Allocating the costs of multi-purpose water resource development: a case study of Chi-Chi Weir in Taiwan |
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| Authors: | Li-Chun Huang Ching-Kai Hsiao Sheng-Feng Kuo |
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| Institution: | (1) Department of Applied Economics, National Chung Hsing University, No. 250, Kuo-Kuang Rd., Taichung, 402, Taiwan, ROC;(2) Department of Finance, Nan Kai University of Technology, Nantou, Taiwan, ROC;(3) Department of Resource Environment, Leader University, Tainan, Taiwan, ROC |
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| Abstract: | Most multi-purpose water resources have been planned and constructed by governments in Taiwan to meet the water demands of
different users. However, economic and solvency differences among parties using water create conflicts regarding the reasonable
and equitable allocation of investment and operational costs. The Chi-Chi Weir in Nantou County, which was completed in 2002,
meets the high water demand of residents and the needs of industrial growth in central Taiwan. Thus, multi-purpose water reservoirs
are designed to serve agriculture, the public and industry. Three analytical methods, the quantity-based method, marginal
cost method, and separable cost remaining benefit method (SCRB), are employed to compare the cost allocation for different
parties using water. The quantity-based method indicates that proportional costs allocated to agriculture, the public, industry
and new irrigated areas are 88.02, 3.63, 7.86, and 0.49%, respectively. Via the marginal cost method, the proportional costs
allocated to agriculture, the public, hydropower, industry and new irrigated areas are 68.44, 2.51, 28.71, and 0.34%, respectively.
The marginal cost price of water is NT$ 2.97 ton−1; industrial use has the highest price. Based on the SCRB method, the proportional costs allocated to agriculture, the public,
hydropower, and new irrigated areas are 18.2, 22.2, 51.8, 4.8, and 2.9%, respectively. |
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| Keywords: | Water resource Cost allocation Separable cost remaining benefit method Quantity-based method Marginal cost method |
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