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Water shortages in the Beijing-Tianjin-Hebei (BTH) region in China have constrained the region’s coordinated development. A feasible solution is introducing water rights transactions through the middle route of the South-to-North Water Diversion Project (SNWDP). However, there are few methods available for systematically simulating and evaluating the impact of inter-regional water rights transactions. In this study, an improved computable general equilibrium (CGE) model was developed to simulate the water rights transactions. Different water resources were integrated as intermediate inputs, and the model includes a substitution mechanism between different water resources. The water stress index (WSI) was used to evaluate the impact on the economy and water resources simulated by the model. The study proposes and evaluates different scenarios with different water-saving levels and transaction volumes. Water rights transactions have a positive effect on the overall economic growth of the BTH region, reducing the local water resource stress in Beijing and Tianjin; the transactions have a limited impact on the economy and water usage of Hebei Province. Compared with the general water-saving intensity scenario without water rights transactions, the recommended scenario adopts ultra water-saving intensity, along with the transfer of 100 hm3 of water rights from Hebei to Beijing and Tianjin. This leads to an increase in the overall gross domestic product (GDP) of the BTH region by CNY 0.587 trillion (USD 99.6 billion); a decrease in local water usage in Beijing and Tianjin of 197 hm3; and a relief in the regional imbalance of water resources stress. This study provides a quantitative analysis tool for evaluating the impact of water rights transactions and optimizing water resources allocations in the BTH region, providing a reference for simulating and evaluating water rights transactions in other regions.

In response to rapidly growing energy demands, Chinese authorities plan to invest more in hydropower development. However, there are concerns about the possible effects on macroeconomy. This paper uses SinoTERM, a dynamic multi-regional computable general equilibrium model (CGE) of the Chinese economy, to analyze the economic impact of large hydropower development projects. The model features regional labor market dynamics and an electricity subdivision module with substitutability between various types of electricity generation. The results suggest that hydropower development will boost economic growth in the project region. Most sectors in the project region will benefit from the hydropower development such as other services, health, and education, while some sectors will suffer a loss in output because of the substantial increase in real wages. For the national, every 10,000 yuan investment can drive the national GDP growth of 1,000 yuan, and the cost is expected to be recovered in ten years. By the end of 2040, the real national wage will be around 0.16% higher than the baseline scenario. The project could only be justified if net environmental benefits outweigh this loss.