Market-based stochastic optimization of water resources systems for improving drought resilience and economic efficiency in arid regions

Efficient reallocation and conjunctive operation of existing water supplies have been receiving increasing attention as the competition among water users are intensified in worldwide. In this paper, a market-based stochastic optimization model is developed to address inherent uncertainties and complexities in water resources planning in arid regions. This model can be used not only to explore the water conservation potential via three strategies as cropping pattern optimization, irrigation infrastructure improvement and water trading, but also to help generate related water policy that promote the local welfare and facilitate local cleaner production. A real case study of the pumping irrigation system located in Yellow River basin is conducted to demonstrate applicability of the proposed model. Our findings indicate that the adjusted cropping pattern significantly increases the irrigator's income by growing economic crops such as herb and wolfberry; meanwhile, it does not sacrifice the food production. With the efficient infrastructural development, substantial water resources are saved and traded to other industries, thereby stimulating the local economy. Optimum subsidization policy is identified to increase the local welfare by allowing seasonal water trading while lessening the financial burden of the local government.