Quantitative study on eco-economic compensation for water rights trading along the South-to-North Water Diversion Project in China

Abstract

Abstract The completion of the South-to-North Water Diversion Project (SNWDP) of China has necessitated water rights trading along the route. However, water rights trading generally results in an externality loss for the seller. The scientific compensation of water rights trading should be considered from the aspects of economy, society and eco-environment. In this study, we quantified the water rights trading compensation along the route from economic, social, and environmental aspects, using a method based on emergy theory. Taking Pingdingshan-Xinmi water rights trading as an example, the eco-economic compensation of Pingdingshan was quantified and analyzed. The results showed that the impact of water rights trading on Pingdingshan was mainly social and ecological in the short term, and the average social and ecological compensation was 0.027 ¥/m3 and 0.32 ¥/m3 respectively. As the economic loss caused by water shortage becomes more prominent in the long term, the social, ecological and economic compensation were shown to be 0.028 ¥/m3, 0.30 ¥/m3 and 4.55 ¥/m3 respectively in 2030. The economic impact of water rights trading on the water seller will become more and more obvious, and reasonable compensation is the key to the sustainable development of the water market.