What is it about?

With social and economic growth, the uneven spatial and temporal distribution of water resources, frequent water, and drought disasters, human activities interfering with the water cycle, and low water use efficiency are gradually becoming major factors hindering China’s green and sustainable development. To address this issue, the government is exploring the development of new water resources management policy initiatives, attempting to shift from levying water resources fees to water resources taxes and establishing a water resources protection tax system in the country.

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Why is it important?

The analysis of the behavior of micro-actors directly affected by the water resources tax policy implementation can help to understand the transmission mechanism of water resources tax. It can help to understand why each actor chooses to conserve water resources and reduce unreasonable water demand through water resources tax.


Based on the coexistence of water scarcity and sustainable development requirements in China, water administration departments and scholars generally believe that the current water resources tax design should not consider its fiscal revenue. More attention should be paid to the significance of resource conservation, ecological protection, and green development in water resources. On the one hand, the water resources tax is an effective compensation for using natural resources, which concentrates on the labor value, service value, and ecological value of water resources. On the other hand, the water resources tax effectively curbs the unreasonable demand for water in the region, and the tax collection and management is more reasonable and transparent. It improves the efficiency of water use and reduces the exploitation of groundwater, which plays a role in the protection of water resources, thus promoting environmental protection to a certain extent. In addition, from the various practices of water resources tax in foreign countries, the water-saving effect of water resources tax is also significan, but it also has a serious negative impact on agricultural production. Therefore, the implementation of the water resources tax policy needs to be combined with the actual situation of the country to achieve the expected policy effect.

Guiliang Tian
Hohai University

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This page is a summary of: Can the water resources tax policy effectively stimulate the water saving behavior of social water users? A DSGE model embedded in water resources tax, PLoS ONE, March 2023, PLOS, DOI: 10.1371/journal.pone.0281920.
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