Policy evaluation of economic – environmental tradeoffs in regulating industrial water use: An agent-based model

Water resource shortage and water pollution are prominent and urgent resource and environment problems. Industrial water consumption and sewage discharges account for a large proportion of the total sewage discharge of China. Therefore, scientifically regulating the water consumption and sewage discharge of industrial enterprises can effectively alleviate water scarcity and pollution problems. By establishing a multi-agent model, this study simulates the water use behavior of industrial enterprises, exploring the responses of industrial enterprises to a different type of scenarios for water management that can coordinate economic and environmental benefits. The purpose is to reduce the water consumption and pollutant emissions of industrial enterprises while achieving economic benefits, so as to provide policy references for water authorities. The results show that: 1) The three policies of water price, water resource tax and emission reduction subsidy can effectively regulate the water consumption and sewage discharge of enterprises. 2) Water price and water resource tax rate need to be controlled within a reasonable range. Appropriate water price and water resource tax rate can encourage enterprises to increase R&D investment. On this basis, it is suggested to emphasize the two-way influence of the government and enterprises, continue to implement water resources management policies such as water resources tax, so as to promote the balance between ecology and economy.