Abstract
Around 2000, Payments for Watershed Services (PWS) programs was introduced into China, and pilot projects were firstly carried out in developed regions and small watersheds such as Xinanjiang River, Jiulongjiang River and Taihu Lake Basin. Since 2010, it has become an economic compensatory measure with the characteristics of government public policy, aiming to solve the conflict of interest between the upstream and downstream water rights trading relations. The benefit for the region interest is evident, and the transfer payment mechanism between the city governments is designed to achieve the goal in which the downstream is access to better water ecosystem services and the upstream gain spatial development right as compensation. Different from other countries in the world, in which the market dominate the PWS, in China local governments become the main participators. Although through government-led transfer is efficient, the performance is uncertain as the result of lacking market allocation. Therefore, this top-down policy with evident governmental intention make it difficult to distinguish whether the upstream cities have obtained sufficient compensation to cover their losses in potential development, and whether the downstream has obtained higher-quality water resources. In fact, based on in PWS program the upstream and downstream governments have the initiative to dynamically adjust their development strategies during the policy-formulation. In this process, local governments are driven by their own interest, and their behaviors may fall out from the overall goal of the region. In recent 10 years, current water rights business policy has encountered the following problems: Firstly, the current PES mode is static, in which the compensation is actually a one-time deal. The compensation only includes signing contracts, water quality monitoring, and liquidated damages, rather than in accordance with dynamic change of water environment. Secondly, PWS weighs too much on considering the upstream water source, neglecting of the over-development of the tributaries and the downstream. Although PWS Program limits the local damage behavior and achieves the best performance in a small range, but the excessive use of fees paid by the tributaries and the downstream will damage the balance leading to the worsening ecological service of the whole basin. Thirdly, the ways of how local government redistribute their funds are uncertain. In practice, the funds poured into the fields of poverty-alleviation and ecology-protection are limited and cause the low performance of PWS program. To solve these problems, it is of significant importance to make a systematic evaluation of the current PWS program. In this research the PWS program in Dongjiang River, southern part of Guangdong Province is selected as an example to analyze the dilemma of water resources protection as well as the specific measures adopted to maximize governmental interests and regional interest by policy-design. Dongjiang, as the source of drinking water in Guangdong Province ,China, is one of the earliest rivers that carried out PWS program and its PWS programme is considered as the typical model of medium-size watershed areas. This program involves two provinces in China with Guangdong Province, the main economy engine in southern part of China and Jiangxi Province where the mineral exploitation is frequent. The program has draw attention from government and researchers for the huge amount of compensation fund (up to 214 million dollars) as well as the typical contradiction between upstream and downstream for the evidently different development status and orientation between the two provinces. This study can be used for reference for the regions where the government is the main participator in PWS, specifically, how to benefit the region by financial funds distribution, ecological facilities construction and administrative approval.
