Water shortage and water prices

Canal near Shaoxing, China, Goulard Sébastien


As the population in China becomes more urbanised, water consumption is increasing. Because the country is prospering, more water is needed for agriculture, industrial use and urban dwellers’ daily consumption.

The Chinese still do not consume as much water as Americans; nevertheless, it is time for China to create incentives to significantly reduce water consumption.

In a recent conference paper1, Zhao, Guo and Marinova argued that increasing water prices may not be the solution for this problem.

The paper looks at the case of Tianjin, where water is very scarce. To solve this problem, local authorities have sought larger water supplies, over-pumping ground water and seeking to exchange water rights with neighbouring provinces. The authors feel that local authorities should take the opposite stance and aim to decrease the demand for water:

Increasing the water supply is not the answer to Tianjin’s water shortage.”

Of course, local government could decide to raise the price of water in order to encourage residents to consume less. This option has already been implemented in the past, but produced poor results in the long term. It is a policy that could be regarded as unfair, since the poorest households suffer the most from higher water prices. Moreover, irrational water prices could threaten the economic development of the city. Higher prices would be a threat to many local firms, which would become less competitive.

 The authors believe that local authorities should seek to fix a fair price that would satisfy consumers’ needs, economic development and ecological capacities. According to this paper, water prices need to rise progressively. However, according to the authors, “price” is not just about attaining a sustainable level of water consumption. China needs to adopt a sober economic development model, limit urbanisation, develop a more transparent water management system and educate people about water shortages.

Issues related to water consumption are not unique to China. Europe – especially southern Europe – is also suffering from water shortages. In the case of Europe, water shortage is not due primarily to human consumption and urbanisation, but is the result of intensive agriculture and the development of golf courses (in Spain). Unfortunately, Europe can hardly provide a single solution for China regarding water saving policies. In France, agriculture accounts for 70% of water consumption; this results in water pollution caused by pesticides. However, water management is mainly financed by household consumers, not agriculture, in order to maintain the competitiveness of French agriculture. There are, nevertheless, some initiatives to preserve water resources. For example, at the European level, the common agricultural policy’s new scheme encourages better management of water resources.

In the case of China, what can the government do to reduce its water consumption and maintain an equilibrium between human, industrial and ecological needs?

I, personally, believe it is unrealistic to restrain urbanisation, slow down development, and ask Chinese urban dwellers to reduce their water consumption. However, more attention should be focused on decreasing water pollution and preserving water resources. Although urbanisation cannot be stopped, the problem of water consumption should be better incorporated into urban planning and larger investments should be made in infrastructures for reusing water.  More importantly, management of water resources must be more transparent, as Yi, Jiao and Chen pointed out in their paper published in July 20112.

Generally speaking, environmental issues should be at the heart of every developmental policy, from agriculture to industry.

Cite this blog post
Sebastien Goulard (2013, July 8). Water shortage and water prices. URBACHINA. Retrieved April 19, 2024, from https://doi.org/10.58079/v2hq

  1. Zhao, B., X. Guo, and D. Marinova (2011). “To pay more or use less: China’s urban water pricing regime and water awareness.” In The 19th International Congress on Modelling and Simulation (MODSIM2011), Dec 12, 2011, Perth, WA: The Modelling and Simulation Society of Australia and New Zealand Inc []
  2. Yi L, Jiao W, Chen X N, Chen W (2011). An overview of reclaimed water reuse in China. Journal of Environmental. Sciences, 23(10), pp. 1585–1593 []

Sebastien Goulard

Ph.D. in political science (EHESS, Paris); M.A. in social sciences (EHESS, Paris); M.A. in international relations (IRIS, Paris), B.A. (Hons) in international political studies (ESE - Nottingham Trent University)

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