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Considering Ecosystem Services Loss Into The Price Of Hydropower In China

Congress: 2015
Author(s): Qinhua Fang (Xiamen, China, Peoples Republic)


Keyword(s): Sub-theme 9: Water allocation among competing uses and users,
Abstract Introduction and objectives: The development of hydropower is controversial because of its negative impacts on watershed ecosystem. Many studies have revealed the ecological damage and environmental degradation caused by dams especially small scale ones around the world. However, these scientific results has not well informed the policy, one of the reasons is the discussion on the approaches to internalize the ecological losses is still lacking. In this paper, we proposed a new way to introduce the ecosystem services loss into the price of hydropower in China by reviewing the studies on the price components and other scientific studies. Methodology approach: In this study, China's process of hydropower pricing will be firstly critically reviewed, including the procedure and its components. The recent evolvement of the pricing policy in China will also be discussed. Secondly, a review of the loss of ecological damage and environmental degradation due to hydropower development will conducted, particularly from the perspective of ecosystem services valuation. To include the most of the relevant studies, those of payment of ecosystem services or ecological compensation for hydropower development will also be inclusive. Finally, the above results will be summarized and a recommendation to improve current pricing mechanism will be proposed. Analysis, results, conclusions and recommendation: Currently, the price of hydropower in China is composed of construction cost without consideration of its loss of ecosystem services. Without considering this environmental costs of hydropower development, the negative impacts of hydropower development on watershed ecosystem could not be compensated, and it is finally burdened by those vulnerables. Therefore, it's important to introduce the negative impacts of hydropower development for a sustainable watershed. Three dams were selected in a preliminary study in Jiulong River Watershed, various ecosystem services affected by the dam construction were identified, models were employed to compute the loss in the monetary term based on the collected data, the results show that the rates of the negative impacts over positive ones are 64.1%, 66.0% and 91.2%,meaning the negative impacts should not be ignored in the pricing process. More supporting studies will be reviewed in this relevant field. Conclusions will be summarized based on the above results, including, China should revise the hydropower development policy by improving the pricing mechanism, especially to internalize the environmental costs to the whole costs; a more open pricing process for hydropower development is called for in China to ensure the participation from all stakeholders.
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