Water Resources Planning and Management Problems Induced by Rapid Changing Institutional Environment: A Case Study of China

This paper probes three kinds of institutional changes and their effect on water resources planning and management m China: the evolution of water price regulations, the evolution of regulations for fund raising of water resources engineering and the reformation of water right system. The idea of taking water as an economic good with greatly increased water price is beneficial for most water resource engineering projects; however, it has made some outstanding projects impossible to realize their planned performance. The main reason is that water demand to these projects under the water market is much lower than the predicted when the planning of the projects, which causes the capacity waste of those projects. Under the new investment regulations, local government should share the capital cost according to their share of benefit. For example, provinces and cities that share the water supplied by South to North Water Transfer Project should share the capital investment of the project according to their share of water quantity diverted. This investment regulation impacts the decision preference and planning process of large projects in the country. The emerging water right and market systems will certainly bring opportunities and also challenges to water resources planning and management in China. The planning and design of some projects may also be influenced by the possible changes of water right.