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Water 2015, 7(7), 3431-3465; doi:10.3390/w7073431

Assessing the Water Parallel Pricing System against Drought in China: A Study Based on a CGE Model with Multi-Provincial Irrigation Water

1
School of Humanities & Economic Management, China University of Geosciences, Beijing 100083, China
2
Key Laboratory of Carrying Capacity Assessment for Resource and Environment, Ministry of Land and Resources, Beijing 100083, China
3
Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, Beijing 100101, China
4
Reitaku Institute of Political Economics and Social Studies, Reitaku University, 2-1-1, Hikarigaoka, Kashiwa, Chiba-ken 277-8686, Japan
5
Faculty of Economics and Business Administration, Reitaku University, 2-1-1, Hikarigaoka, Kashiwa, Chiba-ken 277-8686, Japan
*
Authors to whom correspondence should be addressed.
Academic Editor: Markus Disse
Received: 12 January 2015 / Revised: 25 April 2015 / Accepted: 10 June 2015 / Published: 30 June 2015
View Full-Text   |   Download PDF [457 KB, uploaded 30 June 2015]   |  

Abstract

The reform of water management in China is still in progress, and the pricing of water resources is undertaken in parallel, with a divide between irrigation water and pipe water associated with different users: The supply of irrigation water is regulated by local government and that of pipe water is operated by the production sector of pipe water. Based on a literature review and an interview survey of farmers, this study incorporated the water parallel pricing system of China within a computable general equilibrium (CGE) model, where the drought of 2000 is simulated. The 16 provincial irrigation water supplies and their subsidies were also estimated and introduced into this CGE model. The results demonstrated that the effects on the macro-economy were insignificant. However, the effects on agricultural production, particularly on farming production mainly cultivated in northern areas, were significant. Most farming production sectors employed more capital and labor to prevent losses in output from drought. Agricultural labor was shifted from non-farming agricultural production sectors into farming. Both urban and rural households suffered severe losses in welfare and food consumption, even though they benefited from the additional income. Moreover, rural households suffering the worst losses were located in both northern and southern areas. View Full-Text
Keywords: water parallel pricing system; multi-provincial irrigation water; CGE model; drought; China water parallel pricing system; multi-provincial irrigation water; CGE model; drought; China
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

Zhong, S.; Shen, L.; Sha, J.; Okiyama, M.; Tokunaga, S.; Liu, L.; Yan, J. Assessing the Water Parallel Pricing System against Drought in China: A Study Based on a CGE Model with Multi-Provincial Irrigation Water. Water 2015, 7, 3431-3465.

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