Quantitative standard of eco-compensation for the water source area in the middle route of the South-to-North Water Transfer Project in China

Abstract

The Middle Route Project(MRP) of the South-to-North Water Transfer Scheme (SNWT) in China will require a very large financial expenditure to ensure the water supply and the associated water quality to northern China. An eco-compensation mechanism between the water service source areas and its beneficiaries is essential. This paper establishes an analytic framework of ecocompensation standard for the protection of the water source area, including both the calculation of ecocompensation based on opportunity cost method (OCM) and calculation of the burden sharing of eco-compensation between the water source area and the external water reception area based on the deviation square method (DSM). Taking Shiyan City, Hubei Province in China as a case study, our results show that the eco-compensation in the first-phase of MRP for the water source area in Shiyan, Hubei Province should be 1.63×1010 CNY, about four times of planned eco-construction investment budget (4.33×109 CNY). In addition, the burden sharing of eco-compensation varied greatly in terms of different methods. It would be better to integrate the results of different single-factor burden sharing methods by determining the corresponding weighting coefficient with DSM and form one unanimous consent result by the interested parties.