**4. Discussion**

### *4.1. Improving PES Programs*

Individuals adversely affected by environmental policies need to be sufficiently compensated [50]. In the case of E-flows, relatively low levels of compensation will influence the sustainability of policies, as although owners may reluctantly release E-flows in the short run under pressure from the government, less effort will be given to maintenance and managemen<sup>t</sup> of E-flows over the longer term.

Furthermore, the calculation of E-flow impacts varies depending on which methods of assessment is adopted. Furthermore, losses in electricity production vary between SHPs —even under the same hydrological circumstances—depending on which approaches are taken [51]. However, current compensation strategies do not reflect the actual losses incurred by owners. Thus, it is more reasonable to apply differentiated compensation based on SHP electricity generation losses rather than E-flows. Therefore, a price system based on differential compensation according to the actual electricity production losses incurred to maintain E-flows is recommended.

Apart from the amount of compensation [52], the source of compensation is a prickly issue to tackle. A long-term, funding-supported system should be established as soon as possible [29]. The benefits of restoring river ecosystems are well known and all beneficiaries must bear some responsibility. As the direct parties involved, SHP owners should take the initiative to undertake environmental improvements, whereas consumers, as indirect parties, need to take responsibility for triggering the demand for environmental services. Therefore, both parties should bear some of the losses caused by implementing E-flows. The governmen<sup>t</sup> can offer subsidies for retrofitting dams, installing ecological generators, and monitoring facilities. Considering that governmen<sup>t</sup> finances may not be able to afford ongoing compensation, we propose a cost-sharing PES program paid by all interest groups. Similar to thermal power, for which on-grid tariff includes the costs of denitration, there

is an opportunity to recover the partial costs of releasing E-flows from some electricity consumers. The raised on-grid tariff of hydropower was still the lowest among all types of energy in Fujian Province, at 0.33 CNY/kWh compared to 0.39 CNY/kWh for thermal power [53], 0.4 CNY/kWh for nuclear power [54], and 0.48 CNY/kWh for wind power [55]. Based on our questionnaires, the option of sharing the additional costs of implementing E-flows between government, owners, and electricity consumers gained the highest level of support among each group (Figure 5), which suggests the potential for establishing such a PES program.

**Figure 5.** Comparison of the views of short-term hydropower project owners, administrators, and the public on a cost-sharing PES program for E-flows (select one or more answer choices).

Based on the electricity generation by different types of SHPs, if all SHPs adopt the 10%MAF strategy when implementing E-flows, the average electricity production losses are estimated to be approximately 9.38% of the total electricity production of SHPs in Fujian Province. Considering the average annual electricity generation (approximately 23.3 billion kWh [56]) and on-grid tariff of SHP in Fujian Province, the losses of releasing E-flows are calculated as 2.18 billion kWh, which amounts to approximately 721.22 million CNY. According to the total electricity consumption (211.27 billion kWh [57]) and the average on-grid tariff (0.6 CNY/kWh) in Fujian Province, the total electricity consumption costs 126.762 billion CNY. The impact ratio of electricity bills is derived from losses of releasing E-flows divided by total electricity consumption costs, which is calculated as 0.57%.

If all the losses caused by implementing E-flows are transferred to the electricity rate, the impact on people's original electricity bills is approximately 0.56%. On the basis of the cost-sharing principle, electricity consumers and the SHP owners would bear this impact together; if this system was adopted, electricity consumers pay < 0.56% more than their existing electricity bills. The results from the questionnaires show that although there is significantly less support from administrators than the public, nearly three-quarters of both groups were willing to pay 1% more than their usual electricity bills to support E-flow implementation.

### *4.2. Improvement of Communication and Management*

The cooperation of stakeholders is essential for successful E-flows implementation. In general, the greater the acceptance of the need for E-flows, the more likely a successful

partnership can be formed. Our results indicate that the perception of the necessity of E-flows differs between and within interest groups. Thus, all groups need to increase their eco-awareness of the need to achieve environmental protection. Ensuring appropriate that communication during the decision-making process will further ensure the success of implementing scheme [58]. This is crucial to enable all stakeholders to raise and resolve potential disagreements [59]. Our study showed that communication is an essential component of collaboration; active dialog between interest groups helps to reach a compromise, allowing potential conflicts to the recognized and addressed during the implementation process.

Moreover, understanding of SHPs is often one-sided, largely depending on where their benefits lie. SHPs are generally welcomed, as they are the cheapest and most accessible means of obtaining electricity [60,61]; however, with improving living standards, Chinese residents have begun to pay more attention to environmental quality. Indeed, E-flows schemes have little negative impact on the public's economic interest but bring environmental and recreational benefits, which may account for their relatively low level of recognition of "SHPs belong to green energy" and high level of support for E-flows implementation.

Monitoring the long-term impacts of current measures is also helpful for informing subsequent managemen<sup>t</sup> [44]. As there remain unknown relationships between flows and biotic responses [62], monitoring is needed to address this uncertainty [63], and local electricity users can be successfully involved in this monitoring work [64]. Additionally, publishing the outcomes of current monitoring measures should help bolster public support [65], which would likely enhance public desire for further E-flows implementation. Specific E-flow assessments could be conducted on SHPs located in ecologically sensitive regions in light of the capacity and available resources of regional and local governments. Undoubtedly, gradually augmenting the scale of E-flows implementation seems inevitable, which must be matched by suitable compensation schemes.

As people's environmental requirements have changed, governmen<sup>t</sup> understanding and regulation of water resources need to change too [16]. Future water resources planning should strive for both comprehensive and coordinated development of the environment and society. Taking environmental factors into account at the planning stage will help identify potential stakeholder conflicts that will otherwise need to be tackled at a later date.
