Optimal water allocation scheme based on trade-offs between economic and ecological water demands in the Heihe River Basin of Northwest China.

Water conflicts between the economy and ecology have been severe in inland river basins. To solve this problem, this study selected the Heihe River Basin (HRB) as a typical basin in Northwest China. The water-oriented economy and the ecological area changes under the economic priority (EP) and eco-environmental sustainability (ES) scenarios were stimulated via computable general equilibrium (CGE) and ecological water demand modeling, respectively. This study improved the general production function of CGE model by using IO tables embedded in water and land resources. To guide the adjustment of water diversion scheme, an elasticity coefficient based on marginal efficiency was constructed to weigh the trade-offs between the economic and ecological water demands. The results showed that the EP scenario induced a GDP decrease of 1.04 yuan per cubic meter of water. The ES scenario caused a change in ecological area of 9.43 m2 per cubic meter of water. Based on the elasticity coefficient, the demand of 1 m2 of ecological area in the downstream area cost 0.11 yuan of the GDP of the entire basin, resulting in a total economic cost of approximately 95.92 million yuan since 2000. This study provides new insights into water reallocation in terms of sustaining both the economy and ecosystem in arid and semi-arid river basins.