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Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China

HE Xiaoying,  KANG Hong,  GU Yaopeng,  SONG Yuanliang

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文章导航 > Chinese Geographical Science  > 2020 >  30(6): 1039-1051
HE Xiaoying, KANG Hong, GU Yaopeng, SONG Yuanliang. Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China[J]. 中国地理科学, 2020, 30(6): 1039-1051. doi: 10.1007/s11769-020-1165-5
引用本文: HE Xiaoying, KANG Hong, GU Yaopeng, SONG Yuanliang. Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China[J]. 中国地理科学, 2020, 30(6): 1039-1051. doi: 10.1007/s11769-020-1165-5
shu
HE Xiaoying, KANG Hong, GU Yaopeng, SONG Yuanliang. Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China[J]. Chinese Geographical Science, 2020, 30(6): 1039-1051. doi: 10.1007/s11769-020-1165-5
Citation: HE Xiaoying, KANG Hong, GU Yaopeng, SONG Yuanliang. Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China[J]. Chinese Geographical Science, 2020, 30(6): 1039-1051. doi: 10.1007/s11769-020-1165-5
shu

Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China

doi: 10.1007/s11769-020-1165-5

  • 1. School of Management and Economics, Xi'an Technological University, Xi'an 710021, China;

  • 2. Zhongguancun Listed Companies Association, Beijing 100011, China

基金项目: 

Under the auspices of the Ministry of Education of Humanities and Social Science Project (No. 17XJA790005), Grant of Shaanxi Social Science Association &Shaanxi Statistics Bureau (No. 2019TJ053)

详细信息
    通讯作者:

    HE Xiaoying.E-mail:hexiaoying@xatu.edu.cn

Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China

  • 1. School of Management and Economics, Xi'an Technological University, Xi'an 710021, China;

  • 2. Zhongguancun Listed Companies Association, Beijing 100011, China

Funds: 

Under the auspices of the Ministry of Education of Humanities and Social Science Project (No. 17XJA790005), Grant of Shaanxi Social Science Association &Shaanxi Statistics Bureau (No. 2019TJ053)

  • 摘要: China has started shifting from relying on supply management to demand management strategy in addressing its water shortage problems. Water option, a financial derivative for water commodity, has been utilized to manage water demands in the United States and Europe since the 1990s but is still novel to China. In this study we analyzed the pros and cons of China's existing system for water rights transfers and proposed an alternative, flexible trading instrument-water options for China. Incorporating the uncertainty to water option pricing, this study first conducted an empirical analysis of the water option in the water-receiving area of the Hanjiang-Weihe River Transfer Project of China, and then evaluated the benefits of the water option applications. Results show that water option trading can bring water cost saving and increase the potential industrially added value for industrial enterprises in the receiving area, and trading of short-and-medium term water options is more favorable than the long-term water options trading. The novel water option trading proposed in this study, once verified through pilot studies, will be helpful in addressing water shortage problems in China.
    Abstract: China has started shifting from relying on supply management to demand management strategy in addressing its water shortage problems. Water option, a financial derivative for water commodity, has been utilized to manage water demands in the United States and Europe since the 1990s but is still novel to China. In this study we analyzed the pros and cons of China's existing system for water rights transfers and proposed an alternative, flexible trading instrument-water options for China. Incorporating the uncertainty to water option pricing, this study first conducted an empirical analysis of the water option in the water-receiving area of the Hanjiang-Weihe River Transfer Project of China, and then evaluated the benefits of the water option applications. Results show that water option trading can bring water cost saving and increase the potential industrially added value for industrial enterprises in the receiving area, and trading of short-and-medium term water options is more favorable than the long-term water options trading. The novel water option trading proposed in this study, once verified through pilot studies, will be helpful in addressing water shortage problems in China.
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Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China

doi: 10.1007/s11769-020-1165-5
  • 1. School of Management and Economics, Xi'an Technological University, Xi'an 710021, China;
  • 2. Zhongguancun Listed Companies Association, Beijing 100011, China
    • 基金项目:

    Under the auspices of the Ministry of Education of Humanities and Social Science Project (No. 17XJA790005), Grant of Shaanxi Social Science Association &Shaanxi Statistics Bureau (No. 2019TJ053)

    通讯作者: HE Xiaoying.E-mail:hexiaoying@xatu.edu.cn
  • 收稿日期: 2020-01-22

摘要: China has started shifting from relying on supply management to demand management strategy in addressing its water shortage problems. Water option, a financial derivative for water commodity, has been utilized to manage water demands in the United States and Europe since the 1990s but is still novel to China. In this study we analyzed the pros and cons of China's existing system for water rights transfers and proposed an alternative, flexible trading instrument-water options for China. Incorporating the uncertainty to water option pricing, this study first conducted an empirical analysis of the water option in the water-receiving area of the Hanjiang-Weihe River Transfer Project of China, and then evaluated the benefits of the water option applications. Results show that water option trading can bring water cost saving and increase the potential industrially added value for industrial enterprises in the receiving area, and trading of short-and-medium term water options is more favorable than the long-term water options trading. The novel water option trading proposed in this study, once verified through pilot studies, will be helpful in addressing water shortage problems in China.

English Abstract

HE Xiaoying, KANG Hong, GU Yaopeng, SONG Yuanliang. Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China[J]. 中国地理科学, 2020, 30(6): 1039-1051. doi: 10.1007/s11769-020-1165-5
引用本文: HE Xiaoying, KANG Hong, GU Yaopeng, SONG Yuanliang. Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China[J]. 中国地理科学, 2020, 30(6): 1039-1051. doi: 10.1007/s11769-020-1165-5
shu
HE Xiaoying, KANG Hong, GU Yaopeng, SONG Yuanliang. Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China[J]. Chinese Geographical Science, 2020, 30(6): 1039-1051. doi: 10.1007/s11769-020-1165-5
Citation: HE Xiaoying, KANG Hong, GU Yaopeng, SONG Yuanliang. Optioning Water Rights: A Potential Alternative to the Hanjiang-Weihe River Water Transfer Project, China[J]. Chinese Geographical Science, 2020, 30(6): 1039-1051. doi: 10.1007/s11769-020-1165-5
shu

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