Rules In Payments For Watershed Services Under The Institutional Analysis And Develop Framework

Environmental pollution of watersheds and the shortage of watershed resources have become major problems for countries around the world.China has also paid a huge price in accelerating urbanization and industrialization and has borne extremely high governance costs.As an important institutional tool to change the ecological environment of the watershed and the utilization of water resources,payments for watershed services(PWS)have become an important starting point for the construction of beautiful China.The 19th National Congress of the Communist Party also pointed out that it is necessary to "Step up the protection of ecosystems...Exploring and diversifying the payments for ecosystem services",so exploring PWS has been an essential initiative to promote the construction of ecological civilization and to protect the environment by an institutional approach.The existing practices of PWS in China is dominated by the government.The governments at all levels,as the specific bearers of water resources ownership and jurisdiction,play an important role in the construction and operation of PWS.Inter-provincial PWS involves cross-regional governance,and the interests of relevant stakeholders are complex and difficult to coordinate.At the same time,the mobility and openness of the water resources make the use conflicts between the upstream and downstream areas of the watershed increasingly normalized.How to resolve the conflicts of interest in PWS in cross-provincial watersheds through institutional arrangements and the establishment of specific rule systems is the research question of this paper.Specifically,what are the manifestations of interests in the upstream and downstream areas,how do these lead to conflicting interests of local governments in the upstream and downstream areas,how do they coordinate interests through PWS to achieve cooperation,how do they make the system work well and in an orderly manner after established and whether it will produce effective results.This paper studies the above issues based on the theory and perspective of institutional analysis and development(IAD)framework.In this paper,PWS is taken as the research object.After combing the relevant literature of PWS and defining the important concepts and theories of PWS,this paper proposes a"factor characterization-intrinsic mechanism-rules design" under IAD framework.The analytical framework serves as the logical pivot for this study.Afterwards,the action scenarios of PWS,the interests of the upstream and downstream actors and the logic of action are discussed.It is found that in the natural state,it is difficult for the stakeholders to establish a PWS system to cope with the problems in the utilization of the watershed resources.Specific rules are needed to control who can participate in buying and selling of watershed services,under what circumstances participation is allowed,how transactions are regulated,and many other actions.Decisions made by the developers of PWS schemes about what rules to include and what form these rules take are likely to have an impact on the eventual success or failure of the schemes.After established and operated,it is necessary to evaluate the implementation results from both the perspective of whether the results meet the expected objectives and the sustainability of these results,so the paper selects the China’s first inter-provincial PWS pilot—Xin’an River Project as an example to multi-dimensionally evaluate the implementation results.Finally,the optimization of PWS is discussed to guide the practice and innovation of PWS in China.The main research methods and conclusions drawn in this paper are as follows:The mode established for rules in PWS depends on the cost of providers and buyers.In the process of the game between the ecosystem service providers and the buyers in the natural state,the additional benefits,costs of providers and buyers’ cost are important factors affecting the system’s evolutionary stability strategy.As additional revenues outweigh costs,more and more providers will choose to provide ecosystem services.But in reality,such conditions are hard to realize.Therefore,in the natural state,it is difficult to establish PWS by the governments of the areas through which the watershed flows.Then in the government-led PWS,whether the higher-level government is the rule maker or choose to let the watershed flow through the government as the main body of the rules is the issue of the choice of the establishment model of PWS.After adding the motivation-constraint mechanism of the higher-level government and the motivation-constraint mechanism between providers and buyers,it is found that when the cost of implementing is low,the constraint mechanism of the higher-level government is stronger.Providers and buyers will evolve to social optimal strategies;when the cost of implementing is higher for providers and buyers,the restraint mechanisms based on ecosystem services are likely to be more effective than higher-level government restraint mechanisms,and the react of buyers is more positive than that of the provider.Based on this,recommendations can be made for the reasonableness of the selection of different establishment modes based on the cost of implementing.The motivation-constraint mechanism of higher government is more effective in watersheds with lower costs.If the cost is high,there is a need to encourage providers and buyers to establish motivation-constraint mechanism based on ecosystem service standards,improve technical support for providers to help them meet ecosystem service standards,and increase financial incentives for providers.The process of implementing PWS depends on the whole and coordination of a particular system of rules.The rules for the top-level design of PWS in China lay the practical foundation for PWS,which is reflected in the property rights of river resources,watershed management and the paid use of watershed services.At the same time,the practices of PWS promote the improvement of the top-level design.The elements will find problems in practice and propose possible solutions in the policy reform.Among them,the rules-in-use of PWS constitutes a realistic mechanism for coordinating the interest’s distribution relationship,interest acquisition relationship and interest protection relationship of different participants.By constructing a set of specific rules-in-use systems for PWS,it is found that this set of rules should include clear position rules,accurate boundary rules,comprehensive and hierarchical choice rules,aggregation rules for reasonable decentralization,matching scope rules,transparent information rules,and innovative pay-off rules.Further integration with Xin’an River practices shows that the established system of rules-in-use provides common rules for the regulation of the main stakeholders of PWS,the additionality of watershed service,the conditionality of PWS,the distribution of benefits and the adaptation to other social goals,which provide solutions for the general problems in PWS.Main rules are the cornerstones of the inter-regional PWS mechanism,including the position rules which clarify stakeholders and their responsibilities,the boundary rules which set selection criteria,the choice rules which stipulate multi-level action sets,the pay-off rules which innovate payments’sources and graduated sanctions.Other rules are important factors in promoting the sustainability of PWS,including the information rules which determine the available complete information,the aggregation rules which give authority to the local appropriately,the scope rules which establish a management organization that matches the watershed area.The operational results of PWS should be able to achieve the expected objectives and these results are sustainable.In terms of achieving expected goals of PWS in Xin’an river,the water quality of the basin has not only met the payments’ requirements but has also been further improved.Next,by calculating NANI(Net Anthropogenic Nitrogen Input),the practice of Xin’an River has effectively reduced the nitrogen input of rivers.PWS in Xin’an river aims to control water pollution by strictly regulating the use of payments’ funds and designing a series of projects to optimize the industrial layout of the basin and to change the behaviour of human activities in the area.Moreover,PWS in Xin’an river has changed the regional development model,increased the linkage between upstream and downstream,targeted poverty alleviation,and achieved multi-participation,which providing institutional guarantees for the sustainability of all good results and laying a solid foundation.According to the above conclusions,this paper suggests that PWS needs to design a rule system with diversified subjects and multi-directional operation.Creating aggregation rules that facilitate grassroots participation and forming information rules that promote information exchange can reduce the cost of establishing the system of PWS;creating multiple position rules for shared responsibility and establishing market-based boundary rules and pay-off rules can promote the effective implementation of PWS;creating multi-level choice rules and developing scope rules for multiple assessment indicators can guarantee that operational results of PWS achieve the expected objectives.It can further provide recommendations for the establishment of replicable PWS systems,so as to transform the institutional advantages of PWS into governance efficiency of watershed ecological resources.