Analysis on reasons for reserved water in water rights allocation

In initial water rights allocation, defining reserved water is not only internal requirement of national water rights system, important security in case of water-supplying crisis, but also consistent with the connotation and essence of sustainable development. Some water statutes and policies have already suggested reserving water in case of emergency, and practice proves that reserving water is feasible. Based on the theory of social net-welfare, reserved water can be used for regulating water rights market and helps realizing Pareto improvement finally.