danfeng County (丹凤县), Shangnan County (商南县), Shanyang County (山阳县)
      • Hanzhong City (汉中市): Hantai District (汉台区), Ningqiang County (宁强县), Lueyang County (略阳县), Mian County (勉县), Liuba County (留坝县), Nanzheng County (南郑县), Chenggu County (城固县), Yang County (洋县), Xixiang County (西乡县), Foping County (佛坪县), Zhenba County (镇巴县)
      • Baoji City (宝鸡市): Taibai County (太白县)
    • Hebei Province (河北省)
  • Water Receiving Area

Population affected by water quality control in the water source area

NSPD: "Water Quantity (allocation, competitive use, climate influence/uncertainty)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Water Quality (quality for a given purpose, quality from the viewpoint of a stakeholder)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Governance (institutions, entities, legal frameworks)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Values and Norms (social value or cultural norm)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property.
Stakeholder Types: Federated state/territorial/provincial government, Non-legislative governmental agency, Development/humanitarian interest, Environmental interest, Industry/Corporate Interest, Community or organized citizens

Hundreds of thousands of people in the water source area will, directly or indirectly, positively or negatively, be affected by the water quality control projects. The first category is farmers who will be affected by “ecological migration” and industrial point-source removal. Ecological migration is an emerging concept in China. Unlike traditional migration, the population forced to leave is not located at the reservoir inundation, area such as it was in Three Gorges Dam project. Though the farmers in the WSA live upstream of the Reservoir, their agricultural practices or living activities will affect the water quality in the reservoir, and therefore they must leave the area. Those who will be considered for migration include: 1) farmers who live in mountainous areas without access to grid who deforest trees for fuel; 2) farmers who cultivate on steep slopes (steeper than 25 degree, for example) not suitable for agriculture and contribute to landslides and water and soil loss, 3) farmers whose agricultural practices and daily life cause non-point source pollution to the rivers and reservoirs. There is no published data on the total number of people who will be migrated. The rough estimation is of the order of hundreds of thousands. For example, Yun County (郧县) of Shiyan City (十堰市) in Hubei Province alone has 28817 people (7229 family) to be migrated into 79 settlement locations. These settlement locations are usually within or near the same town they used to live in (内安政策) but usually have better access to roads, centralized waste disposal infrastructure or electricity grid. The photos below show two of the settlements in Yun County. In addition to ecological migration, farmers will also be affected by industrial point source removal.

Yellow ginger (turmeric) industry is one of the biggest industries in the water source area. Yellow ginger contains saponin, a valuable element for heart disease medicine. China supplies approximately 90% of the Saponin in the world, and about 40% of Chinese manufactured saponin was from the Middle Route Water Source Area. Because of its rarity, locals call yellow ginger “soft gold.” More than one million people in the water source area were relying on the chain of yellow ginger cultivation, saponin manufacturing and sales. However, the traditional manufacturing process of saponin is very energy intensive and pollutive (Figure 2). To produce 1t of saponin, it takes 180t yellow ginger, 20t hydrogen chloride, 6t gasoline, 50t coal, and 500t water. Most of water used in the process is turned into acidic wastewater containing high concentration of COD (12 times more than paper manufacturing industry). To achieve the loading reduction required by the Plan, hundreds of saponin manufacturing plants were closed down and some are suspended until they can reach the emission standard. Workers lost their jobs. Additionally, because of factories closures, the yellow ginger cultivation area reduced from 330,000 hectares to 60,000 hectares. Farmers lost an important stream of income and large amount of workers were unemployed.

Another big industry affected by the water quality control plan is the paper manufacturing industry. Tailong Paper Manufacturing Company (泰龙造纸厂), for example, which used to produce 1/3 of GDP of Xichuan County, contribute 20 million CNY annually to its tax revenue, and employ 1700 workers was closed down in 2004 for environmental compliance. Four thousand other paper mills were shut down in the water source area. Other affected industries include mining, metal smelting, chemical production industry, and more.

Stakeholders

  • Yellow Ginger Industry
  • Paper manufacturing industry
  • Chemical production industry
  • Metal smelting industry
  • Ecological migration of farmers
  • General population in water source area

Costs and benefits sharing between WRA and WSA

NSPD: "Governance (institutions, entities, legal frameworks)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Assets (specific human or economic assets)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Values and Norms (social value or cultural norm)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property.
Stakeholder Types: Federated state/territorial/provincial government, Non-legislative governmental agency, Industry/Corporate Interest, Community or organized citizens

Even though the shut-down of pollutive factories has important benefits to both the ecosystem health of the Water Source Area and water quality for Water Receiving Area, the social and economic burden is borne only by the Water Source Area. It is unjustifiable for the impoverished water source area to not only contribute its water, but also bear the social and economic cost of water quality control projects. Although, one-time fiscal funding contributions from the central government can temporarily solve some emergent shortage, a long-term mechanism needs to be in place to make sure the costs and benefits are shared fairly between the water receiving area and the water source area. In the synthesis part of this section, we propose a mechanism called “Payment for Water Quality Services (PWQS)” to realize this equity goal.

Stakeholders

  • Water Receiving Area (WRA)
  • Water Source Area (WSA)
  • SNWD Project Office

Involving stakeholders in decision making process

NSPD: "Water Quality (quality for a given purpose, quality from the viewpoint of a stakeholder)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Assets (specific human or economic assets)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property., "Values and Norms (social value or cultural norm)" is not in the list of possible values (Water Quantity, Water Quality, Ecosystems, Governance, Assets, Values and Norms) for this property.
Stakeholder Types: Federated state/territorial/provincial government, Sovereign state/national/federal government, Community or organized citizens

The Chinese governance structure is hierarchical; and most of the policy design and implementation process is top-down. However, the term “public participation” has appeared more often in recent literatures of social science and environmental management 8–10. If a long-term mechanism were to be proposed and implemented, how can we involve the stakeholders (county governments, farmers, unemployed workers) in the design and implementation of the mechanism? This is another issue of interest in this case.




Analysis, Synthesis, and Insight

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ASI:Alternative Solutions to the Water Demand of Northern China

Concerning the ultimate problem of imbalance water demand distribution in the Northern and Southern China, scholars suggest implementations that will further consider China's water sustainability other than water diversion.(read the full article... )

Contributed by: Samuel Hsiao (last edit: 1 August 2013)



ASI:Determining Fair Payment for Ecosystem Services

Payment for Ecosystem Services (PES), a voluntary exchange of a defined environmental service for a fee, has been previously implemented in China there is no consensus on criteria for fair compensation. Planned water quality control actions require capital investments and restrict development options for the water source area. For this reason, the receiving area is expected to compensate the source area for their conservation efforts. How should PES payments be determined?(read the full article... )

Contributed by: Margaret Garcia (last edit: 19 March 2013)