China’s Game-Changing Water Policies

Water is an issue that preoccupies Chinese officials throughout the country, but nowhere perhaps as much as in Beijing. The already water-scarce capital has been suffering a continuous and precipitous decline in water availability over the past decades, as both population size and income levels have grown dramatically. Caixin magazine has a terrific new piece that details not only the current crisis but also the historical challenges Beijing has faced. The piece also explores what the capital should be doing but isn’t. Experts, for example, have been pushing pricing reform, water conservation, and recycling. Some of this is being done, but not enough. Instead, Beijing’s plans center on desalination, exploiting karst resources, and the South-North Water Diversion, each of which, as the article discusses, brings with it additional economic and potentially serious environmental costs.

Lest the Caixin article leave you too pessimistic, you can check out the testimony from my panel on China’s water issues from last week’s Economic and Security Review Commission hearing on “China’s Global Quest for Resources and Implications for the United States” down in D.C. Both of my co-panelists, Grace Mang and Jennifer Turner, raised a couple of potentially game-changing initiatives by the Chinese that could transform the way they do business related to water resources. Ms. Mang and Dr. Turner focused on the nexus of energy and water, and their take on the situation was decidedly upbeat.

Ms. Mang, who is the China program director at International Rivers Network, highlighted Sinohydro’s efforts to develop a strategy for environmental corporate social responsibility (CSR). Since Sinohydro, according to its own estimates, commands a 50 percent share of dam-building globally, what the company does in terms of CSR matters a lot. According to Ms. Mang, Sinohydro just passed an environmental policy that will make it the world’s leader in environmental CSR in the hydropower industry. She suggests that it would be “prudent for traditional dam builders and funders to take notice and try to meet China’s challenge to do better.” While I think it is probably a bit early to be calling on the international community to match Chinese standards, I agree that the aspirations of Sinohydro are inspirational and should be tracked carefully.

Dr. Turner, who heads the Woodrow Wilson Center’s China Environment Forum, focused on the development of shale gas as an alternative to water-demanding coal. Of course utilizing shale gas presents its own environmental challenges—it is water-intensive up-front and water pollution can be a serious problem. Nonetheless, given the choice between adding more coal to China’s energy mix and pushing forward with shale gas, Dr. Turner is probably right that, if managed properly, the latter is a very attractive option both for water and climate change concerns.

For my own part, I’m not quite as confident as Ms. Mang or Dr. Turner about China’s capacity to change the way that it does business—and my own testimony on China’s management of its shared trans-boundary water resources reflects my ambivalence. The seeds of change are everywhere, but whether they can take root and blossom in an often very harsh and arid policy environment will depend on careful tending over time.