Determining an Optimal Water Mix for Hong Kong
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Determining an Optimal Water Mix for Hong Kong David von Eiff 1
&
Aude Pommeret 1,2
Received: 6 July 2019 / Accepted: 16 November 2020 # Springer Nature Switzerland AG 2020
Abstract In this paper, we adapt the decision-making model proposed by Leroux and Martin (2016) to include an additional water resources type to make it suitable for Hong Kong’s current and proposed water supply mix. More precisely, we broaden the model to account for purchased water (from China) which is currently the primary source of water for Hong Kong. In addition, purchased water price uncertainty has been integrated, which differs from the uncertainty on water inflows and quality. Harvested stormwater and manufactured water, although not currently used in Hong Kong, may be sources for the future and are therefore considered in a 4-pronged scenario. The objective is to derive the optimal shares for each water supply. We obtain the optimal water mix and consumption levels for several scenarios, the current scenario, the proposed 4-pronged scenario, a drop in water quality, and self-sufficiency. The 4-pronged scenario advocates for a large-scale development of desalination plants in Hong Kong; however, it is also significantly more expensive and therefore results in a lower optimal water consumption which has implications regarding the current water tariff approach. Keywords Water . Government policy . Uncertainty . Optimization techniques . Dynamic analysis JEL Codes Q25 . Q28 . C61 . D80
1 Introduction Throughout its history, Hong Kong has been forced to be both proactive and innovative to provide a sufficient drinking water supply capable of meeting the ever-growing needs of both its population and economy. This goal was first met in 1965, due to a decision to enter into an agreement with the Government of Guangdong Province to purchase Dongjiang (Dong River) water to supplement local supplies. While at that time this deal guaranteed a secure and low-cost supply of water that was adequate to meet demand, this is now beginning to change due to a variety of economic and environmental pressures, both within Hong Kong and outside its borders. To ensure a continued secure supply, Hong Kong must begin to consider further diversifying its local freshwater sources to reduce its reliance on imported water while also increasing overall water * David von Eiff [email protected] 1
School of Energy and Environment, City University of Hong Kong, 83 Tat Chee Ave, Kowloon Tong, Hong Kong
2
IREGE University of Savoie, Chambéry, France
resources. In this paper, we will introduce the current water resource situation and then derive an optimal water supply mix and consumption level for Hong Kong based on the current and potential freshwater resources contingent upon uncertainties in their supply. While the use of purchased water was initially supplementary, the volume of Dong River water used in every year since 1985 has surpassed local supply [1] and is now the major source of water providing 70–80% of annual supplies [2]. While the supply of
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