Effectiveness Analysis and Individual Behavior Simulation of Water Rights Trading Policy to Alleviate Water Poverty

Abstract

The year 2023 will mark the tenth year of China’s pilot water rights program, with China’s overall water use efficiency improving and the water-related industry continuing to grow. Due to the uneven spatial and temporal distribution of water resources in China, there still exists the real problem of resource-type water shortage and structural water shortage, in which the problem of water poverty is particularly prominent. In order to alleviate water poverty, this paper constructs a water poverty indicator system and measures it, uses a double difference model to study whether the water trading policy is effective in alleviating water poverty, and establishes a tripartite evolutionary game model to simulate the behavioral strategies of the relevant stakeholders in water trading. The main findings of this study are as follows: (1) the degree of water poverty in China’s 31 provinces and municipalities from 2008 to 2022 shows a decreasing trend in general, but there are still regional differences; (2) the pilot policy of water rights trading effectively alleviates the situation of water poverty in China, and the alleviation effect is especially obvious for the western region; (3) The degree of government subsidy, the price of water rights trading, the degree of government punishment for non-trading behavior, and the extra income gained from water rights trading all affect the degree of water poverty of both parties to the water rights trading. Therefore, we should continue to improve the water rights trading platform, promote the construction of a diversified water use market, and strengthen the monitoring, measurement and supervision of water rights trading.