Abstract
Water rights transactions are an important way for countries to use market mechanisms to optimize the allocation of water resources. Taking the South-North Water Transfer East Project (SNWDP-ER) in China as an example, a full cost pricing model (FCPM) is used to construct an accounting framework for water rights transactions. Water quality factors are innovatively introduced into the model to carry out a study on water rights trading pricing (WRTP) from the perspective of combining water quantity and quality. The results show that: (1) the actual WRTP (1.25 yuan/m3) for the first phase of the SNWDP-ER was low and in fact not sufficient to cover the corresponding costs. (2) By calculating the ability of water users to pay, and comparing this situation with advanced overseas cases, the conclusion was reached that the FCPM of WRTP (1.63 yuan/m3) is reasonable. (3) The method of accounting for the WRTP for major projects that take into account water quantity and quality and that are conducive to strengthening ecological protection in river basins is generally feasible. Reasonable WRTP for major projects can promote water market reform by bringing user fees, improving the competition mechanism in the water market, and reducing the financial payments pressure.
Similar content being viewed by others
Data availability
The data involved in the study can be obtained from the corresponding author at reasonable request.
Notes
Translated at the average exchange rate of USD to RMB in 2020.
References
Ahmed, S. S., Bali, R., Khan, H., Mohamed, H. I., & Sharma, S. K. (2021). Improved water resource management framework for water sustainability and security. Environmental Research, 201(8), 111527. https://doi.org/10.1016/j.envres.2021.111527
Amiri, V., Rezaei, M., & Sohrabi, N. (2014). Groundwater quality assessment using entropy weighted water quality index (EWQI) in Lenjanat, Iran. Environmental Earth Sciences, 72(9), 3479–3490. https://doi.org/10.1007/s12665-014-3255-0
Bakker, K. (2014). The business of water: Market environmentalism in the water sector. Annual Review of Environment and Resources, 39(1), 469–494. https://doi.org/10.1146/annurev-environ-070312-132730
Berrittella, M., Rehdanz, K., & Tol, R. (2006). The economic impact of the South-North Water Transfer Project in China: A computable general equilibrium analysis. Social Science Electronic Publishing, 41(2), 222–228. https://doi.org/10.2139/ssrn.952938
Bhave, A. G., Conway, D., Dessai, S., & Stainforth, D. A. (2018). Water resource planning under future climate and socioeconomic uncertainty in the Cauvery River Basin in Karnataka, India. Water Resources Research, 54(2), 708–728. https://doi.org/10.1002/2017WR020970
Bhojwani, S., Topolski, K., Mukherjee, R., et al. (2019). Technology review and data analysis for cost assessment of water treatment systems. Science of the Total Environment, 651, 2749–2761. https://doi.org/10.1016/j.scitotenv.2018.09.363
Bjornlund, H., & Mckay, J. (2002). Aspects of water markets for developing countries: Experiences from Australia, Chile, and the US. Environ. The Developing Economies, 7, 769–795. https://doi.org/10.1017/S1355770×02000463
Brewer, J., Glennon, R., Ker, A., & Libecap, G. (2008). presidential address water markets in the west: Prices, trading and contractual forms. Economic Inquiry, 46(2), 91–112. https://doi.org/10.1111/j.1465-7295.2007.00072.x
CCO of SNWDP (2018). China's South-to-North Water Diversion Project -Economic and Financial Volume. State Council Construction Committee of SNWDP. Beijing
Chen, Y., Luo, D., & Cheng, Y. (2021). A study on the base price of regional water rights trading by full cost method considering ecological compensation. Water Economics., 39(05), 72–78+82.
Chen, Y., & Zhou, Y. (2016). Measurement of ecological compensation standards in watersheds based on water quality and quantity: An example from Ningxia Hui Autonomous Region in the Yellow River Basin. China Agricultural Resources and Zoning., 37(4), 119–126.
Chen, Z., Wang, H., & Qi, X. (2013). Pricing and water resource allocation scheme for the South-to-North water diversion project in China. Water Resources Management, 27(5), 1457–1472. https://doi.org/10.1007/s11269-012-0248-1
Costanza, R., Arge, R. D., Groot, R. D., Farber, S., Grasso, M., Hannon, B., Limburg, K., Naeem, S., Oneill, R. V., Paruelo, J., Raskin, R. G., Sutton, P., & Vanden, B. M. (1997). The value of the world’s ecosystem services and natural capital. Nature, 387(6630), 253–260. https://doi.org/10.1016/S0921-8009(98)00020-2
Di, D., Wu, Z., Wang, H., & Huang, S. (2020). Optimal water distribution system based on water rights transaction with administrative management, marketization, and quantification of sediment transport value: A case study of the Yellow River Basin, China. Science of the Total Environment, 722, 137801. https://doi.org/10.1016/j.scitotenv.2020.137801
Easton, S., & Pinder, S. (2022). Measuring the price of Australian water. Australian Journal of Management., 47(1), 24–33. https://doi.org/10.1177/0312896221992454
Ezugwu, C. K., Onwuka, O. S., Egbueri, J. C., et al. (2019). Multi-criteria approach to water quality and health risk assessments in a rural agricultural province, southeast Nigeria. HydroResearch, 2, 40–48. https://doi.org/10.1016/j.hydres.2019.11.005
Gao, X., Shen, J., He, W., Zhao, X., Li, Z., Hu, W., Wang, J., Ren, Y., & Zhang, X. (2021). Spatial-temporal analysis of ecosystem services value and research on ecological compensation in Taihu Lake Basin of Jiangsu Province in China from 2005 to 2018. Journal of Cleaner Production, 317, 128241. https://doi.org/10.1016/j.jclepro.2021.128241
Ghosh, S. (2019). Droughts and water trading in the western United States: Recent economic evidence. Journal of the American Water Resources Association, 45(6), 1508–1518. https://doi.org/10.1080/07900627.2017.1411252
Gleick, P. H. (2003). Water use. Annual Review of Environment and Resources, 28(1), 275–314. https://doi.org/10.1146/annurev.energy.28.040202.122849
Grafton, R. Q., Libecap, G. D., Edwards, E. C., et al. (2012). Comparative assessment of water markets: Insights from the Murray-Darling Basin of Australia and the Western USA. Water Policy, 14(2), 175–193. https://doi.org/10.2166/wp.2011.016
Jamshidi, S., Niksokhan, M. H., & Ardestani, M. (2014). Surface water quality management using an integrated discharge permit and the reclaimed water market. Water Science and Technology, 70(5), 917–924. https://doi.org/10.2166/wst.2014.314
Johst, K., Drechsler, M., & Wätzold, F. (2002). An ecological-economic modelling procedure to design compensation payments for the efficient spatio-temporal allocation of species protection measures. Ecological Economics, 41(1), 37–49. https://doi.org/10.1016/S0921-8009(02)00019-8
Khan, S., Dassanayake, D., Mushtaq, S., & Hanjra, M. A. (2010). Predicting water allocations and trading prices to assist water markets. Irrigation and Drainage, 59(4), 388–403.
Kuwayama, Y., & Brozović, N. (2013). The regulation of a spatially heterogeneous externality: Tradable groundwater permits to protect streams. Journal of Environmental Economics and Management, 66(2), 364–382. https://doi.org/10.1016/j.jeem.2013.02.004
Leemans, H., & Groot, R. (2003). Millennium ecosystem assessment: Ecosystems and human well-being: A framework for assessment. Physics Teacher, 34(9), 534–534. https://doi.org/10.1119/1.2344558
Li, Z., Wang, Y., & Li, C. (2018). Paying close attention to the effect of ecological environment in water right trade. Water Resources Development Research, 18, 19–21. https://doi.org/10.13928/j.cnki.wrdr.2018.12.004
Liu, W., (2014). Discussion on the influencing factors of inter-basin water transfer prices. Price Theory and Practice. 11:107–108. JournalArticle/5b435b79c095d716a4c7d75b
Michelsen, A. M., Booker, J. F., & Person, P. (2000). Expectations in water-right prices. International Journal of Water Resources Development, 16(2), 209–219. https://doi.org/10.1080/07900620050003125
Mosha, D. B., Vedeld, P., Kajembe, G. C., & Tarimo, A. K. (2016). Reflections on evolving water management institutions and institutional bricolage: A case of irrigation schemes in Iringa Rural and Kilombero districts Tanzania. Water Policy, 18(1), 143–160. https://doi.org/10.2166/wp.2015.020
Mukate, S., Wagh, V., Panaskar, D., et al. (2019). Development of new integrated water quality index (IWQI) model to evaluate the drinking suitability of water. Ecological Indicators, 101, 348–354. https://doi.org/10.1016/j.ecolind.2019.01.034
Murdock, S., Albrecht, D. E., Hamm, R. R., & Backman, K. (1991). Role of socio demographic characteristics in projections of water use. Journal of Water Resources Planning and Management, 117, 235–251. https://doi.org/10.1061/(ASCE)0733-9496(1991)117:2(235)
Null, S. E., & Prudencio, L. (2016). Climate change effects on water allocations with season dependent water rights. Science of the Total Environment, 571, 943–954. https://doi.org/10.1016/j.scitotenv.2016.07.081
Ortega, J. F., Juan, J., & Tarjuelo, J. M. (2005). Improving water management: The irrigation advisory service of Castilla-La Mancha (Spain). Agricultural Water Management, 77(1–3), 37–58. https://doi.org/10.1016/j.agwat.2004.09.028
Pamei, M., Hemso, E., & Puzari, A. (2022). Evaluation of the Physico-Chemical and the sustainability of ground and surface water quality using statistical correlation method and Water Quality Index in Dimapur District, Nagaland. Environmental Nanotechnology, Monitoring & Management, 18, 100699. https://doi.org/10.1016/j.enmm.2022.100699
Payne, M. T., & Smith, M. G. (2013). Price determination and efficiency in the market for water rights in New Mexico’s Middle Rio Grande Basin. International Journal of Water Resources Development, 29(4), 588–604. https://doi.org/10.1080/07900627.2012.730670
Pérez-Blanco, C. D., Essenfelder, A. H., & Gutiérrez-Martín, C. (2020). A tale of two rivers: Integrated hydro-economic modeling for the evaluation of trading opportunities and return flow externalities in inter-basin agricultural water markets. Journal of Hydrology, 584, 124676. https://doi.org/10.1016/j.jhydrol.2020.124676
Philpot, S., Hipel, K., & Johnson, P. (2016). Strategic analysis of a water rights conflict in the south western United States. Journal of Environmental Management, 180, 247–256. https://doi.org/10.1016/j.jenvman.2016.05.027
Pohlner, H. (2016). Institutional change and the political economy of water megaprojects: China’s south-north water transfer. Global Environmental Change, 38, 205–216. https://doi.org/10.1016/j.gloenvcha.2016.03.015
Pullen, J. L., & Colby, B. G. (2008). Influence of climate variability on the market price of water in the Gila-San Francisco Basin. Journal of Agricultural and Resource Economics, 33(3), 473–487.
Reznik, A., Feinerman, E., Finkelshtain, I., et al. (2016). The cost of covering costs: A nationwide model for water pricing. Water Economics and Policy, 2(4), 21–29. https://doi.org/10.1142/S2382624X16500247
Sechi, G. M., Zucca, R., & Zuddas, P. (2011). The water pricing problem in a complex water resources system: A cooperative game theory approach. Springer. https://doi.org/10.1007/978-3-642-20009-0_81
Sharma, R., Kumar, R., Sharma, D. K., et al. (2022). Water pollution examination through quality analysis of different rivers: A case study in India. Environment, Development and Sustainability, 24, 7471–7492. https://doi.org/10.1007/s10668-021-01777-3
Sheng, J., Wang, H., & Qiu, W. (2022). Water quality and incentive coordination in water markets: The eastern route of China’s South-North Water Transfer Project. Journal of Hydrology, 607, 127526. https://doi.org/10.1016/j.jhydrol.2022.127526
Svensson, J., Wang, Y., Garrick, D., & Dai, X. (2021). How does hybrid environmental governance work? Examining water rights trading in China (2000–2019). Journal of Environmental Management, 288, 112333. https://doi.org/10.1016/j.jenvman.2021.112333
Wang, Y., Liu, D., Cao, X., Yang, Z., Song, J., Chen, D., & Sun, S. (2017). Agricultural water rights trading and virtual water export compensation coupling model: A case study of an irrigation district in China. Agricultural Water Management, 180, 99–106. https://doi.org/10.1016/j.agwat.2016.11.006
Wu, X., Wu, F., Li, F., & Xu, X. (2021). Dynamic adjustment model of the water rights trading price based on water resource scarcity value analysis. International Journal of Environmental Research and Public Health, 18(5), 2281–2281. https://doi.org/10.3390/ijerph18052281
Xie, G., Lu, C., Leng, Y., Zheng, D., & Li, S. (2003). Valuation of ecological assets on the Qinghai-Tibet Platea. Natural Resources Journal, 18(2), 189–196. https://doi.org/10.11849/zrzyxb.2003.02.010
Funding
Funding was provided by Postgraduate Research & Practice Innovation Program of Jiangsu Province Grant no (KYCX22_0703).
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors promise no competing interest.
Ethical approval
Not applicable.
Consent to participate and for publication
All authors agree.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Li, S., Wang, N., Shen, J. et al. Pricing of water rights transactions for major water transfer projects considering water quantity and quality. Environ Dev Sustain 26, 7735–7756 (2024). https://doi.org/10.1007/s10668-023-03030-5
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10668-023-03030-5