Estimating the economic impact of large hydropower projects: a dynamic multi-regional computable general equilibrium analysis

In response to rapidly growing energy demands, Chinese authorities plan to invest more in hydropower development. However, there are concerns about the possible effects on macroeconomy. This paper uses SinoTERM, a dynamic multi-regional computable general equilibrium model (CGE) of the Chinese economy, to analyze the economic impact of large hydropower development projects. The model features regional labor market dynamics and an electricity subdivision module with substitutability between various types of electricity generation. The results suggest that hydropower development will boost economic growth in the project region. Most sectors in the project region will benefit from the hydropower development such as other services, health, and education, while some sectors will suffer a loss in output because of the substantial increase in real wages. For the national, every 10,000 yuan investment can drive the national GDP growth of 1,000 yuan, and the cost is expected to be recovered in ten years. By the end of 2040, the real national wage will be around 0.16% higher than the baseline scenario. The project could only be justified if net environmental benefits outweigh this loss

Regression Model Selection and Assessment of Agricultural Water Price Affordability in China

The agricultural water price depends on the agricultural water price affordability (AWPA) in each region. This study found that the logarithmic linear model had the best fitting effect through evaluating the grey situation decision model, which considered factors such as rainfall and output value per unit area. The contribution of each influencing factor was determined by the Lindeman–Merenda–Gold method. We established a new model to determine the water expenditure coefficient (WEC) by improving the way that the value of the WEC is assigned. Then, the AWPA in different regions was calculated. The results showed that the WEC was between 2.62% and 12.95%, and the AWPA price was between 0.058 and 0.52 yuan/m3 (0.0084 and 0.075 $/m3). The contribution of precipitation and output was 45.20% and 25.60%, respectively. The WEC and AWPA in northeast, northwest, and northern China are higher than those in southwest and southern China. The AWPA in the Yellow River Basin was higher than that in the Yangtze River Basin; however, the space for adjustment in the Yellow River Basin was slightly smaller than that in the Yangtze River Basin

Study on the Unconventional Water Subsidy Policy in the Arid Area of Northwest China

The arid regions of Northwest China are facing water shortages and ecological fragility. Making full use of unconventional water is one of the effective ways of solving water issues and achieving high-quality regional development. The high cost of unconventional water utilization is the main obstacle to its utilization and technological development, and the subsidy policy may become a breaking point. Taking Ningdong Energy and Chemical Industry Base (NECI Base) as a case study, the article proposes raising the Yellow River water price to subsidize the utilization of mine water. The development and utilization of mine water can be effectively improved. Considering the optimal allocation of multiple water sources and the substitution relationship between the Yellow river water and mine water, this paper extends the water resources module (WRM) of the Computable General Equilibrium (CGE) model. The model can reflect the substitution of water sources and the linkage between water prices and the economy. Ten different subsidy policy scenarios are simulated through the extended CGE model, and the laws and mechanisms of the subsidy policy on the economy and water usage are summarized. The results show that increasing the price of Yellow River water by 8% to subsidize the mine water will achieve optimal socio-economic output. Under this scenario, the industrial value added (IVA) is basically unaffected, the water-use efficiency (WUE) is significantly improved, and the affordability of the enterprise is satisfied. The Yellow River water usage decreased from 319.03 million (M)m³ to 283.58 Mm³ (11.1% saving), and mine water usage increased from 27.88 Mm³ to 47.15 Mm³ (69.1% increase)

Regression Model Selection and Assessment of Agricultural Water Price Affordability in China

The agricultural water price depends on the agricultural water price affordability (AWPA) in each region. This study found that the logarithmic linear model had the best fitting effect through evaluating the grey situation decision model, which considered factors such as rainfall and output value per unit area. The contribution of each influencing factor was determined by the Lindeman–Merenda–Gold method. We established a new model to determine the water expenditure coefficient (WEC) by improving the way that the value of the WEC is assigned. Then, the AWPA in different regions was calculated. The results showed that the WEC was between 2.62% and 12.95%, and the AWPA price was between 0.058 and 0.52 yuan/m3 (0.0084 and 0.075 $/m3). The contribution of precipitation and output was 45.20% and 25.60%, respectively. The WEC and AWPA in northeast, northwest, and northern China are higher than those in southwest and southern China. The AWPA in the Yellow River Basin was higher than that in the Yangtze River Basin; however, the space for adjustment in the Yellow River Basin was slightly smaller than that in the Yangtze River Basin

Refined Allocation of Water Resources in Pishihang Irrigation Area by Joint Utilization of Multiple Water Sources

Refined allocation of water resources is an important means of sustainable water resources utilization. Based on General Water Allocation and Simulation (GWAS), this study uses a Geographic Information System (GIS) to construct spatial topological relationships. A fairness optimal minimum was set as the objective function. Total quantity control, water supply potential, and quality-divided water supply were set as constraint conditions. Considering the dynamic mutual-feedback relationship between the middle-lower-reaches reservoir and the upstream reservoir, this study refines the allocation of water resources combined with the characteristics of “long cane knots melons” in the Pishihang irrigation area. Results showed that at 50%, 80%, and 90% frequencies in the base year, 2025, and 2035, respectively, the water deficient ratio is 0. For continuous drought years at 90% frequency, all water users are faced with different degrees of water shortage. In water source structures, water diversion in the irrigated area is the largest, followed by local surface water; reclaimed water and shallow groundwater are used as supplements. In the case of consecutive drought years, the water shortage degree can be reduced through rational development of local water and additional external water transfer. The model has thus been well applied. This study provides a more accurate method for optimizing water resources allocation

Impact of Water Saving Policy on Water Resource and Economy for Hebei, China Based on an Improved Computable General Equilibrium Model

Hebei Province of China is facing a severe water resource shortage, making it urgent to formulate economical and effective water conservation policies. However, few studies have focused on analyzing the resource and economic impacts of a water policy. This study developed an improved computable general equilibrium (CGE) model with an extended water resources module as a policy analysis tool. The extended water resources module includes different water resources as commodities and water sectors, and introduces a substitution mechanism among the water resources. Policy scenarios containing different policy types and policy objects were established, including water price, technology (tech) improvement, structure adjustment, and water reuse policies in primary, secondary, and tertiary sectors. The impact on the water resource and economy of the scenarios was analyzed using the CGE model. The recommended policies include: an agricultural technology improvement policy that decreases groundwater usage by 240 hm3; an industrial technology improvement policy under which water usage per 10,000 CNY of industrial added value decreases by 13%; an industrial water reuse policy that increases unconventional water usage by 20%; and a structure adjustment policy to increase the proportion of the tertiary sector. The study provides an analysis tool for simulating and evaluating a water resource policy

Modeling Hydropower investments in China based on Sino TERM

China’s burgeoning economic growth has been accompanied by soaring demand for electricity. Conscious of worsening pollution in Chinese cities due to increased coal-fired electricity generation, and of growing global concerns about greenhouse gas emissions, Chinese authorities are planning to continue massive investments in hydropower generation. This study uses Sino TERM, a dynamic multi-regional model of the Chinese economy from the TERM family, to examine investment scenarios across China. Preliminary results indicate that (1) Hydropower can significantly boost local economic development, driving a GDP growth of 43% per year on average. It can promote the development of some industries such as construction, trade, transport, and machine equipment, but have a little impact on overall national economy. (2) Hydropower can provide 300 billion kW·h of power annually, thus alleviating conflicts between the supply and demand and ensuring China’s energy security. (3) Hydropower can replace 96 million tons of standard coals each year, reducing 200 million tons of CO2 emissions, 2.59 million tons of SO2, with prominent effects on energy saving and emission reduction. Hydropower proportion increases by 1.6%, which is conducive to improving the electric power consumption structure