Water environmental issues result from problems between the socio-economic system and the water environmental system. The concept of water environmental carrying capacity (WECC) can be used to describe water environmental system’s capacity which supports socio-economic development, and examine the trade-off between the driver/pressure (socio-economic) and the support (environmental) components of the societal-environmental interactive system. At the same time, an objective assessment of WECC may provide feasible integrated solutions for resolving water-related environmental problems. Hence, the quantitative assessment of WECC should be based on best available scientific knowledge coupled with appropriate simulation of complex interactions between the society and the environment. For this reason, this paper develops a WECC assessment method (WECC-SDM) which is based on a system dynamics framework. WECC-SDM can dynamically compute the WECC under different societal and environmental scenarios through coevolution and systematic simulations of the society–economy–water environment interactions. The WECC-SDM-based WECC assessment is, in fact, an interactive yet adaptive process of diagnosis–adjustment–improvement, which may provide helpful information for the sustainable development of river basins. The application of WECC-SDM shows that WECC in Tieling (in Northwest China) was severely overloaded in 2012 due to heavy ammonia nitrogen pollution in the dry season, which matches actual observations. The model was subsequently used to predict the situation of Tieling for the next 20 years. However, if positive actions in line with positive socio-economic development are taken to prevent and control pollution, it is possible for Tieling to revert back to a positive WECC situation in 2028, and support a population of 3.17 million and a GDP of 314.8 billion Yuan. As shown by the case study of Tieling, WECC-SDM can make a reasonable assessment of the current situation and simulate the trends of different scenarios, and is thus a practical WECC assessment tool.
