Difference between revisions of "Water Quality Control of the South-to-North Water Diversion (SNWD) Middle Route Project (MRP)"
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|Land Use=agricultural- cropland and pasture, industrial use, urban | |Land Use=agricultural- cropland and pasture, industrial use, urban | ||
|Water Use=Agriculture or Irrigation, Domestic/Urban Supply, Industry - consumptive use, Industry - non-consumptive use | |Water Use=Agriculture or Irrigation, Domestic/Urban Supply, Industry - consumptive use, Industry - non-consumptive use | ||
| − | |REP Framework===Governance Framework== | + | |REP Framework= |
| + | ==Introduction== | ||
| + | China’s water resources are extremely unevenly distributed. While the South China Plain is relatively water abundant, the Huang-Huai-Hai (3H) river basins in the North are rather dry. The North China Plain has half of China’s total national area, 45% of total cultivated land and 36% of the total population, but possesses less than 12% of the total water resources1. Per capita annual water availability in the North is about 500 m3 and can fall below 400 m3 in Beijing and Tianjin2. This is much lower than the 1000 m3 per capita threshold of water scarcity defined by the UN. In 1952, the late Chairman Mao first came up with the idea of “borrowing” water from the South to meet the demands of the North. Over the next several decades, scientists and engineers debated about the technical and economic feasibility of Mao’s vision. In 2002, the plan of the magnificent South-to-North Water Division Project (SNWDP), which will divert 44.8 billion cubic meters of water from the Yangtze River Basin to the northern river basins, was approved. It consists of three water division routes that connect the Yangtze River Basin to the other three major river basins: Huang River (Yellow River), Huai River and Hai River. Up to now, the Eastern and Middle Routes are under construction and the Western Route is under planning. | ||
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| + | As the construction of the projects proceeds, one question appears on the agenda: will the water delivered to the north be of good quality? If the water quality were too bad, it would increase treatment cost and reduce its economic value. The return on the huge investment made on the planning and construction of the projects would be uncertain. Therefore, “assuring water quality is essential to the success of the SNWDP”, as quoted in many of the recent official Chinese media reports today. This case study will focus on the water quality control on Middle Route, though the analysis and policy recommendations will also apply to the other two routes. | ||
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| + | The middle route will be completed by the end of 2014. It is designed to supply 9.7 billion cubic meters of water annually along a 1,432 km canal to Beijing and 20 other municipalities and cities along the route (Figure 1). The route starts from the Danjiangkou Reservoir, which is formed by the impoundment of the convergence of the Han River and the Dan River (Figure 2). | ||
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| + | <gallery> | ||
| + | File:River_project_watershed_Zhang2009.jpg|Figure 1: Map of the Middle Route Project and Han River Watershed. See file for source information. | ||
| + | File:Satellite of MRP region.jpg|Figure 2: Satellite Image of Danjiangkou Reservoir | ||
| + | </gallery> | ||
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| + | ==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. | 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. | ||
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| + | [[File:Structure of china govt wang deangelis 2012.jpg | thumb | 500px | Figure 3: Political Structure of Chinese Government]] | ||
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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. | 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. | ||
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==Water Quality Related Regulation== | ==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 | + | 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 III <ref name="Water Pollution 2005">Water Pollution Control & Soild and Water Conservation Plan Drafting Committee Water Pollution Control & Soil and Water Conservation Plan of Danjiangkou Reservoir and Upstream. (2005). </ref>. 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. |
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| + | <gallery> | ||
| + | File:MRP case provinces.jpg | Figure 4: 18 Water Quality Control Zone in Danjiangkou Reservoir Watershed in three provinces. See image for source info. | ||
| + | File: MRP zones image.jpg| Figure 5: Three broad categories of Water Quality Control Zone in Danjiangkou Reservoir Watershed | ||
| + | File: Wra wsa wang delangelis 2012.jpg | Figure 6: Water Source and Receiving Area of MRP. See image for base map source info | ||
| + | </gallery> | ||
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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. | 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. | ||
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| − | Tables 1a and 1b: Economic facts of the Water Source Area (WSA) and Water Receiving Area (WRA) provinces/municipalities source | + | |
| + | Tables 1a and 1b: Economic facts of the Water Source Area (WSA) and Water Receiving Area (WRA) provinces/municipalities source <ref name="Economist China"> The Economist. "Comparing Chinese provinces with countries: All the parities in China". (201AD).at [http://www.economist.com/content/all_parities_china]. retrieved May 2012. </ref> | ||
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Table 1a WRA | Table 1a WRA | ||
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As mentioned previously, the Plan guides much of the water quality control efforts for the Danjiangkou Reservoir. Based on loading reduction targets for each control zone, the Plan includes several lists of projects to invest in, which include wastewater treatment plants, landfills, eco-agriculture, soil and water conservation, wetland protection, etc. Eight-hundred and seventy-eight projects were proposed to be carried out in the short term, which will cost 6.989 billion CNY (Chinese Yuan). Another 1,234 projects were planned for the long term, which would cost 12.444 billion CNY. The breakdown of the costs of the projects is shown in Table 2. | As mentioned previously, the Plan guides much of the water quality control efforts for the Danjiangkou Reservoir. Based on loading reduction targets for each control zone, the Plan includes several lists of projects to invest in, which include wastewater treatment plants, landfills, eco-agriculture, soil and water conservation, wetland protection, etc. Eight-hundred and seventy-eight projects were proposed to be carried out in the short term, which will cost 6.989 billion CNY (Chinese Yuan). Another 1,234 projects were planned for the long term, which would cost 12.444 billion CNY. The breakdown of the costs of the projects is shown in Table 2. | ||
| − | The amount of work needed to be done is enormous, but it is not clear in the Plan who will bear the cost of these projects. Up to now, there is no clear-cut long term mechanism in place to finance those projects. If there financing instrument for the planned water quality control projects, the burden on local economy and local people will be unbearable. For example, according to Dong et al. | + | The amount of work needed to be done is enormous, but it is not clear in the Plan who will bear the cost of these projects. Up to now, there is no clear-cut long term mechanism in place to finance those projects. If there financing instrument for the planned water quality control projects, the burden on local economy and local people will be unbearable. For example, according to Dong et al.<ref name="Dong et al 2006"> Dong, Z. et al. Computing payment for ecosystem services in watersheds: An analysis of the Middle Route Project of South-to-North Water Diversion in China. ''Journal of Environmental Sciences'' 23, 2005-2012 (2011).</ref>, Shiyan City, one of the cities in the Water Source Area Security Zone in Hubei Province, has shut down a large number of polluting enterprises, including 3,622 paper mills. It has spent 5.34 billion CNY on water quality control projects, and its financial revenue has reduced by 0.65 billion CNY due to the closure of the pollution-cause enterprises. |
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| − | + | Table 2 Breakdown of water quality control projects and their costs <ref name="Water Pollution 2005"/> | |
|Key Questions= | |Key Questions= | ||
|Issues={{Issue | |Issues={{Issue | ||
| − | |Issue=Government expenditure on water quality related infrastructure projects | + | |Issue=Government expenditure on water quality related infrastructure projects. How will the required water quality standard be met in an equitable way? |
| − | |Issue Description= | + | |Issue Description=The cost to finance this project both in terms of short term construction and long term maintenance is very large. The economic reality for the counties in the water source country varies significantly and in some locations the tax revenue is not sufficient to cover infrastructure project costs associated with the Plan. |
Stakeholders | Stakeholders | ||
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}}{{Issue | }}{{Issue | ||
|Issue=Population affected by water quality control in the water source area | |Issue=Population affected by water quality control in the water source area | ||
| − | |Issue Description= | + | |Issue Description=Certain farmers will be required to cease farming their land upstream from the reservoir to preserve water quality (mitigation of runoff). A rough estimation is in the hundreds of thousands. Manufacturing plants in the area will also be displaced. |
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Stakeholders | Stakeholders | ||
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|Issue=Costs and benefits sharing between WRA and WSA | |Issue=Costs and benefits sharing between WRA and WSA | ||
| − | |Issue Description= | + | |Issue Description=Due to forced ecological migration of farmers and the shut-down of factories in the Water Source Area, the WSA will be bearing the greatest social and economic burden of the Plan. The Water Receiving Area will enjoy the benefit of water delivery, without the burdens borne by the WSA. |
Stakeholders | Stakeholders | ||
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*Water Receiving Area (WRA) | *Water Receiving Area (WRA) | ||
*Water Source Area (WSA) | *Water Source Area (WSA) | ||
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}}{{Issue | }}{{Issue | ||
|Issue=Involving stakeholders in decision making process | |Issue=Involving stakeholders in decision making process | ||
| − | |Issue Description=The Chinese governance structure is hierarchical; and most of the policy design and implementation process is top-down | + | |Issue Description=The Chinese governance structure is hierarchical; and most of the policy design and implementation process is top-down. 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? |
|NSPD=Water Quality (quality for a given purpose, quality from the viewpoint of a stakeholder); Assets (specific human or economic assets); Values and Norms (social value or cultural norm) | |NSPD=Water Quality (quality for a given purpose, quality from the viewpoint of a stakeholder); Assets (specific human or economic assets); Values and Norms (social value or cultural norm) | ||
|Stakeholder Type=Federated state/territorial/provincial government, Sovereign state/national/federal government, Community or organized citizens | |Stakeholder Type=Federated state/territorial/provincial government, Sovereign state/national/federal government, Community or organized citizens | ||
}}{{Issue}} | }}{{Issue}} | ||
|Analysis and Synthesis={{Analysis and Synthesis | |Analysis and Synthesis={{Analysis and Synthesis | ||
| − | |Analysis=The | + | |Analysis=====Problem Definition==== |
| + | The SNWDP presents the challenge of ensuring water quality in a long-range inter-basin water transfer. In order to enhance the quality of water in the Water Receiving Area (WRA), there must be improvements in the Water Source Area (WSA). The thousands of proposed pollution control projects require billions of dollars in the short and long term. Having the relatively poorer Water Source Area contribute water and pay for the water quality control projects is unjustifiable. Therefore, in this case study, we analyzed the affected stakeholders and proposed a mechanism to share benefits and costs between WRA and WSA. | ||
| − | Issue | + | ====Issue Analysis==== |
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| + | The major issue in this case study is how to achieve the water quality standard required by the Plan in an equitable way. In this section, we analyze some sub-issues, relevant stakeholders of the sub-issues, and the variables linked to the sub-issues and stakeholders. | ||
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| + | ====Issue 1: Government expenditure on water quality related infrastructure projects==== | ||
| + | As mentioned in the Background section, 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. | ||
| − | Issue 2: Population affected by water quality control in the water source area | + | ====Issue 2: Population affected by water quality control in the water source area==== |
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. | 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. | ||
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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. | 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. | ||
| − | Issue 3: Costs and benefits sharing between WRA and WSA | + | ====Issue 3: Costs and benefits sharing between WRA and WSA==== |
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. | 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. | ||
| − | Issue 4: involving stakeholders in decision making process | + | ====Issue 4: involving stakeholders in decision making process==== |
| − | 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 | + | 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 |
| − | + | <ref name="Zhong et al 2008"> Zhong, L.-J. & Mol, A.P.J. Participatory environmental governance in China: public hearings on urban water tariff setting. Journal of environmental management 88, 899-913 (2008). </ref> | |
| + | <ref name=" Li et al 2012"> Li, W., Liu, J. & Li, D. Getting their voices heard: three cases of public participation in environmental protection in China. Journal of environmental management 98, 65-72 (2012). </ref> | ||
| + | <ref name="Zhao et al 2010 "> Zhao, Y. Public Participation in China’s EIA Regime: Rhetoric or Reality? Journal of Environmental Law 22, 89-123 (2010). </ref>.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. | ||
|Synthesis===Payment for Water Quality Services (PWQS)== | |Synthesis===Payment for Water Quality Services (PWQS)== | ||
| − | After analyzing the issues and the affected stakeholders, we propose implementing a scheme of Payment for Water Quality Services (PWQS). Water Quality Services are any measures taken to enhance water quality, including pollution control, land-use changes, technical investments, | + | After analyzing the issues and the affected stakeholders, we propose implementing a scheme of Payment for Water Quality Services (PWQS). Water Quality Services are any measures taken to enhance water quality, including pollution control, land-use changes, technical investments, etc <ref name ="Kemekes et al 2010"> Kemkes, R.J., Farley, J. & Koliba, C.J. Determining when payments are an effective policy approach to ecosystem service provision. Ecological Economics 69, 2069-2074 (2010).</ref>. |
| − | PWQS is based on the concept of Payment for Ecosystem Services (PES) | + | PWQS is based on the concept of Payment for Ecosystem Services (PES)<Ref name="Forest Trends et al 2008"> Forest Trends, The Katoomba Group, and UNEP. Payments for Ecosystem Services : Getting Started Payments for Ecosystem Services Getting Started : A Primer. Prospects (Nairobi, 2008). </ref>. . Some common practices of PES include emissions cap-and-trade systems to limit total pollution and allow the market mechanism to regulate polluting sources. Emissions trading systems have been used for nutrient pollution in water sources, and carbon in the EU. Reforestation is another form of PES, in which landowners are compensated for the planting costs or opportunity cost of planting trees instead of using land for alternate, often polluting, uses. Another form of PES is incentivizing farmers to convert to more sustainable methods of agriculture. Public or private actors on individual or collective scales may choose to implement these types of PES structures in order to reap environmental benefits such as water or air quality, soil conservation, or habitat restoration<ref name="Forest Trends 2008" />. |
| − | Payments for Watershed Services (PWS) | + | Payments for Watershed Services (PWS)<ref name="Forest Trends 2008"> Forest Trends and the Ecosystem Marketplace Payments for Ecosystem Services: Market Profiles. (2008). </ref> is another scheme on which PWQS is based. PWS involves reducing poverty by using payment systems to maximize watershed services. Because of the ability of PWS to address poverty reduction in addition to environmental concerns, these schemes have been designated “pro-poor.”<ref name="Pagiola 2007"> Pagiola, S. Guidelines for “Pro-Poor” Payments for Enviornmental Services. (2007).</ref> The PWQS scheme we proposed is specialized to combine environmental, economic, and social benefits by incentivizing PES measures to enhance water quality and PWS methods to provide other societal benefits to a disadvantaged and affected population. Pro-poor benefits are integral to the societal aspect of PWQS. |
==Evaluation, Collection and Distribution of PWQS== | ==Evaluation, Collection and Distribution of PWQS== | ||
| − | In order to ensure the success of a PWQS scheme, the payments must be valued | + | In order to ensure the success of a PWQS scheme, the payments must be valued correctly<ref name="Farley et al 2010"> Farley, J. & Costanza, R. Payments for ecosystem services: From local to global. Ecological Economics 69, 2060-2068 (2010). </ref>, and the collection and distribution must be transparent and equitable so that they are acceptable to both buyers and sellers of water quality services. |
Sufficient valuation begins with the water quality standards. When regulators raise standards, the Water Source Area must take measures to ensure that the water will meet the new requirements, such as removing industrial point source pollution, installing wastewater treatment plants, implementing landfill projects, or employing soil and water conservation projects. In this case, Beijing requires that the water quality at Danjiangkou Reservoir must reach Grade II and its inflow tributaries must reach Grade III. Based on the requirement, the stakeholders should evaluate the costs of the necessary changes depending on what action they choose to take. Costs can be economic, financial, and social. For example, if a heavily polluting industrial factory must be shut down, the cost of the water quality service is the lost economic value of the factory to the community and the resulting unemployment. The value of enhanced water treatment is equivalent to the construction costs of new infrastructure projects that will raise water quality. Development opportunity costs are also part of the value of water quality services, including the financial loss of companies that will not operate in the water source area because of the stringent water requirements. The lost jobs and necessity of ecological migration are some social costs that changes in water quality may bring. | Sufficient valuation begins with the water quality standards. When regulators raise standards, the Water Source Area must take measures to ensure that the water will meet the new requirements, such as removing industrial point source pollution, installing wastewater treatment plants, implementing landfill projects, or employing soil and water conservation projects. In this case, Beijing requires that the water quality at Danjiangkou Reservoir must reach Grade II and its inflow tributaries must reach Grade III. Based on the requirement, the stakeholders should evaluate the costs of the necessary changes depending on what action they choose to take. Costs can be economic, financial, and social. For example, if a heavily polluting industrial factory must be shut down, the cost of the water quality service is the lost economic value of the factory to the community and the resulting unemployment. The value of enhanced water treatment is equivalent to the construction costs of new infrastructure projects that will raise water quality. Development opportunity costs are also part of the value of water quality services, including the financial loss of companies that will not operate in the water source area because of the stringent water requirements. The lost jobs and necessity of ecological migration are some social costs that changes in water quality may bring. | ||
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Payments for Water Quality Services are necessary to rebalance the burden and the benefits of providing clean water, so whatever institutions are created to monitor the collection and distribution of payments should also recognize the rights of the participants. When PWQS schemes are initiated, the institutions should allow for individuals and communities to be more involved in the decision-making process to make sure that payments are being used effectively. Instruments to ensure the effectiveness of PWQS could include incremental reports, a formal process for appeals, or comment periods to evaluate the validity of complaints or suggestions. Payments should also be used as financial support for significant community goals, when appropriate. | Payments for Water Quality Services are necessary to rebalance the burden and the benefits of providing clean water, so whatever institutions are created to monitor the collection and distribution of payments should also recognize the rights of the participants. When PWQS schemes are initiated, the institutions should allow for individuals and communities to be more involved in the decision-making process to make sure that payments are being used effectively. Instruments to ensure the effectiveness of PWQS could include incremental reports, a formal process for appeals, or comment periods to evaluate the validity of complaints or suggestions. Payments should also be used as financial support for significant community goals, when appropriate. | ||
| − | + | There are also possibilities for more general payments to be used on the collective or individual basis. Direct payments can be used to finance the general transition from polluting to sustainable industries. The opportunity cost of losing industrial business, or the cost of converting one industry to another could be accounted for with direct payments. PQWS also includes the possibility of per-project payments, in which beneficiaries contribute resources to specific water quality enhancement ventures. In the case of constructing a waste treatment facility, for example, funds could supply money for construction of the facility in the water source area, or external sources could take the responsibility of building the facility to ensure their own water quality. | |
Indirect payments are other options for compensating water quality services. These are to cover costs associated with reforming local industrial and agricultural sectors to conform to more sustainable practices. The first obstacle is integrating sustainable development into existing infrastructure. Locals can generate income and stimulate the economy from alternative land-uses that increase water quality and benefit the environment. An opportunity for local farmers is transforming environmentally harmful practices into eco-agriculture. Restoring, preserving, and maintaining local environmental attractions can lead to the development of an eco-tourism industry. In-kind payments, such as products or training necessary for shifting to alternate lifestyles or land-uses are also forms of indirect payments for using sustainable practices. Introducing sustainable development requires a strong partnership between the buyers and sellers of WQS, which will only come when both sides can recognize the mutual benefits of working together. Recipients will be willing to pay for better water quality, and donors will continue water quality services if they feel that that compensation is adequate. When benefits equal or outweigh costs, commitments on both sides will be reinforced. Close linkages between the water source and water receiving areas will also ensure that recipients will use PWQS as intended. | Indirect payments are other options for compensating water quality services. These are to cover costs associated with reforming local industrial and agricultural sectors to conform to more sustainable practices. The first obstacle is integrating sustainable development into existing infrastructure. Locals can generate income and stimulate the economy from alternative land-uses that increase water quality and benefit the environment. An opportunity for local farmers is transforming environmentally harmful practices into eco-agriculture. Restoring, preserving, and maintaining local environmental attractions can lead to the development of an eco-tourism industry. In-kind payments, such as products or training necessary for shifting to alternate lifestyles or land-uses are also forms of indirect payments for using sustainable practices. Introducing sustainable development requires a strong partnership between the buyers and sellers of WQS, which will only come when both sides can recognize the mutual benefits of working together. Recipients will be willing to pay for better water quality, and donors will continue water quality services if they feel that that compensation is adequate. When benefits equal or outweigh costs, commitments on both sides will be reinforced. Close linkages between the water source and water receiving areas will also ensure that recipients will use PWQS as intended. | ||
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In order to distribute costs equitably, stakeholders should create cost-sharing mechanisms to lessen the burden of creating water quality services. Public funding is likely to be a major source of resources for PWQS. Financing can come from the central, provincial, county, or local level. Capital can flow through top-down transfers between government levels, or horizontal transfers along the same government levels. However, initial costs are often high, and public funding is often limited. Therefore, there are great opportunities for mutual investment of public and private funding. Companies that can maintain water quality standards may have interest in bidding for the privilege to operate in the water source areas. This will lessen the burden to the public sector and encourage investment and clean development. All water quality schemes should consider raising support and funding from outside investors, such as NGOs. | In order to distribute costs equitably, stakeholders should create cost-sharing mechanisms to lessen the burden of creating water quality services. Public funding is likely to be a major source of resources for PWQS. Financing can come from the central, provincial, county, or local level. Capital can flow through top-down transfers between government levels, or horizontal transfers along the same government levels. However, initial costs are often high, and public funding is often limited. Therefore, there are great opportunities for mutual investment of public and private funding. Companies that can maintain water quality standards may have interest in bidding for the privilege to operate in the water source areas. This will lessen the burden to the public sector and encourage investment and clean development. All water quality schemes should consider raising support and funding from outside investors, such as NGOs. | ||
| + | |||
==Implementing PWQS – the Intervention Point== | ==Implementing PWQS – the Intervention Point== | ||
| − | The above proposed PWQS is, by any means, a negotiation process. The implementation of the scheme requires a neutral organization to facilitate and mediate between WSA and WRA. In other words, there must be an intervention point in the existing governance structure. We propose creating a sub-committee under the SNWD Project Office to coordinate the negotiation processes between the water source and receiving areas. This sub-committee will facilitate the joint fact finding process to evaluate the costs of water quality enhancement. It can work with both regions to develop a detailed plan for the collection and distribution of payments for water quality services. Additionally, the sub-committee would design a conflict resolution mechanism to deal with problems as they arise and allow for flexibility within the new PWQS system. | + | The above proposed PWQS is, by any means, a negotiation process. The implementation of the scheme requires a neutral organization to facilitate and mediate between WSA and WRA. In other words, there must be an intervention point in the existing governance structure. We propose creating a sub-committee under the SNWD Project Office to coordinate the negotiation processes between the water source and receiving areas. This sub-committee will facilitate the joint fact finding process to evaluate the costs of water quality enhancement. It can work with both regions to develop a detailed plan for the collection and distribution of payments for water quality services. Additionally, the sub-committee would design a conflict resolution mechanism to deal with problems as they arise and allow for flexibility within the new PWQS system. |
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|User=Kelly DeAngelis | |User=Kelly DeAngelis | ||
}} | }} | ||
| − | |Abstract=This case study addresses the issues of cost-benefit sharing between Water Source Area (WSA) and Water Receiving Area (WRA) in a large-scale water transfer project in China. The proposed water quality control projects in the WSA of China’s South-to-North Water Diversion (SNWD) Middle Route Project (MRP) affects industrial and agricultural sectors in the relatively poor WSA, but also benefits residential users in both the WSA and WRA in terms of water quality and ecosystem improvements. Since the unemployed industrial workers, farmers, and the general population of the WSA have made sacrifices to provide clean water to the WRA, we propose a mechanism to redistribute the expenses of water quality services among the stakeholders in an equitable and effective manner. The mechanism is termed “Payment for Water Quality Services (PWQS)”. Possible means to implement it within the current governance structure is also discussed. | + | |Abstract=This case study addresses the issues of cost-benefit sharing between Water Source Area (WSA) and Water Receiving Area (WRA) in a large-scale water transfer project in China. The proposed water quality control projects in the WSA of China’s South-to-North Water Diversion (SNWD) Middle Route Project (MRP) affects industrial and agricultural sectors in the relatively poor WSA, but also benefits residential users in both the WSA and WRA in terms of water quality and ecosystem improvements. Since the unemployed industrial workers, farmers, and the general population of the WSA have made sacrifices to provide clean water to the WRA, we propose a mechanism to redistribute the expenses of water quality services among the stakeholders in an equitable and effective manner. The mechanism is termed “Payment for Water Quality Services (PWQS)”. Possible means to implement it within the current governance structure is also discussed. |
| − | + | |Questions and Wisdom=Central to this case are questions of water quality: 1) how can stakeholders place economic value on efforts to enhance water quality and, most importantly, 2) how can stakeholders distribute the costs of water quality projects amongst polluters and beneficiaries? Here we find that hierarchical structures and limited stakeholder involvement in water projects can lead to unbalanced distribution of costs and benefits. The issues in the SNWD MRP demonstrate the need for cost-sharing mechanisms as part of an institutional governance structure in water quality projects. When stakeholders have disproportionate costs and benefits associated with enhancing water quality, a financing instrument can help to place economic value on environmental and social factors. | |
| − | |Questions and Wisdom=Central to this case are questions of water quality: 1) how can stakeholders place economic value on efforts to enhance water quality and, most importantly, 2) how can stakeholders distribute the costs of water quality projects amongst polluters and beneficiaries? Here we find that hierarchical structures and limited stakeholder involvement in water projects can lead to unbalanced distribution of costs and benefits. The issues in the SNWD MRP demonstrate the need for cost-sharing mechanisms as part of an institutional governance structure in water quality projects. When stakeholders have disproportionate costs and benefits associated with enhancing water quality, a financing instrument can help to place economic value on environmental and social factors. | + | |
}} | }} | ||
Revision as of 10:48, 6 June 2012
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 |
Contents
Summary
Natural, Historic, Economic, Regional, and Political Framework
Introduction
China’s water resources are extremely unevenly distributed. While the South China Plain is relatively water abundant, the Huang-Huai-Hai (3H) river basins in the North are rather dry. The North China Plain has half of China’s total national area, 45% of total cultivated land and 36% of the total population, but possesses less than 12% of the total water resources1. Per capita annual water availability in the North is about 500 m3 and can fall below 400 m3 in Beijing and Tianjin2. This is much lower than the 1000 m3 per capita threshold of water scarcity defined by the UN. In 1952, the late Chairman Mao first came up with the idea of “borrowing” water from the South to meet the demands of the North. Over the next several decades, scientists and engineers debated about the technical and economic feasibility of Mao’s vision. In 2002, the plan of the magnificent South-to-North Water Division Project (SNWDP), which will divert 44.8 billion cubic meters of water from the Yangtze River Basin to the northern river basins, was approved. It consists of three water division routes that connect the Yangtze River Basin to the other three major river basins: Huang River (Yellow River), Huai River and Hai River. Up to now, the Eastern and Middle Routes are under construction and the Western Route is under planning.
As the construction of the projects proceeds, one question appears on the agenda: will the water delivered to the north be of good quality? If the water quality were too bad, it would increase treatment cost and reduce its economic value. The return on the huge investment made on the planning and construction of the projects would be uncertain. Therefore, “assuring water quality is essential to the success of the SNWDP”, as quoted in many of the recent official Chinese media reports today. This case study will focus on the water quality control on Middle Route, though the analysis and policy recommendations will also apply to the other two routes.
The middle route will be completed by the end of 2014. It is designed to supply 9.7 billion cubic meters of water annually along a 1,432 km canal to Beijing and 20 other municipalities and cities along the route (Figure 1). The route starts from the Danjiangkou Reservoir, which is formed by the impoundment of the convergence of the Han River and the Dan River (Figure 2).
Figure 1: Map of the Middle Route Project and Han River Watershed. See file for source information.
Figure 2: Satellite Image of Danjiangkou Reservoir
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 III [1]. 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.
Figure 4: 18 Water Quality Control Zone in Danjiangkou Reservoir Watershed in three provinces. See image for source info.
Figure 5: Three broad categories of Water Quality Control Zone in Danjiangkou Reservoir Watershed
Figure 6: Water Source and Receiving Area of MRP. See image for base map source info
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 source [2]
Table 1a WRA
{
Issues and Stakeholders
Government expenditure on water quality related infrastructure projects. How will the required water quality standard be met in an equitable way?
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
The cost to finance this project both in terms of short term construction and long term maintenance is very large. The economic reality for the counties in the water source country varies significantly and in some locations the tax revenue is not sufficient to cover infrastructure project costs associated with the Plan.
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)
- Henan Province (河南省)
- 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
Certain farmers will be required to cease farming their land upstream from the reservoir to preserve water quality (mitigation of runoff). A rough estimation is in the hundreds of thousands. Manufacturing plants in the area will also be displaced.
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
Due to forced ecological migration of farmers and the shut-down of factories in the Water Source Area, the WSA will be bearing the greatest social and economic burden of the Plan. The Water Receiving Area will enjoy the benefit of water delivery, without the burdens borne by the WSA.
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
Analysis, Synthesis, and Insight
What is an ASI?
Individuals may add their own Analysis, Synthesis, and Insight (ASI) to a case. ASI sub-articles are protected, so that each contributor retains authorship and control of their own content. Edit the case to add your own ASI.
Learn moreASI: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)
- ^ Water Pollution Control & Soild and Water Conservation Plan Drafting Committee Water Pollution Control & Soil and Water Conservation Plan of Danjiangkou Reservoir and Upstream. (2005).
- ^ The Economist. "Comparing Chinese provinces with countries: All the parities in China". (201AD).at [1]. retrieved May 2012.
