Author(s): C. Hao; Y. Jia; C. Niu; N. Wei; J. You
Keywords: Dualistic water cycle; Socio-economic development; CGE; WEP
Abstract: Nowadays, natural-artificial dualistic characteristic of water cycle has been generally considered as the key issue of water resources assessment and management in a changing environment, especially for those countries in water-stressed conditions. However, mechanism of bilateral interaction between natural water cycle evolution and socio-economic development has been obscured due to complexity of hydrological process and socio-economic system. The coupling of economic model CGE (Computable General Equilibrium) and distributed hydrological model WEP (Water and Energy Process) provides a model-based tool for researches on response and feedback of water cycle to social development, as well as economic prospects under the constraint of water resources, by quantitatively analyzing the effect of industrial restructuring readjustment, water saving and pollution treatment. To simulate water demand of socio-economic development, water account should be added into social accounting matrix of traditional CGE model as one of its factors so that water demand could be calculated as an endogenous variable. On one hand, Water policies, including water use limitation and water price adjustment, are evaluated by CGE as preset scenarios under different levels of socio-economic development, and its results of water demand are put into WEP model to simulate corresponding response in the process of water cycle. On the other hand, variation of available water resources under different conditions could be well simulated by WEP model, and its results may provide proper constraints for water demand in CGE to indicate the influence of water resources on socio-economic development. The research is believed to be helpful for better understanding on two ways interaction between water and society.