Exploring price effects on the residential water conservation technology diffusion process: a case study of Tianjin city

Abstract

Reforms of the water pricing management system and the establishment of a flexible water pricing system are significant for cities in northern China to tackle their critical water issues. The WATAP (Water conservation Technology Adoption Processes) model is developed in order to capture the water conservation technology adoption process under different price scenarios with disaggregate water demands down to the end use level. This model is explicitly characterized by the technological selection process under maximum marginal benefit assumption by different categories of households. In particular, when households need to purchase water devices in the provision market with the consideration of complex factors such as the life span, investment and operating costs of the device, as well as the regulated water price by the government. Applied to Tianjin city, four scenarios of water price evolutions for a long-term perspective (from year 2011 to 2030) are considered, including BAU (Business As Usual), SP1 (Scenario of Price increase with constant annual rate), SP2 (Scenario of Price increase every four years) and SP3 (Scenario of Price increase with affordable constraint), considering many factors such as historic trends, affordability and incentives for conservation. Results show that on aggregate 2.3%, 11.0% and 18.2% of fresh water can be saved in the residential sector in scenario SP1, SP2 and SP3, respectively, compared with the BAU scenario in the year 2030. The water price signals can change the market shares of different water appliances, as well as the water end use structure of households, and ultimately improve water use efficiency. The WATAP model may potentially be a helpful tool to provide insights for policy makers on water conservation technology policy analysis and assessment.

Keywords

technology selection / model optimization / water price / scenario analysis / consumer behavior

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Acknowledgements

This work is supported by the National Natural Science Foundation of China (Grant Nos. 51021066 and 71273153), China Institute of Water Resources and Hydropower Research Project (No. ZJ1224)

RIGHTS & PERMISSIONS

2014 Higher Education Press and Springer-Verlag Berlin Heidelberg