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Valuing the Environment in Developing Countries

Case Studies

Edited by David Pearce, Corin Pearce and Charles Palmer

In this book, the first of two volumes, the authors provide detailed case studies of valuation techniques that have been used in developing countries. They demonstrate that valuation works and that it can yield significant insights into policy-relevant issues regarding conservation and economic development. The authors address a whole range of environmental issues under the broad themes of water and air quality, biological diversity and forest functions. The economic approaches covered include contingent valuation, hedonic property prices, travel cost methodologies and benefits transfer.
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Chapter 3: Valuing river water quality in China

Case Studies

Brett Day and Susana Mourato


Brett Day and Susana Mourato 1 INTRODUCTION The rivers in the region surrounding Beijing provide an example of a classic externality problem caused by ill-defined property rights. Rivers, as with many natural resources, perform a number of economic functions. For one, they act as a receptacle for industrial, agricultural and human waste products. The water pollution caused by these activities conflicts with a second stream of market and non-market benefits that are derived from the water quality in rivers being maintained. In particular, the rivers of the Beijing region provide direct use benefits through on-site recreation (for example, angling, swimming, boating, beach sports, sunbathing, sightseeing, walking and the amenity value of the riverine environment). Unpolluted rivers may also provide a variety of indirect use benefits that might include increased local employment from tourism. The possibility exists that the water quality of rivers also influences another set of benefits known as ‘non-use values’. These benefits are derived by individuals who value a high-quality environment, irrespective of their use of it. We might consider the benefits that individuals derive from protecting river quality for future generations (bequest values), from knowing that other people may enjoy cleaner rivers (altruistic values) or simply from the knowledge that rivers are being preserved for their own sake, providing a natural habitat for fish, plants and wildlife (existence values). In recent years, economic growth in and around Beijing has resulted in the increased pollution of surface waters. Of...

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