Water Fees, Employment And Economic Growth

As a common sense, the effects on employment and economic growth vary with water policy and changes. Based on the VAR model, we selected different standards of water resources fees as a pulse vector, as a result, the model simulated the effects of different water fees for China’s economic output and employment, and ultimately reached a optimal water resource fee policy. Studies have shown that:the impact of policy imposed 0.1 yuan/ton is not significant to China’s economic output and employment. However, if we adopt a "neutral" fee policy it will have a very significant negative effects. Therefore, it is recommended to charge 0.1 yuan/ton water fees in the short term, and gradually increase the amount of the levy in the long term, rather than to promote the implementation of neutral water fee income policies, of which is usefull to direct our economic body to adapt to the impulse from " external shocks "of the water resource fees. As a result, it will direct the water industry to improve water use efficiency to the largest extent.The paper consists of six parts,mainly around the criteria for the classification of high and low water industry, water resource charges and the impact of environmental regulation on economic growth and employment,and to be addressed from both theoretical and practical aspects. As an introduction, the first chapter mainly introduced the background, significance, content, technical procedures, methods and ideas of the research and gave a literature review. The second chapter described the current situation and existing problems of collection of water resource fees, only to illustrate that our country’s water fee collection has not yet formed a scientific and reasonable mechanism, forcing us to make the biggest effort to explore water resource fees policy, suitable for national conditions. The third chapter was the analysis of relevant theories. The fourth chapter was based on theoretical derivation, expounding the effect of water resource fees on employment economic growth. While, the fifth chapter was on account of empirical analysis of the impact on economic growth and employment We formulated two diffefent kinds of fee policies, of which the first one was comprehensive water resource fees without any subsidies, and the second was neutral fee policy. The emrirical analysis showed that neutral fee policy was not very effective in our country, the levy of 0.1 yuan /ton water fee policy could have a negative impact on economic output and employment,but this effect was not significant, and becoming smaller as time passed by. In the fifth chapter, some suggestion was made to give full play to water resource policy. Through analysis, came the formation of the following recommendations:1. the neutral fee policy is not recommended when choosing the fee policy, and not to give subsidies to the high water consumption industries and low water industry at the same time.2. make 0.1 yuan/ton water resources fee as a basis, gradually increasing the amount of the levy, and it will help our economy to adapt to sudden "external shocks"-water resources fee and directs water industry to improve water use efficiency.