Water Entitlements and Trading Activity (WET)—Phase 2

Objectives: The goal of the WET Phase 2 is to further develop and strengthen the WET framework developed under WET Phase 1 and thus help position the Chinese Government to move towards a water management system that:

better defines rights to water and provide greater certainty and security to right holders
ensures rights to water are granted within the environmentally sustainable limits of the watercourse or aquifer
allow for the allocation and transfer of water rights in a way that is transparent, involves relevant government bodies, community groups and individuals, and encourages the efficient use of water
allow for a shift towards market mechanisms as the basis for allocating water.

WET Phase 2 aimed to contribute to achieving this goal by providing high-level policy and technical assistance to further develop and refine the WET framework, to test aspects of the framework at a provincial level and to build the capacity of staff within MWR and at a provincial level to implement a WET system.

Australian Contribution: A$2.08 million

Duration: 2007–08

Location: MWR, Inner Mongolia and Zhejiang

Project components:

Component 1: High level policy work: assisting MWR in developing more of the detailed policy required to support and implement the WET framework
Component 2: Technical assistance to develop the system tools necessary to support a WET system
Component 3: Capacity building, to develop within MWR and regional staff the skills and processes necessary to implement and manage a WET system.

All three components involved elements both at the central government level and work in the two pilot provinces.

Achievements:

The final project report includes:

Policy recommendations in respect of water resources allocation planning, water allocation in irrigation districts, urban water management, water accounting, water licensing, and hydrological modelling
a guideline for determining and defining environmental flow requirements for rivers
a pilot study, demonstrating the application of the water allocation and environmental flow guidelines to the JiaoRiver, in Zhejiangprovince
a pilot study, demonstrating the application of a "water rights" approach within Hangjin Irrigation District, in Inner Mongolia.

Water Entitlements and Trading Project—Phase 2 Final Report

A special issue of the International Journal of Water Resources Development (Volume 25 Number 2), ‘The Development of a Water Rights System in China’, was published based on the findings of WET Phase 2.

Managing contractor:

This was a joint initiative between AusAID and the Department of the Environment, Water, Heritage and the Arts (DEWHA) in Australia, and the Ministry of Water Resources (MWR) in China. Cardno Acil Pty Ltd was engaged by DEWHA to provide administrative and logistical support to the Activity.

Chinese counterparts: Department of Water Resources, Ministry of Water Resources.

AusAID contact person:
Martin Cosier
Senior Policy Officer
No 21, Dong Zhi Men Wai Dajie, Beijing, PRC
Tel: +86-10 5140 4395
Fax: +86-10 5140 4199
Email: Martin.Cosier@dfat.gov.au

Last reviewed: 29 November, 2011