Risks of Intensification of Hydropower Development in Southwestern China

© Civic Exchange, March 2011

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reaching across sectors and borders.

The views expressed in this report are those of the author, and do not necessarily represent the opinions of

Civic Exchange.

Cover design: Thanh Nguyen

Layout: Yan‐yan YIP

ACKNOWLEDGEMENTS

Throughout the whole research process and report drafting, many experts have provided valuable opinions. I am grateful to all the inputs, and solute them all for theirlong‐term effort and persistence to protect China’s waterresources. They are inspirational.The research and report writing collided with theChristmas and Chinese New Year’s holidays, and boughtinconvenience to my family. I am grateful to all familymembers for their understanding and support –Especially Simon, Ambery, Athan, my our family and Perth,as well as my parents.I am particularly thankful to Christine Loh for the amountof time and energy she put in to sharpen this report.Adrian Lu translated the original into English, and Yan‐yanYip and Michelle Wong made it publishable. I am veryfortunate to have their assistance and expertise.Su LiuMarch 2011  

PART 1RELEVANCE TO DRAFTING OF THE 12THFIVE-YEAR PLAN

Hydropower is portrayed by its supportersas a clean, renewable and sustainable source of energy.Seen by many as an important strategic option for China’sapproach towards its climate change response,adjustment of its energy structure, and fulfillment of itsinternational carbon emission reduction obligations,hydropower has been given a prominent position inChina’s mid‐ to long‐term energy planning. In the contextof China’s economic and societal development planning,hydropower will play a key role in China’s 12th Five‐YearPlan and beyond.According to Zhang Guobao, who recently stepped downas the vice director of China’s National Development andReform Commission and China’s National EnergyAdministration, to achieve its goal of producing 15% of itsprimary energy from non‐fossil sources by 2020, China isplanning to generate 9% of its primary energy fromhydropower,1 with 6.5% of the 9% to be realized by theend of 2015.2 This percentage (9%) far exceeds theprojected 4% share coming from nuclear energy by 2020,and requires China to develop 380 gigawatts of power(GW) out of the nation’s total hydropower potential of400GW.The large scale development of hydropower projects isseen as unavoidable. Of the country’s 13 largehydropower development zones, eight are concentratedin Southwest China (Jinsha River, Yalong River, Dadu River,Wu River, Nanpan and Hongshui Rivers, Lancang River,Xiangxi and Nu River).3 According to Zhang Bo‐ting, vicesecretary general of the China Society for HydropowerEngineering, during the 12th Five‐Year Plan period,construction of the great majority of China’s hydropowerprojects will begin on these southwestern river systems.4Additionally, the “Chinese Communist Party’s SuggestionsRegarding the National Economy and SocietalDevelopment in the 12th Five‐Year Plan”, clearlyemphasizes “actively developing hydropower, conditionedon ecological protection.” Yet, the river systems in the Southwest are China’s mostabundant troves of biodiversity, as well as home toimportant concentrations of mineral deposits and culturaldiversity. This area is also one of the earth’s mostgeologically active regions, currently still undergoingdramatic geological changes.6 In this area of fragileecosystems and frequent geological activity, the risks andrewards of development are mutually limiting.The building of any large engineering project in this areawill result in unavoidable effects on the local ecology,environment, geology, resources, livelihoods, culture andcommunities. Moreover, the intense development ofhydropower will inevitably also result in a maelstrom ofconflict between various stakeholders. China’s currenthydropower development method is a continuation ofthe Soviet‐style approach that focuses almost entirely onpower generation and generally ignores thefundamentally important ecological services provided byriver systems.In the rush to develop, China cannot afford the time,space and social and environmental capacities required tolearn by trial and error. Paradoxically it has beensacrificing irreplaceable ecosystems to “learn” how todevelop more sustainably. Ecosystems and the servicesthey provide take a very long time to form, but can bedestroyed by just a few short‐sighted policies or lack ofenforcement of those policies that exist.Which course should be followed then? In our view,planning must adopt the “Precautionary Principle”8,which requires deep and comprehensive examination andevaluation.If planned and built properly and in a measured manner,hydropower can be an appropriate sustainable energysource. However, hasty decision‐making, disorderlydevelopment and over‐development will certainly resultin the destruction of the nation’s water resources, wipingout peoples’ livelihoods, undermining social stability,wasting the resources that China needs for its futurecompetitiveness, upsetting China’s relations with itsSoutheast Asian neighbours, and perhaps eventhreatening national security.  

PART 2PROBLEMS ASSOCIATED WITHHYDROPOWER INTENSIFICATION 

2.1 Dealing with climate change

Responding to climate change includes decreasing theimpact that human activities have on the earth’s ecologyand environment, in turn reducing the threat to humansurvival caused by environmental damage. The end goalis to protect the earth’s ecology, thus allowing humans tomaintain a sustainable relationship with the earth. Rightly,the Chinese Government has promised to reduce carbonemissions to further this important goal.Various research studies have shown that over the past50 years, the amount of runoff has changed substantiallyfor many rivers due to the combined effects ofwithdrawals, dams, and climate change. The impact ofdirect human alteration of the land around rivers isharming rivers far more than what can be expected overthe next 50 years simply from the effects of climatechange.9If the current plans for extensive hydropowerdevelopment in a concentrated area in the Southwest arecarried out hastily, the ecological and environmentaleffects are difficult to forecast accurately, but will bedramatic, far‐reaching and irreversible.The Southwest, especially the area known as the GoldCross, is not only an important biodiversity hot spot,10but its ecology is also extremely sensitive and it is still ageologically active area. If this area were damaged, itwould be hard to restore. Humanity can not survivewithout a healthy ecological environment, and the limitsof the environment depend on the health of hydrologicalsystems.Once the limits of the environment are reached,humanity’s room for development will have reached itslimit too. China’s rivers are the lifelines of its hydrologicalsystem. Without healthy rivers, there could be no healthyecosystems and healthy communities.The problems caused by large‐scale hydropower projects(changes to river ecology; destruction of valley vegetation,loss of water conservation lands, dramatic reduction ofbiodiversity, eutrophication of reservoir water, increasedfrequency of geological events on reservoir shores,damage to local livelihoods, population relocation issues,erosion, etc.) have not yet received adequateinvestigation.To intensify hydropower development in the name ofreducing carbon emissions without first findingacceptable solutions to these problems seems like puttingthe cart before the horse. It is risky to achieve carbonemissions reductions by sacrificing the long‐termwell‐being of the people and the resources needed tocontinue development in the long‐term.4 

2.2Reducing carbon emissionsThe current plans for hydropower development in theSouthwest may not reduce China’s carbon and otherpollutant emissions if proper measurements are nottaken. In fact, due to the construction of transmission anddistribution infrastructure lagging behind completion ofpower generation units, local governments have to findways to consume electricity locally.In order to do this, local governments encourage theestablishment and continued operation ofenergy‐intensive projects, often promoting the continuedexistence of so‐called “three high” (high pollution, highwater use, high energy use) factories that should,according to central policy, be phased out. This is anexample of the local authorities going easy on pollution inrelatively poor, undeveloped west.Moreover, areas where intense hydropower developmentis planned also often happen to be rich in mineralresources. This has resulted in a practice of linking miningoperations with electricity generation. Because energyintensive enterprises, including mining operations,usually maintain operations during the dry season whenhydropower is not available in large amounts, they haveto build and operate small‐scale coal‐fired generatorsinstead. In reality, coal and hydropower areco‐developed in those areas. Furthermore, many of therural areas in which this happens are outside of the scopeof the central emissions monitoring system.These problems raise the question of whether developinghydropower truly reduces the amount of total carbonemissions. If hydropower development is intensified in anattempt to fulfill China’s carbon emission pledges beforethere is an opportunity to properly plan and investigatedevelopment plans, it is likely that such developmentwould actually increase the effects of climate change onrivers and ecosystems and bring a new wave of pollutingindustries into the Southwest. Rather than achievingreduced carbon emissions overall, such actions may eventhreaten the nation’s ecological security, further testingthe limits of the environment. In effect, China could besacrificing the king to save a pawn.Rock structure on the Tea‐Horse Ancient Road by the Nu River in Bing Photo: Su Liu 

2.3 Alternative options to reduce carbonemissionsIn 2011, while total energy demand will increase, the rateof increase is expected to slow.15 This provides a windowfor China to adjust its energy plan. The primary reason forintensifying hydropower development is to change theenergy mix in order to help reach the nation’s carbonemission reduction goals. 16 In light of the controversysurrounding the plans to intensify hydropowerdevelopment in the Southwest, the Chinese Governmentshould evaluate alternative options before choosing ascientifically sound way forward. For example: 

2.3.1 Small hydropower plantsOne way to increase the proportion of hydropower in thecountry’s energy mix in a relatively inexpensive andlow‐impact manner is by building small‐scale hydroaccording to local conditions and needs. However, thecurrent development goals aim to the dam major riversto build large hydropower plants.Small scale hydropower is relatively low cost, easy tomaintain, has relatively low environmental impact, andcan bring direct benefits to local populations. However,because small hydro plants are difficult to connect to thegrid in most areas in China, their construction andoperation is challenging.While large hydropower plants are being feverishly builtand planned, the cleaner and more cost‐efficient smallscale hydropower plants are almost ignored. Theemissions reduction benefits of small scale hydropowerplant should be thoroughly investigated. 

2.3.2 Cutting emissions in the coal‐fired power industryUpgrading of the nation’s coal‐fired plants has not yetbeen completed and more can still be done to maximizeoutcome. Ultra super critical technology, integratedgasification combined cycle technology, and circulatingfluidized bed combustion technology are all beingdeveloped. The widespread use of high efficiency, lowemission coal‐fired power generation is an importantoption for China in its quest to conserve energy resourcesand raise economic efficiency.18 

2.3.3 Adjust industrial structure and decreaseemissionsAccording to the “First Half of 2010 Energy Consumptionper Unit GDP Report” promulgated by China’s StatisticsBureau, National Reform and Development Commission,and the National Energy Administration, while China’senergy consumption per unit GDP rose in the first half of2010, there were great variations across differentindustries and regions in the country.19 This means thereis still room for emission reduction in many industries andregions. Thus, finding the right measures to achievehigher efficiency and lower emissions need to beemphasized.Emissions from a factory by the Da Du RiverPhoto: Su Liu6

2.3.4 Improve management of urbanizationCities consume more than two‐thirds of the world’senergy and account for over 70% of global carbonemissions.21Along with China’s continuing economic and societaldevelopment, the country’s rate of urbanization isincreasing rapidly. In 2007, 44.9% of China’s populationlived in cities, a total of 599 million people. By 2050,China’s urbanization rate is estimated to rise to 70%‐75%,with an urban population of about 1.1 billion.22Many of China’s large cities are currently undergoingwildly rapid growth, and many are constructinginfrastructure that creates structural obstacles to achieveemissions reduction.23 The guiding principle ofpermanent emissions reduction must include nationwidecontrol of urban populations, the size of cities, anddeveloping energy‐efficient and low‐carbon smaller cities.This principle is also an important factor in managingenergy demand.Developing hydropower and other “clean” energy sourceswithout effectively managing the size of cities and rate ofurbanization could ultimately be an exercise in futility, aband‐aid solution that might contribute little to solving oreven exacerbate the country’s environmental problems.The National Geology Park, Da Du River ValleyPhoto: Su Liu7  

2.3.5 Decrease waste and improve power transmissionPower grid and transmission line construction lags farbehind the development of generation capacity in China.The lack of macro‐level planning mechanisms has led toovercapacity problems in Inner Mongolia, where much ofthe region’s coal‐fired generation capability is wastedbecause of lack of channel to transmit the electricity tothose who need it. In the so‐called “Three Gorges ofWind Power” in Inner Mongolia, during the 6‐8 monthsof optimal wind generation, much of the generationcapacity has to “give way” to the output from coal‐firedplants because of transmission bottlenecks.24Similar problems in the Southwest already limit thetransmission of power generated locally, resulting insignificant amount of wasted capacity. Fixing theseproblems will help to cut emissions and increaseefficiency.

2.4 Plans to transmit power from the west tothe eastAnother important goal associated with hydropowerdevelopment is to send power from the west to the eastin order to address power supply issues in the east and tofoster economic development of the west. The mostsignificant obstacle to this is the cost of building andmaintaining the transmission infrastructure. Currently,power prices in the west do not reflect the real costs oftransmission.26In the geologically complex Southwest, the financial costof hydropower projects is clearly higher than in morestable areas. The environmental, ecological and socialcosts however do not appear to have been quantified oraccounted for27. When the true costs are included, wouldthe electricity still be affordable to users in the east; andhow could the irreversible ecological damage becalculated? In the end, the nation would bear these risksand the people would suffer the consequences, whiledevelopers and a small number of other stakeholdersprofit.

 2.5 Inconsistent with other long‐term nationalplansAt present, the following national plans and projectsassociated with water resources have been announced:(1) The eastern, central and western lines of the South toNorth Water Diversion Project (completed, underconstruction and under planning, respectively);(2) Thirteen large hydropower bases with key riverbasins in the Southwest (under construction or inplanning);(3) Further developing Eco‐tourism in greater theShangri‐la area28 (in operation and planning); and(4) Three Parallel Rivers, Yunnan Protected Areas,UNESCO World Heritage Site (already established).The above projects compete for water resources andpropose contradict requirement to hydrological andecological systems in the Southwest.The river basins of the Southwest also provide water tothe densely populated, economically vibrant Pearl Riverbasin. The amount of water needed for households,commercial use and industrial production is alreadygigantic. Add on the effects of rapid urbanization, it iseasy to see that the demand for water will only grow forthe foreseeable future. Badly planned water projects mayeventually harm the economic capacity of all the areas ofthe Pearl River basin, one of China’s most importantengines of growth.  

2.6 Threatens security and social stability2.

6.1 Ecology crisis to “kill the river for power”The CPC Central Committee and the State Council’s No. 1document for 2011 calls for “implementing the strictestmanagement system for water resources.” Goals includeestablishing control over the use and development ofwater resources, improving efficiency of water use, andsetting “three red lines” to limit the excessivedevelopment of water resources, wastage of water, andwater pollution. The document calls for ensuring anadequate supply of water for the country’s sustainableeconomic and societal development and satisfying thepeople’s desire to improve the water‐related environmentagainst a backdrop of limited water resources and limitedcarrying capacity of water systems.29Against all this, the current attitude of hydropowerdevelopment is “don’t let a single drop flow freely.”30Tributaries and parent rivers are being simultaneouslydammed – once‐mighty rivers are being stopped in theirtracks and transformed into a step‐series of dead lakes;and irreplaceable, invaluable ecosystem services arebeing obliterated. Electricity generation is maximized atthe expense of the rivers’ ability to hold and move water,irrigate agricultural fields, replenish ground water, absorband process natural detritus, shape the land, and otherinnumerable services upon which humans rely. In thedrive to exchange free‐flowing rivers for electricity, all ofthese crucial environmental contributions provided byrivers have been greatly ignored.China’s intense and chaotic hydropower developmentand the setting‐up of power plants for mining are shiftingindustries closer to the sources of China’s great riversthereby increasing pollution in the west. Continuing onthis course would be an abdication of responsibility. Theirtotal effect on water supply and water quality must beprudently investigated.31 Clean, sustainable hydropowerresources should be developed along the principle ofsustainability using a clean, sustainable process.Otherwise, the country’s security, its people’s survival andsociety’s stability could be put at risk.

2.6.2 Minorities’ interestsThe river basins that are affected by hydropower planning,including the Nu River, the Jinsha, the upper stretch ofthe Lancang, Yalong, Dadu and the upper stretch of theMin are centres of ethnic diversity. The protection ofethnic and cultural diversity in the relocation processwould be an important test for the Chinese Government’sstated priorities of “basing development on the needs ofthe people”, “developing scientifically” and “building aharmonious society.”Current and implemented plans for relocating peoplehave not adequately accounted for the indigenouspeople’s requirements. Planning has not prioritized thedisplaced people’s livelihoods, interests, and long‐termdevelopment, nor have promises that displaced peoplewould be able to improve their lives been fulfilled. Inmany cases, the opposite has actually happened – groupsof previously well‐to‐do people have descended intopoverty since they were relocated.32 Even less has beendone to preserve ethnic and cultural diversity.33 Sharingof hydroelectric profits with local people has yet tohappen.Relocation costs are rising, and the process is becomingmore difficult as many of those who have already beenrelocated have found that their new conditions areunacceptable. Many of the displaced populationsreceived no guarantee that they would be able to build anew livelihood, and some have even found that theirsurvival is threatened.34 Ironically, there are cases wherethose who have sacrificed their homes for hydropowerdevelopment are left with no clean drinking water, arableland or access to the hydro‐electricity generated rightnext to them.35Prioritizing hydropower over people is a way of thinkingand acting that ignores the costs and consequences ofrelocation and could erode the stability of localcommunities. This course of action could threaten thelong‐term interests of the entire country.

2.6.3 International relations at riskThe Nu and Lancang Rivers are, respectively, theupstream stretches of the Salween and the MekongRivers. Not only are these rivers extremely important toChinese citizens, they are also the lifelines of several ofChina’s neighbours in Southeast Asia. As a responsiblenation in the international community, China mustconsider the interests of its down stream neighbours.Generating electricity is only one function of theseprecious natural resources. By maximizing these rivers’capacity for generating electricity, China would likelydamage ecosystems and create other negativeconsequences within and outside its borders. As a result,China would not be able to stand on righteous ground inthe realm of international relations.36 

2.7 Secondary risk of geological disasterHydropower development in the Southwest isconcentrated on the six major rivers flowing from theHengduan Mountain range,37 including the Nu River, theupper reaches of the Jinsha River and Lancang River,namely, the three rivers flowing through the ThreeParallel Rivers of Yunnan Protected Areas UNESCO WorldHeritage Site, an area also known as Yunnan’s Gold Crossof biodiversity. In choosing this area as a World HeritageSite, one of the primary reasons listed by UNESCO is thefact that it displays“The geological history of the last 50 millionyears associated with the collision of theIndian Plate with the Eurasian Plate, theclosure of the ancient Tethys Sea, and theuplifting of the Himalaya Range and theTibetan Plateau. These were major geologicalevents in the evolution of the land surface ofAsia and they are on‐going.”38One reason for hydropower development in theHengduan mountain range is that the developablepercentage of its exploitable power is considered to bestill much lower than in developed countries.39 However,this reason does not stand up to scrutiny. The Hengduanarea is unique and cannot be compared with otherhydropower rich areas of the world. It is located at ameeting of tectonic plates and is still geologically active.Many questions regarding this area are on the front lineof geological science and have not yet been answered.Thus, the effect of geological activity on large‐scaleconstruction projects is highly controversial and theconstruction of hydropower projects entails risks withpossibly unprecedented consequences.40 The Nu River,for example, is keen to be developed by hydropowercompanies but viewed as unsafe for large‐scale hydroprojects by geology and seismology scientists, thoughsmall hydro may be appropriate.41The Min RiverPhoto: Su Liu11

2.8 Implications of the reversal of decisionsIn 2010, the Jinsha River Longkaikou hydropower projectand the Ludila hydropower project were allowed toresume construction. These projects had been halted bythe Ministry of Environmental Protection in June 2009because Huaneng and Huadian, the project developers,had blocked the flow of the rivers on which these projectswere situated without first completing an environmentalassessment process. The companies’ actions were thenconsidered as “having significant effects on the ecology ofthe middle portion of the Jinsha River”. However, thereversals were made without clearly stated justification.42At the same time, the Jinanqiao hydropower project,which had been put on hold for several years because itsdevelopers had started construction before completingenvironmental assessments, also received formalapproval to resume from the National Development andReform Commission. Similarly, last November thedevelopers of the Liyuan hydropower project (one of theEight Stages on Jinsha River43) had already blocked theflow of the river before the approval being granted tobegin construction. Approval for the remaining projectson the river is seen as a fait accompli.44The central government’s tolerance of environmentalmisconduct effectively cedes control to powerful interestgroups. Encouraging illegal activities by transformingthem into approved activities affects the government’slegitimacy and may affect social stability.12 

2.9 China’s future competitivenessEnergy policy is a crucial part of climate change policy,and both must consider ecological baselines and ensureprotection of the country’s natural resources. A country’sfuture development and competitiveness would not bedetermined by its current GDP and growth rate, butrather the country’s natural resources and the ability ofits ecosystems to sustainably provide the servicesrequired by human beings to thrive.In the latter part of the 20th century, the ChineseGovernment became aware of the limits that the naturalenvironment would place on development if the countrywere to develop in a sustainable manner. To providesupport for sustainable development, China created andimplemented an initiative called the “National BasicResearch Program of China” (the 973 Program), which isstill in effect.45Yunnan’s GDP is less than 2% of the China total, yet it ishome to 10% of the world’s biological species andaccounts for 20% of China’s biodiversity, much of which isconcentrated in the Three Parallel Rivers area.46 This areais believed to support over 25% of the world's animalspecies, many being relict and endangered. UNESCOstated:“Biodiversity and threatened speciesNorthwest Yunnan is the area of richestbiodiversity in China and may be the mostbiologically diverse temperate region onearth. The site encompasses most of thenatural habitats in the Hengduan Mountains,one of the world's most importantremaining areas for the conservation of theearth's biodiversity".

However, the strategic and security value of the ThreeParallel Rivers area have been largely ignored. Itsabundant biodiversity, especially in its four river basins,plays a key role in maintaining a stable ecosystem. Itswidespread forests and numerous lakes are crucial tolocal climate management, absorption of carbon, creationof oxygen, recycling of nutrients, preservation of waterand soil and other ecosystem functions. These ecosystemservices protect and replenish an international drainagearea totaling 2.93 million square kilometers.48 49Regarding nature, what humans do not know far exceedswhat we do know. However, there is no question thathuman existence requires clean water, clean food, andclean air which depend on functioning ecosystems. In aworld where natural resources are being rapidly depletedand the natural environment degraded, it is likely that themore a nation manages wisely its natural resources andecosystems, the more it also strengthens it long‐termcompetitiveness.It is of the utmost importance to protect the fewremaining expanses of undeveloped virgin wilderness inthe Southwest. Such places are so rare and unique, theirecosystems and ecosystem services must be protected ascompletely as possible. Protecting the Southwest andits rivers and biodiversity is in fact guarding China’s mostvital interests and security.

PART 3RECOMMENDATIONS

3.1 General recommendations

3.1.1 Update energy goals and hydropower’s roleIn March of 2008, the Chinese Government promulgateda new energy development plan, stating that 10% and15% of the country’s energy would come from renewablesources in 2010 and 2020 respectively. These targets wereset on the assumption that energy consumption in 2010and 2020 would be equivalent to 2.5 billion and 3.2billion tons of standard coal respectively. In actuality,China’s energy consumption in 2009 already reached 3.2billion tons of standard coal. This means China needs toreconsider its whole energy plan as part of the 12thFive‐Year Plan.50 The role of hydropower, including smallhydropower generation should be reviewed and revised.On the demand side, the pricing of electricity must bereviewed to reflect more closely the true cost of itsprovision, as well as using pricing mechanism wisely todepress wasteful consumption in industries, commercialactivities and household usage. Additional efforts must bemade to reduce energy consumption in urban areas as awhole, which makes it important to promote and observethe results of the NDRC’s low carbon development pilotplan in five provinces and eight cities.51

3.1.2 Improve water resource managementIn light of the increased concern about water supply andmanagement in the 12th Five‐Year Plan, a range of new“good governance” management initiatives should beconsidered. For example:(a) Have a national leader be responsible for each majorriver (河长制,52 river champion).(b) Establish an integrated and specialized mechanismfor rivers and watersheds planning using a setlegal process administered by a dedicatedcross‐sector authority.53(c) Release river and watershed development plans tothe public: In light of the importance of theSouthwest rivers, by releasing development plansfor public comment, this would gather valuablefeedback for the authorities and keep all playershonest.(d) Provide river, watershed and ecosystem training forofficials: By using the party school system, officialscan quickly gain a fundamental understanding ofhow to better manage the nation’s ecologicalassets.15 

3.1.3 Establish national strategic water and ecologicalresource reserve zonesChina must protect the source of its lifeblood byestablishing strategic reserve zones in its most sensitiveriver sources and watersheds, including those originatingin the Tibet‐Qinghai Plateau. Before these precious areasare fully studied and understood, plans to divert water,build hydro projects, construct highways, establish miningoperations and create other large scale constructionprojects should not be permitted. The ChineseGovernment should work with the indigenous people tosimultaneously protect their livelihoods and the naturalenvironment. 

3.1.4 Establish a national ecological development specialadministrative zone54A national ecological development special administrativezone would focus on protecting the natural environmentand maintaining the operation of ecosystem services.Within the zone, activities55 that could significantlydisturb any part of the ecosystem (including rivers, lakes,wetlands, riverbanks, mountain ranges, forests,vegetation, animals, etc.) should be prohibited. Trialzones may include Yunnan’s Nujiang Lisu AutonomousPrefecture and the UNESCO World Heritage Site area ofthe Three Parallel Rivers Protected Area.The government should design innovative policies,including ecosystem service compensation mechanismsand incentivization of ecological protection operations, toimprove the livelihoods of local people, aid thedevelopment of low‐impact ecotourism, and set up a trialcarbon trading system.56The zone could also test new standards for evaluating andpromoting officials. Hard performance targets couldinclude goals for protecting biodiversity, water quality,native vegetation coverage, wild animal species, andother strategic resources. With the goal of securingprosperity for future generations, other evaluationstandards would be based on improving the long‐termlivelihood of local people rather than the current focus onshort‐term GDP growth. 

3.2 Recommendations relating to hydropower

3.2.1 Rationalize approval authority for hydropowerprojectsAt present, many agencies have hydropower projectapproval power, resulting in a chaotic structure that lacksaccountability. A specialized approval agency andmechanism should be created with a strong legal processthat provides for truly independent evaluation andassessment by experts. Moreover, the independentassessment reports should be published in increasetransparency and enable public comment. This willprevent loopholes being exploited at the expense of thenatural environment and national interest. 

3.2.2 Restructure electricity priceRespond to the real cost of the west to east powertransfer. All related costs must be accounted for.57 TheCentral People’s Government should enhance goodgovernance on distribution of benefits between east andwest, and establish a mechanism to facilitate regional andinter‐provincial negotiations between west and east, so asto ensure the west have a fair say in electricity pricing.58 

3.2.3 Investigate hydropower relocation issues(a) Dealing with relocation costs and consequencesProblems faced by relocated communities which need tobe urgently addressed include:i. Lack of drinking water and means for making aliving faced by villagers who relocated inGanlanqing, Yunxian County of Lincang city. Theywere part of the long distance relocation due toDachaoshan hydropower plant.ii. Payment of the longstanding unpaidpost‐relocation subsidy;iii. Provide means of survival and livelihood forpeople relocated to the new Hanyuan city; 59 andiv. Determine what kind of risks there may be for thenew Hanyuan city communities, as there could begeological instability. 60(b) Protect the needs of relocated communitiesRelocation plans should be framed with the relocatedpopulation’s interests in mind and address the needs ofboth older and younger generations, both of which needsustainable livelihoods, improved standards of living, andpotential for development. Promises made to thesecommunities to induce them to move need to be fulfilledby the government and those who profit from thehydropower projects. 

3.2.4 Investigate the geological consequences associatedwith hydropower projectsThe majority of China’s hydropower plants have beenbuilt in the past two decades. It is necessary to establish along term investigating and monitoring system on thegeological consequences associated with those projects,and to dis‐incentivize the covering up of bad news. 

3.2.5 Publicize geological risk evaluation reportsProjects built in geologically active areas, including mostof the southwest, face high geological risks. Informationabout the risks and plans for dealing with geologicaldisasters should be released. 

3.2.6 Publicize environmental assessment reportsassociated with large scale projectsFor those projects which were halted and then approved,the reasons for approvals and how they were madeshould be made public to improve transparency andaccountability.  

3.2.7 Protect the integrity of the national‐level rare fishprotection zoneThe national‐level rare fish protection zone on the upperreaches of the Yangtze River must not be compromisedagain in favor of the Xiaonanhai（小南海） hydropowerproject. This decision should be subjected to publiccomment and participation63. 

3.2.8 Set up public hearing mechanismThe Southwest hydropower projects involve nationalsecurity and social stability. Public hearings must beinstitutionalized for policy‐makers so that they couldobtain sufficient information. Due process and justicecould only be upheld under the rule of law, then equalityand citizen’s right for everyone could thus be protected.65