Impact analysis of government investment on water projects in the arid Gansu Province of China |
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| Institution: | 1. Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, Beijing 100101, China;2. Center for Chinese Agricultural Policy, Chinese Academy of Sciences, Beijing 100101, China;3. University of Chinese Academy of Sciences, Beijing 10049, China;4. State Key Laboratory of Water Environment Simulation, School of Environment, Beijing Normal University, Beijing 100875, China;1. College of Water Sciences, Beijing Normal University, Beijing 100875, China;2. CSIRO Land and Water, Private Bag 5, Wembley, WA, Australia;3. School of Environment, Beijing Normal University, Beijing 100875, China;4. College of Hydrology and Water Resources, Hohai University, Nanjing 210098, China;1. Key Laboratory of Western China’s Environmental Systems (Ministry of Education), Lanzhou University, Lanzhou 730000, China;2. College of Earth and Environmental Sciences, Lanzhou University, Lanzhou 730000, China;1. School of Land Science and Space Planning/Hebei International Joint Research Center for Remote Sensing of Agricultural Drought Monitoring, Hebei GEO University, Shijiazhuang 050031, China;2. Hebei Province Key Laboratory of Sustained Utilization and Development of Water Resources, Hebei GEO University, Shijiazhuang 050031, China;3. Key Laboratory of Agricultural Remote Sensing, Ministry of Agriculture/institute of Agricultural Resources and Regional Planning, Chinese Academy of Agricultural Sciences, Beijing 100081, China;4. Yanchi Research Station, School of Soil and Water Conservation, Beijing Forestry University, Beijing 100083, China;5. Key Laboratory of State Forestry Administration on Soil and Water Conservation, Beijing Forestry University, Beijing 100083, China;1. Graduate School of Engineering, Osaka University, 2-1 Yamada-oka, Suita, Osaka 565-0871, Japan;2. Advanced Technology R&D Center, Mitsubishi Electric Corporation, 8-1-1 Tsukaguchihonmachi, Amagasaki, Hyogo 661-8661, Japan |
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| Abstract: | In this paper, we introduced three-nested Constant Elasticity of Substitution (CES) production function into a static Computable General Equilibrium (CGE) Model. Through four levels of factor productivity, we constructed three nested production function of land use productivity in the conceptual modeling frameworks. The first level of factor productivity is generated by the basic value-added land. On the second level, factor productivity in each sector is generated by human activities that presents human intervention to the first level of factor productivity. On the third level of factor productivity, water allocation reshapes the non-linear structure of transaction among first and second levels. From the perspective of resource utilization, we examined the economic efficiency of water allocation. The scenario-based empirical analysis results show that the three-nested CES production function within CGE model is well-behaved to present the economy system of the case study area. Firstly, water scarcity harmed economic production. Government investment on water projects in Gansu thereby had impacts on economic outcomes. Secondly, huge governmental financing on water projects bring depreciation of present value of social welfare. Moreover, water use for environment adaptation pressures on water supply. The theoretical water price can be sharply increased due to the increasing costs of factor inputs. Thirdly, water use efficiency can be improved by water projects, typically can be benefited from the expansion of water-saving irrigation areas even in those expanding dry area in Gansu. Therefore, increasing governmental financing on water projects can depreciate present value of social welfare but benefit economic efficiency for future generation. |
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| Keywords: | Water project CGE Economic efficiency Factor mobility Government investment Gansu |
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