Han River Water Use Charge & Watershed Management Fund (South Korea)

Seoul, Incheon and surrounding Gyeonggi-do municipalities draw drinking water from the Han River, whose headwaters lie in less-developed upstream districts of Gyeonggi-do, Gangwon-do and Chungcheongbuk-do. To fund water-quality protection at the source while compensating upstream communities for land-use restrictions, the Han River Law of 1999 introduced a mandatory water use charge on downstream users.

The charge started at KRW80 per cubic metre in 1999 and rose to KRW170 per cubic metre by 2012, a level maintained since. Revenue flows into the Han River Watershed Management Fund, administered by the Ministry of Environment's Han River Basin Environmental Office, which finances land purchases in reservoir-protection and waterfront zones, resident assistance programmes in the 11 covered upstream districts, local environmental-facility construction, and water-quality improvement projects, alongside the operation of a joint Han River Watershed Management Committee.

Academic benefit-transfer studies estimate the aggregate value of the Han River's managed water resources at roughly KRW449 billion (about US$449 million) per year in net benefits, equivalent to about KRW7,728 (roughly US$7.70) per downstream household per month -- figures used to justify the ongoing charge.

The scheme is also a documented cautionary case. Over the 1999-2014 period the charge raised a cumulative KRW5,187.6 billion (about US$5.19 billion), yet peer-reviewed reviews report that water pollution problems in the Han River basin persist, and that downstream and upstream stakeholders remain in dispute: downstream residents in some periods have refused to pay or pushed to reduce or abolish the charge, while upstream residents argue that land-use regulations should ease and compensation should increase. The mechanism has proven durable but has not resolved the underlying water-quality and equity tensions it was designed to address.

Read the full analysis: https://research-repository.griffith.edu.au/server/api/core/bitstreams/048548a1-2f56-5890-89b7-a90b9574cc11/content