Urban transformation optimization model: How to evaluate industrial structure under water resource constraints?

Abstract Many major cities today are beginning to experience increasing water shortages. A major use of water is often in industrial production, and therefore its reduction should go a long way to correcting the situation. The composition of the whole local or regional industrial structure has a significant influence on this, with its combination of sectors of different resource-intensities varying in their scale of use. However, the form of industrial structure also has an influence on other aspects of city life – particularly its economic performance. Evaluating industrial structure, therefore, involves an optimization problem of, on the one hand, determining the appropriate proportions of various types of sectors that will best satisfy the objective of minimizing water consumption in the face of a range of economic and other constraints. Alternatively, it can be seen as an optimization problem with the objective of maximizing economic benefit under a range of water use and other constraints. In developing the optimization model, we first break down industrial water use into two objectives - (1) minimizing total consumption and (2) minimizing intensity (per unit) of consumption. Adding the economic objective of maximizing Gross Domestic Product (GDP), all three are then optimized retrospectively by a series of input-output analyses to evaluate the suitability of the industrial structure. The application of the model is demonstrated in a case study of Beijing that indicates that, while its industrial structures in 1992 and 2002 were far from optimal, the actual 2012 industrial structure was quite close to that determined by the model and augurs well for the city's future sustainable development.