China Policy Journal Volume 1, Number 1, Fall 2018 | Page 64

Payment for Ecological Services and River Transboundary Pollution
Using GIS water quality panel
data from 321 monitoring stations
across Brazil as well as jurisdictional
boundary modification data for 5,500
Brazilian counties, Lipscomb and Mobarak
(2008) studied whether water
quality across jurisdictional boundaries
deteriorates due to the concentration
of polluting activities near a river’s
exit from a jurisdiction. Their results
confirmed that within a 5-kilometer
distance from a boundary, pollution
increased by 2.3% for every kilometer
closer a river was to the exit border.
In addition to the river transboundary
pollution cases, transboundary
air pollution has been studied. One
interesting example is Helland and
Whitford (2003). Motivated by anecdotal
evidence suggesting that local
regulators were more lenient in their
treatment of polluters when the incidence
of pollution partially fell on those
outside the state, this paper examined
a transboundary air pollution spillover
incidence that occurred in the US
and revealed significantly higher toxic
chemical levels in border counties.
3. Standards for Payment
of Ecological Services
For the PES mechanism, the most
important question is how to set
reasonable payment standards for
the affected ecological services. By “selling”
the ecological services provided by
environment protectors to the beneficiaries,
this mechanism aims to generate
funds to increase the conservation
benefits perceived by the environmental
protectors and therefore reinforces
their incentives to protect the environment
and resources. Following this logic,
we should expect the payment of the
PES mechanism to be higher than or at
least equal to the conversation cost and/
or the opportunity cost of the existing
commercial development projects to
which the environmental protectors
face. The larger the gap is between the
perceived benefit and the cost, the more
room there is for negotiation between
environmental service providers and
beneficiaries and the higher the probability
is to bring welfare increases for
both sides and to realize effective environmental
protection.
However, the difficulties in assigning
pertinent monetary values to
affected ecological services are numerous.
Although natural environments
represent one of the cornerstones of the
human environment and offer essential
goods and services for human survival
and well-being, their integration into
the economic system has proven to be
very complex. The process to include
the total economic value of nature in a
neoclassical logic requires the encounter
of two fundamental elements: the
physical, biotic and abiotic components
of nature on the one hand and the individual's
view of these elements on the
other. If it is reasonable to use the wellbeing
that the individual obtains from
these natural components, two aspects
of the difficulty of putting a dollar value
to such wellbeing remain: First, not
all the wellbeing obtained by an individual
is exchangeable in a market. The
response of the nature to the multitude
of human needs, whether aesthetic,
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