Modeling social–economic water cycling and the water–land nexus: A framework and an application

Water resources are an essential and determining factor for food production, ecosystem health, and socio-economic development. The socio–economic water cycling system is a complex adaptive system. Changes in the socio-economic system at the macro level, such as industrial transformation, technical progress, and water price reform, will have impacts on water resources utilization at the micro level. In this study, we applied the multi-region computable general equilibrium theory to build a multiple-scale socio–economic water cycling (SEWC) model for analyzing the impacts of water price reform, water reallocation schemes, and industrialization processes on water resources utilization, with particular attention being placed on the water–land nexus. Importantly, the key parameters for constructing this multiple-scale SEWC model, such as the relationships between water and land resources, vary spatially across multiple levels (i.e., the levels of river basin, county, and irrigation area). We therefore innovatively considered and estimated the key parameters firstly and then integrated them into the model to achieve more reliable simulation results. Taking the Heihe River Basin as an empirical example, the simulated results show that a 5% increase in both the surface water price and the groundwater price in Gaotai County would lead to a differing extent of the economic impact among the other counties. Consequently, an appropriate allocation scheme of water resources according to the levels of irrigation area, county, and the Heihe River Basin is imperative if water utilization pressure is to be mitigated within the entire river basin.