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Economic Impacts of Total Water Use Control in the Heihe River Basin in Northwestern China—An Integrated CGE-BEM Modeling Approach

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  • Na Li

    (School of Management, University of Chinese Academy of Sciences, Beijing 100190, China
    Research Center on Fictitious Economy & Data Science, Chinese Academy of Sciences, Beijing 100190, China)

  • Xiaojun Wang

    (School of Management, University of Chinese Academy of Sciences, Beijing 100190, China
    Research Center on Fictitious Economy & Data Science, Chinese Academy of Sciences, Beijing 100190, China)

  • Minjun Shi

    (School of Management, University of Chinese Academy of Sciences, Beijing 100190, China
    Research Center on Fictitious Economy & Data Science, Chinese Academy of Sciences, Beijing 100190, China)

  • Hong Yang

    (Swiss Federal institute for Aquatic Science and Technology (Eawag), Ueberlandstrasse 133, 8600 Duebendorf, Switzerland
    Faculty of Science, University of Basel, Petersplatz 1, 4003 Basel, Switzerland)

Abstract

This paper develops an integrated modeling approach combined with a top-down dynamic computable general equilibrium (CGE) model and a bottom-up bio-economic model (BEM) to study the economic impact of a total water use control policy in the Heihe river basin, northwestern China. The integrated CGE-BEM model is regionally disaggregated with a variety of crops and livestock, and includes the responses of farmers and consequent feedback effects in the regional economic system. The results show that under the total water use control scenario, the water use structure is changed and water use efficiency is improved. The total water use control policy has limited negative impact on the regional economic growth with only a slightly lower growth rate of 13.38% compared with a growth rate of 14% by 2020 under a business as usual water use scenario. However, the total water use control policy has significant negative impacts on several sectors, especially agriculture and food processing. It is expected cropping systems will change through a replacement of water-intensive crops with water-efficient crops. Farmers’ incomes will decrease by 3.14%. In order to alleviate farmers’ income loss and deal with water use conflicts across different sectors and regions, the promotion of migration of surplus labor from agriculture to non-agricultural sectors and the improvement of water use efficiency in agriculture are needed.

Suggested Citation

  • Na Li & Xiaojun Wang & Minjun Shi & Hong Yang, 2015. "Economic Impacts of Total Water Use Control in the Heihe River Basin in Northwestern China—An Integrated CGE-BEM Modeling Approach," Sustainability, MDPI, vol. 7(3), pages 1-19, March.
    • Handle: RePEc:gam:jsusta:v:7:y:2015:i:3:p:3460-3478:d:47179
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    Cited by:

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    2. Li, Guifang & Shi, Minjun & Zhou, Dingyang, 2021. "How much will farmers be compensated for water reallocation from agricultural water to the local ecological sector on the edge of an oasis in the Heihe River Basin?," Agricultural Water Management, Elsevier, vol. 249(C).
    3. Guifang Li & Dingyang Zhou & Minjun Shi, 2019. "How Do Farmers Respond to Water Resources Management Policy in the Heihe River Basin of China?," Sustainability, MDPI, vol. 11(7), pages 1-19, April.
    4. Yanhu He & Jie Yang & Xiaohong Chen & Kairong Lin & Yanhui Zheng & Zhaoli Wang, 2018. "A Two-stage Approach to Basin-scale Water Demand Prediction," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 32(2), pages 401-416, January.
    5. Ye Sun & Tomohiro Akiyama, 2018. "An Empirical Study on Sustainable Agriculture Land Use Right Transfer in the Heihe River Basin," Sustainability, MDPI, vol. 10(2), pages 1-13, February.
    6. Yuanjie Li & Zhuoying Zhang & Minjun Shi, 2019. "Restrictive Effects of Water Scarcity on Urban Economic Development in the Beijing-Tianjin-Hebei City Region," Sustainability, MDPI, vol. 11(8), pages 1-23, April.
    7. Peng Ou & Ruting Huang & Xin Yao, 2016. "Economic Impacts of Power Shortage," Sustainability, MDPI, vol. 8(7), pages 1-21, July.
    8. Yu Liu & Xiaohong Hu & Qian Zhang & Mingbo Zheng, 2017. "Improving Agricultural Water Use Efficiency: A Quantitative Study of Zhangye City Using the Static CGE Model with a CES Water−Land Resources Account," Sustainability, MDPI, vol. 9(2), pages 1-15, February.
    9. Heng Yi Teah & Tomohiro Akiyama & Ricardo San Carlos & Orlando Vargas Rayo & Yu Ting Joanne Khew & Sijia Zhao & Lingfeng Zheng & Motoharu Onuki, 2016. "Assessment of Downscaling Planetary Boundaries to Semi-Arid Ecosystems with a Local Perception: A Case Study in the Middle Reaches of Heihe River," Sustainability, MDPI, vol. 8(12), pages 1-11, November.

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