Abstract
In this study, an interval optimization model is developed to maximize the benefits of a water rights transfer system that comprises industry and agriculture sectors in the Ningxia Hui Autonomous Region in China. The model is subjected to a number of constraints including water saving potential from agriculture and ecological groundwater levels. Ecological groundwater levels serve as performance indicators of terrestrial ecology. The interval method is applied to present the uncertainty of parameters in the model. Two scenarios regarding dual industrial development targets (planned and unplanned ones) are used to investigate the difference in potential benefits of water rights transfer. Runoff of the Yellow River as the source of water rights fluctuates significantly in different years. Thus, compensation fees for agriculture are calculated to reflect the influence of differences in the runoff. Results show that there are more available water rights to transfer for industrial development. The benefits are considerable but unbalanced between buyers and sellers. The government should establish a water market that is freer and promote the interest of agriculture and farmers. Though there has been some success of water rights transfer, the ecological impacts and the relationship between sellers and buyers require additional studies.
Highlights
Transferring and trading water rights could generate significant externalities including ecological or environmental effects[5, 6]
China’s first pilot project of water rights transfer was implemented in 2004 in the Ningxia Hui Autonomous Region, which aimed to alleviate the situation of excessive water usage by transferring water rights from agriculture to industry[3, 15]
An interval optimization model is proposed to maximize the benefits of a water rights transfer system that includes industrial and agricultural sectors in Ningxia
Summary
Transferring and trading water rights could generate significant externalities including ecological or environmental effects[5, 6]. Other studies analyzed the impacts of trading on aquatic ecology, most of which evaluated effects on environmental flow[10,11,12,13,14]. As the two major sectors in water rights transfer, the optimal allocation of water between agriculture and industry remains unclear. These transfers are obviously constrained by economic benefits, but the limitation from ecology has largely been ignored[21]. An interval optimization model is proposed to maximize the benefits of a water rights transfer system that includes industrial and agricultural sectors in Ningxia. The model is subjected to a number of constraints including the water saving potential from agriculture and ecological impacts. Altered frequencies may affect the production of agriculture, and compensation for agriculture will be considered
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