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Sustainability 2014, 6(11), 7586-7600; doi:10.3390/su6117586

Modeling the Impacts of Urbanization and Industrial Transformation on Water Resources in China: An Integrated Hydro-Economic CGE Analysis

1
School of Economics, Renmin University of China, 59 Zhongguancun Street, Beijing 100872, China
2
State Key Laboratory of Water Environment Simulation, School of Environment, Beijing Normal University, Beijing 100875, China
3
Institute of Policy & Management, Chinese Academy of Sciences, Beijing 100190, China
4
Center for Chinese Agricultural Policy, Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, Beijing 100101, China
*
Author to whom correspondence should be addressed.
Received: 5 August 2014 / Revised: 17 October 2014 / Accepted: 23 October 2014 / Published: 29 October 2014
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Abstract

Pressure on existing water resources in China is expected to increase with undergoing rapid demographic transformation, economic development, and global climate changes. We investigate the economy-wide impacts of projected urban population growth and economic structural change on water use and allocation in China. Using a multi-regional CGE (Computable General Equilibrium) model, TERM (The Enormous Regional Model), we explore the implications of selected future water scenarios for China’s nine watershed regions. Our results indicate that urbanization and industrial transformation in China will raise the opportunity cost of water use and increase the competition for water between non-agricultural users and irrigation water users. The growth in water demand for domestic and industrial uses reduces the amount of water allocated to agriculture, particularly lower-value and water-intensive field crops. As a response, farmers have the incentive to shift their agricultural operations from traditional field crop production to higher-value livestock or intensive crop production. In addition, our results suggest that growing water demand due to urbanization and industrial transformation will raise the shadow price of water in all nine river basins. Finally, we find that national economic growth is largely attributable to urbanization and non-agricultural productivity growth. View Full-Text
Keywords: urban population growth; economic structural change; multi-regional CGE model; water accounts; nine river basins; water use and allocation; shadow price urban population growth; economic structural change; multi-regional CGE model; water accounts; nine river basins; water use and allocation; shadow price
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Jiang, L.; Wu, F.; Liu, Y.; Deng, X. Modeling the Impacts of Urbanization and Industrial Transformation on Water Resources in China: An Integrated Hydro-Economic CGE Analysis. Sustainability 2014, 6, 7586-7600.

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