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Integrating ecological damages into the user charge for land reclamation: a case study of Xiamen, China

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Abstract

Land reclamation has become one of the great concerns of many coastal states for its serious environmental and ecological effects. User charge is an effective market-based approach for regulating land reclamation. The user change should be designed to reflect the full effect of converting sea to land to ensure sustainable use of marine resources. In this paper, we present an ecological-economic framework to estimate the user charge that covers both the ecological damages and the rent associated with the reclaimed land. We apply the framework to Xiamen’s West Sea. Results of the case study suggest that the rents of reclaimed land for industrial and commercial uses are 49 yuan/m2 and 1,066–2,704 yuan/m2, respectively. The unit value of ecological damages of land reclamation is 605 yuan/m2. The present user charge is too low to regulate excessive land reclamation. The user charge for land reclamation in the study area should be modified to 653 yuan/m2 for industrial uses and 35–40% of adjacent land prices for commercial uses.

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Notes

  1. The rent of reclaimed land is analyzed from the perspective of developers (a private financial analysis). Tax payments are real costs to the developers.

  2. Because the marine and coastal ecosystems provide yearly services, and land reclamation destroys these services permanently, the time value of money must be considered in calculating the value of total ecological damages of land reclamation. It must be stressed that the discount rate in Eq. 13 is the social rate of discounting rather than private discount rate. There is no agreeable opinion about the specific value of the social discount rate. Generally speaking, however, the use of a long term, real government bond rate is a practical alternative (MPP-EAS (Regional Program for the Prevention and Management of Marine Pollution in the East Asian Seas) 1999). EPA (2000) suggests using 1.5%, 2–3%, and 7% (as in intra-generation case) as the social discount rates to conduct sensitivity analysis while including a “no discounting” scenario in economic analysis of public policy. In this paper, we use 2% as the social discount rate.

  3. The formula for calculating the rate of return on total investment is: \( T\rho = \sum_{t = 1}^{8} {{\frac{\rho }{{(1 + r)^{t + 1} }}}} \).

  4. This value was 30–60 yuan/m2 before 2007.

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Acknowledgements

We would like to express our appreciation to Dr. Di Jin of the Woods Hole Oceanographic Institution and Prof. Luoping Zhang of Xiamen University for beneficial discussions regarding various aspects of this study. The study was funded by the National Natural Science Foundation of China (#70771098) and Xiamen Science and Technology Bureau (#04389).

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  1. Joint Key Laboratory of Coastal Study of Xiamen University and Fujian Institute of Oceanography, Environmental Science Research Center, Xiamen University, Xiamen, 361005, China

    Benrong Peng, Weiqi Chen & Huasheng Hong

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  1. Benrong Peng
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  2. Weiqi Chen
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  3. Huasheng Hong
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Correspondence to Huasheng Hong.

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Peng, B., Chen, W. & Hong, H. Integrating ecological damages into the user charge for land reclamation: a case study of Xiamen, China. Stoch Environ Res Risk Assess 25, 341–351 (2011). https://doi.org/10.1007/s00477-010-0372-5

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