Study On Water Pricing And Adjustment Mechanism For Inter-basin Water Transfer

Since 3400 BC, the ancient Egyptian for the first time starting the local inter-regional water transfer, the development of water transfer project in the worldwide never stopped. Inter-basin water transfer plays an important role in the global economic and social development. After the founding of China, a series of inter-basin water transfer projects wewe constructed. The construction of South-North Water Transfer Project and other constructions of large water transfer project start a new era of the inter-basin water transfer project in China. In the Socialist Market Economic System, the water price of the projects directly related to the interests of the water source areas, water diversion operating companies and the reception area and water allocation among the various reception areas, unreasonable water price may make a huge investment could not achieve the desired results.Most of the Inter-basin water transfer projects are multi-objective water supply, integrated large-scale infrastructure projects, they have public welfare and commercial of two-fold targets.Therefore, reasonable water pricing mechanism will not only meet the benefit of inter-basin water transfer enterprise and water receiption area, but also the goals of public welfare and commercial water supply of inter-basin water transfer project. Water pricing mechanism is the key point of the inter-basin water transfer project, and it will lead to success or failure of the project.In this paper, the theory of economics, water resource and system analysis were used, connected the characteristics of inter-basin water transfer project, the problem of water price was putted into the system of economy and society. Through the analysis of the structure and founction of inter-basin water transfer project, to study the relationship of water price and water quantity, water quantity and economy and society, and study the water pricing mechanism and water price adjustment mechanism, trying to have a break in the area of water price theory research. According to reception area, the water of inter-basin water transfer project can be divided into domestic water, industry water and ecological water. With the water price at the diversion sluice of the reception area as the research object, the domestic water pricing mechanism, industry water pricing mechanism, ecological water pricing mechanism and water price adjustment mechanism were studied in this paper.Domestic water is the typical quasi-public goods, and the price of water should be set down cost-based under control of government. However, the unbalanced water transfer cost information between the water transfer enterprise and the water regulators is a problem. Water regulator is in the situation of information disadvantage, and water transfer enterprises have the motive to making a false statement to obtain high profits with the advantages of cost information. By means of the analytical framework of principal-agent theory, this article established an inter-basin water transfer domestic water price game model, and designed an incentive-compatible domestic water pricing mechanism based on supply costs and exogenous subsidy, and the effectiveness of the mechanism was proved in this article.As a means of capital goods, the properties of industry water determine its pricing is bound to be decided according to the market mechanisms. However, due to the characteristics of natural monopolies of the water transfer companies, if not control, it is bound to form a monopoly high price. Under the condition of asymmetric information of the cost between the water transfer companies and water price decision maker, the bilateral auction game model based on the water companies and water reception area was established and focused analysed in this paper. The results of the auction with full information and asymmetric information were compared. At the same time the impact of the transaction, in the presence of transaction costs, is discussed, and put forward the relevant policy measures.The ecological water in the water reception area is affected by the local rainfall, climate, and has the characteristics of uncertainty. In this article, the Economics Option theory was introduced to the Inter-basin water transfer pricing mechanism of ecological water, and a two-way forward contract transactions water use pattern considered the water demand uncertainty and supply costs uncertainty of water transfer companies was presented. The corresponding water pricing model was established, and the selection of model parameters was discussed. In this mechanism, the rights of the water transfer companies and the reception area was reasonably presented in the price. Analysis shows that this mechanism reduces the risks of water use in the water reception area and the risks of benefits loss, may it will also lead the reception area reduce water demand uncertainty and conducive to water use planning and economy.In the operation period of inter-basin water transfer project, the price of water should make corresponding adjustments following the changes of the impact factors to achieve balance between supply and demand of water resources. The adjustments of domestic water price related to water reception area people's social welfare and water transfer business interests, with the goal of social welfare maximization, a price adjustment model based on the cost changes was established. The model give different weights to the consumer surplus of water reception area residents and the water transfer companies'profits, and the adjustment range of the water price, under different weights, was discussed. For the industry water use, this article discussed the adjustment range of water price under different conditions, and the way of water price regulator to make the water price adjustment policies. The process mainly from the supply and demand, combined with its water pricing mechanism, with water price adjustment goal of short-term supply-demand equilibrium.This study chose the South-to-North Water Transfer Middle Line as the typical project, and with Zhengzhou city as the typical water reception area. With the suggested water pricing method and adjustment method, and the actual situation of Zhengzhou city was considered, the prices of the domestic water, industry water and ecological separately simulated in this paper. Finally, combining the theoretical and the applied research results, this paper presented the research conclusion and put forward the issues for further research.This study is financially supported by the National Natural Science Foundation of China (No.50879081) and South-to-North Water Transfer Middle Line science and technology progrom (ZXJ/FW/CW-015)...