Arbeitspapier

Higher Water Tariffs for Less River Pollution - Evidence from Min River and Fuzhou City, People's Republic of China

Upstream nonpoint source pollution has become a significant threat to urban drinking water safety in the People's Republic of China. Payment for environmental services (PES) is seen as a promising mechanism to deal with the situation. In designing a sound PES, it is crucial to determine the willingness to pay (WTP) of urban beneficiaries for upstream water pollution controls. An analysis of household data from a contingent valuation survey conducted in Fuzhou in 2009 reveals that household income is the most important factor in determining respondents' positions on water tariff increases as well as WTP under a PES scheme. Mean WTP varies from Yuan (CNY) -0.45 per cubic meter to CNY0.86 for different income groups. The overall mean WTP is estimated to be CNY0.21, which is equivalent to a 10% increase in the current tariff, with the 95% confidence interval at (CNY0.12, CNY0.31). The point estimate implies a total annual WTP of Fuzhou City equal to CNY22 million, which is 27% less than the contribution of Fuzhou to an ongoing government-financed PES. However, with continuous water tariff increases, affordability among low-income households might arise as an issue. This calls for subsidies targeting low-income households to be incorporated in water tariff reform.

Language
Englisch

Bibliographic citation
Series: ADB Economics Working Paper Series ; No. 201

Classification
Wirtschaft
Subject
nonpoint source pollution
payment for environmental services (PES)
urban water
Gewässerbelastung
Wasser
Gebühr
Fuzhou
China

Event
Geistige Schöpfung
(who)
Jiang, Yi
Jin, Leshan
Lin, Tun
Event
Veröffentlichung
(who)
Asian Development Bank (ADB)
(where)
Manila
(when)
2010

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Jiang, Yi
  • Jin, Leshan
  • Lin, Tun
  • Asian Development Bank (ADB)

Time of origin

  • 2010

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