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A Dynamic Approach to Calculate Shadow Prices of Water Resources for Nine Major Rivers in China

He, Jing and Chen, Xikang and Shi, Yong (2006) A Dynamic Approach to Calculate Shadow Prices of Water Resources for Nine Major Rivers in China. Journal of Systems Science and Complexity, 19 (1). pp. 76-87. ISSN 1009-6124

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Abstract

China is experiencing from serious water issues. There are many differences among the Nine Major Rivers basins of China in the construction of dikes, reservoirs, floodgates, flood discharge projects, flood diversion projects, water ecological construction, water conservancy management, etc. The shadow prices of water resources for Nine Major Rivers can provide suggestions to the Chinese government. This article develops a dynamic shadow prices approach based on a multiperiod input–output optimizing model. Unlike previous approaches, the new model is based on the dynamic computable general equilibrium (DCGE) model to solve the problem of marginal long-term prices of water resources. First, definitions and algorithms of DCGE are elaborated. Second, the results of shadow prices of water resources for Nine Major Rivers in 1949–2050 in China using the National Water Conservancy input–holding–output table for Nine Major Rivers in 1999 are listed. A conclusion of this article is that the shadow prices of water resources for Nine Major Rivers are largely based on the extent of scarcity. Selling prices of water resources should be revised via the usage of parameters representing shadow prices.

Item Type: Article
Uncontrolled Keywords: ResPubID19000, computable general equilibrium, input–output analysis, nine major rivers - China, shadow prices, water development
Subjects: FOR Classification > 0502 Environmental Science and Management
Faculty/School/Research Centre/Department > School of Engineering and Science
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Depositing User: VUIR
Date Deposited: 02 May 2012 04:27
Last Modified: 02 May 2012 04:27
URI: http://vuir.vu.edu.au/id/eprint/2996
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Citations in Scopus: 0 - View on Scopus

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