Map to HK & Guangdong Water Governance

By Kris Hartley 17 November, 2014

Hartley on the best collaboration framework for water security in HK & Guangdong under the 'two systems'

Growing concerns over HK’s main water supply & yet governance regime faces critical challenges

Hong Kong’s water supply concerns are increasingly urgent, and a regional collaborative approach may be the best way to address them. Gaining a robust understanding of the complex relationship between Hong Kong and China is critical for developing sustainable solutions. To this end, a uniquely tailored analytical framework for collaborative governance is needed to account for the variety of water management agencies within the region’s “two system” environment. Such a framework should be meaningful to both practitioners and scholars, integrating the latest research with an understanding of current and evolving realities.

Sustainability of Dong River water supply may be comprised by growing demands in HK & Guangdong

As described by Su Liu, there are growing concerns about Hong Kong’s principal water source. The Dong River supplies roughly 80% of the city’s water. Despite contractual agreements, the sustainability of this source may be compromised in the coming decades by demand growth in Hong Kong and up-stream in Guangdong. The province is likely to continue industrializing, as evident in its effort to increase power generation capacity by 45% between 2010 and 2015.

“Hong Kong’s water governance faces 3 critical challenges: fragmentation, inefficiency & moral hazard.”

Complicating this arguably untenable situation, Hong Kong’s water governance regime faces three critical challenges: fragmentation, inefficiency, and moral hazard.
First, as outlined by Liu and Jessica Williams, water governance in Hong Kong involves 11 departments across three ministries, with each having some jurisdiction over water supply and usage. This fragmentation poses a challenge for strategic and operational coordination. Second, the efficiency of Hong Kong’s water management system can be improved. Consumer pricing is not currently used as a tool for demand management, and fees are below those in benchmark cities. Finally, Hong Kong’s water governance regime suffers from a moral hazard resulting from the assumed sustainability of Dong River supply. This has led to chronic underinvestment in the types of alternative supply technologies that are the hallmark of sustainability in cities like Singapore.

Solutions lie in closer collaboration between HK & Guangdong agencies, but how to achieve this?

The solution is a closer collaboration between Hong Kong and Guangdong agencies for long-term supply strategies. This relationship is complex and should be thoroughly understood before it can be further developed. To this end, the interplay among agencies for transboundary water management can be viewed through the lens of theoretical frameworks.
Institutional Analysis and Development (IAD) framework
One example is the Institutional Analysis and Development (IAD) framework, created by Nobel Prize-winning scholar Elinor Ostrom. The IAD (Figure 1) systematically examines several dimensions of institutional complexity, broadly classified into situational characteristics, action arena, and outcomes resulting from patterns of interaction. The IAD has been applied in a variety of environmental contexts and continues to inform institutional studies of collective action and self-ordered management of common pool resources. Ultimately, it describes a “third way” of governance, beyond government and market.

IAD is useful but incomplete – struggles to accommodate complexities of a transboundary environment under “two systems”

Concerning Hong Kong’s situation, the IAD is useful but incomplete. It focuses on a single action arena and assumes a degree of uniformity among actors. While this is a valuable tool for analyzing institutional dynamics at certain scales (primarily local), it has difficulty accommodating the complexities of a transboundary environment under “two systems.”

Transboundary water governance framework

By contrast, Jensen and Lange’s transboundary water governance framework (Figure 2) examines the political economy of water at both the national and regional scales, accounting for multiple stakeholder types and institutional arrangements. This framework is useful in its focus on national interests and development strategy, both of which are critical factors in transboundary resource management efforts. However, it lacks the detailed analysis of action arenas, situations, and evaluative criteria characterizing the IAD.

This framework accounts for transboundary elements but lacks detailed analysis of action areas & evaluative criteria like in IAD

Proposed New Framework: One Framework, Two Systems
A new framework combining these two best captures the complexity of Hong Kong’s water governance environment.

A new proposed framework which combines both national & regional analyses could work for HK

Figure 3 illustrates the proposed framework, which structurally resembles the IAD but adds a transboundary dimension critical for this case. This framework is novel in applying differing conceptualizations of water unique to particular scales. For the national political economy it treats water as a toll good, with a provider (Guangdong) charging a user (Hong Kong) for access. While this conceptualization is appropriate for contractual relationships, it alone fails to recognize the broader sustainability challenge. As such, the new framework’s regional analysis also treats water as a common pool resource, applying the logic of collective management that is a hallmark of Ostrom’s research.

The new framework makes four contributions meaningful to both practitioners and scholars:

• The political economies of water are split between domestic and international scales, enabling the concurrent analysis of institutional dynamics common to both systems but also those unique to each;
• The framework accounts for the multiple agencies (with various levels of authority) involved in water management;
• It allows collaboration to be understood in a “two systems” context, resembling the dynamics of the Hong Kong case; and
• The framework analytically suits the transboundary nature of water, a resource that ignores political boundaries.

The model also makes three theoretical contributions:

• It treats agencies as individual actors with their own strategies and legal constraints, resembling the type of cases used by Ostrom to illustrate self-ordered governance and collaboration among individuals within communities;
• It treats the transboundary governance environment as an institutional parameter for agency behavior, reflecting the complexity of a “two systems” environment; and
• It applies the highly influential IAD to a previously under-explored context with broader scale, thereby expanding its relevance.

Benefits from the proposed combination framework

In conclusion, much has been written about the practical dimensions of Hong Kong’s water governance regime, with many useful suggestions. However, analyses should not fail to recognize the value of theory to systematically conceptualize these challenges.

“It provides a “roadmap” for the development of solutions to similar challenges in politically fragmented regions, and also to global challenges such as climate change.”

The proposed framework offers three answers to the “so what?” question often asked by practitioners in reference to theory. First, it contributes to the formulation of strategies that can be implemented immediately. The recognition of water as a common pool resource, rather than a toll good, engages policymakers in a broader debate about supply sustainability rather than a narrow focus on usage contracts. Second, the framework provides a new approach to understanding the multitude of transboundary environmental resource challenges (e.g. air pollution) that previously lacked a robust analytical tool. Finally, it provides a “roadmap” for the development of solutions to similar challenges in politically fragmented regions, and also to global challenges such as climate change.

Further Reading
Hong Kong Water

• 8 Things You Should Know About Hong Kong Water – Is Hong Kong’s water supply guaranteed? Can you drink straight from the tap? How much bottled water does Hong Kong consume? China Water Risk sets out 8 interesting facts about Hong Kong water
• A Vulnerable Dongjiang is a Vulnerable HK – Su Liu of the Civic Exchange on HK’s laissez-faire attitude towards water and why time is running out as the Dongjiang River which feeds HK becomes more vulnerable
• Hong Kong Water – Agenda & Goals – Hong Kong University’s Dr. Frederick Lee says it’s time for Hong Kong to adopt a users-pay-principle as the territory’s outdated water tariff regime will undermine the success of its water conservation goals
• Hong Kong: Stepping Up Water Security? -Read our overview of HK’s water security issues – are the steps taken by government to address this sufficient
• The Future of Hong Kong Water – China Water Risk talks to Bobby Ng, Assistant Director of HK’s Water Supplies Department on the government’s plans for the territory’s water supplies
• Hong Kong Water: 5 Challenges -Industry veteran, Daniel Cheng, MD of Dunwell Enviro-Tech and Deputy Chairman of the Federation of Hong Kong Industries talks about HK’s 5 challenges in securing reliable water supply
• Water: Tale of Two Cities – Su Liu of the Civic Exchange discusses the different strategies adopted by Hong Kong & Singapore towards solving their water scarcity and how Hong Kong’s approach still leaves the territory vulnerable in the long term

Transboundary

• Keeping Peace: China’s Upstream Dilema – Despite voting against the UN Water Convention, China does embrace its central principles. Prof Wouters shares her expert views on the region’s water treaties & keeping the peace on transboundary waters
  
• China’s Soft Path to Transboundary Water -With 40 transboundary waters, find out what Dr. Wouters, Director of the UNESCO Centre for Water Law & the China International Water Law Centre has to say on China’s new ‘soft’ approach’
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  Geopolitical Risks – Transboundary Rivers – China owns headwaters to at least 10 major transboundary rivers but has no formal agreements with neighbours on these. Sophie le Clue explores increasing tensions in South and SE Asia
• Water Treaties – A Question of Rights – Sophie le Clue gives an overview of the water treaty landscape; the abundance of bilateral and multilateral treaties, but notably China’s lack of presence in the field