Impact analysis of government investment on water projects in the arid Gansu Province of China

Publication date: Available online 13 April 2015 Source:Physics and Chemistry of the Earth, Parts A/B/C Author(s): Zhan Wang , Xiangzheng Deng , Xiubin Li , Qing Zhou , Haiming Yan 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 wat...
Source: Physics and Chemistry of the Earth, Parts ABC - Category: Science Source Type: research