Measuring benefits of rural-to-urban water transfer

Agriculture-to-urban water transfer is currently an important measure to meet the increasing water demand result from rapid industrialization and urbanization in China. Not only measuring benefits of agriculture-to-urban water transfer is critical to assess water transfer proposals, but also it can provide reliable basis for redistributing the benefits of agriculture-to-urban water transfer. This paper has developed a comprehensive framework in which Production Function Approach (PFA) is applied to quantify the value of water use in agricultural and industrial sectors, and Contingent Valuation Method (CVM) is employed to investigate the value of water use in municipal consumption and ecological environment. A case study from Zhuji in China verified the feasibility and validity of the method proposed in the paper. Results indicate that the Agriculture-to-urban water transfer increases the water value created by improving allocation efficiency of water use in different sectors. The benefits of agriculture-to-urban water transfer mainly origin from the fact that the economic value in industrial water-use are higher than which in the other sectors’ water-use. Meanwhile, the urban residents have a stronger desire to improve the water eco-environment which lead to higher water value in urban area.