Water permits trading framework for urban water demand management based on smart metering

Water rights trading is commonly used as a means of water resources reallocation between different water use sectors or between different end-users within the same sector. No studies, however, were reported on water rights trading from residential water use to other sectors. The primary reasons include the ambiguous definition of residents’ water rights and lack of real-time information about water consumption. This study presents a domestic-industrial water permits trading framework for urban water demand management. The framework is applied to the case study of Dalian demonstrating its feasibility theoretically and technologically from the perspective of the whole city and typical demonstration areas. The finding obtained shows that the tradable water volume accounts for 13.72% of the total residential water use, brings a profit of 91.05 million yuan to the residents, and saves 56.67 million yuan of water resources costs for industry users. The increase in water prices for consumption through tiered pricing can raise the tradable volume to 16.10%. Furthermore, a trading platform based on WeChat is developed to completely materialize the entire water permits trading process according to the real-time water consumption data collected from smart water meters. This study shows that the water permits trading between urban domestic-industrial sectors is an effective means of redistributing urban water resources to improve economic benefits while ensuring urban water supply security.