QIN Chang-hai 1, GAN Hong 1, 2, JIA Ling 1, WANG Lin 1, 2

1. Department of Water Resources, China Institute of Water Resources and Hydropower Research, Beijing 100038, China
2. State Key Laboratory of Simulation and Regulation of Water Cycle in River Basin, China Institute of Water Resource and Hydropower Research, Beijing 100038, China

Abstract: Aiming at the situation of non-market pricing system of water resources, a general equilibrium model for water price policy simulation (WaGE) has been built up to analyze the influence on national economy variation and household income, etc. and to establish a reasonable water price. Based on general equilibrium theory, WaGE is able to analyze and simulate water price policy, involving water element in the element supply system and separating water related enterprises from industries. Taking Beijing as the research area to implement practical application, the results show that there is little influence on economic growth, industrial structure, and residents living level by appropriate water price rising and water related subsidy, while the positive effect on the water supply enterprise is significant. Under the circumstance of low water price and imbalance of water supply enterprises income and expenditure, improving water price could effectively enhance the income of water supply enterprises and reduce the water usage, which would take a positive role on reducing the depletion of water resources and water environmental degradation due to excessive development of water resources.

Key words: water resources, price, CGE, policy simulation, Beijing

Published in: Journal of Hydraulic Engineering, Vol. 45, No. 1, 2014