Asia

China Aims to Conserve Water by Charging Heavy Users More


Workers in the tunnel of a canal through the Yellow River in the middle route of the South-to-North Water Diversion Project in Zhengzhou city, China on Dec. 30, 2012

Photograph by Imaginechina via AP Photo

Workers in the tunnel of a canal through the Yellow River in the middle route of the South-to-North Water Diversion Project in Zhengzhou city, China on Dec. 30, 2012

Beijing’s winters are bone dry. Temperatures have frequently dipped below freezing this season, but no snow has fallen on rooftops and sidewalks. This city of 21 million exists, improbably, on an arid plain with no adjacent rivers. In late December, China’s government announced the completion of a major project to channel water from a tributary of the Yangtze River to China’s capital. But even that won’t be enough.

Water is an extremely limited resource in China, where 20 percent of the world’s population lives but only 7 percent of its available freshwater exists. Recognizing the limits of grand infrastructure projects to reroute nature’s endowment, the powerful National Development and Reform Commission announced plans on Friday for a tiered pricing system that will charge the heaviest water users higher prices, in an effort to encourage resource conservation.

The government plans to roll out the new pricing scheme by the end of 2015. Households that use 80 percent or less of the average household monthly water consumption will see no changes in their bills. But households that use more will face tiered price increases, calculated according to their monthly usage. After piloting a similar tiered system for water pricing, the sprawling southern megacity of Guangzhou saw average household water consumption drop at least 8 percent, according to state media reports.

As China’s urban population swells, total water demand is increasing. Already, 108 Chinese cities—including Beijing—face severe water shortages, according to a study (pdf) from the Hong Kong-based China Water Risk, a nongovernmental organization. By 2030, China could face water shortages of 201 billion cubic meters annually, according to estimates (pdf) by the Water Resources Group in collaboration with McKinsey.

In 2009, China consumed nearly 600 billion cubic meters of water. Last year the Ministry of Water Resources released a plan to cap China’s total water use at 700 billion cubic meters per year, deeming that the maximum sustainable level. The newly announced tiered pricing scheme is one strategy to get household consumers to watch their water bills and shorten their showers.

Larson is a Bloomberg Businessweek contributor.

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