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China’s first water use rights system with tradable water use quotas was launched early in 2002 (Zhangye City,
Ganzhou District, Gansu Province) as part of a national water saving project. Water use in the pilot area was
readjusted based on local ecological and social conditions: high-efficiency water users were given preference
for distribution of use rights, and per capita water use was determined based on proximity to water resources.
Water use rights certificates were distributed to counties and irrigation districts, and subsequently to townships,
villages and households.
In Minle County, each irrigation district distributed water rights certificates to households based on land area
and a water resource deployment scheme which was checked, ratified and strictly enforced. Water used for
irrigation was reduced to 1,500–1,800 m3/ha/year, significantly lower than the previous year.
DESIGNING MBIS FoR FULL CoST
RECovERy
Market-based instruments have the potential to
of pollution/resource
use, provided that charge/tax rates are set high
enough or the number of permits is adequately
restricted. This is a key difference with regulatory approaches
which require compliance to a set standard
and leave resource use up to this limit free of charge
i.e. there is no incentive to reduce pollution below the
standard. Under MBIs like taxes, the tax is imposed on
all emissions (e.g. every tonne of carbon, every litre of
discharged water) and thus increases incentives to
reduce resource use. however, tax rates, fees or charges
will only reflect the true economic value of the
resource in question if the MBIs are explicitly designed
and set at an adequate level to secure full cost recovery
(see Box 7.13).
Scuba diver at the top of '1000 Steps' beach and
dive site on Bonaire.
TEEB FoR NATIoNAL AND INTERNATIoNAL PoLICy MAKERS - ChAPTER 7: PAGE 22