Water Price Formation Mechanism And Dynamic Path Exploration

In today's world,the water scarcity has become the difficult issue all over the world,with the development of our society,on the one hand,the rising demand of water resources is challenging the water supply heavily;on the other hand,low utilization efficiency of water resources,insufficient supply,decreasing total fresh water resources,serious water pollution and other issues have become increasingly prominent.Among the many means to solve water scarcity,the water price regulation undoubtedly is one of the most efficient means.In this paper,we derive the water demand functions of industrial sector,agricultural sector,and residential sector,by maximization principle,from the overall optimization of macro-economy,and establish the moving equations of water price and supply on these three sectors.Then,the dynamic optimization model is build based on the basic theory of modern control and SIMULINK simulation,aiming at solving the optimal dynamic water price and supply,which not only ensure economic develop healthily,but also regulate water demand and supply,and then save water resources.In the process of solving this model,we explore the relations among water price,parameters of this model,industrial structure,and technical change.By simulating and solving of pricing mechanism model,the conclusions are drawn as follows:(1)The rapid expansion of technology will lead to a corresponding raise of water supply and price.Technical improvement will stimulate economic development,expand economic scale,and then raise water demand.Water supply and price of theses three sectors also increase gradually even if the pace of technical level progresses laxly.That is,in the long turn,water usage of macro-economy will increases ceaselessly without technical innovation.(2)The optimal supply of water resources and the change of price relates to the convergence of economic cycle.From the long term,if macroeconomic convergence occurs,then the optimal water supply also has convergence,because the supply and demand of water resources is to match the increase in demand,the supply will increase,at the same time,with economic convergence,the water demand grows slowly,then the supply of resources will also grow slowly.(3)Changes in the structure and scale of economy,will also affect the supply structure of water resources.In the long turn,optimal water supply and price,industries with the smaller proportion,will increase continually.On the contrary,The changes of optimal water supply and price,industries with the larger proportion,is relatively stable.(4)The theory of Cost water price has little influence on optimal water supply and price.Namely,the cost of water price has little impacts on optimal water price and supply.In this paper,our research on the pricing mechanism of water resources,objectively reflects the game process among water demand subjective,water supply subjective and government,paving the way for regressing market price of water resources and pricing by the market law,and takes account of macro-economic welfare.