Evaluating the water-saving and wastewater-reducing effects of water rights trading pilots: Evidence from a quasi-natural experiment.

Water rights trading is a market mechanism that promotes the conservation, protection and optimal allocation of water resources. This paper takes the water rights trading pilots' policy as a quasi-natural experiment, and then adopts the spatial difference-in-differences model to investigate the water-saving and wastewater-reducing effects of water rights trading pilots by using the panel data of 30 provinces in China from 2006 to 2019. The results indicate that water rights trading has good environmental governance effects on water-saving and wastewater-reducing in the pilot areas. However, water rights transactions are mainly concentrated within provinces, and there is no spatial spillover effect. Besides, the pilot policy has more long-term dynamic effects in reducing sewage discharge than water-saving due to rebound effect possibly. The optimization of the industrial structure and environmental regulation play important roles in the realization of the policy effects of the water rights trading pilots. An important implication is that water rights trading pilots are worthy of promotion throughout China in view of the policy effects, and China should focus on inter-regional market transactions and industrial structure transformation to promote the optimization of the water rights trading mechanism.