Abstract
In this study, an interval optimization model is developed to maximize the benefits of a water rights transfer system that comprises industry and agriculture sectors in the Ningxia Hui Autonomous Region in China. The model is subjected to a number of constraints including water saving potential from agriculture and ecological groundwater levels. Ecological groundwater levels serve as performance indicators of terrestrial ecology. The interval method is applied to present the uncertainty of parameters in the model. Two scenarios regarding dual industrial development targets (planned and unplanned ones) are used to investigate the difference in potential benefits of water rights transfer. Runoff of the Yellow River as the source of water rights fluctuates significantly in different years. Thus, compensation fees for agriculture are calculated to reflect the influence of differences in the runoff. Results show that there are more available water rights to transfer for industrial development. The benefits are considerable but unbalanced between buyers and sellers. The government should establish a water market that is freer and promote the interest of agriculture and farmers. Though there has been some success of water rights transfer, the ecological impacts and the relationship between sellers and buyers require additional studies.