Recently, the Chinese government has implemented stringent water requirements based on the concept of ‘Basing four aspects on water resources’. However, existing research has inadequately addressed the constraints of water resources on population, city boundaries, land, and production, failing to adequately analyze the interplay between water resource limitations and urban development. Recognizing the interconnectedness between urban water use and economic development, a multi-objective model becomes crucial for optimizing urban water resources. This study establishes a nonlinear multi-objective water resources joint optimization model, aligning with the “Basing four aspects on water resources” requirement to maximize urban GDP and minimize total water use. A genetic algorithm (NSGA-II Algorithm) is applied to solve this complex nonlinear multi-objective model and obtain the Pareto solution set, addressing information loss inherent in the traditional water quota method. The model was tested in Wujiang District, an area located in China’s Jiangsu Province that has been rapidly urbanizing over the past few decades, and yielded 50 non-inferior water resource optimization schemes. The results reveal that the Pareto solution set visually illustrates the competition among objectives and comprehensively displays the interplay between water and urban development. The model takes a holistic approach to consider the relationships between water resources and urban population, land use, and industries, clearly presenting their intricate interdependencies. This study serves as a valuable reference for the rational optimization of water resources in urban development.

Rapid urbanization and industrialization have intensified the contradiction between water scarcity and economic growth. Achieving synergy between economic development and water conservation through taxation and subsidy policies has emerged as a critical research focus. This study develops an extended Computable General Equilibrium (CGE) model incorporating a water resource module to evaluate the impacts of production tax and subsidy policies in Wenling City, Zhejiang Province, China, a typical water-scarce city. By integrating a nested Constant Elasticity of Substitution (CES) production function for various water sources, the model captures the interactions between water supply and industrial output. Six policy scenarios of taxations and subsidies are designed. The impacts on macroeconomic aggregates, industrial output, and water usage are simulated. Results indicate that standalone taxation policies (Water Conservation Taxation Policy A1/Industrial Transformation Taxation Policy B1) reduce water usage by 3.35–3.80% but suppress Gross Domestic Product (GDP) growth by 0.37–0.76%. Among combined policies, the Water Conservation Combined Policy A3 achieves the optimal synergy between water conservation and economic growth, increasing real GDP by 1.00% while reducing water usage by 4.97%. This study reveals that taxation curbs the expansion of water-intensive industries, whereas subsidies redirect production factors toward water-efficient industries. Combining these policies effectively balances water conservation and economic development objectives. This study demonstrates how differentiated tax instruments drive water conservation through industrial transformation, providing a quantitative framework for production tax policy formulation in water-scarce regions.

Water conservation in agriculture is one of the key measures for alleviating the imbalance between water supply and demand, and a comprehensive assessment of the economic effects of agricultural water conservation is crucial for advancing the implementation of water conservation policies. Based on a traditional CGE model, this study incorporates “water resources” as an intermediate input and couples it with a mathematical model of water conservation costs to accurately reflect the relationship between the physical quantity of water resources and their economic value. The study establishes eight water conservation scenarios to simulate the impact of varying levels of water conservation on macroeconomic aggregates, water savings, and water conservation costs, and analyzes the marginal costs and marginal benefits under different conservation intensities. The results indicate that agricultural water saving can significantly improve economic water-use efficiency and drive macroeconomic growth through industrial linkage effects; nevertheless, the scale of reallocation of water saved from agriculture to non-agricultural sectors is limited. As water-saving intensity increases, the rate of change in economic output of each sector gradually rises and then stabilizes during 2022–2030. Among all sectors, the secondary sector exhibits the largest output change rate, ranging from 0.7% to 3.0%, while the tertiary sector shows the smallest change rate, varying from 0.4% to 1.7%. Under scenarios J1–J7, the marginal cost of water saving rises from 19.2 m³ per yuan to 52.1 m³ per yuan, and the marginal output decreases from 81.1 m³ per yuan to 6.8 m³ per yuan. The pattern of marginal cost–benefit follows general economic principles. The economically reasonable water-saving threshold occurs where marginal cost equals marginal benefit, corresponding to a water-saving volume of 8.2 × 10⁸ m³ and agricultural water withdrawal of 43.9 × 10⁸ m³. The research findings can serve as a reference for high-quality water-saving agricultural development in irrigation districts of arid and semi-arid regions.

Agricultural land use in arid regions is subject to binding water-resource constraints, yet existing studies of crop rotation and fallowing have focused mainly on cultivated-land restoration and crop production, with limited attention to spatial allocation and compensation under water constraints. This study develops a plot-level framework under the principle of determining land use by water availability. Taking Yanchi County, Ningxia, as a case study, ecological, water-resource, and land-resource constraints are integrated through spatial overlay and suitability assessment, and groundwater-, ecological-, and cultivated-land-protection schemes are developed. Results identify 9309 hm² as potentially feasible for crop rotation and 4568 hm² for fallowing. Under the high scenario with maize–potato rotation, irrigation-water reductions are 6.37, 4.69, and 4.31 million m³, with corresponding net-profit losses of 13.75, 9.53, and 9.60 million yuan, respectively. The groundwater-protection scheme achieves the largest absolute water savings and best matches current groundwater-management needs. Baseline compensation standards are 6357, 1390, and 615 yuan/hm² for maize fallowing, maize–potato rotation, and maize–sorghum rotation, respectively. The findings support differentiated, phased implementation combined with loss protection and water-saving incentives.