technical assistance consultant’s report€¦ · · 2014-09-29technical assistance...

Technical Assistance Consultants Report

This consultants report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed projects design.

Project Number: 40687 September 2010

Peoples Republic of China: River Basin Water Resources Allocation and Management Policy (Cofinanced by the Multi-Donor Trust Fund for the Water Financing Partnership Facility )

Prepared by

GHD Pty Ltd

Australia

For the Ministry of Water Resources, Peoples Republic of China

GOVERNMENT OF THE PEOPLES REPUBLIC OF CHINA Ministry of Water Resources

Asian Development Bank

GHD Pty Ltd, Australia

General Institute for Water Resources and Hydropower Planning & Design [GIWP]

RIVER BASIN WATER RESOURCES ALLOCATION AND MANAGEMENT POLICY

Final Report

VOLUME 1:

MAIN REPORT RIVER BASIN WATER RESOURCES ALLOCATION AND MANAGEMENT

September 2010

TA 7127-PRC

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CONTENTS

EXECUTIVE SUMMARY ....................................................... ix

1. INTRODUCTION ...........................................................1 1.1 Objectives ............................................................................1 1.2 Background to the Study.....................................................1 1.3 Methodology ........................................................................2 1.4 Activities to Date .................................................................3

1.4.1 Inception Phase......................................................................3 1.4.2 Interim Phase.........................................................................3 1.4.3 Completion Phase ...................................................................4

1.5 Report Structure ..................................................................5 1.6 Definition of Terms ..............................................................6

1.6.1 Terminology ...........................................................................6 1.6.1.1 Surface Water Resources, Groundwater Resources and

Total Water Resources.................................................. 6 1.6.1.2 Water Resources Management Plans, Water Allocation

Schemes and Water Allocation and Regulation Plans ........ 8 1.6.1.3 Water Scarcity, Water Stress and Water Shortage............. 9

1.6.2 Classification of Water Use ......................................................9

2. REVIEW OF DOMESTIC PRACTICE .............................12 2.1 Purpose ..............................................................................12 2.2 Institutional Foundation ...................................................12

2.2.1 Legal Provisions....................................................................12 2.2.2 Government Administration ...................................................15 2.2.3 Institutional Issues ...............................................................16

2.3 Water Resources Allocation ..............................................17 2.3.1 Background to Water Resources Planning in the PRC ..............17 2.3.2 Pilot Trial Projects for Water Resources Allocation...................18 2.3.3 Current Status ......................................................................19 2.3.4 Summary .............................................................................26

2.4 Environmental/Ecological Water Management................26 2.4.1 Water Pollution.....................................................................26 2.4.2 Research on Environmental Water Requirements in the PRC ...30 2.4.3 Ecology and Instream Environment........................................31

2.5 Economic Evaluation .........................................................33 2.5.1 The Economic Value of Water................................................33 2.5.2 Approaches to Economic Assessments of Value ......................34 2.5.3 Water Markets......................................................................35 2.5.4 Water Pricing........................................................................36 2.5.5 Payment for Ecosystem Services............................................36

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3. REVIEW OF INTERNATIONAL PRACTICE ...................38 3.1 Purpose ..............................................................................38 3.2 Institutional Organization for Water Resources

Management ......................................................................38 3.2.1 General Trends.....................................................................38 3.2.2 Europe ..............................................................................39 3.2.1 United States........................................................................41 3.2.2 Australia ..............................................................................42 3.2.3 Chile ..............................................................................42 3.2.4 Other Countries ....................................................................43

3.3 Water Resources Allocation and Water Sharing ..............44 3.3.1 Role and Function of Water Resources Allocation....................44 3.3.2 UN Convention .....................................................................45 3.3.3 Water Sharing in International Treaties ..................................45 3.3.4 Water Sharing Between States/Provinces ...............................46

3.3.4.1 Murray-Darling Basin, Australia ....................................... 46 3.3.4.2 USA River Basin Compacts.............................................. 48 3.3.4.3 Water Reform in South Africa ......................................... 50 3.3.4.4 Pakistans Indus Water Accord ........................................ 51

3.4 Provision for Environmental Flows ...................................51 3.4.1 Methods for Determination of Environmental Water

Requirements .......................................................................52 3.4.2 Policy Level Case Studies ......................................................54

3.4.2.1 European Union Water Framework Directive.................. 54 3.4.2.2 South Africa National Water Resource Strategy.............. 55 3.4.2.3 Australia National Water Initiative ................................ 56

3.4.3 River Basin Case Studies .......................................................57 3.4.3.1 Murray-Darling Basin, Australia ....................................... 57 3.4.3.2 Guadalquivir River Basin, Spain ....................................... 58

3.4.4 Concluding Remarks .............................................................60 3.5 Economic Evaluation and Management Measures ...........60

3.5.1 Water Resources Economics ..................................................60 3.5.2 Role of Economic Evaluation in Water Resources Allocation

Planning ..............................................................................61 3.5.3 Principal Evaluation Methods .................................................63

3.5.3.1 Benefit Cost Analysis...................................................... 63 3.5.3.2 Economic Modeling and Contingency Valuation................. 63

3.5.4 Economic Measures in Water Resources Management.............64 3.5.4.1 Cost Recovery ............................................................... 64 3.5.4.2 Tariff Structure.............................................................. 65 3.5.4.3 Marginal Pricing............................................................. 65 3.5.4.4 Shadow Pricing.............................................................. 66 3.5.4.5 Payment for Environmental Services................................ 67 3.5.4.6 Water Trading ............................................................... 68

3.5.5 Discussion ............................................................................69

4. ANALYSIS AND RECOMMENDATIONS FROM THE REVIEWS 71 4.1 Lessons Learned ................................................................71

4.1.1 Trans-boundary Water Agreements .......................................71 4.1.2 Relevance of Political Institutions and Traditions.....................72 4.1.3 River Basin Water Resources Management Planning ...............73

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4.1.4 Accommodating Development Objectives with Environmental Sustainability ........................................................................75

4.1.5 Accommodating Market Forces with Government Regulation ...77 4.1.6 Different Needs and Requirements.........................................79 4.1.7 Future Needs and Requirements............................................80 4.1.8 Coping with Hydrological Variability .......................................81 4.1.9 Water Resources Assessments...............................................83

4.1.9.1 Surface Water Resources................................................ 83 4.1.9.2 Groundwater Resources ................................................. 84

4.1.10 Basis for Allocating Water Shares...........................................85 4.2 Statement of Best Practice................................................86

4.2.1 Introduction .........................................................................86 4.2.2 Strategies And Principles Of Water Allocation .........................89 4.2.3 Key Determining Factors When Formulating Water Allocation

Schemes ..............................................................................92 4.2.4 Technical Procedures For Implementing Water Allocation

Schemes ..............................................................................96 4.2.5 Enabling Environment ...........................................................98

4.3 Policy Recommendations ................................................ 100

5. DEFINITION OF PRINCIPLES FOR RIVER BASIN WATER RESOURCES ALLOCATION ...........................103 5.1 Background ...................................................................... 103 5.2 Basic Principles ................................................................ 103

5.2.1 Basic Human Needs ............................................................ 103 5.2.2 Equity ............................................................................104 5.2.3 Efficiency ........................................................................... 104 5.2.4 Sustainability ...................................................................... 105 5.2.5 Coordination and Balance (or Harmony)............................... 106

5.3 Roles and Responsibilities............................................... 106 5.3.1 Transboundary Waters Convention ...................................... 106 5.3.2 Chinese Legislation and Administration................................. 107

5.4 Other Guiding Principles ................................................. 108

6. CATEGORIZATION OF RIVER BASINS ......................109 6.1 Objectives ........................................................................ 109 6.2 Criteria for Categorization .............................................. 109

6.2.1 Principles of Selection of Indicators for Categorization........... 109 6.2.2 Selection of Indicators ........................................................ 110 6.2.3 Criteria for Categorization of River Basins............................. 112

6.3 Selection of River Basins for Categorization .................. 114 6.4 Data Collection ................................................................ 115 6.5 Analysis ............................................................................ 115 6.6 Application of the System for Categorization of River

Basins ............................................................................... 121

7. GUIDING STRATEGIC FRAMEWORK FOR RIVER BASIN WATER RESOURCES ALLOCATION ...........................123 7.1 Approach to Development of the Framework ................ 123

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7.1.1 Purpose and Objectives....................................................... 123 7.1.2 Methodology ...................................................................... 123 7.1.3 Institutional Context ........................................................... 124 7.1.4 Functions and Responsibilities ............................................. 126

7.2 Technical Issues of Availability and Sharing of Water Resources......................................................................... 127 7.2.1 Availability of Water Resources ............................................ 127

7.2.1.1 Water Resources Unavailable for Allocation and Use ......... 127 7.2.1.2 Environmental Water Requirements................................. 129 7.2.1.3 Distinction between Abstractions and Water Use .............. 129 7.2.1.4 Consideration of Groundwater......................................... 131 7.2.1.5 Consideration of Water Quality........................................ 134 7.2.1.6 Non-Consumptive Water Uses......................................... 135 7.2.1.7 Exploitable Water Resources in the NWRIP ...................... 136

7.2.2 Quantification of Water Resources Available ......................... 136 7.2.2.1 Introduction .................................................................. 136 7.2.2.2 Scientific Approach of River Basin Model Application ......... 138 7.2.2.3 Alternative Method for Water Resources Allocation ........... 140

7.2.3 Basis for Sharing of Water Resources................................... 141 7.2.3.1 Criteria for Water Sharing............................................... 141 7.2.3.2 Cutting Water Allocations During Water Shortages............ 142 7.2.3.3 Reserves....................................................................... 145 7.2.3.4 Basis for Cuts in Water Allocations during Periods of Water

Shortage ...................................................................... 145 7.3 Formulation of a River Basin Water Allocation Scheme 146

7.3.1 Process for Scheme Formulation and Implementation ........... 146 7.3.2 Preliminary Investigations ................................................... 146

7.3.2.1 Preparation of River Basin Water Accounting Model .......... 148 7.3.2.2 Assessment of Water Resources Available........................ 149 7.3.2.3 Forecasts of Future Development and Water Demands ..... 149 7.3.2.4 Identification of Key Ecosystems and Environmental Assets151 7.3.2.5 Assessment of Eco-Environmental Water Requirements..... 151 7.3.2.6 Identification of Social Equity and Efficiency Objectives..... 152

7.3.3 Initial Stakeholder Consultations.......................................... 153 7.3.4 Investigation and Evaluation of Water Management Options .153

7.3.4.1 Technical Analysis of Water Resources Management Options ........................................................................ 153

7.3.4.2 Evaluations of Socio-Economic and Eco-Environmental Impacts........................................................................ 155

7.3.5 Executive Review and Stakeholder Consultation.................... 156 7.3.6 Documentation of a River Basin Water Allocation Scheme ..... 157

7.4 Operation of a Water Allocation Scheme........................ 158 7.4.1 Process for Scheme Operation ............................................. 158 7.4.2 Annual Water Allocation and Regulation Plan........................ 160 7.4.3 Regular Seasonal Updates ................................................... 160 7.4.4 Monitoring and Evaluation ................................................... 161 7.4.5 Reporting and Accountability ............................................... 162 7.4.6 Appeals and Dispute Resolution........................................... 163

7.4.6.1 Annual Water Allocation and Regulation Plan.................... 163 7.4.6.2 Seasonal Updates to the Allocation Plan........................... 163 7.4.6.3 Two-Monthly Updated Analysis Reports ........................... 163 7.4.6.4 Annual Review Reports................................................... 163

7.5 Review and Revision of Water Allocation Schemes ....... 164 7.5.1 Reviews of Water Allocation Schemes .................................. 164

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7.5.2 Amendments to Water Allocation Schemes........................... 164 7.5.3 Revisions of Water Allocation Schemes................................. 165

7.6 Summary of the Guiding Framework for River Basin Water Allocation .............................................................. 166 7.6.1 Formulation of Water Allocation Scheme .............................. 166 7.6.2 Operation of a Water Allocation Scheme .............................. 167 7.6.3 Scheme Review and Revision .............................................. 167

7.7 Recommendations for Implementation.......................... 167

8. APPLICATION OF STRATEGIC FRAMEWORK TO RIVER BASINS..........................................................170 8.1 Objective .......................................................................... 170 8.2 Methods for Application of the Guiding Strategic

Framework....................................................................... 170 8.2.1 Application of River Basin Water Accounting Model ............... 170 8.2.2 Application of the Method Using Percentiles of Water Resources

Availability.......................................................................... 171 8.3 Proposed Linkage of River Basin Category to Framework

Application ....................................................................... 172 8.3.1 Linkage to River Basin Categories ........................................ 172 8.3.2 Category 3 River Basins ...................................................... 173 8.3.3 Category 2 River Basins ...................................................... 175 8.3.4 Category 1 River Basins ...................................................... 176 8.3.5 Summary ........................................................................... 178

9. RECOMMENDATIONS ...............................................180 9.1 Guiding Strategic Framework ......................................... 180 9.2 Supporting Recommendations........................................ 182

REFERENCES .....................................................................187 APPENDIX A: WATER RESOURCES IN THE PRC

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LIST OF FIGURES Figure 1-1: Water Resources 6 Figure 1-2: Concept of Water Resources Availability in the PRC 7 Figure 1-3: Water Resources Available for Exploitation and Allocation 8

Figure 2-1: Chinas System for Water Resources Administration 16 Figure 2-2: Location of Water Resources Allocation Pilot Projects in the PRC 18 Figure 2-3: Information on Water Resources Allocation Schemes 20

Figure 3-1: Illustration of Marginal Pricing 65 Figure 3-2: Comparison of Cost Basis and Effect on Pricing 66 Figure 3-3: Economic Flow Diagrams 68

Figure 4-1: Factors in International Transboundary Water Sharing Agreements 72 Figure 4-2: Water Resources Planning Hierarchy 74 Figure 4-3: Operational Context and Institutional Framework of Water Resources

Management 87 Figure 4-4: Scheme for Water Resources Allocation and Management Planning 99

Figure 6-1: Matrix Approach to Categorization 118 Figure 6-2: Preliminary Tests of Categorization Method 120

Figure 7-1: General Framework for Water Allocation 125 Figure 7-2: Exploitable Water Resources 128 Figure 7-3: Estimation of Water Use 130 Figure 7-4: An Approach to Cap Groundwater Use 133 Figure 7-5: General Approach for Water Allocation and Licensing 134 Figure 7-6: Environmental Water Requirements and Water Quality Concept 135 Figure 7-7: Proposed Scheme for Prioritization of Water Use 144 Figure 7-8: Process for Formulation of River Basin Water Allocation Scheme 147 Figure 7-9: Generic Forecasting Procedure 150 Figure 7-10: Proposed Approach to Water Resources Allocation and Management 159

Figure 9-1: Three-Phase Framework Implementation 180 Figure 9-2: Illustration of Capacity Sharing 185

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LIST OF TABLES Table 1-1: Tours Organized for Review of River Basin Water Resources Management

Overseas 4

Table 2-1: Laws and Regulations for Water Resources Management in the PRC 13 Table 2-2: Main Rivers in Jiangxi Province 25 Table 2-3: Summary of Domestic Water Allocation Schemes 27 Table 2-4: Environmental Monitoring Sites in the PRC 30

Table 3-1: Summary of Environmental Flow Assessment Methodologies 52

Table 6-1: Criteria of Indicators for Categorization of River Basins 113 Table 6-2: Significance of Criteria System 113 Table 6-3: Preliminary Selection of Representative River Basins 115 Table 6-4: Data and Indicator Values for Selected River Basins 116 Table 6-5: Classification of River Basins 117 Table 6-6: River Basin Categorization 121

Table 7-1: Summary of Contents of Scheme Documentation 157

Table 8-1: Method of Application Proposed for River Basin Categories 172 Table 8-2: Different Approaches for Different River Basin Categories 178

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ABBREVIATIONS 2G Grain for Green program ACT Australian Capital Territory ADB Asian Development Bank AEP annual exceedance probability BP best practice CGE Computable General Equilibrium (economic models) CHG Confederacin Hidrogrfica del Guadalquivir (Guadalquivir River Basin Authority,

Spain) DMC Developing Member Country (member of ADB) DWAF Department of Water Affairs and Forestry (South Africa) EA Executing Agency (for this TA, the MWR) ECM Ecological Compensation Mechanism ELOHA Ecological Limits of Hydrological Alteration method EU European Union EWR Environmental (or eco-environmental) Water Requirement GDP Gross Domestic Product GHD GHD Pty Ltd (consultants) GIWP General Institute for Water Resources and Hydropower Planning & Design IFIM Instream Flow Incremental Methodology IRSA Indus River System Authority (Pakistan) IWHR China Institute for Water Resources and Hydropower Research IWRM Integrated Water Resources Management MDBA Murray-Darling Basin Authority (Australia) MDBC Murray-Darling Basin Commission (predecessor of MDBA) MEP Ministry of Environmental Protection MHURC Ministry of Housing and Urban & Rural Construction MLR Ministry for Land and Resources MoA Ministry of Agriculture MoT Ministry of Transport MWR Ministry of Water Resources NCFPP Non-Commercial Forest Payment Program NDRC National Development and Reform Commission NFA National Forestry Administration NFCP National Forest Conservation Project NPC National Peoples Congress NWI National Water Initiative (Australia) NWRIP National Water Resources Integrated Plan NWRS National Water Resource Strategy (South Africa) ORASECOM Orange-Senqu River Basin Commission (southern Africa) O&M operations and maintenance

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PES Payment for Environmental (or ecological, or ecosystem) Services PRC Peoples Republic of China RB river basin RBC River Basin Commission RB-WAS River Basin Water Allocation Scheme SLCP Sloping Land Conversion Programs TA Technical Assistance ToR Terms of Reference TPM TriPartite Meeting (ADB, MWR, consultant) UK United Kingdom (Great Britain) UN United Nations UNICEF United Nations International Childrens Emergency Fund USA United States of America VMP value marginal product WARP Water Allocation & Regulation Plan (annual or seasonal) WAR Water Allocation Reform (in South Africa) WFD Water Framework Directive (of the European Union) WHO World Health Organization WMA Water Management Area WQ water quality WR water resources WRMP Water Resources Management Plan WUA Water User Association

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EXECUTIVESUMMARY The objective of TA7127-PRC River Basin Water Resources Allocation and Management Policy is improved and sustainable water resources management through adoption and application of an appropriate framework for river basin water resources allocation. The water resources (WR) allocation system is intended to maximize social, environmental and economic benefits of water use in the PRC. The methodology prescribed in the ToR included several key activities, as follows: (i) a review and assessment of international and domestic practices in river basin water resources

allocation in selected countries and river basins, including completed and ongoing pilot programs in the PRC;

(ii) a comparison of various methodologies and models of water resources allocation, and documentation of best practices;

(iii) preparation of a policy note based on best practices, and with policy recommendations; (iv) MWR staff study visits to river basins with good practices in water resources allocation, and on-

the-job training; (v) an assessment and categorization of river systems with similar characteristics; and (vi) definition of principles for river basin water resources allocation, and preparation and finalizat-

ion of a guiding framework for improved future implementation of river basin water resources allocation in the PRC.

The draft Final Report is organized in four volumes:

(vii)

(viii)

(ix)

(x)

Volume 1 this volume is the main report which provides a general overview of the project and reports on the tasks specified in the ToR.

Volume 2 is the Policy Note prepared to support development of a guiding framework for river basin WR allocation, and volume 4 is a background paper produced to document findings of reviews of international and domestic practice in WR allocation and management. Volume 2 includes a statement of best practice derived from the reviews of international and domestic practice. Volume 3 details the guiding strategic framework for river basin WR allocation that is the key output of the project. The guiding strategic framework outlines how a water allocation scheme should be formulated for allocation of water resources to regions (provinces, autonomous regions and municipalities under direct supervision of the central government) within a river basin.

Appendix A provides relevant background to the need for effective management systems and policy for water allocation to promote river basin integrity and water security. It notes the increasing competition for access to water resources arising from population growth and rapid economic development, related problems of eco-environmental degradation, and the spatial mismatch of population distribution and availability of water resources in the PRC. Over-exploitation of resources is evident in many regions where agricultural, urban and industrial sectors have secured water resources at the expense of ecology and environment. Although the rate of increase in water use has slowed, water use is still increasing, so the water crisis remains to be resolved.

Volume 1: Main Report Volume 2: Policy Note Volume 3: Guiding Strategic Framework for River Basin Water Resources Allocation Volume 4: Review of Practice in River Basin Water Resources Allocation and

Management

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ReviewofDomesticPracticeChapter 2 summarizes the review of domestic practice, which is reported separately and in full in volume 4. The review of domestic practice included:

review of the institutional and legal foundations for water resources management in the PRC; review of specific cases of water resources allocation plans/schemes that have been introduced

int; an introduction to approaches for assessments of environmental water requirements that have

been applied in river basins in the PRC; and discussion of application of economic methods and economic measures that are most relevant to

water resources allocation and management.

The Water Law (2002) is the main legal foundation for water allocation and a water rights framework in the PRC. This is supported by other regulations, of which the most relevant are those dealing with the system for licensing of water use rights and the Interim Measures for Water Quantity Allocation enacted in 2008.

A key output of recent updating of national water resources planning by MWR was the National Water Resources Integrated Plan (GIWP, 2008). The NWRIP was an outcome of nation-wide investigations and quantitative assessments of water resources, their utilization, and long-term forecasting of water supply and demand which provides a foundation for practical water resources allocation.

Pilot trial projects used to advance the practice of water resources allocation in the PRC are reviewed, including schemes for the Yellow River basin, the lower Jinjiang river basin in Fujian Province, the Heihe river basin in north-west China, the Tarim river basin in Xinjiang Province, the Huolin River in the Songliao river basin and Daling River in north-east China, the Shiyang river basin in Gansu Province, and for the main rivers of Jiangxi Province flowing into Poyang Lake. From the review, it is noted that there has been a wide variety of approaches, methods and principles applied in past preparation of water resources allocation schemes. Future planning and practice in the PRC would benefit from greater consistency of approach through development of a strategic framework, guide-lines or statement of best practice, and a more coherent policy for water resources allocation.

Many ecological problems have occurred in the PRC as the result of over-exploitation of water resources, including river reaches ceasing to flow, shrinking of lakes, silting of river channels and estuaries, vegetation loss, desertification, water quality deterioration, and biodiversity reduction. This has already had adverse impacts on the lives of many Chinese people. The concept of environmental water requirements was scarcely recognized in when the first pilot schemes for river basin water resources allocation were introduced.

Economics researchers and practitioners have generally adapted economic models to public policy decisions by developing the evaluation procedure termed cost-benefit analysis. The review of domestic practice also considers approaches to economic assessments of water value, and the potential roles of water markets, water pricing and payment for ecosystem services (PES).

InternationalReviewofPracticeChapter 3 summarizes the review of international practice, which is reported separately and in full in volume 4. The review of international practice included:

review of global trends in institutional organization for water resources management; examination of relevant international and transboundary conventions and pacts; review of specific cases of transboundary water resources management or allocation in different

parts of the world;

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an international selection of cases related to practical assessments of environmental water requirements in river basins; and

discussion of international application of economic methods and measures that are most relevant to water resources allocation and management.

In most countries, demands for water are initially met by engineering, supply-side solutions. This paradigm of water resources management is appropriate for prevailing conditions of water abundance while levels of demand remain within the constraints of water resources availability. As demands increase and approach those limits, water shortages arise and become more frequent, making it increasingly difficult and expensive to simply augment supply to match demands. Demands for water for socioeconomic development begin to erode the water requirements essential for environmental quality and sustainability of natural ecosystems. A shift then generally occurs towards more integrated water resources management (IWRM) in which a balance between demand and supply is sought through demand management measures as well as augmentation of supply, and a new paradigm of water sharing and water allocation is introduced that is characterized by assessment and provision of water requirements for ecosystem sustainability, more critical assessment and testing of the socioeconomic justification of new or increased demands for water, and a shift to decentralization of institutional administrative arrangements. This shift has occurred or is occurring in most countries with advanced economies, and in certain developing countries like the PRC.

The study reviewed the institutional organization for water resources management in European countries, the United States, Australia, Chile and other countries. It also reviewed transboundary conventions and pacts, most notably the 1997 UN Convention on the Law of the Non-Navigational Uses of International Watercourses which stresses some basic principles for transboundary water sharing.

Case studies of river basin water resources allocation schemes examined in greatest detail include recent reform of water resources management in the Murray-Darling river basin of Australia, river basin compacts in the USA including those for the Colorado, Columbia and Pecos river basins, current water reform in South Africa with reference to the Inkomati and Orange river basins, and Pakistans Indus Water Accord. With respect to environmental water requirements, the international review examined the Water Framework Directive (WFD) of the European Union (EU), South Africas National Water Resource Strategy and Australias National Water Initiative, and looked at practical implementations in the Murray-Darling basin and the Guadalquivir river basin in Spain. It concludes that, to meet the challenges of supporting economic growth while sustaining important environmental values and ecosystems, it may be necessary to reconfigure economies to adapt to inevitable water scarcity constraints. Although there are many methodologies available for environmental flow determination, the most appropriate are those related to specific ecological objectives.

In advanced nations there is virtually universal reliance on analysis of systems operations using water accounting models that employ networks of nodes and links to simulate the spatial complexity of water resources and demands in river basins. Application of these models by skilled water resources analysts ensures that issues of water resources availability and variability in space and time are properly accounted for. Priorities for supply and rules for allocating water to meet demands and EWRs during periods of scarcity are generally integrated into these models and can be varied and tested to formulate a scheme that will best meet the (often competing) objectives for river basin WR allocation and management.

Tours were conducted by small groups to examine examples of river basin management and water resources allocation overseas. One group visited Canberra, Australia from 13-17 June 2010 to discuss WR management in the Murray-Darling basin; another group will visit the south-west USA

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(Colorado and New Mexico) later in 2010 to review interstate water compacts for transboundary sharing of water resources in the Colorado and Rio Grande river basins.

StatementofBestPracticeandPolicyRecommendationsChapter 4 commences with analysis derived from the reviews of domestic and international practice, and discusses lessons to be learned for water resources allocation in the PRC. One of the findings is that the institutional background in each of the international cases is quite different to that existing in the PRC. Although those institutional differences limit their relevance to the situation in the PRC, several useful lessons can be learned from both recent positive adaptations in water resources management policies and practice in places like Australia and South Africa, and from negative aspects of certain other management regimes. There follows a statement of best practice based upon the lessons learned from the reviews of international and domestic practice, and policy recommendat-ions. The Policy Note in volume 2 includes examples drawn from the review of international and domestic practice to illustrate the statement of best practice.

DefinitionofPrinciplesPrinciples by which any policy framework for river basin water resources allocation should be guided are defined and discussed in chapter 5. These include basic human needs for drinking, food preparat-ion, hygiene and sanitation, principles of social equity, economic and operational efficiency, eco-environmental sustainability and sustainability of water resources for future generations and socio-economic development, and a principle of harmonious coordination and balance in administration of water resources allocation and management. Adequate consultation with key stakeholders is a fundamental requirement for social equity.

Related to transboundary sharing of water resources, the UN Convention on the Law of the Non-Navigational Uses of International Watercourses emphasizes fair and equitable use, an obligation to prevent significant harm to others in utilization of water resources, and partnership in the manage-ment of water resources.

GuidingStrategicFrameworkforRiverBasinWaterResourcesAllocationVolume 3 presents the proposed guiding framework or strategy for river basin WR allocation as a stand-alone document, but the framework is also outlined in reasonable detail in chapter 7 of this volume 1. A key feature of the proposed framework is a 3-stage approach to water resources allocation: (1) Formulation of a River Basin Water Allocation Scheme (RB-WAS) (2) Operation of a River Basin Water Allocation Scheme (3) Review and revision of a River Basin Water Allocation Scheme.

Following a decision to implement a RB-WAS, the formulation of a scheme entails several steps, including: (a) preliminary planning and investigations; (b) initial stakeholder consultations; (c) detailed investigations and evaluations of allocation and management options; and (d) decision making and stakeholder participation. Steps (a) and (b) serve to establish scheme objectives, rules and criteria for decision making, and a sense of common purpose and joint endeavor. Steps (c) and (d) may have to be repeated numerous times before a scheme is identified that can be reasonably defended as best meeting often-competing objectives, particularly in river basins where available resources are scarce in comparison to demands and water requirements.

Water allocation planning should be nested within the planning objectives of a comprehensive water resources plan for the river basin, the Water Resources Management Plan (WRMP). Once the RB-WAS is implemented, during its operations the framework proposes annual Water and Regulation

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Plans (WARPs) be prepared based on assessments of water resources available, with seasonal updates. See schematic diagram below.

WRMPWaterResourcesManagementPlan

RBWASRiverBasinWaterAllocationScheme

AnnualWaterAllocation&

RegulationPlan,withUpdates

principlesobjectivesanalysis

operations of infrastructureconditions for water diversions

specifications for adjustment to variations in water availability

Key features of the operational phase are monitoring and evaluation, and reporting and accountabil-ity. The framework also proposes mechanisms for stakeholder consultation and dispute resolution.

Occasional reviews of scheme performance against scheme objectives are proposed, with provision for amendments to the RB-WAS to maintain flexibility to changing circumstances, or revisions of the RB-WAS that would require re-formulation of the scheme to match updated scheme objectives.

Technical issues such as determination of water resources available, coping with hydrological variability, cutting of allocations during water shortages and other important issues are dealt with in the framework.

CategorizationofRiverBasinsChapter 6 describes how a system for the categorization of river basins was devised with relevance to the application of the guiding strategic framework, and was applied to 26 selected river basins in the PRC. The system includes 3 primary categories which may be characterized as: Category 1: The current balance between water resources available and water use is satisfactory. Category 2: There are indications of water stress that will require careful management in the future. Category 3: Water resources are already being heavily exploited. Urgent management measures are

required to avoid deterioration of current conditions and attempt to correct over-exploitation of water resources.

ImplementationoftheFrameworkChapter 8 provides the linkage between river basin categories and different application of the guiding strategic framework for river basin water resources allocation. In brief, less rigorous methods are acceptable in category 1 river basins and the approach proposed is based upon past best domestic practice. However, for river basins in categories 2 and 3, the application of river basin water account-ing models (river basin water balance network models) is recommended; together with greater effort

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to identify scheme objectives including eco-environmental and social objectives, and in evaluation of impacts on eco-environmental sustainability and socio-economic outcomes. Formulation of a RB-WAS should be a multi-disciplinary team project, and appropriate skills and experience need to be recruited. Category 3 river basins require greater attention to detail, scientific field studies and more thorough and intensive planning and investigations.

GuidetoApplicationoftheStrategicFrameworkChapter 7 in this volume outlines the general framework proposed for water resources allocation at river basin scale. Section 7.2 proceeds to discuss and provide general guidance on some of the key technical aspects of WR allocation: the quantification of the water resources available for allocation in a river basin; and the basis for the sharing or allocation of water between or to multiple water users. Figure 7-7 proposes a scheme for prioritization of water use that can be used to adjust water allocations during periods of water shortage in conjunction with a system of staged restrictions on water use, although the importance of consultation with key stakeholders at the initial stage of formulation of a water allocation scheme is emphasized so that a mutual understanding can be reached about the basis for reducing allocations.

Section 7.3 explains in detail how a river basin water allocation scheme (RB-WAS) should be formulated. Section 7.6.1 provides a convenient summary of these procedures. Key principles for water resources allocation were presented in chapter 5. The methods to be used to determine water resources available are explained in sections 7.3.2.1, 7.3.2.2 and 7.3.4.1.

Section 7.4 recommends how a RB-WAS should operate after a scheme has been formulated and implemented. A key feature of the recommendation is the annual preparation of water allocation and regulation plan (WARP) for the coming year of operation based on assessment of the water resources that are or will be available, with regular seasonal updates during the course of each year. Other important features of the recommended procedures for operation of a RB-WAS are provisions for monitoring and evaluation, and for reporting and accountability. Section 7.6.2 provides a concise summary of these procedures.

Section 7.5 provides proposals for reviews of a RB-WAS, and for possible amendments or revisions to the scheme arising from periodic (or special) reviews also summarized in section 7.6.3.

Chapter 8 provides clear guidance on how to formulate and implement RB-WASs for different categories of river basins, culminating with the summary presented in Table 8-2. The differences relate primarily to the method recommended for quantification of water resources available for allocation and the investigation of potential WR management options, the methodology adopted for the identification of key eco-environmental objectives and the determination of EWRs, and the evaluations of eco-environmental and socio-economic impacts of the RB-WAS.

Several recommendations are provided in sections 7.7 and 9.2 for the implementation of the guiding strategic framework after completion of this TA.

In volume 3, Appendix A describes some useful decision support tools (index measures) that can assist decision makers during formulation of a RB-WAS; Appendix B provides additional guidance to assist selection of an appropriate method for assessment of EWRs; Appendix C provides additional guidance to assist in socio-economic evaluations during scheme formulation and during scheme operation; and Appendix D provides a brief review of selected water balance network accounting models that can be used for water accounting in river basin WR allocation planning.

RecommendationsAssuming the proposed strategic framework is adopted as a policy tool in the PRC, chapter 9 provides some recommendations for its implementation.

River Basin Water Resources Allocation and Management Policy xvi GHD Pty Ltd / GIWP September 2010

The guiding strategic framework prepared under this TA has potential application anywhere, includ-ing any ADB developing member country. Application of the framework will be particularly beneficial in river basins experiencing water stress and river basins where water must be shared between distinct regions. The three-stage process of implementation is generally applicable, and the categorization of river basins and variants of the technical approach associated with categorization are also generally appropriate; however the boundary values used in assessment of the criteria for categorization will probably need to be adjusted to local needs and conditions.

If the proposed framework for river basin WR allocation is accepted, an urgent priority is to test the application of the framework to a small sample of river basins. The purpose of the trial applications would be to identify and resolve any practical difficulties for framework application not identified during this TA which could require amendment to the proposed framework or refinements in its application. It would be useful if trials could be expedited to resolve any outstanding issues in advance, so that the guiding strategic framework could be used more effectively in delivery of the likely targets of the 12th Five Year Plan (2011-2015).

Capacity building is recommended to develop the skills and human resources necessary to implement river basin water allocation schemes under this guiding strategic framework. Appropriate training programs are desirable to develop technical skills and capacity, and to align existing skills to the tasks involved in formulation and operation of river basin water allocation schemes according to the proposed guiding strategic framework. Skills and experience need to be accumulated for river basin water accounting modeling, associated natural sciences and water resources economics and social impact assessment. Development of a large pool of skilled and well-trained professionals is necessary.

A study by water resources engineers and computer programming specialists is recommended to review existing water balance network models for water accounting available both domestically and internationally. Specialists should be sent on training courses so that they become competent in application of specific modeling packages and learn their full capabilities. After detailed review of what is available domestically and capabilities of models already applied for river basin water resources management planning in other countries, one of the domestic models should be adapted to give it the capabilities of a multi-nodal water resources planning model appropriate to the tasks involved in formulation and operation of river basin water allocation schemes.

If the two preceding recommendations are to be realized, a concerted program is essential to develop the required skills and build capacity. This can best be delivered through formation of a special technical management unit dedicated to these objectives. It is therefore recommended as a priority that a Water Resources Allocation Management Unit (WRAMU) be supported within GIWP to direct and oversee a program for the development of human resources skills and technical capacity that will be required for the future formulation of RB-WASs in the PRC.

Final Report Volume 1

River Basin Water Resources Allocation and Management Policy 1 GHD Pty Ltd / GIWP September 2010

1. INTRODUCTION This project arises in response to a request in December 2007 for Technical Assistance (TA) to the Asian Development Bank (ADB) by the Ministry of Water Resources (MWR the Executing Agency) of the Government of the Peoples Republic of China (PRC). The TA addresses a crucial element for improvement of water resources (WR) management in the PRC: effective management systems and policy for water allocation that will promote river basin and water security.

GHD Pty Ltd of Australia is the principal consultant responsible for implementation of the TA, work-ing in partnership with the General Institute for Water Resources and Hydropower Planning & Design (GIWP) in Beijing. An Agreement was signed by the consultants and MWR and ADB in April 2009. The consulting team was mobilized on 1 July 2009.

1.1 Objectives The objective of TA 7127-PRC River Basin Water Resources Allocation and Management Policy is improved and sustainable WR management through adoption and application of an appropriate framework for river basin WR allocation. The WR allocation system is intended to maximize social, environmental and economic benefits of water use in the PRC. This should be achieved by:

(i) equitable distribution of water between regions and among water user groups; (ii) setting appropriate priorities for water allocation during periods of water scarcity (drought); (iii) establishing standing rules for sharing of limited water resources between regions and user

groups for sustainable development, and for maintaining water quality and ecosystem protection; (iv) protection of long-term reliability and sustainability of water resources, and avoidance of over-

exploitation and degradation of resources; and (v) adapting to changes and accommodating new demands for water while protecting the interests of

existing water users and the environment.

These objectives are consistent with the agriculture and natural resources development goals of ADBs country partnership strategy for the PRC, and specifically in relation to goals to:

(a) support ecological and environmental improvement; (b) reverse natural resources degradation; (c) address water resource depletion and livelihood improvement for people residing in threatened

and sensitive areas; and (d) promote river basin and ecosystem management, and the efficient use of natural resources.

1.2 Background to the Study

Continuing population growth and rapid economic development in the PRC have increased water use per capita and competition among potential water users. Aquifers are becoming depleted, water pollution is rising, and the ecosystem and environment are being degraded. Along with the need to meet increasing water demand, adequate flows need to be maintained in rivers to protect the environment and dependent ecosystems. Given the rising urban and industrial demand for water, the share of irrigation water use is likely to decrease further. However, because of the political and social importance of food security in the PRC, ensuring there is enough water for agriculture remains a



government priority. An excellent account of the growing water scarcity and pressing issues for water resources management in the PRC is available in Xie Jian et al. (2009).

As well as the natural temporal variability of available water resources, there is a geographic mismatch of water resources, population and arable land. The north of China contains 45% of the population, and 65% of the arable land, but has only 19% of national water resources. Water scarcity, either temporal or spatial, leads to intense political pressures, and because of conflicting water demands effective planning tools are required to meet administrative challenges. Key challenges are how to manage a declining resource in the face of increasing demand, how to respond to the mismatch between supply and demand, and at the same time avoid serious environmental and ecological problems that arise from over-exploitation of natural resources.

Despite progress made in reforming legal and policy frameworks in the PRC, more development of capacity to adopt integrated water resources management (IWRM) is needed to meet these key challenges, develop appropriate frameworks to allocate water, monitor use and resolve conflicts among water users, and improve governance in WR management. Based on analysis of these issues, measures should be formulated to establish modern WR management systems in line with a water rights regime and integrated river basin management which will improve efficiency and introduce market mechan-isms for allocation of water resources.

In particular, the TA will address a crucial element for improvement of WR management in the PRC: effective management systems and policy for water allocation that will promote river basin integrity and water security.

In the past, water resources planning and allocation has been attempted for some of the major river basins in the PRC, and one of many objectives in the current 11th 5-Year Plan that ends in 2010 was to extend that to other river basins. Attainment of that planning objective may be delayed, in part because of the absence of a recognized guiding framework for the tasks. Completion of those tasks of water resources planning and allocation will now be included in the 12th 5-Year Plan for 2011-2015, so outcomes of this TA will potentially have critical implications for those endeavors and for future sustainable management of water resources in the PRC.

Some relevant data, statistics and analysis are available in Appendix A.

1.3 Methodology To develop effective management systems and policy for water allocation that promote river basin and water security in the PRC, the TA includes several key activities as listed in the ToR: (1) a review and assessment of international and domestic practices in river basin WR allocation in

selected countries and river basins, including completed and ongoing pilot programs in the PRC; (2) a comparison of various methodologies and models of WR allocation, and documentation of best

practices; (3) preparation of a policy note based on best practices, and with policy recommendations; (4) MWR staff study visits to river basins with good practices in WR allocation, and on-the-job

training; (5) an assessment and categorization of river systems with similar characteristics; and (6) definition of principles for river basin WR allocation, and preparation and finalization of a guid-

ing framework for improved future implementation on river basin WR allocation in the PRC.



1.4 Activities to Date

1.4.1 Inception Phase An Inception Report was prepared and finalized in August 2009, and on August 15 a workshop with a panel of experts and the responsible ADB Project Officer was conducted to review that report, its review of the background to the study and its proposals for conducting the TA. All participants appreciated the importance of the TA as it helps formulate water resources allocation principles, methodologies and a guiding framework, which are very relevant to the PRC's priority in water management in the next five years; i.e., to develop water resources allocation plans for major river basins and other smaller river basins where water scarcity is severe or where water shortages occur frequently. The panel supported the proposed approach and methodology, and in particular appreciated the incorporation of economic, environmental and ecological considerations in water resources allocation. MWR pointed out that the proposed water resources allocation principles and guiding framework should be consistent with the current PRC legal foundation for water resources management, particularly the Water Law (2002).

1.4.2 Interim Phase

In the six months leading to the preparation of an Interim Report in February 2010, the activities listed as (i), (ii) and (iii) above were completed. A working paper on the review of international and domestic practice was completed in November 2009. Based on the review, analysis of the working paper contents and lessons learned, a draft Statement of Best Practice was prepared in December 2009 with a Policy Note summarizing key recommendations. A meeting with the panel of experts was convened on December 11 to review the outcomes of the review and draft Statement of Best Practice and to consider the policy recommendations. A preliminary guiding framework was also presented to the panel. The panel expressed appreciation of the efforts made, but requested more information on institutional and management aspects of international practice and linkage to the statements about best practice. They noted a distinction between transboundary water resources allocation at international level between sovereign States and at inter-provincial level where a higher-level mediator and arbitrator exists by virtue of a national government. The policy recommendations were generally accepted. Panel members stressed the need to consider development of the guiding framework within the context of the Water Law of the PRC and its articles pertinent to water allocation. They pointed out the important role of water licensing in the allocation, management and distribution of water at provincial and lower levels, and emphasized that the key issue for consideration by the TA is water allocation at river basin scale where water is to be allocated by the national government to the provinces and regions sharing the water resources of a river basin. The Statement of Best Practice and Policy Note were revised following the meeting with the panel of experts in December.

After completion of the Interim Report in February, a workshop and tripartite meeting (TPM) were conducted on April 9, 2010. The responsible ADB officer requested changes to the statement of best practice and policy recommendations that were included in the Interim Report , and changes requested have been incorporated in volume 2 of this Final Report, which is referred to as a Policy Note. The panel of experts attending the workshop commented on the river basin categorization, principles and priorities for water allocation, the concept and management of a water reserve, terminology to be adopted, matters related to implementation, revision and evaluation of water allocation schemes, and sundry other issues. The workshop feedback was useful for completion of the TA, including finalizat-ion of the categorization of river basins and formulation of a guiding strategic framework for river basin WR allocation.



1.4.3 Completion Phase

In the last phase of the TA culminating in the submission and review of the draft Final Report, the collation and analysis of data for river basin categorization was completed, and substantial detail and guidance was added to the preliminary strategic framework to make it more readily adaptable and implementable in future practice in the PRC. Linkage between the categorization of river basins and the practical formulation of river basin water allocation schemes was made, however the ultimate decision of how to implement the guiding framework in any particular river basin will inevitable depend upon specific conditions and requirements plus the professional and executive judgement of those responsible at the time.

International study tours were also organized so that small groups of specialists from MWR and GIWP could observe and learn from the experience and practice in other countries where water scarcity creates management problems for WR allocation. Two study tours were organized: one to the Murray-Darling basin and Australian federal government organizations responsible for current WR planning in that river basin; the other to Colorado and New Mexico in the USA where there are several interstate water compacts including those for the Colorado, Rio Grande and Pecos river basins that were subjects of review in the review of international practice in WR allocation and management that is included in volume 4 of this Final Report 1. Table 1-1 provides some relevant information.

Table 1-1: Tours Organized for Review of River Basin Water Resources Management Overseas

Information Australia USA Dates of Travel 13 - 18 June 2010 not undertaken at reporting date Number in Delegation 3 4 Cities Visited Sydney, Canberra Denver, Fort Collins, Berthoud (Co),

Albuquerque (NM) Organizations Consulted Federal Department of Environment,

Water Resources, Heritage & the Arts Water Policy Section National Water Commission Murray-Darling Basin Authority Commonwealth Scientific & Industrial Research Organization (CSIRO), Division of Land & Water

N. Colorado Water Conservancy District Colorado State University, Water Institute Colorado Water Conservation Board Colorado Office of the State Engineer, Division of Water Resources US Bureau of Reclamation, SW Division New Mexico Office of the State Engineer, Interstate Streams Commission Univ. of New Mexico, Utton Transboundary Resources Center

An international seminar was conducted in Beijing over 1 days on September 14-15, 2010. At this seminar, findings of the TA that may be relevant in other Asian countries were presented to an audience from WR management agencies in ADB developing member countries (DMCs), ADB specialists, representatives from Chinese river basin commissions (RBCs) and provincial water resources departments (WRDs), and MWR officials and invited domestic and international specialists.

Following a final workshop on September 13 to receive comments from the panel of experts appointed by MWR, and a final TPM the same day, and allowing for time for formal comments to be received, this draft report was revised and submitted as the Final Report later in September 2010.

1 Regrettably, due to procedural delays and delays securing approvals, the US tour could not proceed as scheduled.



1.5 Report Structure The Final Report is organized in four volumes:

Volume 1: Main Report Volume 2: Policy Note Volume 3: Guiding Strategic Framework for River Basin Water Resources Allocation Volume 4: Review of Practice in River Basin Water Resources Allocation and Management

In volume 1, the next chapter of this report presents a summary of past and current practice in water resources management in the PRC that is relevant to this review of water resources allocation. It considers the institutional and legal setting in the PRC, and considers past practice in river basin water resources allocation in several parts of China. Water requirement assessments for ecosystems and instream environments are discussed, followed by some comments about approaches to economic evaluation that may be relevant to water resources allocation.

Chapter 3 deals with the review of international practice in water resources allocation and management, beginning with a review of global trends and the key international convention on water sharing in international watercourses. A comprehensive review of water resources practices for water allocation and water resources management in many parts of the world follows, with a review of current practice internationally for provision of environmental flow requirements, followed by a discussion of the role of economic evaluation and economic measures that impact on the allocation of water resources. Findings from the international study tour are summarized.

A working paper produced during the review of international and domestic practice is included as volume 4.

Chapter 4 provides a synthesis of the analysis deriving from the reviews of international and domestic practice, drawing lessons that can be learned from the reviews that relate to a statement of best practice and its application in the PRC. The statement of best practice and pertinent policy recommendations are summarized in chapter 4. Volume 2 is a separate Policy Note derived from lessons learned by the reviews of international and domestic practice.

Chapter 5 provides a definition of key principles for river basin water resources allocation, discusses roles and responsibilities in WR management related to river basin water resources allocation, and draws conclusions about the principles that should guide WR allocation planning in the PRC.

In chapter 6, work undertaken to categorize river basins in the PRC is reported. The categorization is linked to potential variations in formulation of RB water allocation schemes. It includes an explanation of the objective of the river basin categorization and the selection of criteria that can best be used to characterize distinctions between river basins. The selection of river basins to which the categorization was applied is introduced and explained, and the task of data collection is described. Procedures are proposed for use the selected criteria in RB categorization, and analysis undertaken to compare results of different proposals is described before a system for categorization is identified that is suitable for the current purpose.

The guiding framework for river basin (RB) water resources allocation is the principal outcome of the TA, and its formulation is described in chapter 7. A complete presentation of the framework is in



volume 3. Chapter 7 outlines the general approach to its formulation and the aspects of WR manage-ment covered by the framework, provides a concise summary of the proposed framework, and makes pertinent recommendations for further consideration to make future implementation of the proposed framework more practical.

Chapter 8 deals with preliminary testing of the proposed guiding strategic framework. Of course, formulation and implementation of a RB water allocation scheme is far from trivial, requiring an extended time-frame that is prohibitive in the context of the current TA; but it was possible to reflect upon how the guiding framework would be used in practice and relate this to the prevailing conditions in selected river basins used as case studies.

Chapter 9 concludes the Final Report. It presents recommendations for further consideration by MWR.

1.6 Definition of Terms

1.6.1 Terminology 1.6.1.1 Surface Water Resources, Groundwater Resources and Total Water Resources

Total water resources are combined renewable resources potentially available from both surface water and groundwater resources within a river basin. Many groundwater resources are connected to surface freshwater bodies (rivers or lakes), and their extraction and use will deplete the surface water resource available. Diversion and use of surface water may also deplete connected groundwater, which for water quality reasons or reasons of convenience may be a preferred source of water supply. Although there is often not a direct relationship between extraction of groundwater and surface water depletion, by convention in the PRC these connected groundwater systems are included as part of the river basin surface water resources. (In many other countries, these connected groundwater resources would not be included with surface water resources, although the interaction between use of connected groundwater and surface water would be considered and, if possible, estimated.) They are also, of course, part of the groundwater resources, which also include those aquifers that have no connection with surface water bodies. See Figure 1-1. This gives rise to the concept of overlap of groundwater and surface water resources in the PRC.

overlap

Water in rivers, lakes, reservoirs, glaciers, snowpack, etc.

Water in groundwater aquifers connected to surface water bodies

Water available in shallow groundwater not connected to surface water bodies

WR TOTAL(renewable)WATERRESOURCES

WRS TOTALSURFACEWATERRESOURCES

GWTOTALGROUNDWATERRESOURCES(subjecttosustainableextractionlimits)

SW

GWC

GWU

Figure 1-1: Water Resources



Groundwater resources are also classified as shallow or deep groundwater in the PRC, but in general it is against government policy to exploit deep groundwater and in this report it is not included in the total water resources of a river basin.

Mathematically, WR = SW + GW . . . [1.1]

GW = GWC + GWU . . . [1.2]

and WRS = SW + GWC . . . [1.3]

where WR is total water resources, SW is water resources occurring in surface water bodies, GW is groundwater (i.e. all shallow groundwater), GWC is groundwater in aquifers connected to surface water bodies, GWU is groundwater unconnected to surface water bodies,

and WRS is surface water resources as defined in the PRC.

In many river basins, because of the limitations of human regulation, not all of the total water resources may be available for exploitation during the passage of large floods, for example; or in more arid areas where there may be losses in transmission. This gives rise to another concept common in Chinese WR management: that of exploitable water resources. The Chinese usage of this term generally excludes water for eco-environmental purposes. See Figure 1-2.

Figure 1-2: Concept of Water Availability in the PRC

If river basin water allocation is to include allocation of water to meet eco-environmental water requirements (EWRs) this presents a small difficulty that needs to be clarified by further definition, as follows and as depicted in Figure 1-3:

WRX = WR - SWu EWR . . . [1.4]

given that SW = SWX + EWR + SWu . . . [1.5]

while WRA = SW SWu (+GWC (+GWU)) . . . [1.6]

where WRX is exploitable water resources as in common usage in the PRC, EWR is environmental water requirements to be allocated,



Water in rivers, lakes, reservoirs, glaciers, snowpack, etc.

Water in groundwater aquifers connected to surface water bodies

Water available in shallow groundwater not connected to surface water bodies

SW

GWC

GWU

SWU Surfacewaterthatcannotberegulated&allocated

EWR Ecoenvironmentalwaterrequirement

WRA Surfacewateravailableforallocation(allocationofgroundwatermaybeormaynotbeincludedinriverbasinwaterallocationsschemes)

WRX exploitablewaterresources

SWX

Figure 1-3: Water Resources Available for Exploitation and Allocation

SWu is that part of the surface water resources that are uncontrollable during floods, SWX is that part of the exploitable water resources occurring in surface water bodies

and WRA is the water resources available for allocation (which may or may not include available groundwater resources, a decision to be made during formulation of a water allocation scheme).

The surface water that cannot be regulated and allocated (SWu) may also be important to ecosystems e.g. intermittent inundation for sustainability of wetlands or floodplains but because it cannot be allocated is not included for our purposes in the EWR.

1.6.1.2 Water Resources Management Plans, Water Allocation Schemes and Water Allocation and Regulation Plans

Water resources management planning entails planning the management of water for all of its uses and to alleviate impacts of extremes (floods and droughts). This report refers to three types of plans, although all three are related.

A Water Resources Management Plan (WRMP) is a comprehensive plan for management of water resources within a river basin. In the PRC, it is common practice for river basin commissions (RBCs) appointed by MWR in each of the major river basins to prepare comprehensive water resources management plans that deal with broad WR management issues such as flood and drought management, navigation and other issues, as well as management of water resources for supply and demand. Although they do not specify water allocations, they do explain the principles upon which water allocation should be based and make estimates of water resources available and forecast demands. The title given to these comprehensive water resources management plans vary, but in this report they will be referred to generically as Water Resources Management Plans (WRMPs).

A River Basin Water Allocation Scheme (RB-WAS) is a scheme, or plan, for how water resources will be allocated at river basin scale. It is primarily concerned with how available water resources will be allocated to meet human domestic and production purposes in balance with sustainability of the eco-environment. Article 2 of the Interim Measures for Water Allocation (2008) refers to a premise that the eco-environment and sustainable water resources development are protected



(translation from Chinese). At river basin scale, water allocations for human domestic and product-ion purposes are allocated to provinces, autonomous regions and municipalities under central government control, referred to in this report as key stakeholders. It is intended that each RB-WAS will be prepared by the relevant river basin commission (RBC) appointed by MWR in each of the major river basins the other key stakeholders.

A Water Allocation and Regulation Plan (WARP) refers to a short-term plan for allocation of currently available water resources. It is proposed that annual WARPs will be prepared to implement provisions of the RB-WAS, generally at the end of each wet/flood season. Seasonal updates to the annual WARP may be appropriate in certain river basins. This would entail hydrological assessment of the water resources currently available and extra resources that can confidently be predicted to become available over the (short-term) planning period.

1.6.1.3 Water Scarcity, Water Stress and Water Shortage

Water scarcity may be defined as a condition where the water resources available are inadequate for any reason. The inadequacy may relate to water needed for natural processes such as plant growth or sustenance of aquatic life, or to water requirements for human use. Water scarcity may be natural or man-made, caused by drought (temporary), natural aridity (permanent) or over-use (induced by man).

Water stress is water scarcity induced by mans use of water resources. As population and/or socio-economic development grow, increased demands for water will reach a level when the water used for human domestic and production purposes exceeds the supply capacity of river basins, with symptoms of increasing frequency and severity of water shortages accompanied by degradation of water resources and dependent ecosystems, decline of aquatic and riparian habitats and loss of biodiversity. This is water stress.

Water shortage is an imbalance of supply and demand that occurs whenever the full demands for human domestic and production purposes cannot be supplied by the water resources currently available.

1.6.2 Classification of Water Use Water is used for a variety of purposes, and purpose is one basis for classification that is relevant to water resources allocation. A common classification of water use is as follows:

(i) Water for subsistence or survival. This includes drinking water and is a component of domestic water use; however it is usually expanded to include other basic domestic use such as washing and sanitation, generally estimated as between 25 to 50 liters per person per day 2.

(ii) Water required for sustainability of natural aquatic and riparian ecosystems. This is referred to in this report as eco-environmental water requirements (or environmental water requirements, EWRs). Aquatic ecosystems include riverine, lacustrine and estuarine environments, and wetlands including intermittent wetlands, marshes and meadows. Riparian ecosystems include floodplain ecosystems and riparian strips where vegetation has plentiful access to groundwater connected to water bodies. Without adequate water of appropriate quality these ecosystems will become degraded. Most ecologists consider there is a threshold beyond which ecosystem collapse will be initiated and decline may be irreversible. Some species may be of direct economic value, and their

2 A lower allowance of 20 litres per day is proposed by the WHO and UNICEF, but applies to less developed countries.



decline may cause adverse socio-economic impacts. At a more basic level, most human economic activity depends on the bounty provided by natural physical systems, and ecological decline or ecosystem collapse may have major ramifications for regional economic production and social welfare.

(iii) Water used for economic production in primary industry. Because it has different characteristics that may be important, water used for agriculture is usually identified as a separate water use category. Irrigation often accounts for the greatest single component of water used for economic production, and because of its delivery and application is often the least efficient in its use of water. In many environments agriculture is possible without irrigation or with lower reliability of irrigation water supply, and traditionally farmers have contended with much more varying climate and water availability than other sectors of the economy. Mineral extraction (mining) is another primary industry that can use significant quantities of water although it is sometimes grouped together with water used for secondary industry, particularly if water is supplied for both from a common source.

(iv) Water used for economic production in secondary and tertiary industry. This includes water used by secondary and tertiary industry: industrial enterprises, commerce, provision of services, and in public institutions.

(v) Water used for social purposes. Households typically use much more water than is used for subsistence or survival (category (i) above). Water is used in households for a variety of non-essential purposes that are generally considered to enhance the quality and standard of living, e.g. gardens, car washing, recreational pools, cooling, etc. Furthermore, with increased standards of living quantities of water used by appliances and for washing and sanitation typically increase significantly. Water is also used for social purposes in public gardens and water features. In the PRC this is often considered a separate category of water use, termed urban ecological water or out-of-stream ecological water in distinction to instream ecological water requirements of category (ii) above.

Water use may also be classified as consumptive or non-consumptive use. Non-consumptive use is usually taken to include water for the environment, as in category (ii) above, and the much smaller-scale, out-of-stream ecological water noted in (v) above. It also includes water used for generation of hydropower. Water used for generation of hydropower may alternatively be regarded as another instream water use, even though it sometimes involves diversion of water away from the stream of origin. Despite its non-consumptive character, water used for generation of hydropower is relevant for WR management because except in run-of-river schemes it modifies the availability of water for other purposes downstream (i.e. the temporal distribution of downstream flows).Another means of classifying water resources for purposes of WR management is according to water supply. Water for irrigation is generally delivered by separate water supply systems, for example, and does not require the same level of treatment as water used for many other purposes. Urban or municipal water supply systems and rural water supply systems generally deliver treated water for domestic, commercial and industrial use from different sources and perhaps to different water quality standards.Industrial water generally does not require water quality of similar standard as domestic water use with important exceptions, including food processing and certain scientific and high-technology manufacturing and water recycling may be appropriate to improve water use efficiency. Water for industry and mining operations can sometimes be delivered from separate water supply systems, particularly where scale of enterprise or location requires.



It may be relevant to consider new sources of water in WR management too, including recycled water, treated wastewater or stormwater, or water from desalination plants. River basin water resources allocation may also need to consider water transfers to or from other river basins that can be used to redress inconsistencies between the spatial distributions of water availability and demand.



2. REVIEW OF DOMESTIC PRACTICE 2.1 Purpose The methodology specified in the ToR requires a review of relevant domestic and international practice so that lessons may be learned for future application to water resources allocation and management in the PRC, and in preparation for a statement of best practice and a policy note related to the TA objectives. A working paper was prepared during the practice review, which is included as volume 4. This chapter provides a summary of the review of domestic practice and its preliminary analysis. In chapter 4, more is included about the lessons that can be learned, prior to presentation of the statement of best practice and preliminary recommendations for future policy.

The review of domestic practice included: review of the institutional and legal foundations for water resources management in the PRC; review of specific cases of water resources allocation plans/schemes that have been introduced in

the PRC; an introduction to approaches to assessments of environmental water requirements that have been

applied in river basins in the PRC; and discussion of application of economic methods and economic measures that are most relevant to

water resources allocation and management.

Faced with many difficult water management issues, the PRC has made much progress in water resources management, including improvements to institutional arrangements and the legal system. Due to intensified competition for water and degraded eco-environments, water allocation practices have been implemented for many rivers in the PRC, especially in northern China. Review of these practices will provide a clear understanding of what has been achieved and valuable experience on approaches to water resources allocation. Related topics are also reviewed, such as eco-environmental water requirements and economic mechanisms, which have important roles in water resources allocation.

2.2 Institutional Foundation Section B.1 of Volume 4, the working paper on review of international and domestic practice, provides more complete description of institutional arrangements for water resources management in the PRC.

Institutional arrangements are the institutions and administrative procedures that are developed by society to manage and allocate water resources. They may be:

(i) government institutions, responsible for either nationwide or local decision-making; (ii) laws and regulations, which give guidance for management of water resources and appropriate

procedures;

2.2.1 Legal Provisions China's society and economy have experienced tremendous change and rapid development in recent years. With the rapid socio-economic development demands for water resources have been increasing rapidly too, aggravating water shortages and creating water resources pollution and other environment-al problems, which were described in chapter 2. Sustainable use of water resources in the PRC is there-fore confronted with major challenges, and its management is receiving much more attention. The State Council and all levels of water resources departments are strengthening the legal system structure for



water resources management to adapt to these challenges. Table 2-1 shows key legislation, policy documents and regulations.

Table 2-1: Laws and Regulations for Water Resources Management in the PRC

Name Category Date of Enforcement Issuing entity

Constitution of the People's Republic of China Law December 4, 1982

National People's Congress

Soil and Water Conservation Law of the People's Republic of China Law June 29, 1991

National People's Congress

Flood Control Law of The Peopl

technical assistance consultant’s report€¦ · · 2014-09-29technical assistance...

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