Drought in Yunnan: Natural Law or Man-made Destruction?

Institutional analysis of water resources

(1) The reason of drought lies in wasting water.

Among the natural disasters in China, the most serious one is periodic drought or flood. In recent years, the Yangtze River 1998 summer flood; 1In the summer of 999, there was another flood in the Yangtze River basin. In the spring of 2000, a sandstorm appeared in the north, followed by a rare drought in the area north of the Yangtze River in China. The major media and websites in China reported the drought in the north of the Yangtze River: people and animals in various places had difficulty drinking water, and crops died, followed by poor harvests and decreased farmers' income.

The drought in China is not due to the lack of precipitation in China. There is not much precipitation in northern China, but it does not necessarily lead to drought. Due to the lack of water in Israel, the annual precipitation is less than 200 mm, but agriculture brings more than one billion dollars in net profit to its national economy every year. The annual precipitation in most parts of North China in China is over 400mm, which is much better than that in Israel, but droughts often occur.

The key reason of drought in China lies in wasting water. China's agricultural water consumption accounts for more than 80% of the country's total water consumption, and the waste of water resources is as serious as drought. In the Yellow River Irrigation District in northern Ningxia, farmers planted rice and submerged it. Production of 1 kg rice requires 1 ton water.

There are many water-saving technologies in China now. If we use water scientifically and use less water, we can also get a bumper harvest of grain. For example, the Weibei Plateau in Shanxi is very dry. When rain falls to the ground, it is absorbed by the soil layer. In spring, the water in the upper layer evaporates, and the soil below is still wet. Because the roots of wheat are short, they can't absorb the water below. People came up with a trick of "promoting water with fertilizer", applying phosphate fertilizer to make the root of 1 meter grow to more than 2 meters, absorb water and get a bumper harvest. More than 20 counties in Weibei were originally short of grain, and now they have become commodity grain bases in Shanxi. However, many water-saving technologies are not used, so it is difficult to popularize water-saving irrigation technology. For example, when planting winter wheat in North China, it is generally mistaken that the more irrigation, the higher the yield, and it often takes four or five or even seven or eight times to harvest. But expert research shows that pouring 1 to three times is enough. This achievement won the second prize of National Science and Technology Progress Award 1990, which is a key promotion project. Relevant institutions have been promoted in Henan, Hebei and Shandong for 3 years, but the results are not great.

The drought in the north has caused great losses. Under the severe drought, agriculture is bound to fail. Sandstorms in the north and the interruption of the Yellow River are also serious problems. The sources of sandstorms are all in arid areas. The floating soil in more than a dozen local counties is one foot thick, and tiny dust is everywhere. It ravaged Beijing in Yanshan Taihang Mountain and even drifted to Shanghai and Nanjing. The lower Yellow River is cut off every year, and the cut-off time is getting longer and longer. This has greatly hindered the sustainable development of the Yellow River Basin.

(B) Analysis of institutional scholars

The problem is serious and the loss is huge. But how to solve the problem? In this regard, at present, it is impossible to significantly increase precipitation by artificially changing the weather. From the perspective of institutional analysis, the key is to carry out institutional changes to promote water conservation and reduce water waste. Experts believe that using the economic lever of water fee will make people have the economic enthusiasm to save water. In this regard, everyone has their own views. Many people think that the price increase of water is conducive to reducing waste and improving everyone's enthusiasm for saving water; However, some people think that the demand for water resources is inelastic, even if the price increase is useless; Some people even think that the price increase of water resources is unfair and oppose it. How do institutional analysts view this problem?

The first step of institutional analysis is to analyze the properties of water. Institutional analysts analyze it this way: unlike salt, everyone's demand for salt is basically fixed, and even if the price changes, its consumption will not change greatly; Unlike some luxury goods, such as pearl necklaces, the higher the price, the greater the consumption, and the lower the price, the lower the consumption; It is not like low-quality consumer goods, such as potatoes or inferior rice. The higher the income, the higher the price tolerance of consumers and the lower their consumption. Generally speaking, water resources have certain rigidity. In order to survive, everyone needs to use at least a certain amount of water. Everyone's ability to use water is limited, and it is impossible to waste water indefinitely. There is always a limit to everything. From the minimum amount of water to the maximum amount of water, the specific figures vary from person to person and the climatic conditions are different, but it is certain that this space is still very large. In this range, given different prices, people generally choose to save water, and the price is low, and people tend to choose to waste water.

The second step is to analyze the nature of the existing problems. If water resources are very abundant and can be "inexhaustible", then water resources are not scarce and there is no pricing problem. On the contrary, if water resources are extremely scarce and water supply cannot maintain people's basic survival, then no matter how water resources are priced, it is impossible to solve the water problem. The only choice is to move and live on weeds. For the problem of water shortage in northern China, Beijing and other areas are facing serious water shortage at present, and because the water price is too cheap, many people have no enthusiasm for saving water in the optional water-saving space. In this case, raising the water price is conducive to saving water and solving the serious shortage of water resources at present.

The third step is to analyze the direct efficiency effect that may be caused by specific policy choices. The practice in some cities shows that raising water prices really encourages water conservation. Of course, for different people, the effect is different: for those who have been saving water, the water-saving space is limited and there is no effect, but they can be encouraged to buy water-saving appliances; For people who consume a lot of water, such as taking a bath every day, they would rather spend more money than taking a bath, which has little effect on water saving, but it can make them pay more, help save water and encourage them to adopt water-saving appliances; For consumers who usually waste water and are price-sensitive, raising water prices can effectively encourage them to save water and adopt water-saving appliances. Generally speaking, in a certain space, raising water prices is conducive to encouraging people to save water; Without encouraging water conservation, we can also raise funds to improve water supply facilities, reduce leakage and waste in water supply, improve the environment and protect water resources.

The fourth step is to analyze the distribution effect of specific policy choices. In the view of institutional analysts, any public policy has a distribution effect, which may have the effect of robbing the rich to help the poor, robbing the poor to help the rich, or it may be fair. On the issue of water price policy, there is also a distribution effect. Because the water price is the same for everyone, and the prices of the poor and the rich are the same, raising the water price has different effects on the welfare of the poor and the rich: for the poor, the space for saving water is limited, and the extra burden brought by the price increase cannot be digested by saving water, and the burden has increased; For the rich, there is more room for water saving, but the rich are not sensitive to the price and may still waste water. Although it also increases the burden, it is less than their income. Therefore, it is probably unfair to increase the distribution effect of water price: the poor increase their living burden and their welfare becomes worse; The rich have also added a certain burden, but the burden is very small. In this regard, the government can take some targeted policy measures, such as compound pricing system, and implement low-price policy within a certain limited range; If it exceeds a certain limit, a progressive price policy will be implemented. Although it is impossible to fully satisfy all people, it does help to reduce the unfair distribution effect brought about by rising prices.

So far, the public's discussion on various aspects of water resources policies generally involves only one aspect of the above problems. The discussion of institutional analysts does not stop there. The fifth step of institutional analysis will further raise a question: what kind of water price is reasonable?

In the eyes of many people, this problem is a technical problem, but institutional analysts understand it as an institutional problem: when the system is inappropriate, people tend to pay inappropriate water prices; Under the right institutional platform, people tend to have the right water price. Therefore, this question can be transformed into: what kind of system is needed to formulate a reasonable water price? That is to say: under what pricing system, the formulated water price is conducive to saving water, protecting and developing water sources, and reducing the adverse distribution effect?

This is a complex problem, which requires institutional analysts to further analyze the nature of water resources as a commodity for private consumption and public supply, the distribution of pricing power among water resources consumers, producers and organizational suppliers, and the possible roles of the government, intermediary organizations and related parties. Combined with theoretical analysis, we can also conduct empirical analysis, study the successful experiences and failure cases of countries and regions that lack water in the world, and explore the appropriate institutional basis to solve the water shortage problem.

This article will not discuss these complicated problems. Only the general idea of institutional analysts can be given here: the rationalization of water price is not only the rationalization of price quantity, but also the rationalization of water price determination process. It is very important to straighten out the water price, which is a problem of technical calculation and a process of decision through what mechanism. Just as it is impossible for the government to set a reasonable price for all commodities, it is impossible for the government to set a reasonable water price alone. For general market commodities, the rationality of market price lies in that no one can determine the price, but in the process of full competition, rather than monopoly pricing. As a commodity, water is a kind of private consumer goods with monopoly supply, which is different from pure market goods, that is, private goods. Its price cannot be determined according to market competition, but to a certain extent, it will be much more reasonable for all stakeholders to fully participate in water pricing than for individuals and individual authorities, especially water resources suppliers and price management departments to unilaterally determine the price.

From the perspective of institutional analysis, reasonable water price is an important incentive mechanism. Only under the condition of proper water price, people will have the concept of cost constraint on water and make appropriate investment in water-saving measures.

(C) Government management system and social capital

Water-saving is good, the price system of water-saving can be designed in a compound way, and many water-saving technologies have been invented, but why do people still have no enthusiasm? In addition to the problem that water price affects farmers' enthusiasm, experts also put forward problems that need to be further solved: the problem of government enthusiasm and the problem of government system. Experts suggest that in order to solve the problem of water resources, the government of China should carry out institutional reform and set up special institutions to coordinate and solve the water resources problem. From the perspective of institutional analysis, the above analysis of experts is correct on some issues. For example, the most direct and effective measure or method to solve the problem of cutoff of the Yellow River is that the state should establish an authoritative organization as soon as possible to implement strict and effective unified management of the Yellow River. Formulate the Yellow River Law, implement unified management and dispatching according to law, formulate unified development, utilization and protection plans for water resources in the Yellow River basin, and implement unified distribution and dispatching of water, with the goal of total amount control and water quality control. Establish water-saving industry and raise water price reasonably. Take the road of comprehensive water saving and moderate development to realize the sustainable development of regional economy. The implementation of water price floating, volume charging and progressive price increase of excess water. According to Chinese periodicals, the Yellow River water conservancy project should be carefully constructed to control the water pollution of the Yellow River. In the long run, it is necessary to establish source protection areas, protect vegetation and conserve water sources; Special laws and regulations on the Yellow River should be promulgated as soon as possible; We should do a good job in soil and water conservation in the middle and upper reaches; It is necessary to pay close attention to the study and implementation of the east, middle and west lines of the South-to-North Water Transfer Project, implement water replenishment in a planned way, and speed up the preliminary study of the west line project.

From the perspective of system analysis, although the above-mentioned policy suggestions of experts are reasonable, there are also some problems in management suggestions. Decentralized management can easily lead to local strategic behavior, and in fact, there have been tragedies in which provinces compete for water from the Yellow River. Protecting the ecology of the upper reaches of the whole basin, protecting forests and planting trees, controlling pollution, transferring water from South to North, controlling water conservancy projects, establishing powerful control and management institutions, establishing water-saving agriculture and establishing an elastic water price system are all important measures to solve the problem of the Yellow River cut-off. After 1998 was put forward, these policy schemes did play a role in controlling river closure. But as mentioned above, the interruption of the Yellow River is only one aspect of the Yellow River water resources problem, not the fundamental problem. In the view of institutional analysts, the key problem lies in the improper allocation of water resources in the Yellow River. How to rationally allocate water resources of the Yellow River? Or, how can we make the most effective use of the scarce water resources in the Yellow River Basin? In this regard, not only theoretical analysis is needed, but also many empirical studies and practical attempts are needed.

Among all the policy suggestions to solve the problem of the Yellow River cut off, the most problematic one is probably that it relies too much on centralization. Centralization can indeed alleviate the problem of the Yellow River cut off, as long as the central government has the power advantage over the upper reaches of the Yellow River. But the centralized control of water distribution also has natural limitations:

Limited information and high implementation cost. A typical example is that the allocation scheme of 1987 has not been faithfully implemented. Due to information and technical reasons, the centralized distribution program can't work. The marginal productivity of provinces cannot be equal.

Centralized distribution is rigid, because of this rigidity, the distribution of water resources can not reach the Pareto optimal level (in fact, it is possible to reach a higher efficiency level). It is assumed that water is distributed by the central government to the provinces, and the provinces distribute it according to the existing water use capacity and water use efficiency. Assuming that the initial distribution is effective, the marginal productivity of water consumption in each province is the same. At this time, the distribution of water is effective. However, because the productivity of provinces may change, even if the first allocation is effective, because the allocation of water rights is rigid, it is impossible for provinces to effectively reconfigure.

In order to realize the optimal allocation of scarce water resources in the Yellow River, it is necessary to establish an effective property rights system, determine the property rights allocation of the Yellow River water and groundwater in the basin, and then establish a water rights trading market on this basis. For example, if an effective property rights market can be established between provinces, then the provinces with higher productivity can spend money to buy water from the provinces with lower productivity, and the provinces with lower productivity can sell water to the provinces with higher productivity, then water resources can achieve higher output value. Water can effectively determine the price.

The reasonable price of water resources is not artificially determined, but should be determined by the market. If the allocation of property rights is improper and it is impossible to improve the allocation of property rights through dynamic transactions, then even if the Yellow River continues to flow, the utilization of water resources in the Yellow River may be inefficient. Therefore, it is an important way to effectively utilize the scarce water resources of the Yellow River to establish an effective water property rights distribution system, conduct water rights transactions on the basis of static distribution, and further share the costs of water replenishment projects such as South-to-North Water Transfer Project and ecological environment protection on the basis of effective property rights system.

Government management does not mean that the more integrated and centralized the management system, the better. For water resources, large-scale government needs to allocate water resources on a large scale, and different local governments need to coordinate with each other, but it is also very important for villages, towns and irrigation areas where water users are located. We should not neglect the initiative of grass-roots jurisdiction just because we want to emphasize centralized management. Many problems should be solved at the local level, but they should also be solved at the local level, because both water conservation and water waste occur at the local level. What's more, the scope of the overall situation is also large and small. Even the solution of inter-provincial problems does not necessarily require the direct order of the central government, because effective cooperation between provinces is also an important way. It may be beneficial to turn to a higher authority; But the higher the authority, the more limited the information, the lower the priority, and the less likely it is to be solved reasonably. Therefore, we should first make full use of the local potential, instead of relying on the central government for everything. Otherwise, the central government will be overwhelmed because it is beyond its capacity.

Pay attention to the construction of water-saving social capital, at least not abuse it. The reason why people save water has a considerable relationship with the price of water. The higher the water price, the less they use water, and the lower the water price, the more they use water. However, water is a special commodity. In many ways, people's consumption is inflexible, and water prices cannot make people at all income levels save water. In this case, the system design of water price is important, but it is not omnipotent. For middle-and high-income consumers who are inflexible in water use and insensitive to water price, saving water mainly depends on their awareness and habits of saving water. On the issue of saving water resources, people's awareness and habits of saving water are important social capital for saving water. Without this social capital, the operating space of the water price system is relatively small. In this case, in order to maximize the water-saving space, we should not only have a suitable water price design, but also strive to cultivate water-saving social capital. Of course, it is very difficult to cultivate water-saving social capital. Under the specific incentive background, such capital is very easy to be destroyed, and once destroyed, it is more difficult to cultivate. The solution of water resources problems in China really depends on a reasonable water price system and the cultivation of water-saving awareness, a social capital. On this issue, we must have a clear understanding that water-saving consciousness cannot be cultivated by blaming. Therefore, it is useless to blame farmers, cadres, scientific and technological personnel, central and local governments or the whole society for not saving water. On the contrary, it may destroy the already scarce social capital. Once a society's water-saving consciousness is destroyed, the cost of implementing water-saving measures will rise sharply.

The rationalization of water price is not only the rationalization of price, but also the rationalization of water price determination process. The rationalization of water price is a problem of technical calculation and a process of decision-making through what mechanism. The rationality of market price lies in that the market price is determined in the process that no one can determine the price (competitive pricing rather than monopoly pricing), but in the process of full competition. As a commodity, water is different from private commodities to some extent and cannot be determined according to market competition. However, to a certain extent, all relevant stakeholders can fully participate in the formulation of water price, and the result will be much more reasonable than that of individuals deciding the price. It is a long-term solution to solve the problem of rational utilization of water resources and prevent or mitigate drought disasters in China to design appropriate collective selection rules for the process of determining water resources prices and lay a good constitutional system foundation for appropriate collective selection.