Changing climate has increasingly exacerbated droughts and floods in Taiwan; therefore, it is important to understand the actual demand of transferring Taiwan's agricultural water. This estimation model could help the water resource agencies to develop appropriate mechanisms for transferring agricultural water, as well as bargaining tools for water-related negotiations. In this study, an inverse demand function estimation model for transferring agricultural water was established, and the water usage statistics derived from the water charge agreements, covering the period from January 1989 to December 2006 and including drought and non-drought periods, regarding the charging of water management fees and water usage fees, was applied to the estimation model in our empirical research. The agreements were made between irrigation associations and water companies, industrial water users, and science and industrial parks, for the purposes of strengthening irrigation management, building usage, and disposal of remaining water. The empirical research was conducted to estimate the demand for transferring agricultural water using double-log regression model for panel data, and analyzed with random effects models for regular conditions and drought periods. The results showed that the inverse demand function developed in this study was able to pass Largrange multiplier test, and adjusted R 2 for the regression were high, fitting the random effects model showing good compatibility with the sample selection.From the results, we can verify the estimation models to forecasting models. The significant results not only prove that the model could provide important market information for the commercialization of water resources, but water resource agencies could also make use of this important information to develop suitable mechanisms for transferring agricultural water, as well as bargaining tools for negotiation of water transactions.

This paper aims to evaluate the social value of the environmental multifunctionality of paddy fields in Taiwan; through individual consumers' direct expressions of their perceived benefit and to provide the empirical data thus collected for the reference of the decision makers in the government. This study use contingent valuation method (CVM) to evaluates the value of environmental multifunctionality of paddy fields from the purposefully selected pool of samples in Taiwan. The result shows if judged by the threat that free trade poses to the retention of arable land, most respondents give a value of 114 NT/ household/month to 115 NT/household/month for 1% reduction of arable land to be restored to the existing level; and168 NT/household/month to 181 NT/household/month for a reduction rate of 4%. There are 7,394,758 households in Taiwan. The aggregating result is 10,116,028,944 NT/ year to 10,204,766,040 NT/year for 1% reduction of arable land to be restored to the existing level; and 14,907,832,128 NT/year to 16,061,414,376 NT/year for a reduction rate of 4%.

In the face of climate change, extreme climates are becoming more frequent. There were severe droughts in Taiwan in 2020, 2014–2015, and 2002. In these years, the paddy fields were kept fallow to save water and transfer agricultural water to non-agricultural use. On the other hand, with global warming, the existence of paddy fields may be one of the natural solutions to regional temperature mitigation. This study used remote sensing to quantify the difference in temperature between paddy fields and urban areas. The result of overall surface temperature deductive analysis revealed that the temperature in the whole Taoyuan research area was 1.2 °C higher in 2002 than in 2003 because of fallowing of the paddy field, while in the Hsinchu research area, it was 1.5 °C higher in 2002 than in 2003, due to the same reason described above. In terms of the difference in land use, for the Hsinchu research area, the surface temperature deductive result showed that the average paddy field temperature in 2002 was 22.3 °C (sample area average), which was 7.7 °C lower than that of the building and road point and 4.3 °C lower than that of the bare land point. The average paddy field temperature in 2003 was 19.2 °C (sample area average), which was 10.1 °C lower than that of the building and road point and 8.3 °C lower than that of the bare land point. Then this study evaluated the economic valuation of the paddy field cooling effect using the contingent valuation method. Through the paddy field cooling effect and in the face of worsening extreme global climate, the willingness to pay (WTP) of the respondents in Taiwan for a decrease of 1 °C with regard to the regional microclimate was evaluated. It was found that people in Taiwan are willing to pay an extra 8.89 USD/per kg rice/year for the paddy for a decrease in temperature by 1 °C in the regional microclimate due to the paddy field. Furthermore, this study applied the benefits transfer method to evaluate the value of a decrease of 1 °C in the regional microclimate in Taiwan. The value of a decrease of 1 °C in the regional microclimate in Taiwan is 9,693,144,279 USD/year. In this regard, the economic value of 1 °C must not be underestimated. In conclusion, more caution is needed while making decisions to change the land use of paddy fields to other land uses.

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