Can environmental regulation promote green innovation and the productivity of cities? The “Compliance Cost” (CC) perspective and the “Porter Hypothesis” (PH) offer contrasting views, whereas the existing empirical results are inconclusive. This paper aims to highlight the roles of multifaceted government interventions, including government-to-firm subsidies, tax levies on firms, and environmental infrastructure provisions, in moderating environmental regulation for realizing PH. Based on the fixed-effects models for Chinese prefecture cities from 2005–2013, we found that environmental regulation positively impacted green innovation but negatively affected productivity. The results of moderating effects suggest that environmental regulation can better promote green innovation if it is compounded with more government-to-firm subsidies, lower firm tax burdens, and increased environmental infrastructure provisions. We further decomposed the impacts of these interventions across seven fields of green innovation and found that subsidy and tax burden relief were especially effective in facilitating more GI in the sector of transportation and alternative energy production. This paper amplifies the theoretical framework of PH by accentuating the analytical lens of multifaceted government interventions but also provides insights into how local governments can effectively design “carrot-and-stick” policies to realize PH at the city level.

The formation of world-class megalopolises has been a goal of urban development agencies around the world owing to their economic advantages. On their bids of becoming a world-class megalopolis, water availability is a factor that requires consideration. China has set an ambitious goal of developing a world-class megalopolis in the water-scarce Beijing-Tianjin-Hebei (BTH) region. This study investigates the water challenge the BTH region faces and the effects of main water conservation measures in the region towards the goal. An inter-city input–output model was constructed for identifying the water gap in the region and analyzing the effectiveness of main water conservation measures under various scenarios. The results indicate a significant gap between the water required to achieve the goal of becoming a world-class megalopolis and the region’s available water resources. Although proposed water conservation measures of improving water use efficiency and reducing agricultural water use provide a modest improvement, the amount of water required for urban development still exceeds the availability. The study emphasizes the significance of agricultural water use reduction in Hebei through crop system replacement from water-intensive winter wheat to water-saving crops. The study also proposes an alternative option of adjusting the development plan through redefining the boundary of the BTH megalopolis by excluding part of cities in Hebei. The results of this study contribute to a better understanding of the effect of water scarcity on urban development and thus provide references for other water-scarce regions with ambitious urban development goals.

This study provides a scientific assessment of water scarcity in the Beijing-Tianjin-Hebei (BTH) city region and investigates its restrictive effects on urban economic development by quantifying economic loss caused by water scarcity based on an input–output optimization model. The results show that the water scarcity reflected by shadow prices has significant sectoral and regional heterogeneities. Southern Hebei faces the most severe water scarcity in the BTH city region and the situation is worsening. Water scarcity is shown to have a negative impact on the economy of the BTH city region that amounts to CNY 270.02 billion. Hebei has the largest potential economic loss caused by water scarcity, especially in southern Hebei, the potential GDP (gross domestic product) of which is decreased by 6.2%. This study also points out that the water scarcity in the BTH city region is underestimated in terms of actual water prices, and the scarcity of agricultural water use is mostly underestimated. The results contribute to a deeper understanding of the restrictive impact of water scarcity on regional economic development, and thus provide a scientific reference for policymaking in the BTH city region.

Reducing agricultural water use is an inevitable choice to alleviate water shortage in arid and semi-arid regions, and high-efficiency irrigation technologies provide conditions for water conservation. However, without unified water resources management policy to redistribute the saved agricultural water, farmers’ behavior will lead to water rebound and large-scale expansion of cultivated areas, especially on the edge of oasis regions. To solve these issues and promote the sustainable development of water resources, it makes sense to explore the impact of unified water resources management policy from the perspective of farmers’ behavior. This study takes the typical irrigation zone in the Heihe River Basin as a case to discuss the response of farmers’ economic behavior to transferring irrigation water and restricting land reclamation, i.e., the unified water resources management policy with the technical efficiency of crop irrigation improved based on the bio-economic model. The results show that in the case of loosening land constraints, farmers will reuse all the saved water for agricultural production by reclaiming unused land or increasing the area of water-intensive crops (vegetables). Although the policy of restricting land reclamation can restrict land expansion, it cannot avoid water rebound caused by adjusting the crop-planting structure. Farmers’ land-expansion behavior can be largely restricted by transferring the saved irrigation water to non-agricultural sectors in irrigation zones with inadequate water, but to contain land-expansion behavior in irrigation zones with surplus water, the policy of restricting land reclamation must be implemented simultaneously. The study also reveals that farmers will choose to grow more cash crops (seed maize, vegetables, tomato, seed watermelon, potato, and rapeseed) and fewer food crops (wheat, maize) to increase the profit per unit of water in the scenario of loosening land constraints or transferring agricultural water. Furthermore, the study indicates that farmers’ economic income can be decreased or at least not increased with the transfer of agricultural water. Both benefit compensation from non-agricultural sectors and increased non-agricultural income can compensate farmers’ economic loss. Therefore, it is necessary to improve water rights trading systems and increase employment opportunities for surplus agricultural labor to promote economic development in rural areas.