Payments for Ecosystem Services for watershed water resource allocations

Watershed water resource allocation focuses on concrete aspects of the sustainable management of Ecosystem Services (ES) that are related to water and examines the possibility of implementing Payment for Ecosystem Services (PES) for water ES. PES can be executed to satisfy both economic and environmental objectives and demands. Considering the importance of calculating PES schemes at the social equity and cooperative game (CG) levels, to quantitatively solve multi-objective problems, a water resources allocation model and multi-objective optimization are provided. The model consists of three modules that address the following processes: ① social equity mechanisms used to study water consumer associations, ② an optimal decision-making process based on variable intervals and CG theory, and ③ the use of Shapley values of CGs for profit maximization. The effectiveness of the proposed methodology for realizing sustainable development was examined. First, an optimization model with water allocation objective was developed based on sustainable water resources allocation framework that maximizes the net benefit of water use. Then, to meet water quality requirements, PES cost was estimated using trade-off curves among different pollution emission concentration permissions. Finally, to achieve equity and supply sufficient incentives for water resources protection, CG theory approaches were utilized to reallocate PES benefits. The potential of the developed model was examined by its application to a case study in the Yongding River watershed of China. Approximately 128 Mm3 of water flowed from the upper reach (Shanxi and Hebei Provinces) sections of the Yongding River to the lower reach (Beijing) in 2013. According to the calculated results, Beijing should pay USD$6.31 M (¥39.03 M) for water-related ES to Shanxi and Hebei Provinces. The results reveal that the proposed methodology is an available tool that can be used for sustainable development with resolving PES amounts among different regions under social and environmental constraints by considering the characteristics of social equity and CGs.