A two-tier coordination mechanism for pollution control under water quality differences: a case study of the Yangtze-to-Hanjiang River Water Diversion Project

Abstract

The implementation of the Yangtze-to-Hanjiang River Water Diversion Project has caused the water resources to be replaced in the middle and lower reaches of the Han River, bringing about the problem of “engineering intervention-type” water pollution control. The central government, which leads the national water network construction, bears the responsibility for coordinating water pollution control and, as a beneficiary, shares a certain proportion of pollution control costs for the water supply area, polluting enterprises, and water diversion enterprises in water pollution control. Considering differences in water quality and the central government-led nature of the national water network, this study employs differential game theory, with the dynamic change of pollutant elimination as the state variable and the pollution control effort levels of the three main stakeholders as the control variables, constructs a differential game model involving the central government, the water supply area, polluting enterprises, and water diversion enterprises. Numerical simulation results show that, compared to decentralized decision-making, the two-tier cost-sharing mechanism can increase total pollutant elimination by approximately 45% and overall governance benefits by 30%, outperforming the centralized control mode. The main conclusions include: (1) There is an interactive relationship between the cost-sharing mechanisms of the central government and the coordination mechanism within the basin, and the two-tier cost-sharing coordination mechanism can bring the highest governance benefits and the most efficient pollution treatment effect. (2) When the loss coefficient increases, the efforts of the WSA and PE are improved under the three modes of Decision C, Decision S, and Decision SR. (3) When the amount of pollutants eliminated per unit of pollution control effort increases, the efforts of the WSA and PE show an increasing trend under the four different modes, and the total amount of pollutants eliminated in the basin also shows an increasing trend. This study provides a dynamic mechanism design framework for national water network governance and offers timely policy references for the governance of large-scale inter-basin water transfer systems.