Estimating Ecological Value of Small Hydropower Using Contingent Valuation Method: An Application to Tongjiqiao Reservoir in Zhejiang Province, China

Abstract

Abstract The small hydropower (SHP) will be less competitive in the absence of environmental value. The lack of information has become an important obstacle challenging decision-makers in resource-use choices. This paper is an application of contingent valuation method (CVM) in rural China to estimate the willingness- to-pay (WTP) for environmental services provided by exiting hydropower station. Using the single-bounded and dichotomouschoice CVM, the ecological value of Tongjiqiao Reservoir (TJQR) is estimated, and the annual mean WTPs of single-bounded and double-bounded CVM estimation are 141.05 and 219.52 Yuan (RMB)/a, respectively. The 95% confidence interval of annual WTP on an average is 118.47, 166.79 Yuan (RMB)/a and 204.41, 236.22 (Yuan RMB)/a, respectively. In contrast, double-bounded model could obtain much more information of WTP of the investigated, thus reducing the confidence interval of estimation, and enhancing the estimation accuracy of the WTP. According to the estimated mean WTP of the double-bounded CVM, the total ecosystem service value of the TJQR is 15.54 million Yuan (RMB). Compared with the conventional electricity of fossil power and large hydropower, the SHP will be less competitive in the absence of non-market value, ignoring that the environmental impacts of existing SHP will undermine the healthy development of clean energy sector.