Achieving sustainable soil and water protection: The perspective of agricultural water price regulation on environmental protection

Abstract

With the development of Chinese economy, more and more attention has been paid to environmental protection, the implementation of water price policy affects economic and environmental changes in China. This paper analyzes the impact of water price policy on agricultural land use and the scale of water pollution discharge in 240 cities in China between 2001 and 2017, by including data from China Urban Statistical Yearbook and China Land & Resources Almanac. The theoretical analysis of this study indicates that the optimal scale of pollution depends on the local initial endowment, economic investment capital and the marginal cost of environmental pollution caused by government’s economic activities. Furtherly, the economic activities have a worsening impact on environmental pollution, but when the government implements environmental protection and water price policy measures in response to environmental pollution caused by economic activities, it has a significant impact on the decline in the scale of pollution. The government has promoted the pollution suppression model in the formulation of water prices, which has internalized the external cost of pollution in economic activities and can effectively reduce the scale of agricultural water pollution discharge.