China, People's Republic of: Eco-Compensation Mechanism and Policy Framework Study for the Xiangjiang River Watershed of the Chang-Zhu-Tan City Cluster

Sovereign Project | 47044-001 Status: Closed

Summary

The proposed policy and advisory technical assistance (TA) was requested from the Asian Development Bank (ADB) during the 2012 country programming review mission by the Governemnt of the People's Republic of China (PRC) through the Hunan Provincial Chang- Zhu- Tan (CZT) Resource-Conserving and Environment-Friendly Society Office Office (RES) of the Hunan provincial government. The environmental status and threats to water quality and abundance in the Xiangjiang river watershed will be analyzed to help develop a specific eco-compensation mechanism and policy. Economic analyses will help prioritize recommendations concerning environmentally sustainable natural resource and land use necessary for the implementation of an eco-compensation scheme. A TA reconnaissance mission was conducted on 15-18 March 2013.

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Project Name Eco-Compensation Mechanism and Policy Framework Study for the Xiangjiang River Watershed of the Chang-Zhu-Tan City Cluster
Project Number 47044-001
Country China, People's Republic of
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8421-PRC: Eco-Compensation Mechanism and Policy Framework Study for the Xiangjiang River Watershed of the Chang-Zhu-Tan City Cluster
Technical Assistance Special Fund US$ 400,000.00
Water Financing Partnership Facility - Multi Donor US$ 225,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Partnerships
Sector / Subsector

Agriculture, natural resources and rural development - Irrigation - Land-based natural resources management - Water-based natural resources management

Gender Equity and Mainstreaming
Description

The proposed policy and advisory technical assistance (TA) was requested from the Asian Development Bank (ADB) during the 2012 country programming review mission by the Governemnt of the People's Republic of China (PRC) through the Hunan Provincial Chang- Zhu- Tan (CZT) Resource-Conserving and Environment-Friendly Society Office Office (RES) of the Hunan provincial government. The environmental status and threats to water quality and abundance in the Xiangjiang river watershed will be analyzed to help develop a specific eco-compensation mechanism and policy. Economic analyses will help prioritize recommendations concerning environmentally sustainable natural resource and land use necessary for the implementation of an eco-compensation scheme. A TA reconnaissance mission was conducted on 15-18 March 2013.

The TA supports the Twelfth Five-Year Plan (2011- 2015) of the PRC which emphasizes the importance of environmentally sustainable growth, and the Hunan provincial development and national strategies up to 2050 that included targets for low carbon sustainable growth and protected areas. The TA also supports the United Nations Framework Convention on Climate Change, to which the PRC is a signatory. The TA is aligned with the Asian Development Bank''s (ADB) country partnership strategy (2011- 2015) for the PRC, supporting the government sector objective for natural resources and agriculture. The TA will address important objectives of the ADB's Water Operational Plan (WOP) 2011- 2020, including policy reform (WOP, para. 3.12) and watershed development (WOP, para. 3.25). The Water Financing Partnership Facility (WFPF) funds will directly contribute to three target outcomes of the Water Financing Program: 500 million people provided access to safe water supply and improved sanitation, integrated water resources management introduced in 30 river basins, and improved water governance though national water reforms and capacity development. ADB Loan 2962-PRC, approved on 7 December 2012, focuses on an inland waterway transport project on this river; and this activity will complement the loan by helping maintain local hydrological cycles. The TA was included in ADB's country operations business plan (2013- 2015) for nonlending products and services for the PRC in 2013.

The impact of the TA will be the improved environmental quality in the Xiangjiang river watershed of CZT city cluster. The outcome will be a strengthened eco-compensation mechanism and policy framework to improve water quality and abundance in the Xiangjiang river watershed. The TA will have three outputs: (i) completed analyses of environmental threats to water quality and abundance, including their interrelationship with natural resource and land use in the Xiangjiang river watershed, (ii) recommendations for the design and implementation of an eco-compensation mechanism and policy framework, and (iii) strengthened government capacity in the environmentally sustainable use of natural resources and land to improve water quality and abundance.

The TA is estimated to cost $725,000, of which (i) $400,000 will be financed on a grant basis by ADB's Technical Assistance Special Fund (TASF-other sources); and (ii) $225,000 will be financed on a grant basis by the Multi-Donor Trust Fund under the WFPF administered by ADB. The government will provide the counterpart cost and services.

Project Rationale and Linkage to Country/Regional Strategy The Hunan provincial government (HPG) seeks to address constraints to environmentally sustainable growth through a mix of well developed strategies and policies, including pollution controls, appropriate land use, natural resource conservation, and financial incentives. A well-developed eco-compensation mechanism can help in supporting the HPG's efforts through the provision of financial incentives. This policy and advisory technical assistance (TA) will address gaps in the regulatory and policy framework for an eco-compensation mechansim for the Xiangjiang river watershed in Chang-Zhu-Tan (CZT) through analyses of ecological characteristics, threats, and/or mitigation; cost- benefit analysis, and other economic analyses; and specific eco-compensation requirements. The TA will build on recommendations and lessons from previous international experiences and ADB studies, such as using eco-compensation to support integrated river basin management--a subset of integrated water resources management. The outcomes will be used primarily as decision-making support for the HPG in the construction of a resource-saving and environment-friendly society in the CZT experimental zone.
Impact Improved environmental quality in the Xiangjiang River watershed of Hunan Chang-Zhu-Tan city cluster

Project Outcome

Description of Outcome A strengthened eco-compensation mechanism and policy framework to improve water quality and abundance in the Xiangjiang River watershed
Progress Toward Outcome

The TA implementation has experienced about 2 months of delay. The TA consultant, AECOM Asia Company Ltd (AECOM), was mobilized on 31 March 2014 with the fielding of the team leader and deputy team leader. Other experts commenced in the following week.

ADB fielded an inception review mission during 8 11 April 2014; and clarified that the study will cover the Xiang River watershed within Hunan Province in the analysis and best practices identification, but will have specific recommendations for eco-compensation within the more limited area of the Changsha-Zhuzhou-Xiangtan city cluster. The draft inception report was submitted to ADB on 1 May 2014, and a revised inception report was provided on 15 May 2014. A translated inception report was provided to RES on 16 May 2014. Comments on the inception report from both ADB and RES were incorporated, and the final inception report was submitted on 16 June 2014.

The draft interim report was submitted to ADB and RES on 28 September 2014, ADB provided comments on 6 October 2014, and interim review mission and interim workshop were fielded during 14-16 October 2014.

The draft final report was submitted to ADB on 19 June 2015 and ADB provided comments on 23 July 2015. The report was translated and submitted to RES on 1 July 2015. RES provided their comments on the draft final report to the TA consultant on 15 August 2015. The final review mission was fielded during 10-11 August 2015. The final workshop on eco-compensation was conducted on 10 August 2015 and attended by a total 47 officials from RES and its municipal offices in Changsha, Zhuzhou, and Xiangtan municipalities; and county offices; provincial departments of agriculture, development and planning, environmental protection, finance, forest, housing and construction, land and resources administration, and water resources; World Wide Fund for Nature Changsha Office. During the workshop, RES confirmed their request for the inclusion of some specific investment interventions, in addition to policy recommendations, in the action plans to be produced under the TA. This was in line with the feedback from workshop participants requesting clearer recommendations for the policy framework. This concurs with the objective and outputs of the TA.

The consultant teams of this TA and the proposed Hunan Dongjiang Lake Integrated Environmental Protection and Management Project have established working relationship to explore opportunities for cooperation and linkage between the TA and the lending project. The mission urged both consultant teams to share information and regularly exchange ideas relating to eco-compensation interventions.

Implementation Progress
Description of Project Outputs

1. Completed analyses of environmental threats to water quality and abundance, including their interrelationship with natural resource and land use in the Xiangjiang River watershed

2. Recommendations for the design and implementation of an eco-compensation mechanism and policy framework

3. Strengthened government capacity in the environmentally sustainable use of natural resources and land to improve water quality and abundance

Status of Implementation Progress (Outputs, Activities, and Issues)

The inception workshop was held in April 2014, the midterm review workshop in October 2014, and the final review workshop in August 2015.

The project was modified to add three national staff based on additional identified needs per the request of the local government. All consultants have been hired. Per the request of the consulting firm (AECOM), modifications had been processed to replace the national eco-compensation consultant who relocated to US; and extend the end date to 30 September 2015 to complete the remaining TA activities, including acquiring additional required data; and submitting to ADB and RES the consultant's final report and knowledge product by August and September 2015, respectively, for final review and approval.

AECOM so far has completed the following major tasks: (i) meetings and discussions with RES and other relevant departments on TA approach and objectives; (ii) data collection and initial analysis of the data; (iii) analysis of the national eco-compensation and relevant international experience in related policy instruments and preparation of lessons learned; (iv) community survey of over 400 residents during July-August 2014; (v) conduct of midterm workshop in October 2014; (vi) initial recommendations for the eco-compensation mechanism and policy framework, and identification of priority environmental issues and preferences for local management activity based on survey results and team study; (vii) conduct of provincial study tour for RES and other government staff in Fujian Province in December 2014 to learn from experience in eco-compensation; (viii) conduct of capacity building workshops for RES and government staff on eco-compensation, environmental economics, and water resource management in February 2015; (ix) conduct of workshop with RES on eco-compensation mechanism, policy framework, and recommended activities in June 2014; and (x) development of an action plan and analysis of cost effectiveness of actions, preparation of the draft final report, and conduct of the final workshop in August 2015.

Geographical Location

Summary of Environmental and Social Aspects

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Held meetings with stakeholders during project design and conducted site visits.
During Project Implementation Inception workshop was held in April 2014. Awareness building was part of the workshop held during the midterm review fielded in October 2014. A survey was conducted to provide preliminary inputs on stakeholder views, attitudes, and concerns.

Business Opportunities

Consulting Services The TA will be implemented over 16 months and carried out by a team of consultants to be engaged through a firm, which will provide 10 person-months of international and 42 person-months of national consulting services. TA implementation will require (i) four international specialists (team leader and integrated watershed management specialist, environmental economics and eco-compensation specialist, hydrology specialist, and water pollution specialist), and (ii) eight national specialists (deputy team leader and environmental policy and/or institutional specialist, integrated watershed management specialist, eco-compensation specialist, environmental economics specialist, hydrology specialist, climate change specialist, water pollution specialist, and geographic information system specialist). ADB will engage the consultants in accordance with its Guidelines on the Use of Consultants (2013, as amended from time to time). The consulting firm will be selected using simplified technical proposals and quality- and cost-based selection, with a quality- cost weighting ratio of 90:10 given the high technical complexity.
Procurement Disbursments under the TA will be made in accordance with ADB's Technical Assistance Disbursment Handbook (2010, as amended from time to time).

Responsible Staff

Responsible ADB Officer Suzanne Robertson
Responsible ADB Department East Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, EARD
Executing Agencies
Hunan Provincial Government
418 North Shaoshan Road
Shangsha City, Hunan Province
People's Republic of China

Timetable

Concept Clearance 29 Apr 2013
Fact Finding 15 Mar 2013 to 18 Mar 2013
MRM -
Approval 05 Aug 2013
Last Review Mission -
Last PDS Update 16 Sep 2015

TA 8421-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Aug 2013 02 Sep 2013 02 Sep 2013 31 Mar 2015 31 Mar 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
400,000.00 225,000.00 0.00 0.00 0.00 0.00 625,000.00 05 Aug 2013 568,958.12

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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