Valuing the effects of hydropower development on watershed ecosystem services: Case studies in the Jiulong River Watershed, Fujian Province, China

Hydropower development brings many negative impacts on watershed ecosystems which are not fully integrated into current decision-making largely because in practice few accept the cost and benefit beyond market. In this paper, a framework was proposed to valuate the effects on watershed ecosystem services caused by hydropower development. Watershed ecosystem services were classified into four categories of provisioning, regulating, cultural and supporting services; then effects on watershed ecosystem services caused by hydropower development were identified to 21 indicators. Thereafter various evaluation techniques including the market value method, opportunity cost approach, project restoration method, travel cost method, and contingent valuation method were determined and the models were developed to valuate these indicators reflecting specific watershed ecosystem services. This approach was applied to three representative hydropower projects (Daguan, Xizaikou and Tiangong) of Jiulong River Watershed in southeast China. It was concluded that for hydropower development: (1) the value ratio of negative impacts to positive benefits ranges from 64.09% to 91.18%, indicating that the negative impacts of hydropower development should be critically studied during its environmental administration process; (2) the biodiversity loss and water quality degradation (together accounting for 80–94%) are the major negative impacts on watershed ecosystem services; (3) the average environmental cost per unit of electricity is up to 0.206 Yuan/kW h, which is about three quarters of its on-grid power tariff; and (4) the current water resource fee accounts for only about 4% of its negative impacts value, therefore a new compensatory method by paying for ecosystem services is necessary for sustainable hydropower development. These findings provide a clear picture of both positive and negative effects of hydropower development for decision-makers in the monetary term, and also provide a basis for further design of environmental instrument such as payment for watershed ecosystem services.