Valuing water in the construction of China’s ecological civilization

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Take a minute to consider the Yangtze River. Its voluminous waters support a population and economy larger than the whole of Europe. These same waters sustain iconic species, such as Yangtze finless porpoise, and over 400 different species of fish. Culturally the river’s 7,000 years of human settlement mean it is known as a “cradle of civilization,” with thousands of tourists visiting its historic sites each year. As one of the world’s busiest shipping routes and greatest reservoirs of hydroelectric power, it keeps China’s economy moving and electrified.

What value would you place on these functions? The Yangtze’s waters, like those everywhere, are essential to human existence. They sustain ecosystems and economies while providing for important social, cultural, and religious functions. As such, the value that people and societies place on water goes well beyond the cost of supplying it, or the price that is charged for it.

Yet often these values are in contradiction with each other. Water has attributes of both public and private goods – private when it is in the pipes of a factory, and public when it is supporting fish habitat in the river outside. Depending on the location and time, many of these uses find themselves in competition with each other.

These complexities have motivated international efforts to value water, to help inform and alleviate tradeoffs in water policy. In 2018, the High-Level Panel on Water, convened by The World Bank and the United Nations and comprising a number of heads of state and governments, called for recognition and embrace of water’s multiple values, while building trust, protecting water sources, educating users and spurring innovation.

Responding to these calls, a recent report highlights the needs and opportunities for a new generation of values-based water policies in China. Prepared by the World Bank and the Development Research Center of the State Council, the report examines trends in the management of China’s water resources and identifies challenges and opportunities. The report provides seven policy recommendations for value-sensitive water management to support China’s aspiration of an “ecological civilization”, a guiding framework enshrined in China’s Constitution which embodies the interconnected nature of ecological systems, human health and well-being, and the decoupling of growth and environmental impacts.

Each of these policy priorities, known as “SMARTER” for the initial letter of each of the 7 recommendations, has a value question at its core: What spaces to protect? What infrastructure to prioritize? What prices to set? What trade-offs are acceptable between competing uses? In each case, the answer is not fixed, but must instead reflect the views of diverse stakeholders:

  1. Safeguard the environmental and cultural values of water. The protection of water bodies from headwaters to the lower catchment is currently undervalued in water management decisions, and cultural, social, and ecological values are not sufficiently nor systematically incorporated into decision making. Broad values-based evaluation processes and participatory methods, such as collaborative modeling and collective visioning, can help to prioritize water and ecological resources for protection.
  2. Manage the use of water infrastructure to maximize diverse values of water. China has built the world’s largest stock of water infrastructure. A more targeted approach to investment in infrastructure will be needed as basic service provision reaches completion. A values-based approach to investment planning and management can guide these decisions. This will require a mix of methods, including integrated modelling, valuation surveys, and holistic benefit-cost analysis.
  3. Adapt policy interventions to match the values of water over time and space. Water policies need to allow for great diversity in the values held by stakeholders. Consultative approaches such as stakeholder councils, and collaborative modeling and mapping, help reveal locally held values and develop a shared vision within communities. These approaches provide the knowledge base for policy decisions calibrated to local context.
  4. Reform and calibrate the prices of water to reflect its values. Water prices in China — as in many countries — are currently well below a level that would reflect the full value of water. A gradual upward adjustment in tariffs will help ensure that prices reflect scarcity — encouraging efficient use and water conservation, while helping to cover the increasing costs of water supply.
  5. Transition to values-driven water management through a structured process. Higher prices impact households, especially those that are less well-off. To maintain the support of stakeholders during transition toward price-based water policy, compensating rebates can be directed toward poor households. Consultation mechanisms and public access to data will be essential to build trust and guide the policy process. Information, education, and communication interventions will help smooth the way for policies that can drive efficiency.
  6. Establish improved evaluation systems. Water-related data in China remain distributed across multiple agencies at different levels of government and are often published in hard-to-access forms. Strengthened monitoring and statistical systems with increased integration across sectors and jurisdictions, and drawing on citizen participation, would allow for a values-sensitive water policy aligned with the vision of an ecological civilization.
  7. Realize an ecological civilization and the role of water within it. For China to progress toward its vision for an ecological civilization, socio-cultural and ecological values will need to play an increasingly prominent role in water policy. The tools presented in this report — techniques and recommendations for identifying, evaluating, and realizing these values— are the practical means toward this vision.

The world needs a shift in how it understands, values, and manages water. Population growth and current water management practices lead to growing water scarcity. A new generation of smarter water policies will be central to generating better decision-making, mobilizing investments in modern infrastructure, developing institutions that manage the world’s water sustainably, and ensuring fair and affordable access to water.

Through SMARTER water policies, underpinned by the identification, evaluation, and realization of the diverse values of water, China can offer both lessons and further opportunities to contribute to a water-secure world for all.

Download the report: Clear Waters and Lush Mountains: The Value of Water in the Construction of China's Ecological Civilization


Marcus J. Wishart

Lead Water Resource Specialist for China

David Kaczan

Senior Economist, World Bank

Xiawei Liao

Environmental Specialist, World Bank

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