Journal of Resources and Ecology ›› 2016, Vol. 7 ›› Issue (4): 237-245.DOI: 10.5814/j.issn.1674-764x.2016.04.001

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Comparative Evaluation between Water Parallel Pricing System and Water Pricing System in China: A Simulation of Eliminating Irrigation Subsidy

SHEN Ming1, 2, ZHONG Shuai1, *, SHEN Lei1, LIU Litao1, ZHANG Chao1, 2   

  1. 1 Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, Beijing 100101, China;
    2 University of Chinese Academy of Sciences, Beijing100101, China
  • Received:2016-01-05 Online:2016-07-25 Published:2016-07-25
  • Contact: ZHONG Shuai. Tel: +86-10-64888073
  • Supported by:
    National Natural Science Foundation of China (41271547, 41501604 and 41271546), the 57th China Postdoctoral Science Foundation

Abstract: The reform in water pricing plays a critical role in agricultural production, which is believed to have great water savings potential. We consider eliminating irrigation subsidies as a simulation and conduct a comparative evaluation between the water parallel pricing system (WPPS) and the water pricing system (WPS), which are incorporated into two computable general equilibrium (CGE) models, respectively. The results prove that, compared with WPPS, WPS would contribute higher capacities for water savings with more farming imports and less loss in farming output; households in rural and urban areas would benefit from more income and food consumption, which would be matched by increasing farming imports. A policy recommendation is that eliminating the irrigation subsidy should pay more concerns on alleviating the negative effects on farming outputs. Moreover, improvements in agricultural labor mobility and water demand elasticity are needed to enable more focus on the water conservation policy, particularly in WPS.

Key words: computable general equilibrium model, eliminating irrigation subsidy, factor mobility, farming production sectors, water pricing reform in China