Analysis on impact of water-transfer between regions on the water cost: an analogy

This article makes a qualitative analysis on the water price issue in the project of watertransfer between regions according to the cost division of the whole-cost pricing method,drawing an analogy between this issue and the "bubble method" in pollution-discharge management,and gives a general framework for economic analysis in detailed research.The analysis proves that the water-transfer has a full-scale impact on each part of the two regions water resource cost.If the quantity of the water-transfer is appropriate,the water resource costs of the two regions would be more close each other,and the whole cost is decreased and very similar to the change of the cost of pollution control resulting from the trade of pollution-discharge rights.The water resource connection between the two regions by the water-transfer project changes the water cost division.The surplus water in the region that exports the water now has opportunity costs,because it can be traded to other region and the water-transfer leads a water supply pattern adapting to the water demand in the two regions,the turnover rate of water will be increased and the water cost will be decreased.The time factor demonstrates its importance here.The analysis indicates that when the potential property rights of water resource become full ones that can be traded because of theproject of watertransfer between regions, the efficiency of water resource deployment will be improved,which is consistent with the Coase theorem.The income of the region of inputting water in short-run is different with that in long run.