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The Oxford Companion to the Economics of China$
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Shenggen Fan, Ravi Kanbur, Shang-Jin Wei, and Xiaobo Zhang

Print publication date: 2014

Print ISBN-13: 9780199678204

Published to Oxford Scholarship Online: December 2014

DOI: 10.1093/acprof:oso/9780199678204.001.0001

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Benefit–cost analysis of ambient water quality improvement in China

Benefit–cost analysis of ambient water quality improvement in China

Chapter:
(p.364) 59 Benefit–cost analysis of ambient water quality improvement in China
Source:
The Oxford Companion to the Economics of China
Author(s):

Hua Wang

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780199678204.003.0060

This chapter begins by discussing water scarcity and water quality deterioration in China. It then considers the case of Yunnan province in southwest China, where the clean and the comparatively clean lakes (Grade I–III) account for only 54.6 per cent; the polluted lakes (Grade IV) and the seriously polluted lakes account for over 45.4 per cent. People’s willingness to pay for improvements in water quality by one grade level is estimated to be between 1.6 per cent and 5.2 per cent of income, and the economic internal rate of return is between 13 per cent and 21 per cent. These figures demonstrate that the demand for water quality improvement is very strong in China, and people’s valuation of ambient water quality improvement is far greater than the necessary cost.

Keywords:   environmental quality economics, benefit–cost analysis, wastewater treatment

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