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The economic potential of payments for ecosystem services in water conservation: a case study in the upper reaches of Shiyang River basin, northwest China

Published online by Cambridge University Press:  11 April 2012

Zeng Tang ,
Yulan Shi ,
Zhibiao Nan  and
Zhongmin Xu
Zeng Tang
Affiliation:
State Key Laboratory of Grassland Agro-ecosystems, College of Pastoral Agriculture Science and Technology, Lanzhou University, Lanzhou, Gansu 730020, PR China. Email: tangz@lzu.edu.cn
Yulan Shi
Affiliation:
Cold and Arid Regions Environment and Engineering Research Institute, Chinese Academy of Sciences, PR China. Email: sylbaby15@lzb.ac.cn
Zhibiao Nan
Affiliation:
State Key Laboratory of Grassland Agro-ecosystems, College of Pastoral Agriculture Science and Technology, PR China. Tel: +86 931 8661047. Fax: +86 931 8910979. Email: zhibiao@lzu.edu.cn
Zhongmin Xu
Affiliation:
Cold and Arid Regions Environment and Engineering Research Institute, Chinese Academy of Sciences, PR China. Email: xzmin@lzb.ac.cn
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Abstract

In this paper, we conduct an investigation to assess the economic potential of payments for ecosystem services to conserve water through the conversion of land under irrigation into rain-fed land in the upper reaches of the Shiyang River basin, located in northwest China. We use an approach developed by Antle and Valdivia (2006, Australian Journal of Agricultural and Resource Economics, 50: 1–15) to estimate the supply of water. The analysis shows that it is theoretically possible to reduce agricultural water consumption and subsequently increase the water supply, which would aid the prevention of environmental degradation in the middle and lower reaches of the Shiyang River basin. In addition to the conservation of water, considerable income would be generated by local farmers, which would help to alleviate poverty. Furthermore, the analysis also suggests that more complete data on ecosystem services rates, transaction costs and other related factors would be of value for achieving a more comprehensive assessment.

Type
Theory and Applications
Information
Environment and Development Economics , Volume 17 , Issue 4 , August 2012 , pp. 445 - 460
Copyright
Copyright © Cambridge University Press 2012

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