Protecting Beijing's municipal water supply through watershed management: an economic assessment
2001
Duan, S. | Geng, Z. | Gregersen, H.M. | Brooks, K.N. | Ffolliott, P.F.
Watersheds above the Miyun reservoir, a principal source of surface water for Beijing, are designated to be managed for water production, but under the principle of multiple use. Because of the scarcity of arable land, these watersheds cannot be managed only for drinking water. Efforts are under way to reduce sediment delivery,improve the quality of water entering Miyun reservoir, and improve the welfare of watershed inhabitants. An economic appraisal of a watershed management project for the 3,298-ha Shixia watershed above the Miyun reservoir, indicates a 24 percent economic rate of return on the investment made in the project. The net present value (NPV) of the project, calculated at a discount rate of 10 percent, is approximately US$3.49 million. Sensitivity analyses indicate that a doubling of labor costs lowers the NPV to US$2.07 million and a 10 percent decrease in benefits lowered the NPV to US$2.87. It is concluded that the implementation of conservation practices on the Shixia Demonstration Watershed represent an economically efficient use of resources.
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