Optimal design of two-dimensional water trading considering hybrid “three waters”-government participation for an agricultural watershed

Sharp increase in water consumption and pollutant emissions makes shortage of clean water the main problem hindering regional agricultural development. Two-dimensional water trading (2DWT) can unify the quantity and quality of water to relieve the water crisis in agricultural watersheds. This study developed a hybrid “three waters”-government participation based two-dimensional water trading model group (TWG-2DWTMs) to support 2DWT planning under various complexities. The linkage among water resources, water quality and ecology (i.e., “three waters”) as well as government participation are considered. The TWG-2DWTMs has been applied in Dagu River basin in Qingdao city, an agricultural watershed, and solved under multiple trading rules and water-saving scenarios. The results indicate that trading rule for government participation with ecological runoff guarantee of river regions and concentration control of monitoring sections (CERG) is the optimal trading rule and should be recommended. CERG can realize the transformation from water rights to discharge permits, and promote economic development while ensuring water ecology and water environment. Furthermore, under CERG, water-saving percentage of 50% is the optimal water-saving scenario; water saving can bring about surplus water rights that can be directly traded or transformed into discharge permits, promoting local sustainable development.