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Mar 15, 2008 - Keywords Yellow River valley . Water right institution . Water resources configuration . Water price . Water law. 1 Introduction. The Yellow River ...
Water Resour Manage (2008) 22:1499–1519 DOI 10.1007/s11269-008-9239-7

Water Right Institution and Strategies of the Yellow River Valley H. R. Wang & Y. Y. Dong & Y. Wang & Q. Liu

Received: 15 June 2006 / Accepted: 8 January 2008 / Published online: 15 March 2008 # Springer Science + Business Media B.V. 2008

Abstract With the rapid economic and social development in China, pressure on water resources in the Yellow River is becoming more and more prominent. For the sustainable social, economic and agricultural development in the Yellow River valley, it is imperative to create the perfect water right institution, which plays a key role in improving the efficiency, equity and sustainability of water use. This article analyzes the problems with the water right institution of the Yellow River valley, which includes unclear definition of water right, ineffective allocation mechanism, low water price, and water pollution. Correspondingly, some measures need taking in order to address these challenges. First of all, the water right, especially tradable water right should be well defined. In the article, water right is defined as a series of water management capabilities and use requirements. Then, water right allocation system should be built up, including examining and approving water usufruct, the paid transfer, and the paid utilization of water right. In the end, based on the well defined tradable water right and the well developed water right allocation system, water right market should be developed, which will promote the transfer to the highest valued water uses. When the water right trade happens, the water right price should be fixed in certain situation. On one hand, the water right price should be raised; on the other hand, the water right price should be determined according to a two-part water price system. Of course, market should not be the only role in the water right institution. The authorities should also be necessarily responsible for water right organizations, which make proper water right law, policy and regulations that assist the smooth going of water right market. There are some other measures for the yellow river, such as a water booklet should be recorded for mastering the detailed situation of water resources in the Valley; the South-toNorth Water Diversion Project should be accelerated in order to alleviate the water scarcity. All the above measures will do good to resolve the problems of water resources of the Yellow River valley when they are correctly taken. H. R. Wang (*) : Y. Y. Dong : Q. Liu College of Water Science-Key Laboratory for Water and Sediment Science, Ministry of Education, Beijing Normal University, Beijing, China e-mail: [email protected] Y. Wang Beijing Municipal Research Institute of Environmental Protection, Beijing, China

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Keywords Yellow River valley . Water right institution . Water resources configuration . Water price . Water law

1 Introduction The Yellow River is the most important source in the Northeast and the North China, and the average annual runoff is 58 billion cubic meters. Most of the Yellow River valley belongs to the arid area and the semiarid area, and the runoff of the Yellow River only accounts for 2% of the whole runoff of seven river valleys in China. However, the Yellow Rivers offer water supply for much area, 9% of the whole country area, and 0.156 billion persons. What is more, some districts outside the Yellow River valley, such as Tianjin and Qingdao also transfer water from here (Fig. 1). According to the streamflow data of 56 years (from 1919 to 1975), the average annual gauged streamflow is 47 billion cubic meters at the Huayuankou Station and the average annual naturalized streamflow there is 55.9 billion cubic meters. The average annual naturalized streamflow of the whole Yellow River valley is 58 billion cubic meters, and the depth of streamflow is 77.1 km (without closed-flow area; Table 1). However, the Yellow River is currently facing three serious problems—water resources shortage, flood and water logging disaster, and ecological and environmental degradation. Over the period of 27 years from 1972 to 1998, drying up occurred in a total of 21 years in the downstream of the Yellow River, with the drying up caused by the imbalance between

Fig. 1 Map of China (source: Zhu and Zhang 1999)

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Table 1 Distribution of naturalized streamflows in the Yellow River Station

Average annual streamflow (×109 m3)

Depth of streamflow (mm)

Above Lanzhou From Lanzhou to Hekou town From Hekou town to Longmen From Longmen to Sanmen Gorge From Sanmen Gorge to Huayuankou Below Huayuankou Downstream branches The Yellow River valley

32.26 −1.0 7.25 11.33 6.08 55.92 2.08 58.0

14.5 6.50 5.94 14.61 7.67 9.37 7.71

Source: Li et al. (2003)

the natural runoff and water utilization. Along with the population growth and economic development, the water consumption is continuously increasing (Fig. 2). The conflict between water supply and demand is more and more evident day by day, but water-saving irrigation makes little progress; the basic reason of which lies in that there is structural imperfection in the water right institution of the Yellow River. Therefore, the research about the water right institution of the Yellow River is very meaningful for effectively solving water resource problems.

2 Water Right Institution Water right is the property right of water resources. In narrow sense water right means that departments and individuals have the right to use water resources owned by the nation or the collective in accordance with law, namely water resources usufruct. Generally, water right also includes water resource proprietorship. The third item of water law of China stipulates that “Water resources is owned by the nation”, “The water in the ponds and reservoirs belongs to the collective economic organization”, and “The water right trade allowed by law is only the water resources usufruct.” The study of efficient allocation strategy for water resources and corresponding incentive mechanism can be found in papers

Fig. 2 Water consumption of the Yellow River valley

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by Yen and Chen (2001) and Chambouleyron (2003), and the research of water right can be found in papers by Koppen (1998). Establishing the water right institution is very important for unifying the purpose of water resources legislations, implementation of the laws and regulations, effective utilization of water resources and the application of judicial remedy on water resources protection. So, establishing an effective water right institution will play an important role in the rational and effective allocation of water resources (Cao 2000).

3 Present Situation and Problems of the Water Right Institution Based on “the People’s Republic of China Water Law”, the present water right institution of the Yellow River adopts water catchment’s permit system and carries out the water administration system that both integrated and divided managements are combined. Water resources is allocated administratively according to “the allocation scheme of the available water of the Yellow River” (Chang 2001). The water right institution has restricted the flexible function of the market mechanism, and has hindered the market transaction of water resources. 3.1 The Definition of Water Right Firstly, currently water right of the Yellow River is not clearly defined, in terms of the relation among proprietorship, managerial authority and usufruct (Yin 2004). First of all, the proprietorship and usufruct of water resources of the Yellow River are unclear in definition. According to “Water Law”, the water resources of the Yellow River belongs to the Chinese government, and the nation has the right to control and develop the water resources of the Yellow River. The valley-wide water resources management and administration of the Yellow River are planned and implemented by agencies of Ministry of Water Resources— The Yellow River Water Conservancy Committee, but the local water administrative department in each province along the River is in charge of the water resources. Secondly, because the departments of water administration in every province are completely or partly reimbursed by the government finance, the Water Resources Departments in every province lack authority to manage the water resources of the Yellow River. Finally, the usufruct of water resources of the Yellow River is ambiguous, which mainly reflects on water appropriation right in the Yellow River. The available water allocation scheme of the Yellow River approved in 1987 (Table 2) only stipulates yearly water appropriation. “The annual available water allocation and water transfer of main stream of the Yellow River” and “The managerial approach of water transfer of the Yellow River”, approved by the State Planning Commission and the Ministry of Water Resources of China in 1998, dictated the managerial approach of annual water allocation and water transfer of Table 2 The available water allocation plan of the Yellow River for the 11 provinces and Tianjin (109 m3) Area

Qinghai Sichuan Gansu Ningxia Inner Shan'xi Shanxi Henan Shandong Hebei Tianjin Total Mongolia

Yearly water 1.41 consumption

Source: Ke (2003)

0.04

3.04

4.00

5.86

3.80

4.31

5.54

7.00

2.00

2.00

37.0

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Fig. 3 The Yellow River valley (source: Zhu and Zhang 1999)

the Yellow River in different years in the future, but this is restricted to the provincial class of water allocation (Fig. 3). 3.2 Nonexistence of Effective Disposition Mechanism of Water Resources The compensation mechanism of water resources has not come into being yet. There are many water consumers in the Yellow River valley. The transfer of water right involves more than transferor and transferee, and it is possible that the interests of third party can be impacted for the change of the original function of water body. For example, the transfer of water right between provinces may influence the normal running of the multi-purpose project of the master stream; the transfer of water right between branch streams may change the regional water cycle process, and thus influence the water quantity of the main stream and water use for environment in water course (Li and Zhang 2004). The frequent dryingup of the Yellow River in recent years has brought enormous loss to industrial and agricultural production and residents’ life. According to the investigation and analysis of relevant department, the economic losses of industry and agriculture caused by water resources shortage and drying-up added up to 26,800 million RMB (1US$=7.8 RMB as of February 2007) from 1972 to 1996 in downstream of the Yellow River, and average yearly loss caused by drying-up alone was nearly 1,400 million RMB (1US$=7.8 RMB as of February 2007) at the price of 1995 (shown in Fig. 4). The pay-to-use mechanism of water resource is still not perfect. The 48th regulation of “Water Law” requires that the party to gain water right needs to pay for water resources, but it still lacks detailed regulations about collection means, collection way, management and utilization. Furthermore, the standard of charge for water resources is on the low side (Table 3). While the highest charge exceeds 12 RMB per ton, the lowest charge for water resources is only 1 RMB per ton, even the water use for hydropower (that has significant economic benefits) is only 0.3–0.5 cent/kWh. The Yellow River Water Conservancy Committee is only responsible for the administration of managing and supervising the government-owned water resources, and this is unfavorable for the integrated management of water resources under the market condition (Quan and Liu 2001).

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Fig. 4 The economic loss caused by the setting off of the Yellow River (source: Chang 2001). Note: the 1990s data was up to 1995

In addition, the mechanism for water price is not perfect. Price is the money form of commodity’s value. The price of any commodity lies on its cost and scarcity. A rational water price should reflect the real value of water and the water’s effect on economy, ecology and environment. Considering the water’s commonality and speciality, many Chinese scholars suggest that a rational water price includes the price of water project, the price of water resources, and the price of water environment. The price of water project is the whole laboring value of the project from water pumping to water supply. The price of water resources is water resources fee, corresponding to the scarce degree of water. Corresponding to environmental restoration and compensation, the price of water environment is the government’s charge, including the fee of wastewater discharge and treatment (Dong 2002). Water price includes above three parts does not indicate that all the three parts will be included in the commercial water price. Tax and additional fee, etc. are also good measures (Jiao 2003). Table 3 Charge criteria for the water resources of the five provinces in the Yellow River valley (cent/m3, 1 RMB=100 cents) Program

Qinghai

Inner Mongolia

Shan’xi

Shanxi

Gansu

Surface water for industrial water use Groundwater for industrial water use Surface water for urban domestic water consumption Groundwater for urban domestic water consumption Surface water for agricultural water use Groundwater for agricultural water use Water for hydroelectric power (cent/kWh) Mineral water, geothermal water Water transfer from other river valleys Surface water for other use Groundwater for other use (e.g. aquaculture)

2 2 1

5 7~12 2

1~8 2~12 –

4~8 6~12 3~6

3~5 4~6 3

1

5



5~10

3

– 0.5 – – 2 – 0.3~0.5 (large and medium)/0.1~0.3 (mini – 15~20 9~20 2 60RMB yuan/hm2 3 0.5~4.0 – 6 1~5

– – type) 6 – –

– – – 4 4

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In China the present water price only involves the price of water project (Li and Zhang 2004). The upstream water price is lower than downstream water price. For example, compared with the average water price of the upper reaches of the Yellow River was 0.0045 RMB yuan per cubic meter in 1998, it was 0.04 RMB yuan per cubic meter of the lower reaches of the Yellow River. Investment system is different from the water price management system, and the upstream water price can not be adjusted in accordance with downstream water price. Furthermore, the cost of urban water supply only compensates for the water purification expense, not for the sewage disposal expense (Yang and Shen 1999). Secondly, water price is seriously on the low side. According to Table 4, even in the arid season, service water price is only 0.25 cent/m3, and the agricultural water price is less than 0.6 cent/m3. At present water price only accounts for 30–40% of water supply cost in the Yellow River valley, and the head canal water price only accounted for 18% in 1997 and 20% in 1998. The low water price not only causes serious water waste, but also impacts the function of the water-managing departments. Finally, the management system of water price is not perfect. There are no specific water price administrative departments and no professional charge team familiar with operational knowledge. Metering facilities, such as flow measuring weir and flow-velocity meter are outdated. There is no supervision measure about the water price of the Yellow River, and policy violation is common (Yang and Shen 1999). 3.3 Problems with the Current Water Resources Management and Transfer System Water allocation dictated by the government is not enforced. Before the integrated water resources transfer of the Yellow River, every province’s actual water utilization is greatly different from “1987 Scheme”. From 1989 to 1995, Inner Mongolia and Shandong always diverted more surface water than water allocation target, so did Qinghai in 1991 and 1992. On the contrary, provinces of Shan’xi, Shanxi, He’nan channel much less water than the allocation goal. After the integrated water resources transfer, the situation has not changed much. Provinces of Gansu, Ningxia and Inner Mongolia draw much more water than the allocation target in the water-drawing peak season. According to the water-drawing report from November 2000 to June 2001, 7.058 billion cubic meters’ water was allocated to these three provinces in proportion to a pan coefficient of 0.73, in contrast with actual water utilization of 8.176 billion cubic meters, which cause the actual average runoff to reduce by 3.5–13% from the target. During the months of May and June of 2001, the actual runoff was reduced by 25%, 63%, and 18%, respectively, in Shizuishan, Toudaoguai and

Table 4 The price of the water led from the Yellow River from 1996 to 2000 Year

1996 1997 1998 1999 Before Nov. 2000 After Dec. 2000 Source: Li (2002)

Service water price (cent/m3)

Agricultural water price (cent/m3)

From April to June

Other months

From April to June

Other months

0.45 0.45 0.45 0.45 0.45 4.6

0.25 0.25 0.25 0.25 0.25 3.9

0.48 0.675 0.675 0.675 0.675 1.2

0.36 0.597 0.597 0.597 0.597 1.0

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Tongguan, and the water storage of Sanmen Gorge on the Yellow River and Xiaolangdi reservoir decreased greatly. As a result, water utilization in He’nan and Shandong was seriously affected. In addition to the allocation problem, equidistant change of water utilization is not favorable for optimal configuration of water resources. “Managerial method of water transfer of the Yellow River” stipulates that yearly water utilization in every province should be increased in rainy season and decreased in arid season equi-proportionally. However, water resources of the Yellow River is not uniform spatially and temporally. Consequently, the provinces with less rainfall have to draw water above quota while the provinces with more water have superfluous water resources. There is no incentive compensation mechanism in China. Water is allocated according to administrative order, especially for agricultural water, and other important water utilization could be ignored. In recent years, some provinces call for water in water utilization concentration period. Thus, water transfer scheme often needs correcting, which comes down to water index for electricity generation. Because transmission-line system of electric power is not convenient for adjustment, some reservoirs have to give up water, which brings a lot of economic loss under the policy that electricity maintains water and water guarantees electricity. Water price mechanism is not carried out. How to compensate others’ benefits for some draw water above quota is still not in consideration. 3.4 Incomplete Legal System At present, there is no nationwide special water resources protection law in China. The stipulations about the water resources protection in existing laws are too general to be suitable for the Yellow River valley (Zhang et al. 2000). The valley water resource protection organizations are not empowered with specific legal status, right and obligation in “Water Law” and “Law on the Prevention and Treatment of Water Pollution” (Si and Cui 1999). There are regulations on controlling the total amount of pollutant inlet into the river and the river pollution discharge points, but how to implement them is not specifically stipulated in the laws and regulations. Now the water supply price of hydraulic engineering was checked according to “The methods of checking, gauging and collection, management of water rate for hydraulic engineering” issued by the State Council in 1985, which lags behind seriously. The nationwide uniform water resource fee collection measure has not yet been issued. Some mature management styles and methods, such as setting up pollution discharge trade market, fail to be included in the laws in time (Quan and Liu 2001). Water transfer in Ningxia and Inner Mongolia exposed the absence of legislative authority (Hu and Chen 2004).

4 Strategic Measures for Water Right Institution If the expected net income exceeds the anticipated cost, a system will be innovated (North 1990). The water right institution innovation of the Yellow River should combine the government’s advantages with the market’s, and provide a definite and clear legal policy environment for water resource utilization of the Yellow River in macro-field; while make up a system of constraint and encouragement in micro-field.

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4.1 Clarify Water Right To make water right clear is to raise the water resources efficiency. Firstly, a complete water right concept should be established in laws, with the concept including water resources proprietorship, usufruct, and right of transfer and so on. Secondly, the main body of water right should be definitive. In China, the main body of water resources proprietorship is the nation, of which the right is exerted by the central government. The main body of water resources usufruct may be business entity, government-sponsored institution, or person. Then the institution that water resources proprietorship is separate from water resources usufruct can be established, which is favorable for water right transfer and water resources optimization. The right of valley organizations, local government and water administration department is merely to divide, plan and coordinate water right, and they cannot become the main body of water right. 4.2 Improve Water Right Market and the Allocation Efficiency of Water Resource Water market is to promote the optimizing allocation of water resources with economic instrument by buying and selling water, which is a good method of giving full play to the benefits of water resources for the countries or districts of water scarcity. 4.2.1 “Semi Water Market” in China In China, water market is restrained by many factors. Firstly, water resources transfer is restricted by space-time conditions. In the Yellow River, water demand often exceeds water supply. It is reported that the natural runoff of the Yellow River is 58 billion cubic meters, while the available water is 36 billion cubic meters (Chang 2001); the gross water demand in 2030 is expected to reach 73.4 billion cubic meters. Secondly, among water’s various use, only which can show its benefit that can enter the market, such as waterpower. But 90% of the Yellow River’s water resources is used for irrigation. Thirdly, resource price cannot be decided by market alone. As the water market of the Yellow River is regulated by the government, it is necessary for the government to regulate and control water price. At last, the exploitation of water resources has much to do with local social and economic development, and different regions hardly compete equally (Wang 2001). 4.2.2 Foreign Experiences Firstly, worldwide water supply and management has been undergoing privatization. Chile has adopted the most thorough privatization for the management of water resource and water conservancy facilities. The management of the water conservancy projects was transferred to the water association, and the urban water supply has also been privatized; this has not only improved the efficiency of the urban and agricultural water but also reduced the financial subsidy. Secondly, water right transfer is standardized. The party who gives up water right should get economic compensation, which motivates water utilization to transfer from cheap use to expensive use. As private property, the transfer procedure of American water right is similar to real estate, which is subject to approval, announcement and paid transfer. There are some water banks in the western US. Water bank divide water right into several parts according to annual incoming water, and manage water right in the form of stock-holding system, and carry on a series of legislative activities to dispel the

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legal system obstacle of water right transfer to ensure the success of water right trade and good development of water market. Thirdly, exerting the action of agencies such as water users association and counseling companies is advantageous to carry out reform policy about water resource. In Australia, the related government agencies in every state are responsible for the valley management, and finally link up with irrigation association or water supply companies. Valley water service organization announces annual report and the result of measurement and calculation of water supply price to the public and disseminates knowledge about water and relevant information so that the public can really participate in water management. Fourthly, water environment should be protected. Water right trade may cause the negative effect on the third party and environment, and the protection of environment should be strengthened. For example, in Mexico, there must be clear authorization in the water quality of the non-agricultural water, if some damage is caused to the ecosystem, such as excessive exploitation of the groundwater and other environmental impact, the government can limit its water utilization (Li 2003). 4.2.3 Water Market System Water right market at least includes the following: Trade subject-water user; Trade objectwater resource usufruct in the Yellow River valley; Trade way—The country transfers some water resources usufruct of the Yellow River valley to the water users, and then the water users make decision about water utilization according to the principle of maximizing the economic benefits—keep and use by oneself or transfer. Meanwhile, in order to guarantee the success of water right trade market, the government needs to establish the unified management organization to supervise and manage the policy about water utilization and water right trade (Hu et al. 2001). The essential structure of water right market is listed as follows (Fig. 5): First of all, government confirms control goal of water utilization, and then transfer water right to water users. The water users determine the way of water utilization—keep for oneself, use by oneself or further transfer water right. Water right trade needs government to supervise and manage, including trade subject, trade quantity and trade price. The supervision to water right trade subject is to affirm the qualification of water right trade subject, including the affirmation of the quantity of water right that sellers have and the transfer quantity, and the affirmation of the buyers’ qualification of buying water right. The supervision to buyer’s use of water is to supervise the quantity of trade in order to guarantee the normal operation of water right, to prevent forming the monopoly of water right. The

Fig. 5 The basic structure and operation principle of water right market

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transaction value of water right should be supervised and controlled too, preventing water price from being too high or too low. Government can set up valley fund through a “Water Bank” that buy water right when water is abundant (or when water right transfer price is relatively lower), and sell water right when water is poor (or when the water right transfer price is relatively higher) in order to reduce the fluctuation of water right transfer price (Ge et al. 2002). 4.3 Setting Up the Effective Water Resource Allocation Institution 4.3.1 Being Strict with the Examination and Approval Institution of Water Resource Usufruct of the Yellow River There are two kinds of water resources usufruct in the Yellow River valley, including semiusufruct and usufruct. Semi-usufruct is of preliminary water right, namely the government allocates water resources usufruct to different provinces according to general planning and the principles of optimizing the utilization of water resources. “The available water allocation scheme of the Yellow River” approved by the State Department in 1987 allocated water resources to the provinces along the Yellow River and made them the main body of water resources usufruct (Du et al. 2002). Any water user must transact water permit according to “Water permit institution execution” of the State Department and “Regulations about examining and approving the application of water permit” and pay water resources fee. Yearly water withdrawal, consumption and return must be specified in the water permit. The approved water users must configure water according to departments demand and rational standard. Water resources usufruct should be examined and approved according to the following principles: domestic water must be guaranteed; the water usufruct that has been approved in water permit should receive precedence; arid regions and the regions where a drought often takes place should have precedence; the users who have greater investment ability should receive precedence; fountainhead should receive precedence; local water should receive precedence; the users who gain greater economic benefits should receive precedence; the total should be controlled, in other words, water consumption approved by valley organizations and local water administrative departments must not be more than that approved by the State Department; water allocation of the users who possess water resources usufruct in vain, or transfer water resources usufruct onerously, cannot meet their demand for the decrease of natural water-incoming and coordinate the benefits among regions and departments should be adjusted in time; the provinces where water consumption has approached or exceeded the water allocation goal of the State Department, agricultural water has not get the programming dictator of water saving and industrial water recycle rate is relatively low should be limited examining and approving water resources usufruct; the provinces where water consumption is great and economic benefits are bad or water environment cannot meet the standard should be terminated water resources usufruct. 4.3.2 Setting Up the Paid Transfer System of Water Resource Usufruct of the Yellow River The transfer of right to use water resource of the Yellow River must include several preconditions. Firstly, water resource usufruct should be obtained legally, such as water consumption index sanctified by water permit, or the surplus index of the available water of the Yellow River assigned to every province (district) by the State Department; secondly, the transferable water should limit to the saved water by water conservation and water

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resource protection; thirdly, transferors and transferees sign a contract under the condition of democratic consultation, fairness and reasonability, not damaging the legal right of country, collective and others; fourthly, the transfer application must be examined and approved by the original organ for approval, and the transferee should accept supervision and management by administrative department of water and fulfill obligations in accordance with the law; fifthly, the paid transfer fund which the transferor won must be all used in the transformation of the hydraulic engineering and water-saving project. The transfer of water resources usufruct has various forms. Water purpose transfer— when some industrial department need more water, it can invest water saving irrigation project and then use the saved water. There have been such regulations in water resources configuration in Shanxi. Some industrial departments also put forward such requirement; a region can increase its available water by fountainhead transfer; Benefits transfer—the water fee that the provinces downstream earn from the water utilization above quota should transfer to the provinces upstream for water saving projects. Water transfer from Dongshen to Hongkong and water transfer from Dongyang to Yiwu indicate that it is feasible to establish the paid transfer of water resources in the Yellow River valley. 4.3.3 Implementing the Paid Utilization System of Water Resources of the Yellow River The rational standard of water resources fee should be planned as a whole and made as soon as possible planning in the Yellow River valley. Considering the difference of water resources situation, economy development level and the current situation of management between downstream, midstream and upstream, the standard of different reaches may be different to some extent. The party exceeding the annual water permit should be levied double water resource fee. The Yellow River valley organization manages water-drawing in sum and water-drawing above water allocation quota. Charge for water resources transferred from other provinces or taken from the large-scale project sanctified by the State Department in the Yellow River valley can be levied on directly by valley organization, and others can be imposed by local water administration authorities. The imposed water resources fee should be included in the financial budget and used in the development of water resources. 4.4 Setting Up a Rational Water Price System 4.4.1 Water Price Formation Mechanism Firstly, it should be emphasized that water is goods and water price is made according to the principle “compensate cost, make profits rationally, bear fairly”; secondly, the water supply cost should be checked, calculated and confirmed correctly according to the current national financial system and the relevant regulations strictly; Thirdly, the reclamation of investment cost should be considered in water price; Fourthly, normal water price adjustment mechanism should be established and water price can be adjusted according to the change of water supply cost in time (Li 2002; Zhao et al. 1999). 4.4.2 Water Price Management Mechanism It is also urgent to build up an effective price management system, including the following contents (Zhao et al. 1999). Firstly, for different consumers with different purchase capability and different water accessibility, the water price should be adjusted under the

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general goal of national macro readjustment and control. For example, in the irrigation area with poor agricultural production conditions and infrastructure some subventions, especially visible and direct ones to the farmers, are necessary to reduce indirect and intermediate subsidy. Financial policy may be another effective method for agriculture. Mid-term and long-term loans and agricultural policy financing in the form of discounted interest are necessary as well as the perfection of the law and regulation system about agriculture. Secondly, scientific classification system of water price is necessary for different users, according to the request of the national industrial policy, to save water. Basic water price and measure water price are to be spread while in some areas seasonal water prices are to be adopted. The corresponding marginal cost will rise for increased water supply and water price is higher in summer than other seasons (Wang et al. 2003). Thirdly, water price reform is to be enforced with the reform of water conservancy management system. For example, inter-regional and trans-business water supply company for both urban areas and suburban areas may facilitate the water price reform because such kind of corporation can adjust water price for different parts of a river. Fourthly, stratified water price management is recommended (Wang et al. 2003; Fig. 6).

Fig. 6 Layered water price management frame of the Yellow River valley

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4.4.3 Formatting Mechanism and Management of Agricultural Water Price In order to meet the needs of economic development and taking into consideration of the characteristics of agricultural water utilization, the price formation mechanism and management method of the agricultural water should be refined. The first thing needed is to standardize the compensation mechanism of agriculture water supply and to incorporate the water price for agricultural use into government management. State-owned hydraulic engineering supplies agricultural water on government-fixed price which is the compensation of reasonable water supply costs and is adjusted by the change of costs. For nongovernmental medium- and small-scale hydraulic engineering, government-guided price range may be applied. The second thing is to find a mode for water price management according to local conditions and to strengthen the cost assessment and water price management in towns and townships. In the artesian flow irrigation area where water is taken from rivers and reservoirs, the price can be fixed as the sum of water supply price of government-owned water management unit and last level canal system maintenance cost, which is the reasonable cost of maintaining and protecting the canal system. Standardized management and strict control of the standard are needed in the process. Under the canal conditions in high lift area and electromechanical well irrigation area, the management of government-owned water management department has already extended to peasant’s field, water price can be checked and ratified to peasant households and the water rate is collected directly by the water management unit. The third one is to introduce different prices for different areas and in different seasons. Region-differentiated or irrigation-area-differentiated price may be suitable for certain water resource conditions and water supply facilities. In the area where irrigation water is metered, seasonally different price or flexible price may be introduced in order to use price as an incentive mechanism for saving and alleviating the shortage of water resources. Lastly, in order to promote the rational distribution of water resources and to keep the steady operation of the hydraulic engineering, the two-part water price system of quantity price and capacity price should be carried out in more places. Such being the case, the water-saving consciousness of the farmers can be improved and watersaving agriculture can be realized with farmers’ purchase capacity taken into account (Zhang 2004). 4.5 Reforming the Water Right Institution in the Irrigation Districts of the Yellow River 4.5.1 Refining the Canal System of Irrigation Area of the Yellow River The canal system of irrigation area should be perfected by the government in accordance with the unified criterion. Fund can be raised from state revenue, local revenue and water consumers, in a proportion of 5:3:2. The state revenue can be subsidized by the water resources fee handed in by the provinces downstream. In villages it is feasible that community manages water conservancy (Ma and Han 2001). There have been some successful examples of using foreign loan in China. Generally speaking, government should arrange well ahead for the loan. Gansu Province is successfully implementing the World Bank loan project entitled by “China western anti-poverty World Bank loan project”. With completion of this project of the 84,780,000 dollars in 2006, it is estimated to help more than one million people in Tianshui, Dingxi, southern Gansu Province and Pingliang of Gansu get rid of the poverty in general. The project of Xiaolangdi is the first water electricity project of World Bank loan in China that implements environmental management

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according to the international practice. Many kinds of administrative and economic methods such as revenue, rewarding and allowance are introducing enterprise fund into water resources protection. Funds can be raised from the society through multiple channels such as water resource charges, water rate, pollutant discharges and water resource pollution compensations. River valley organization as an economic entity and independent legal person is responsible for the construction, management and operation of the comprehensive utilization project in the valley. For instance, a valley water resource development group based on Xiaolangdi hydro project construction management bureau can operate as an enterprise (Zhang 2004). 4.5.2 Reforming Water Administration Institution The responsibilities of exploitation departments should be distinguished from that of water administration departments. Exploitation departments oversee and evaluate water resources, work out comprehensive programming of water resources exploitation at all levels, examine the professional water resources programming of related departments, and harness water resources exploitation by new technology. The personnel in exploitation departments must be conscious of sustainable development of water resources. Water administration departments manage water right (including defining, protecting and supervising water right at all levels), prepare the procedure of gaining water right, check water utilization quantity, instruct, examine, approve, and carry out water right transfer or trade, as well as resolve water right problems. The personnel in water administration departments must have strong water right consciousness. 4.5.3 Refining Water Resources Fee Institution The receipt of water resources fee should be unified. Every administrative village levies on villagers according to the water supply quantity and water price provided by the Ministry of Water Resources, and then hand in to the Ministry. Audit should be carried out in villages once or twice a year by the union group consisting of county treasury department, audit departments and the Ministry. Auditing should include whether water is withheld or embezzled and whether charge is feasible. The healthy cycle that water promotes fee and fee guarantees water should come into being. 4.5.4 Strengthening the Reclamation and Utilization of Sewage Wastewater reuse for agricultural irrigation is becoming a common and rapidly increasing practice in arid and semi-arid regions around the world, where treated wastewater serves as an extra source of water available for the rural sector. New projects for reclamation and reuse of wastewater are reported almost every year in countries all over the world, including Middle Eastern and Mediterranean countries, South American countries, USA, and various island countries (e.g., Angelakis et al. 1999; Bahri 1999; Bonomo et al. 1999; Faby et al. 1999; Mills et al. 1992; Salgot and Pascual 1996). This additional water source is especially important in regions with limited water resources when increased urban water demand is met by reducing water supply for irrigation, causing economic (and cultural) stress in the rural sector. Israel is currently reusing more than 65% of the total municipal sewage production of the country, and it is planned to reach more than 90% reuse during the next decade (see

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Table 5). Reclaimed wastewater helps to close a negative water balance in a country where all the conventional water resources are exploited to their maximum capacity (Friedler 2001). The reclamation and utilization of sewage solves one of the main pollution sources— urban sewage, reduces the pressure of normal water demand, and makes pollutant degenerate and decompose by making it diluted into bigger water body and keeping it for longer time. Thus water quality is improved and water pollution is eased. At the same time, the sewage supply is more dependable, and the reliability of this source of water for irrigation allows investments in intensive agriculture. Therefore, irrigation with sewage is very necessary in each city and province in the Yellow River valley, and the water right is clear—“Who invests, who gains”, and is used with the pollution discharge license system. When conditions are mature, sewage trade can be carried out which both can reduce pollution and realize economic profits. 4.6 Refining the Leadership of the Yellow River Valley Organizations The legal status and the power of the Yellow River Water Conservancy Committee and the Yellow River Water Protection Bureau should be ascertained and strengthened. These valley organizations should be empowered with the integrated water transfer and allocation right, and they need to draw up water allocation and dispatchment transfer plan as soon as possible on the basis of the water allocation scheme approved by the State Council in 1987 in order to solve the problems concerning water supply, ice jam prevention and electric power generation (He 1999). The relationship between the valley organizations and associated local departments should be coordinated by the Ministry of Water Resources. The necessary policy and professional training should be carried out in the valley organizations. Moreover, in the water resources protection management organization, the representative of the Central Government should be in the leading group, and the representatives of related administrative department of the central government, provincial government, big cities and economic regions, main customers and polluters should also actively participate as the group member (Zhang et al. 2000). Figure 7 presents the Water resource management organization of the Yellow River. 4.7 Setting Up “Water Booklet” of the Yellow River Valley The “Water Booklet” is one of the characteristics of Russian water resource management. “Water Booklet” is one great project which surveys and enrolls water resources and its distribution, records water consumption accurately for a long time, and gauges detailed analyses of water quality situation. The “Water Booklet” is compiled by a professional Table 5 Water supply and demand in Israel by sector (106 m3) Water sources

Year 1995

Water demand

Year 1995

Year 2010

Freshwater

1,600

Brackish water Wastewater Total

1,80 220 2,000

Urban and industrial Freshwater irrigation Wastewater and brackish water irrigation

700 900 400

900 650 600

2,000

2,150

Source: Shevah and Valdman (1999); Shwartz (1996).

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Fig. 7 Water resource management organization of the Yellow River

organization in Moscow. The huge materials project records water resources according to the administrative divisions of Russia, namely geographical distribution such as republic, border area, state, district, municipality directly under the Central Government. For example, to write down the figure of rivers, length, the division situation of the upstream, midstream and downstream, water level, depth and discharge in a certain state or the border area; to write down the distribution, water storage capacity, water resource utilization situation (the number of water utilization units and water consumers, their water consumption and change every month each year), water utilization quota and actual compliance, water quality situation (chemical constituent concentration, pollutants, water

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quality standard), feculence situation, sediment concentration; all of these information are recorded in categorization in detail in a consistent way. “Water Booklet” is managed by computer, and it is convenient to index and search. “Water Booklet”, which include the general survey on nationwide water resource and water consumption, statistics and log-in project, plays an important part in understanding nationwide water resource situation and managing water facilities effectively (Duan et al. 2001). For many years, the development and utilization of water resource of the Yellow River has been carried out individually by relevant departments, and the economic benefits conflict among national economic departments have influenced the overall water resources planning and management of the Yellow River to a great extent, and water metering facilities and water information facilities falls behind, which are disadvantageous for setting up “Water Booklet” in the Yellow River valley. But at the same time, infrastructure construction has been considerably developed. For example, 156 hydrometric stations and seven water quality monitoring stations have been set up. Certain progress has been made in water supply and demand situation forecasting, the interaction of surface water and groundwater, the influence of tributary water consumption on water quantity of branch stream, rational ecological water demand, and advanced water information sharing system. The Yellow River Water Conservancy Committee and other relevant departments have already done a large amount of work in water metering and water information, such as the national key task project in scientific and technological research—973 project and “the Digital Yellow River”, which has laid strong foundation for setting up “Water Booklet” of the Yellow River valley. 4.8 Refining Law System of Water Resource of the Yellow River Valley The Yellow River Water Conservancy Committee, along with central legislative institution, should draft, make and refine the relevant law system about water resources utilization and configuration of the Yellow River valley. “Yellow River Law” should be drafted and issued in order to make the water right management operable. It is necessary for our country to adjust “Water Law” to be beneficial for the formation of water market of the Yellow River valley. In addition, the Yellow River water resources protection organization should carry out the laws research in future, including the water resources protection regulation of the valley, the water resources protection regulation of water-source reserve of drinking water of important cities and important reservoirs and watersheds, the management method of pollution discharge point into the river, water quality management regulations of boundary sections of provinces (Si and Cui 1999). Yellow River Agricultural Water Law should be made by the National People’s Congress to standardize agricultural water utilization and fulfill water right management and protection. Judicial bodies in the Yellow River valley need further improvement. Water management should go in the way that law manages water and law harnesses water. 4.9 Accelerating the Process of South to North Water Diversion Project South-to-North Water Diversion project should be implemented as soon as possible for “adopting Yangtze River into the Yellow River”. JiangSu Province has implemented “Yangtze water north transfer” project for 36 years and has achieved good benefits, of which the waterways coincide with the route of South-to-North Water Diversion. It is proposed that on the basis of this project water transfer should be extended further to the Yellow River. It is also suggested that the West Line project should be carried out as soon as

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possible. The West Line of South-to North water Diversion project is to adopt water from Tongtian River, Lianye River in the upstream of Yangtze River and Changxu River, Dadu River and Xie’ernai River in Yalong River to the Yellow River. The total length of three tunnels is about 310 km, annual water transfer of 14,500 million—19,500 million cubic meters per year. Yalong River transfers water of 4,500 million cubic meters to the Yellow River, of which the condition is relatively better, and so it should be paid the utmost attention to (Liu 1997). In the receiving valley, the water utilization for ecology and environment should be prevented from being usurped (e.g. water for sediment transportation), and the water right that is not in accordance with the rational water resources configuration should be cancelled (such as right for overexploited groundwater). Governmental functions should be separated from commercial operation in water right management, namely while water right is well macro-controlled, more economic means, such as water resource fee, the two-part water price system should be used in water resource management. The headwater price should be raised for local enterprises, and the price for the water supplied by the South-to-North Water Diversion Project should be reduced rationally. It is tried to realize rational water utilization by market (Liu and Zhu 2002).

5 Conclusion Through efforts for many years, water configuration system and water permit system have been implemented in the Yellow River valley, a series of measures has been implemented in water management, and the overall control and the quota management system also develop, which means that the frame of water right institution of the Yellow River valley has been essentially set up. However, there is something insufficient with the water right institution. First of all, the requirement of sustainable development and valley management have not been fully reflected; Secondly, current systems are not very harmonious; a lot of rights and obligations, management system, operating mechanism are not regulated. This article puts forward some constructive suggestions on the water right institution of the Yellow River valley.

Acknowledgement The paper is supported by the National Science and Technology Supporting Topic (Grant No. 2006BAB04A08). Thanks are also due to the two anonymous reviewers for their insightful comments on earlier version of this paper.

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