China Policy Journal Volume 1, Number 1, Fall 2018 | Page 67

China Policy Journal
non-use values, which may represent a
large percentage of the total value of the
interested ecological services. A good
example is the significance coefficients
that He et al. (2015b) reported for the
methodological dummies in their meta-analysis
estimation function, which
revealed the very large impact of methodological
choices on the reported value
of the ecological services provided
by wetlands.
It is relatively easy to accept the
fact that the different evaluation methods
propose relatively different valuation
results for ecological services.
There is another potential reason to
explain the differences that has not yet
gained enough attention in the literature:
the ambiguity among the state
preference valuation studies about
“what” to evaluate.
Consider the example of a typical
payment scenario for ecological
services related to a better water quality
provided by an upstream region. Ideally,
the downstream residents, as the beneficiaries
of the improved ecological services
provided by the better quality of
river water flowing from the upstream
regions, should only pay for the part of
the increase in ecological services directly
related to the better water quality
contributed by the upstream regions.
Such logic is already well reflected in
the mechanism of some pilot PES projects,
such as the trans-provincial project
on the Xin’an River (2012–2014).
This project required that the decision
to transfer a proposed 500 million yuan
between the upstream Anhui province
and the downstream Zhejiang province
be based on the water quality of the
river section located in the congruent
frontier between the two provinces. If
the water quality meets the required
class II level, the 500 million yuan will
be transferred from Zhejiang to Anhui
to compensate for their water pollution
abatement efforts. Conversely, if the water
quality does not meet the required
level, the transfer will go from Anhui
to Zhejiang province to compensate for
the additional damage caused by the
worse water quality. Whether to make a
transfer depends on whether the Xin’an
River water received by Zhejiang from
Anhui meets the required quality target.
Compared with this specificity, the
welfare changes that many existing stated
preference valuation studies measured
unfortunately were wider; most
of them focused on the potential reduction
of local people’s well-being due to
the changes in the quality of the local
ecological service. For the case of river
water pollution, the local water quality
changes certainly “inherit” the pollution
flows from the upstream regions
but are also directly affected by the injection
of pollution from local economic
activities and everyday life.
4. A New Framework for Setting
Payment Standards with the
Stated Preference Methods
Considering the above discussion,
we use the following Figure 1 to
illustrate the different sources of
pollution in a transboundary river. Assuming
that the river water at the starting
point S has a quality equal to or better
than level II, the river flows from the
64