Restrictive effects of water scarcity on urban economic development in the Beijing-Tianjin-Hebei city region

Abstract

This study provides a scientific assessment of water scarcity in the Beijing-Tianjin-Hebei (BTH) city region and investigates its restrictive effects on urban economic development by quantifying economic loss caused by water scarcity based on an input-output optimization model. The results show that the water scarcity reflected by shadow prices has significant sectoral and regional heterogeneities. Southern Hebei faces the most severe water scarcity in the BTH city region and the situation is worsening. Water scarcity is shown to have a negative impact on the economy of the BTH city region that amounts to CNY 270.02 billion. Hebei has the largest potential economic loss caused by water scarcity, especially in southern Hebei, the potential GDP (gross domestic product) of which is decreased by 6.2%. This study also points out that the water scarcity in the BTH city region is underestimated in terms of actual water prices, and the scarcity of agricultural water use is mostly underestimated. The results contribute to a deeper understanding of the restrictive impact of water scarcity on regional economic development, and thus provide a scientific reference for policymaking in the BTH city region.