IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v17y2020i1p338-d304893.html
   My bibliography  Save this article

Internalization of External Benefits Brought by Hydropower Development

Author

Listed:
  • Huiyan Wang

    (State Key Laboratory of Hydraulics and Mountain River Engineering, Sichuan University, Chengdu 610065, China
    Key Laboratory of Fluid and Power Machinery, Ministry of Education, Xihua University, Chengdu 610039, China)

  • Yong Li

    (State Key Laboratory of Hydraulics and Mountain River Engineering, Sichuan University, Chengdu 610065, China)

  • Jia Li

    (State Key Laboratory of Hydraulics and Mountain River Engineering, Sichuan University, Chengdu 610065, China)

  • Mengyuan Yu

    (College of Environment, Hehai University, Nanjing 210098, China)

Abstract

Hydropower development brings a very large number of external benefits which are enjoyed by the beneficiaries for free. These external benefits are defined and the beneficiaries are identified. Models to measure the external benefits are established to reflect their dynamic changes at different periods. To improve the benefit sharing mechanism, a model to internalize these external benefits is established to further compensate those adversely affected. The Z hydropower project in China is taken as the example to calculate its external benefits and their internalization. The external benefits enjoyed by beneficiaries in the surrounding and downstream areas gradually increase from 18 million US dollars in 2006 to 114 million US dollars in 2065, and their compensation standards increase from 4 million US dollars in 2006 to 97 million US dollars in 2065. The external benefits enjoyed by beneficiaries in the power receiving areas increase from 125 million US dollars in 2015 to the maximum of 133 million in 2026, and their compensation standards increase from 38 million US dollars in 2015 to the maximum of 133 million US dollars in 2033. Sharing of external benefits can improve the benefit-sharing mechanism, and properly redistribute the external benefits of hydropower development.

Suggested Citation

  • Huiyan Wang & Yong Li & Jia Li & Mengyuan Yu, 2020. "Internalization of External Benefits Brought by Hydropower Development," IJERPH, MDPI, vol. 17(1), pages 1-15, January.
    • Handle: RePEc:gam:jijerp:v:17:y:2020:i:1:p:338-:d:304893
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/17/1/338/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/17/1/338/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Soderholm, Patrik & Sundqvist, Thomas, 2003. "Pricing environmental externalities in the power sector: ethical limits and implications for social choice," Ecological Economics, Elsevier, vol. 46(3), pages 333-350, October.
    2. Klimpt, Jean-Etienne & Rivero, Cristina & Puranen, Hannu & Koch, Frans, 2002. "Recommendations for sustainable hydroelectric development," Energy Policy, Elsevier, vol. 30(14), pages 1305-1312, November.
    3. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    4. Zheng, Tengfei & Qiang, Maoshan & Chen, Wenchao & Xia, Bingqing & Wang, Jianing, 2016. "An externality evaluation model for hydropower projects: A case study of the Three Gorges Project," Energy, Elsevier, vol. 108(C), pages 74-85.
    5. Timo Räsänen & Jorma Koponen & Hannu Lauri & Matti Kummu, 2012. "Downstream Hydrological Impacts of Hydropower Development in the Upper Mekong Basin," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(12), pages 3495-3513, September.
    6. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
    7. Mostafa Aleseyed & Terance Rephann & Andrew Isserman, 1998. "The Local Effects Of Large Dam Reservoirs: U.S. Experience, 1975–1995," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 10(2), pages 91-108, September.
    8. Dipak Mazumdar, 2003. "Trends in employment and the employment elasticity in manufacturing, 1971--92: an international comparison," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 27(4), pages 563-582, July.
    9. Kim, Youngil & Roulet, Nigel T. & Li, Changsheng & Frolking, Steve & Strachan, Ian B. & Peng, Changhui & Teodoru, Cristian R. & Prairie, Yves T. & Tremblay, Alain, 2016. "Simulating carbon dioxide exchange in boreal ecosystems flooded by reservoirs," Ecological Modelling, Elsevier, vol. 327(C), pages 1-17.
    10. Bruce C. Greenwald & Joseph E. Stiglitz, 1986. "Externalities in Economies with Imperfect Information and Incomplete Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 229-264.
    11. Sandmo, Agnar, 1978. "Direct versus indirect pigovian taxation," European Economic Review, Elsevier, vol. 7(4), pages 337-349, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marco FRIGERIO & Daniela VANDONE, 2018. "Virtuous or Vicious? Development Banks in Europe," Departmental Working Papers 2018-07, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    2. Petrick, Martin, 2004. "Governing Structural Change And Externalities In Agriculture: Toward A Normative Institutional Economics Of Rural Development," IAMO Discussion Papers 14878, Institute of Agricultural Development in Transition Economies (IAMO).
    3. Weerachart T. Kilenthong & Robert M. Townsend, 2021. "A Market-Based Solution for Fire Sales and Other Pecuniary Externalities," Journal of Political Economy, University of Chicago Press, vol. 129(4), pages 981-1010.
    4. Anton Korinek, 2017. "Currency wars or efficient spillovers?," BIS Working Papers 615, Bank for International Settlements.
    5. Anton Korinek, 2016. "Currency Wars or Efficient Spillovers? A General Theory of International Policy Cooperation," NBER Working Papers 23004, National Bureau of Economic Research, Inc.
    6. Salimata Traore, 2020. "Farmer organizations and maize productivity in rural Burkina Faso: The effects of the diversion strategy on cotton input loans," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 1150-1166, August.
    7. Jankovic Ivan & Block Walter, 2019. "Private Property Rights, Government Interventionism and Welfare Economics," Review of Economic Perspectives, Sciendo, vol. 19(4), pages 365-397, December.
    8. David Meintrup & Chang Woon Nam, 2009. "Shadow Market Area for Air Pollutants," Environment and Planning B, , vol. 36(4), pages 664-681, August.
    9. Marcus Miller & Lei Zhang, 2015. "The Hedgehog and the Fox: From DSGE to Macro-Pru," Manchester School, University of Manchester, vol. 83, pages 31-55, September.
    10. Mariana Mazzucato & Rainer Kattel & Josh Ryan-Collins, 2020. "Challenge-Driven Innovation Policy: Towards a New Policy Toolkit," Journal of Industry, Competition and Trade, Springer, vol. 20(2), pages 421-437, June.
    11. Weerachart T. Kilenthong & Robert M. Townsend, 2021. "A Market-Based Solution for Fire Sales and Other Pecuniary Externalities," Journal of Political Economy, University of Chicago Press, vol. 129(4), pages 981-1010.
    12. Foldvary, Fred E. & Hammer, Eric J., 2016. "How advances in technology keep reducing interventionist policy rationales," Technology in Society, Elsevier, vol. 47(C), pages 16-24.
    13. Geanakoplos, John & Polemarchakis, H.M., 2008. "Pareto improving taxes," Journal of Mathematical Economics, Elsevier, vol. 44(7-8), pages 682-696, July.
    14. Billy A. Ferguson & Paul Milgrom, 2024. "Market Design for Surface Water," NBER Chapters, in: New Directions in Market Design, National Bureau of Economic Research, Inc.
    15. Chechelski, Piotr & Grochowska, Renata & Łopaciuk, Wiesław & Ślązak, Emil & Wasilewski, Adam & Wigier, Marek, 2012. "Development est public policy support in the food economy – the example of Poland," Multiannual Program Reports 164845, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    16. Frame, Bob & Cavanagh, Jo, 2009. "Experiences of sustainability assessment: An awkward adolescence," Accounting forum, Elsevier, vol. 33(3), pages 195-208.
    17. Wojciech Giza, 2019. "The institutional dimension of market failure," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 18(1), pages 5-15, March.
    18. Kim, Sang-Hoon, 2007. "Evaluation of negative environmental impacts of electricity generation: Neoclassical and institutional approaches," Energy Policy, Elsevier, vol. 35(1), pages 413-423, January.
    19. Steven G. Medema, 2020. "The Coase Theorem at Sixty," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 1045-1128, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:17:y:2020:i:1:p:338-:d:304893. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.