Sustainable Water‐Resources Allocation Through a Trading‐Oriented Mechanism Under Uncertainty in an Arid Region

Abstract

In this study, a dual‐interval two‐stage stochastic programming (DTSP) approach is developed for planning water resources through a market‐trading‐oriented mechanism under uncertainty. The DTSP method is used for policy analysis of water trading in the Kaidu‐kongque River Basin with the efficient and sustainable manners to relieve the pressures of economic development and population growth in northwestern China. The obtained results reveals that a market‐trading‐oriented mechanism under the adjustment/regulation by water managers would be a sustainable/effective manner to allocate water resources against the market failure. Meanwhile, the trade‐off between governmental regulation and market behavior has generated a more efficient trading mode with overall consideration of factors such as food safety, drinking safety, environmental protection, and regional development in a watershed system, which could bring about a number of beneficial impacts on regional water resources development. Moreover, the DTSP method is also appropriate for discriminating varied cases associated with various levels of economic influences since the penalties could be exercised with the recourses actions against any infeasibility.

Public Policy Analysis on Watershed Governance in Indonesia

“…The centralization of watershed management is reflected in the central government's watershed management regulations through laws, government regulations, presidential regulations, and ministerial regulations. The central government control environment in watershed management is planning, regulating, and evaluating activities [24]. The three scopes of watershed management are the essential parts in realizing integrated and sustainable watershed management.…”

“…This scope means that with the tiered type of Indonesian government, water resources management will certainly involve cross-regional governments and many institutions. Consequently, clear regulations are needed [24]. Furthermore, institutions with interests in water management need to collaborate to solve the problem [25].…”