Pricing of water rights transactions for major water transfer projects considering water quantity and quality

Shuqin Li (), Nannan Wang (), Juqin Shen () and Fuhua Sun ()
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Shuqin Li: Hohai University
Nannan Wang: Hohai University
Juqin Shen: Hohai University
Fuhua Sun: Hohai University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 3, No 87, 7735-7756

Abstract: Abstract Water rights transactions are an important way for countries to use market mechanisms to optimize the allocation of water resources. Taking the South-North Water Transfer East Project (SNWDP-ER) in China as an example, a full cost pricing model (FCPM) is used to construct an accounting framework for water rights transactions. Water quality factors are innovatively introduced into the model to carry out a study on water rights trading pricing (WRTP) from the perspective of combining water quantity and quality. The results show that: (1) the actual WRTP (1.25 yuan/m3) for the first phase of the SNWDP-ER was low and in fact not sufficient to cover the corresponding costs. (2) By calculating the ability of water users to pay, and comparing this situation with advanced overseas cases, the conclusion was reached that the FCPM of WRTP (1.63 yuan/m3) is reasonable. (3) The method of accounting for the WRTP for major projects that take into account water quantity and quality and that are conducive to strengthening ecological protection in river basins is generally feasible. Reasonable WRTP for major projects can promote water market reform by bringing user fees, improving the competition mechanism in the water market, and reducing the financial payments pressure.

Keywords: South-to-North water diversion project; Water rights trading pricing; Water quality; Water quantity; Ecological compensation (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03030-5

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