JOURNAL OF NATURAL RESOURCES ›› 2013, Vol. 28 ›› Issue (7): 1117-1129.doi: 10.11849/zrzyxb.2013.07.004

• Resources Utilization and Management • Previous Articles     Next Articles

Solutions to Water Scarcity in Arid Regions: Effectiveness of Water Demand Management Policy

WANG Xiao-jun1,2, SHI Min-jun1,2, WANG Lei1,2   

  1. 1. University of Chinese Academy of Sciences, Beijing 100049, China;
    2. Research Center on Fictitious Economy and Data Science, CAS, Beijing 100190, China
  • Received:2012-06-25 Revised:2013-03-12 Online:2013-07-20 Published:2013-07-20


Water scarcity is the most severe constraint to socio-economic development in arid regions. It calls for water demand management to control rapid increase of water demand and to alleviate conflicts between water demand and supply. There are two kinds of water demand management policies, i.e., price control which is based on market mechanism and quota control which is based on administrative management. This paper assumes that the water structure changed along with the upgrading of industrial structure under the zero growth of total water requirement and examines the effectiveness of price control and quota control measure for reducing water demand based on a distributed water-economic model (GBEM). The results show that quota control measure is more effective than price control in curbing water demand. The current price of irrigation water is too low compared with shadow price of water resource so that farmers will not respond to water price change unless water price was raised at the level of shadow price of water resource. To save same amount of irrigation water, farm income under water price control will loss much more than that under quota control. The farm income loss under water price control consists of increased irrigation cost and change of cropping system. The farmer income loss under quota control is caused by decrease of sown areas. Both of the two kinds of policy instruments need to consider benefit compensation to farmers. The two kinds of water demand management policies have less impact on food security. However, cash crops production will change while water demand management policies are implemented. The crops which need more irrigation water will decrease if water price is raised, while quota control measure is implemented, cropping system will shift from the crops with low water efficiency to the crops with high water efficiency.

Key words: water demand management, price control, quota control, arid area, water scarcity, Heihe River Basin

CLC Number: 

  • TV213.4