Sustainable management of water-economy-ecology nexus through coupling bi-level fractional optimization with effluent-trading mechanism: A case study of Dongjiang watershed

Ecosystem deterioration and freshwater depletion due to population growth and rapid urbanization have posed great challenges in managing water-economy-ecology nexus (WEEN) for watersheds. The objective of this study is to develop a bi-level fuzzy fractional programming (BFFP) method to identify sustainable watershed WEEN strategies with considering effluent-trading program. The BFFP method improves traditional methods for WEEN management over handling the bi-level decision process, ratio-objectives and fuzzy environmental policies simultaneously. Then, through coupling BFFP with effluent-trading mechanism, a BFFP-WEEN model is firstly formulated and employed to the Dongjiang watershed in China, where ninety-nine scenarios are examined to reflect various policy implications and decision-makers’ preferences. Major findings are: (1) compared with non-trading, effluent-trading can effectively reduce pollution discharges (e.g., reducing 140.1×106 ton of Chemical Oxygen Demand and 79.5×106 ton of Ammonia-Nitrogen over the planning horizon), revealing that effluent-trading mechanism is beneficial to the improvement of ecological environment; (2) under the trading mechanism, trading ratio has significant effects on marginal benefit and water allocation (e.g., improving marginal benefit by 15.4% and saving 363.7×106 m3 of total water allocation under 1.03 of trading ratio); (3) in order to alleviate the deterioration of ecosystem, industrial water use should be limited firstly and the area of forest land should be expanded; for ensuring the ecosystem requirements, it is recommended to promote the reuse of reclaimed water and improve wastewater treatment/recycling technology. The major improvements in this study include: (1) the development of the BFFP approach to deal with hierarchical decision conflicts and optimize system efficiency under uncertain environmental policies, and (2) the application of BFFP-WEEN model with coupling the effluent-trading mechanism to generate desired strategies for synergistic management of WEEN, and help balance the conflicts among water shortage, ecological degradation, and economic development in watersheds.