Optimal Multi-Sectoral Water Resources Allocation Based on Economic Evaluation Considering the Environmental Flow Requirements: A Case Study of Yellow River Basin

Competitions and disputes between various human water sectors and environmental flow of the river are exacerbated due to the rapid growth of the economy in Yellow River basin as well as the limited supply of available water resources in recent decades. It is necessary to implement rational and effective management and allocation to alleviate the pressure of water shortage. In order to promote economic development and maintain the ecological balance of the river, both the water allocation to the river environmental system and different human needs should be of concern when making the allocation polices. This study developed a water allocation model based on Nash–Harsanyi bargaining game theory for optimal water resources allocation among agricultural, industrial, domestic, public, and urban ecological water (watering for urban green space) sectors while ensuring the environmental flow requirements of lower reaches. A comprehensive economic evaluation framework is built to assess the economic benefits of different water uses that were taken as the basis of water allocation model. The annual environmental base flow is 7.50 billion m3 in the lower reaches of Yellow River. Moreover, the optimal annual allocations for agricultural, industrial, domestic, public, and urban ecological water use sectors are estimated as 33.7, 6.42, 3.96, 1.75 and 2.68 billion m3, respectively.