Dealing with transboundary water pollution in China

Most water pollution by nature crosses boundaries; in China, incidents like February's acid leak in Jiangsu indicate the inability of local authorities to deal with contamination. A good recent post on water security by Ma Jun on China Dialogue reports that, on average, there's an environmental incident in China once every two days, 70% of which involve water pollution. A delegate to China's People's Political Consultative Committee highlighted the trans-boundary water pollution issue by calling for the development of a compensation system, a first step toward establishing clear liability for water polluters.

The delegate, also the Vice-President of Anhui University, Wu Cunmei, noted that it is impossible to prevent contaminated water from flowing through watersheds. The national government should, Wu said, quickly establish a dispute-resolution and compensation mechanism for transboundary water pollution (see China Environment Report, in Chinese only).

As Wu noted, regions near the headwaters of river systems often garner economic benefits by polluting watersheds for downstream users, who must bear the costs themselves. This kind of "local protectionism," (地方保护主义) Wu said, damages the whole national system for preventing water pollution, making it an imperative to develop new mechanisms for transboundary dispute resolution and compensation.

None of this is really news, but it's heartening to hear a delegate to one of China's important "two meetings" (两会) speak so forcefully about environmental protection, and to single out watersheds for the development of an eco-compensation framework. Many experts agree that eco-compensation is particularly suitable for use in watersheds, where the benefits of clean water are clear for both upstream and downstream users (see previous post). Providing local governments with a means to "sue" other jurisdictions might also provide a potent secondary-enforcement mechanism, by deterring areas that may be tempted to adopt lax enforcement.

Nonetheless, creating a robust compensation and dispute-resolution system will be thorny. As long as local officials are rewarded chiefly for effecting economic growth, there will be strong incentives to "pass the cost along" by allowing industry to pollute with minimal enforcement and mitigation (see previous post). Moreover, a compensation regime should be carefully designed to encourage watershed management, not just to compensate downstream users for pollution. It's difficult to include the benefits of, for example, preserving forest cover near river system headwaters in any compensation regime.

Here's an opportunity for an enterprising NGO (or even friendly foreign government?) to step in and offer to provide expertise to the Chinese government in constructing a durable watershed pollution compensation and dispute resolution mechanism. As water scarcity increases and the pollution problem becomes more ingrained, China's leadership will surely be grateful for all the help they can get.