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Updated: Aug 9, 2026
12:44
Watershed Planning within a Quantitative Scenario Analysis Framework
Published on: July 24, 2016
Toward quantifying the effectiveness of water trading under uncertainty
1Sino-Canada Center of Energy and Environmental Research, North China Electric Power University, Beijing 102206, China. luobi111@uregina.ca
Journal of Environmental Management
|April 21, 2006
Summary
This study quantifies water trading effectiveness under uncertainty using a two-stage stochastic program (TSP) model. Results show trading is most effective in dry seasons, but high trading costs can render it ineffective.
Area of Science:
- Environmental Science
- Water Resource Management
- Operations Research
Background:
- Water trading is a key strategy for efficient water allocation.
- Uncertainty in water availability and trading parameters complicates effectiveness assessment.
- Existing methods struggle to comprehensively quantify water trading benefits under uncertainty.
Purpose of the Study:
- To develop and validate a methodology for quantifying water trading effectiveness under uncertainty.
- To measure the statistical water volume released through trading.
- To assess the impact of trading costs and water scarcity on trading program efficacy.
Main Methods:
- Developed an optimization model using interval-parameter two-stage stochastic programming (TSP).
- Quantified effectiveness by measuring statistically released water volume via trading.
- Applied the methodology to a hypothetical agricultural water trading program in Canada.
Main Results:
- The methodology effectively quantifies long-term water trading effectiveness.
- Water trading programs are more effective during dry seasons with water shortages.
- High trading costs significantly reduce or negate the effectiveness of water trading programs.
Conclusions:
- The developed TSP-based methodology provides a robust framework for evaluating water trading under uncertainty.
- Water trading can be an effective tool for managing water resources, especially during scarcity.
- Careful consideration of trading costs is crucial for successful water trading program implementation.
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