Research on the Restructure and Its Practical Proposal of Water (Natural Monopoly) Industry

Article type: Research Article

Authors: Xia, Chengxiang

Affiliations: POB 99 Xi'an University of Finance and Economics, No. 64 Xiaozhai East Road, Xi'an - 710061, China. E-mail: xcx59@msn.com

Abstract: To restructure water industry, a new model is proposed according to its characters, that is, the transportation web systems of water should be constructed and maintained by public finance governmentally and made it public goods. Private enterprises invest to produce the identical water-good and use the web systems to transport it to consumers competitively, which might form a completely competitive market. Under this model, to avoid "the tragedy of commons" and the overuse of water resources, two considerable proposals are suggested analytically. One is the fiscal subsidy plus market pricing, and the other, the cap-and-trade system of water property right.

Keywords: Cap-and-trade, fiscal subsidy, natural monopoly, restructure, water

Journal: Asian Journal of Water, Environment and Pollution, vol. 5, no. 3, pp. 103-109, 2008