Abstract
The present study examines the optimal water supply portfolio under the impact of climate change constructed by the authors previously. It incorporates feasibility planning for water supply projects, assesses a feasible water supply portfolio for central Taiwan, and uses the shadow price method to assess the rationality of the compensation policy for transferring agricultural water to ensure water supply security for the industrial sector. The study finds that Changhua and Yunlin have the highest per-unit costs of raw water, and the Nantou region has the highest carbon emission coefficient (carbon footprint) per unit of water produced. The cumulative value (2021–2031) of the water resources policy to reallocate agricultural water to achieve water supply security is about TWD 15.904–31.13 billion. The shadow price of industrial water is about TWD 40.18/cubic meter. Therefore, a compensation price for agricultural water transfer of less than TWD 40.18/cubic meter represents a rational policy.
Highlights
Enhancing water supply security has become the most important governance challenge for water authorities in various countries in response to climate change (Intergovernmental Panel on Climate Change (Intergovernmental Panel on Climate Change, IPCC), 2014)
The present study refers to the multi-criteria water supply portfolio model developed by [1], using water resources data and proposals for water supply facilities from central Taiwan, and a worst-case scenario under extreme climate to evaluate and plan a feasible water supply portfolio for central Taiwan
The finding of the average marginal benefits of industrial water use is about TWD 50.18/ton, which is much higher than the price of tap water
Summary
Enhancing water supply security has become the most important governance challenge for water authorities in various countries in response to climate change (Intergovernmental Panel on Climate Change (Intergovernmental Panel on Climate Change, IPCC), 2014). Huang and Lee [10] pioneered the application of the hydro-economic model to establish a climate-resilient water supply portfolio, including the dimensions of reliability, economic feasibility, affordability, environmentally friendly, and social acceptability It can capture the cost of water supply infrastructure in different periods and provide a reference for medium and long-term water resources infrastructure planning. If we take the government decision-making model as an example, the measured shadow price will include the current value of the future saving in extraction costs and environmental costs of extracting one unit less of water reflecting higher user costs. The shadow price of water resources is applied to evaluate the value of water supply security (or the cost of water shortage) for the industry as a basis for a rational compensation policy for the transfer of agricultural water supply to industry. The basic parameters for the model are as follows: 1. Water supply target: The target year of 2031 is the final year of the model
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