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Journal of Environmental Accounting and Management
António Mendes Lopes (editor), Jiazhong Zhang(editor)
António Mendes Lopes (editor)

University of Porto, Portugal


Jiazhong Zhang (editor)

School of Energy and Power Engineering, Xi'an Jiaotong University, Xi'an, Shaanxi Province 710049, China

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An AccountingModel for Watershed Ecological Compensation to Address Wa-ter Management Conflicts

Journal of Environmental Accounting and Management 1(3) (2013) 229--247 | DOI:10.5890/JEAM.2013.08.002

Zhifeng Yang; Xi Han; Linyu Xu; Bing Yu

State Key Joint Laboratory of Water Environment Simulation, School of Environment, Beijing Normal University, Beijing 100875, China

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Watershed ecological compensation is a powerful economic method used to address water management problems. In this study, we established an accounting model for watershed ecological compensa-tion based on STELLA software, using revenue functions to quanti-fy the profits of two cities during water use. The revenue functions included factors such as socio-economic water-use benefit, pollu-tion control cost and environmental externalities in the downstream area. This ecological compensation model can be used to address water-use disputes between upstream and downstream cities in the watershed area. Using the Guanting Reservoir Basin as a case study and considering the profit of each stakeholder, we calculated the payments under different scenarios of water quality and quantity within the provincial trans-boundary section. Our results indicated that (i) when the water quality of the inflow to Beijing (down- stream) is Grade V or IV as defined by the National Water Quality Standard of China, Zhangjiakou (upstream) should pay Beijing 92.04 or 48.19 million Yuan RMB, respectively; (ii) when the water quality of the inflow is Grade II, Beijing should pay Zhangjiakou 53.08 million Yuan RMB.


This study was supported by the National Science & Technology Pillar Program, China (No.2012BAC05B02) and National Science Foundation for Innovative Research Group (No. 51121003). The authors gratefully acknowledge this funding support.


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