ASSESSMENT OF ECONOMIC
LOSSES FROM GROUNDWATER
OVERDRAFT IN CHINA
DR. HAIFENG SHI
SENIOR WATER MANAGEMENT EXPERT, MINISTRY OF WATER RESOURCES, CHINA
DR. XIAOKAI LI
LEAD WATER RESOURCES SPECIALIST, THE WORLD BANK
• 1 Introduction
• 2 Groundwater Overdraft Impact Zoning
• 3 Economic assessment model for groundwater overdraft
induced losses
• 4 Cost benefit analysis of the water-conservation
investments to reduce groundwater overdraft in Tianjin
• 5 Conclusions
GROUNDWATER MANAGEMENT IS DRAWING MORE AND
MORE ATTENTION IN CHINA OVER RECENT YEARS
ASSESSMENT OF GROUNDWATER OVERDRAFT
LOSSES
• 1 Introduction
• 2 Groundwater Overdraft Impact Zoning
• 3 Economic assessment model for groundwater overdraft
induced losses
• 4 Cost benefit analysis of the water-conservation
investments to reduce groundwater overdraft in Tianjin
• 5 Conclusions
THE DEFINITION OF OVERDRAFT IMPACTS DEGREES
• In this paper, the impacts caused by groundwater overdraft are categorized
into three zones (regions): severe, medium and light.
• According to population density within the studied region, the country is
divided into high population density, moderate population density and low
population density regions, respectively. Further, based on economic
development level, the country is divided into highly developed, moderately
developed and developing regions, respectively.
• Then overlap these three kinds of zoning, the country can be zoned into 27
kinds of regions.
COLLECTION AND ANALYSIS OF DATA
• For analysis, 96 sets of data of overdraft loss are selected on the basis of
overdraft impact level, population and GDP density by 27 types of regions.
According to the statistical results, these 96 sets only occurred in 16 regions of
the 27 types of regions, while over 90% are concentrated only in 3 types of
regions. So, according to the actual occurrence situation, groundwater
overdraft zones are divided into four types, they are light impact region,
generic impact region, developing serious impact region and developed
serious impact region.
• 1 Introduction
• 2 Groundwater Overdraft Impact Zoning
• 3 Economic assessment model for groundwater overdraft
induced losses
• 4 Cost benefit analysis of the water-conservation
investments to reduce groundwater overdraft in Tianjin
• 5 Conclusions
THE SELECTION OF MAJOR IMPACT FACTORS
•
Because the impacts of groundwater overdraft are gradual, the costs related to human
casualties and injury treatment are normally very small and not calculated. Thus, the main
economic losses of groundwater overdraft are losses and damages to economic assets.
Considering that there is usually a big variety of infrastructure data on which is lacking, we
seek to reflect these factors differently. Based on analysis of the situations, it was found that
the density of infrastructure/buildings closely correlates with and for simplicity reason can
be reflected by that of population density. Similarly, economic development level by unit
area GDP (or GDP density), and level of impacts by impact zone. Therefore, the economic
loss assessment of groundwater overdraft can be simplified to be a function of population
density, GDP density and impact zone. And population and GDP density can be combined
into one factor.
ECONOMIC ASSESSMENT MODEL FOR
GROUNDWATER OVERDRAFT LOSSES
• Using
statistics, the relations between unit area economic loss and the
comprehensive factor for different types of regions are established as follows:
12
2.5
10
2
y = 0.0067x + 0.5
8
1.5
y = 0.0075x + 1.3196
6
1
4
0.5
2
0
0
0
50
100
150
（1）light impacts region
200
0
200
400
600
800
1000
1200
（2）generic impacts region
1400
1600
ECONOMIC ASSESSMENT MODEL FOR
GROUNDWATER OVERDRAFT LOSSES
7
25
6
20
5
15
4
y = 0.0011x + 12.434
y = 0.008x + 1.5168
3
10
2
5
1
0
0
0
0
100
200
300
400
500
（3）developing serious impacts region
1000
2000
3000
4000
5000
600
（4）developed serious impacts region
6000
ECONOMIC ASSESSMENT MODEL FOR
GROUNDWATER OVERDRAFT LOSSES
The equations of economic loss assessment model can be derived as
follows:
M 
0.0067EP  0.5  30  EP  180  in lightimpacts region 




0.0075EP  1.3196  200  EP  1400  in generic impacts region 
 0.008EP  1.5168 100  EP  600  in developing seriousimpacts region  
0.0011EP  12.434 1000  EP  6500  in developed serious impacts region 


 A
MODEL VALIDATION
• Case 1 - Shanghai in East Coast. According to statistics, the annual direct
economic loss caused by land subsidence was 70 million Yuan in 1997. The
calculated annual direct economic loss caused by land subsidence is 68.95
million Yuan.
• Case 2 - Xi'an, a dry inland city in Northwest. The total direct economic loss
from 1959 to 1998 caused by ground cracking and land subsidence was 1.67
billion Yuan and the calculation loss is 42.11 million Yuan per year.
MODEL VALIDATION
• Case 3 Tianjin, a coastal city in the North China Plain. According to statistics,
the annual direct economic loss caused by land subsidence was 46 million
Yuan in urban area in 1997 and the calculated result is 48.55 million Yuan.
• Case 4 Dalian in Northeastern Coast. the government estimate annual direct
economic loss caused by seawater intrusion was around 52 million Yuan in
1993 and the calculated result is 57.04 million Yuan.
• 1 Introduction
• 2 Groundwater Overdraft Impact Zoning
• 3 Economic assessment model for groundwater overdraft
induced losses
• 4 Cost benefit analysis of the water-conservation
investments to reduce groundwater overdraft in Tianjin
• 5 Conclusions
THE LOSS CALCULATION
THE LOSS CALCULATION
• Based on statistics in 2014 and the medium-term development plan of
Tianjian, the overdraft amounts can be gotten as follows:
• Overdraft amount about 0.272 billion m3 in 2014
• Overdraft amount reduce to 108 million m3 by 2020
• Overdraft amount reduce to zero by 2030
• And we can calculate the subsidence area over 15mm per year are
1635,1150 and zero km2 in 2014, 2020 and 2030, respectively.
THE LOSS CALCULATION
• Then by using the assessment model, the direct loss reduction per year can be
calculated and the result is 406 million Yuan. Based on the Heinrich Method,
the indirect economic losses caused by various natural disasters range from 25 times of the direct economic loss, which means total annual economic
benefits in the form of reduced direct and indirect losses would be about
1.218 billion Yuan, i.e. an unit benefit of 4.5 Yuan per cubic meter overdraft
reduction.
COST-BENEFIT ANALYSIS
• 1 Introduction
• 2 Groundwater Overdraft Impact Zoning
• 3 Economic assessment model for groundwater overdraft
induced losses
• 4 Cost benefit analysis of the water-conservation
investments to reduce groundwater overdraft in Tianjin
• 5 Conclusions