Abstract
To improve Chinese cities’ resilience to climate change, the Sponge City Program, which was designed to tackle water pollution, storm water management, and flooding, was initiated in 2014. Being a major policy initiative, the Sponge City Program raises heated discussions among Chinese academics; however, no relevant extensive economic or financial analysis has been conducted. The research carries out an integrated economic and financial analysis on the Sponge City Program from the perspectives of two stakeholders: the government and the project manager. Different stakeholders have unique perspectives on the management of water projects. This study has two parts: economic analysis and financial analysis. The economic analysis is from the government perspective, and considers all the economic, environmental, and social effects. The financial analysis is from the project manager’s perspective, and judges the financial feasibility of projects. Changde city, one of the demo cities of Sponge City Program, is chosen for the research. The results show that from the perspective of the government, the Sponge City Program should be promoted, because most water projects are economically feasible. From the perspective of the project manager, the program should not be invested in, because the water projects are financially infeasible. A more comprehensive and integrated plan for developing and managing the water projects of the Sponge City Program is required. Otherwise, the private sector may not be interested in investing in the water projects, and the water projects may not be operational in the long term.
Highlights
Because of climate change, the frequency of heavy rainfall events has increased in China in recent years
The construction, operation, and maintenance of the water project are regarded as the consumption of resources, so initial investment and operation and maintenance (O&M) cost are included in the economic cost evaluation
The economic benefit of increasing the number of jobs in Changde city was determined by using Equation (2): w where BO1 is the economic benefit of increasing jobs, β is the employment elasticity, w is the number of new jobs that are created due to the implementation of a project, W is the total number of people employed in Changde city, and Y is the gross domestic product (GDP) of Changde city
Summary
The frequency of heavy rainfall events has increased in China in recent years. There is less discussion on the economic or financial analysis of the Sponge City Program. Some studies have identified potential financial problems, such as a lack of financial sources, which these projects can face [5,8,9], there remains a notable dearth of discussion about the Sponge City Program from an economic perspective. The paper analyzes the economic and financial feasibility of the Sponge City Program from the perspectives of two stakeholders: the government and the project manager. Different stakeholders have unique perspectives on water project management This analysis has two parts, economic and financial. A comprehensive economic and financial analysis of the Sponge City Program can be performed through an intensive case study of Changde city. All data in this study are sourced from interviews with project managers, city government officials, and other relevant institutes
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