Regional compensation system widened after river water quality improves

A system that rewards efforts to improve water quality in rivers has been introduced in more regions of China after it proved effective in conserving key watercourses.

Launched as a pilot program in 2011 for the Xin'anjiang River, which flows through Anhui and Zhejiang provinces, the system was introduced against a backdrop of worsening environmental management for the 359-kilometer waterway, according to the Ministry of Ecology and Environment.

Years of rapid economic development in Huangshan city, Anhui, where the river rises, took their toll on Qiandao Lake, which is situated downstream in Chun'an county, Zhejiang. A large quantity of wastewater and trash from Huangshan ended up in the lake.

From 2012 to 2014, if the yearly average quality of water in the river flowing from Anhui into Zhejiang reached a designated level, the authorities in Zhejiang had to pay Anhui 100 million yuan ($15.50 million). If the quality was below this level, Zhejiang received that amount from Anhui.

In 2015, the amount of compensation was raised to 200 million yuan. According to media reports, in 2013, Zhejiang paid Anhui 100 million yuan.

The pilot program has resulted in significant achievements since it was launched, the ministry said.

"The quality of water in the Xin'anjiang River Basin has been sustained at a 'fairly good' level", it said. "Meanwhile, the eco-economy in the river basin has experienced rapid expansion."

In China, water quality is considered "fairly good" if it is at or above Grade III, the third-highest level in the country's five-tier quality system for surface water, with Grade I the highest.

Huangshan, encouraged by the compensation system, has closed 220 polluting companies, relocated another 90 and stepped up efforts to develop ecotourism, the ministry said, adding that more than 100,000 rural residents in the city are now involved in this booming industry.

The city has also returned 24,000 hectares of grain plots to forestry, raising the local forest coverage rate from 77.4 percent to nearly 83 percent, it said.

Thanks to the efforts in Huangshan, the ministry said the water quality in Qiandao Lake has remained at or above Grade II for years and the quality of 70 percent of the water in Chun'an county's 88 rivers has reached Grade I.

The regional compensation system has also been introduced in the Yellow River Basin and in the Chishui River Basin in Southwest China.

In the Yellow River Basin, Shandong province and Henan province reached an eco-compensation agreement in May, as they intensified efforts to protect the waterway.

For every level of improvement from Grade III, Henan receives 60 million yuan, but for every level below this grade, Shandong receives the same amount in compensation.

The two provinces will also be either rewarded or punished for every percentage point change in three key water quality indicators－chemical oxygen demand, ammonia nitrogen and level of phosphorus.

A year-on-year change of 1 percentage point for each of these indicators results in compensation of 1 million yuan. The upper limit for such compensation stands at 40 million yuan, according to the agreement.