DRAFT EA SUMMARY

Changjiang and Pearl River Watershed Rehabilitation Project

Environmental Assessment (Draft) E1238 V. 4

Summary

Chapter 1: Preface

Chapter 1 includes the following components:

(1) Purpose and Background of Environmental Assessment (EA): To satisfy the requirements of both the Chinese Government and the World Bank (the Bank), the EA report is to be prepared in both Chinese and English languages and the English version is to be a compulsory part of the Loan Agreement between the Bank and the Chinese Government.It is the Bank’s policy that the EA must cover the entire projectthat is partly financed by the Bank. This report is prepared by Changjiang Water Resources Planning Institute (CWRPI) with assistance from various departments involved, and with assistance from consultants. Now CWRPI has prepared the draft EA Report for the Proposed Bank-financed Changjiang and Pearl River Watershed Rehabilitation Project in Yunnan, Guizhou, Hubei and Chongqingbased on investigations on status quo environment,public consultation and datacollection. This edition has been revised according to the recommendations of Bank specialists.

(2) Project Background: The upper reaches of the Changjiang (Yangtze) River and the Pearl River lie in the west of China. It is one of the regions with most serious soil erosion. For a long time, due to the natural elements and human activities, water and soil erosion has been accelerating, resulting in environmental degradation. This has severely constrained local socio-economic sustainable development and affected stabilization of the regions in the mid and lower reaches of the rivers.Since the 1980’s, the ChineseGovernment has paid great attention to soil and water conservation and ecological construction in the upper reaches of both the Changjiang and PearlRivers. Remarkable results have been achieved in the KPWSCC implemented since 1989 and the Comprehensive Watershed Rehabilitation Project in the Northern and Southern Panjiang River since 1992. As SWCD was boosted, the public has paid great attention to ecological and environmental protection. The project meets the needs for the implementation of China’s western development strategy.

(3) Bank involvement in the Project: In June 2001, November 2002, April and October 2004, officers of MWR and the Bank visited the project areas. As a result, the intention for cooperation between the two was reached and preparation work started.

(4) Project Description:This project involves 37 counties of3 provinces and 1 municipality, i.e.Yunnan, Guizhou, Hubei, and Chongqing (Municipality). Itcomprises three components of public-good water and soil conservation, individual-benefiting water and soil conservation and livelihood improvement, as well as project management and support services. The total area of water and soil conservation being managed is 1,871.94 km2 and the total investmentfor the project is 1,660 million Yuan ($200 million), of which $100 million will be provided by the Bank and 10 million euro by the EU. The proposed project will be implementedfrom 2005 andconstruction will last for 5 years.

(5) EA Procedures and Methodology:The EAof this project has been conductedin five stages: desk review, preparation, formal work,report preparation and final report preparation. Through general investigation, key investigation, spot investigation, etc., the base datahas been collected.With the exception of some socio-environmental problems, the EA report considers all the potential impacts caused by the projectand emphasizes the analysis of environmental benefits and important environmental problems. It addresses the assessment of potential, longtime, accumulative environmental impacts (EIs)and proposing mitigation measures for negative EIs during project design, implementation and operation.

(6)Relation with Feasibility Study (FS): The EA report is considered to be an integral part and not an attachment of the Project FS. The EA Teamis also one part of the overall FSTeam.

(7) EATeam: This section describes the members of the EAteam, their regular positions, professional skills andtasks. The various disciplines involved include environmental engineering, environmental economics, environmental sociologyand environmental ecology.

(8) Report Organization: It describes the table of contentsof the EAreport, which is prepared to meet the requirements of the Bank.

(9) Acknowledgment: extending thanks to those agencies and individuals that provided assistance to the EAteam.

Chapter 2: Introduction

This chapter briefly introduces project background, components, layout and construction schemes, economic analysis, project management as well as experiences of completed and on-going projects. The figures of the project areas have been prepared (shown in Figure 1.1-1 and Figure 1.2-1).

(1) Project Components

The project includes three components: water and soil conservation, livelihood improvement, and project management and support.

(2) Project Layout

According to the features of water and soil erosion, the project could be devided into5 soil erosion zones.Priority measures for each of the zones are decided according to the features of soil, climate and soil erosion (shown in Table 2-5). In addition, the EAreport introduces main construction methods of the project (shown in Table 2-6).

(3) Project Economic Analysis

Total static investment for the project is 1.66 billion yuan, of which Bank loan is 8.3 billionyuan and domestic investment 8.3 billoin yuan.

(4) Experiences of Completed and On-going Projects

Now 33 counties in the ChangjiangRiverwatershedhave been included in the areas of KPWSC. KPWSC had been also implemented in Xingyi, Xingren, Anlong and PanCounties of the Pearl Riverwatershed. There are comprehensive institutions of soil and water conservation with rich experiences of soil erosion control and management in the project areas. The public has got skills and awareness of participation. Except for KPWSC, some other projects related to to the project have been implemented, including Eco-farming Project implemented by the Ministry of Agriculture, Program of Ecological Rehabilitation Through Water and Soil Conservation by MWR and Natural Forest Protection Project, CFFP and Chang-fang Project by State Forestry Administration,etc.

At the same time, the Bank-financed Loess Plateau Projects have achievedremarkable economic, social, ecological benefits. A series of sample projects with high quality and effectiveness for soil and water conservation have been established. Some advanced techniques and management experience have been introduced and many excellent managers have been trained. These have provided a lot of management models that can be a reference to the the Project.

Chapter 3: Policiesand INstitutions

Chapter 3 includes following parts:

(1) Relations with domestic systems and policies, briefly addressing how feasibility studies of the project and this report comply with laws and regulations and standards issued by the Chinese Government, analyzing the affected or related policies and management framework in the project area, involving environmental protection, sustainable development strategy, forestry, returning farmland for forests, management of land and grassland, desertification control, poverty reduction, urbanization and integrated basin management, etc., and explaining how they constrain or contribute to the implementation of project activities.

(2) Relations with relevant planning, explaining the adaptability of project implementation to comprehensive and professional plans, involving ecological construction, water and soil conservation, land use, forestry ecological construction, ecological construction and environmental protection, and animal husbandry, etc.

(3) Review of Bank’s safeguard policies, explaining the status of the project EA work’s compliance with the Bank's safeguard policies.

Chapter 4: Current Environmental Situation

This chapter defines the areas for environmental study and describes environmental background of the project-affected areas by province, including natural environment, socio-economic environment and main environment problems.

Environmental Study Area

According to the characters of the project EIs, the study areas affected by the project can be sub-divided into the project region, the project county and the lower reach.

Natural Environment

Natural environment of the project study areas include geology and landform, climate, hydrology, soil, vegetation, wildlife, etc.

There are various physiognomic types in the project areas, comprising of plateaus, basins, mountains, hills and so on. The relief could be divided into several classes: Yungui Plateau, mountains in Eastern Sichuan, Sanxia Gorge, and low hills in Dabieshan. The geological cells is mainly Yangzihuai Platform with complete strata, which mostly are of Carboniferous, Devonian, Permian, Trias, and Quaternary system, and primary lithology are carbonate rock and classtic rock.

The regions are located in subtropical monsoon climate zones with following features: moderate climate and abundant rainfall which coincides with hot weather.

Major regional differences: In Yunnan and Guizhou, there is no frost during winter. The vertical climate distribution is obvious, with typical plateau climate. In Chongqing and Hubei, there are enormous temperature changes, plentiful rainfall and hot summer.

Uneven seasonal distributions of precipitation: Rainfall concentrates between May to October, which accounts for 70-80% of the annual figure. In addition, most of rainfall events occur in the form of storm.

The project areas fall separately under the Changjiang and PearRiver systems. Changjiang mainly includes the JinshaRiver, the Wu River, the ChishuiRiver, the JialingRiver, the DaoRiver, the Ju River and its tributaries. The Pearl River comprises the Southern and Northern Pan Rivers.

There are 10 soil categories, nearly 20 subcategories, and more than 60 soil varieties in the project areas. Soil varietiesinclude red earth, yellow earth, yellow brown earth, brown earth, limestone soil, purple earth, mountain meadow soil, paddy soil, among which the distribution of red earth, yellow brown earth, purple earth, limestone soil, and paddy soil is most extensive.

Vegetation types in the regions are subtropical coniferous and broad-leaved mixed forest with evergreens and deciduous mixed forest. However, original vegetation has been destroyed and most of the existing vegetation is secondary. There are various types of primeval forests. Masson pine and Yunnan pine occupy the largest area, followed by armond pine, robur, oak, poplar, willow, cypress, manchurian catalpa, beautiful sweetgum, birch, toon, white gourd in dryland, etc. The forest area is 1,293.6km2 with a coverage of 18.73%. Natural grassland is less and dispersive consisting of catnip, cynodon dactyulon, green bristlegrass and common eulaliopsis. Planted grass includes knotgrass ft.thompsongrass, whit clover, ryegrass, etc.

Wildlife in the region mainly distribute orderly in high mountains and original vegetation jungles. While because most vegetation of the project areas is secondary community, shrubbery and sparse arbor with frequent human activities, it has not found protected wildlife appearing.

Socio-economic Environment

In 2004, total population of the region reached 1,985,810. Ethnic minorities mainly include Yi, Miao, Buyi and Tujia, followed by Bai, Hani, Zhuang, Dai, Lisu, Hui, Man, and Naxi. Plantation is the key sector for rural economy, as well as breeding by families and a few individual possessing. Outdated agricultural production methods have resulted in slow development of rural economy and poverty in most of the project areas.

The total land area is 6,905.05km2, with 0.29hm2 per capita of agricultural population. Cultivated land covers 2,778.32 km2, 40.2% of the total land. Among arable land, there is 1,618.37 km2 of slope land (231.74 km2 with slope over 25°), 58.2% of the total arable land.

The total area affected by soil erosion is 3, 616.68 km2, accounting for 52.4% of the total land in the project areas. Divided by watershed, the area of land affected by soil erosion is 3, 293.53 km2, 52.0% of the Changjiang watershed. The area affected by soil erosion is 323.15 km2, 56.4% of the Pearl watershed.

Main Environmental Problems

Soil erosion is one of the most serious environment problems in the project areas. Intense soil erosion directly washes soil away, which makes soil depth thin, reduces soil fertility and crop productivity, and even causes desertification. Soil eroded from land enters rivers, lakes, reservoirs, and channels in the downstream regions, resulting in higher riverbed and building up sediment. The result is a decrease in the carrying capacity of rivers and flood discharge capacity of natural waterway, which worsens the environment in the project and downstream areas. All these have seriously constrained the sustainabledevelopment of the national economy in these regions.

Due to vegetation destruction, thinner soil depth and lower water storage capacity, the streams and rivers dry up during winter and spring. Consequently, there are not enough water supplies for irrigation, even for domestic uses, especially in areas with carbonate rock distribution.

Because of steep topography, sparse vegetation, thin soil depth and low capacity of water storage, the project areas are prone to soil erosion, which results in flood once it rains. And due to the special geological structures and human destruction, flood, mud-rock flow and landslide are frequent, endangering the safety of the project areas.

Extensive use of agrochemicals like pesticides, fertilizers and plastic films has produce adverse impacts onrural environment, while increasing the cropyield and the agricultural productivity. Non-point source pollution is also one of the most important factors leading to water quality pollution in the project areas.

Chapter 5: Identification of Environmental Impacts

The main tasks of Chapter 5 areto 1) Identify SEIs related to the project by means of matrix method on the basis of the project analysis, and grade them; 2) Propose the overall objective of environmental protection of the project and one of the sub-projects.

The importance of environmental factor is assessed on the basis of matrix method from perspectives of characteristic, scope and period of potential EI. The results of assessment are divided two categories, i.e. SEIs and other environmental problem. The result shows, SEI of the project has 8 items, including land resource (soil, land use), eco-environment (including forestry ecology, agricultural ecology and pests), water resource (hydrological regime, water quality), soil erosion, regional economy, living standard, natural disasters, habitat (forest park), etc.; Other environmental problems include the impact on downstream areas, impact of the project construction on environment (water quality, environmental air quality, acoustic environment, etc.), environmental risk, and global environmental problems (climate , biodiversity), etc.

The environmental objectives of the project construction are to: set up comprehensive rural sustainable development pattern in poor project areas with serious soil erosion, make use of land and water resources in a efficient and sustainable manner, and increase forest vegetation coverage and wildlife diversity; basically control the trend of worsening ecological environment, such as serious regional soil erosion and water environmental pollution, etc. towards a virtuous-circle development; significantly improve infrastructure conditionsin the project areas and farmers' living standards;ensure coordinated and sustainable socio-economic development in the project areas. The environmental protection objectives include land resource protection, biodiversity protection and water environment protection.

Chapter 6: Environmental Impacts

According to the Terms of Reference, there should be a special social assessment report and its outcome will not be incorporated into the EA. To make the EA report having integrality and objectivity, partial results are quoted directly in Section 6.2.4. Also it has written a separate report for pest management. The results of pest management are quoted directly in Section 6.3.1.

The important environment problems as identified in chapter 5 are discussed in detail in this chapter. Based on the features of the project feasibility studies and construction such as project scope, amount of watersheds, complicated environmental background, etc., the EA carries out an overall analysis on the EIs from the perspective of planning, integrating with potential impacts from the design and various activities under typical watersheds. The selection of watersheds considers the representativenessof different provinces, basins, soil erosion types, environmental background and existing environmental problems.

Water and Soil Resources Protection

Water and soil are the basic indispensablenatural resources both for human survival and development and to realize sustainable socio-economic development. The implementation of the project will help to retain water and keep soil from erosion, reverse the worsening trend of soil erosion, mitigate natural disasters, reduce sediment inflow to lakes and reservoirs, maintain the service life of water projects and achieve sustainable socio-economic development in the project areas.

The benefits of water and soil resources protection of the project mainly include: 1) significant improvement of vegetation coverage and effective control of soil erosion; 2) enhancing soil and water conservation, regulating runoff, decreasing frequency of landslides and floods, reducing sources of solid debris, and mitigating damage of mud-rock flow; 3) protecting land resources, lowering losses of soil nutrients, enhancing soil conservation, mitigating farmland drought, improving irrigation and cultivation conditions and increasing crop yield; 4) reducing sediment in lakes and reservoirs and extending the life of water facilities.

Improvement of Eco-environment

The area is located in subtropical monsoon climate zone. Vegetation types in the regions are subtropical coniferous and broad-leaved mixed forest plus evergreen and deciduous mixed forest. However, original vegetationhas been destroyed, and only secondary vegetation remains at present.The existing forest area is only 129360hm2 with a coverage degree of 18.73%.Benefits of the project on ecological environment improvement are as following:

(1) Significant increase of vegetation coverage

Forestland area would reach 211606 hm2 with forest coverage of 30.64%, up 11.91% through afforestation on waste and slope land suited for forest and construction of orchard. Also grassland areain the project areas will reach 35616hm2 with vegetation coverage of 35.8%, up 5.03%.