Water from afar can’t quench thirst
Amid euphoria and fanfare, water from the $40-billion middle-route of the gigantic South-NorthWater Transfer Project is set to reach Beijing in a matter of days. For the parched Chinese capital, which is in the same league as Saudi Arabia in terms of per capita water availability, this event is worth more than celebration.
Nevertheless, the water transferred from the south of the country is far from adequate to make Beijing watersecure, let alone the vast arid expanses ofNorth China. China as a whole is a water-stressed country, with per capita water resources of some 2,100 cubic meters which is less than one third of the global average. The dire state of water shortage is worsened by the mismatch of spatial and temporal distribution of water sources with the distribution of population and arable land.
North China is home to half the nation’s population and two-thirds of its farmlands. However, with only one-fifth of water sources, this region happens to be the most water-scarce region in China, where water has become a major constraint to socioeconomic development. With climate change becoming more evident, precipitation patterns and distribution are anticipated to be much more uneven and uncertain with higher evaporation. These factors will likely aggravate the existing critical water scarcity in the North. The situation has also been exacerbated by degradation of eco-systems from the overexploitation of water sources.
It is high time policymakers recognized that in the context of declining available water sources as demonstrated in the past decades, particularly during consecutive drought years, and from increased demand for water generated by agricultural, industrial and urban growth, supply side efforts may have well reached their limits.
Unfortunately, demand side solutions have not received as much attention as they deserve. Despite the glaring scarcity of water, its economic value has been grossly discounted in both agricultural and industrial production. Owing to irrational allocation and low pricing, the big water users, agriculture and industries, are not sensitive to the value of water utilized, resulting in the outrageous waste and low water productivity.
In North China, irrigated agriculture still accounts for more than 60 percent of total water use. With declining water availability due to competing uses, coupled with increasing climate variability, irrigated agriculture faces enormous challenges. Barring substantial improvements in water productivity, current practices of irrigated agriculture will no longer be viable.
The cause for the chronic waste and overuse of water lies in the fact that water for farmers is virtually free. For example, the cost of groundwater use is just that of electricity/ diesel for pumping. Farmers, as entrepreneurial as they are, have been driven by financial incentives to withdraw water up to the point where the marginal returns of crop production increases equalize the pumping costs. In reality, in most cases they go beyond that point (with no additional income) as they are not sensitive to water waste. The additional gains in agriculture production are far less than the economic cost of water used.
Even without changing the status quo of water allocation, substantial water saving potential can be tapped in agriculture if only the farmers’ current water use rights can be recognized and traded like land use rights by according a fair value to the groundwater that farmers are currently entitled to use.
Once farmers realize their water rights can be readily tradable, with monetary value above the additional crops produced, they will optimize their water consumption, combined with good agronomic practices, to increase water productivity. The government can pilot this by paying unused water consumption quotas at the price equivalent to or above the incremental agricultural production, but still significantly lower than the economic value of water. This will lay the groundwork for a nationwide water right trading platform, based on enforcement of a water consumption quota system at the basin and different administrative levels.
“Waste not, want not”. The value of water conservation should be fostered and reinforced by a host of economic and regulatory remedies, such as sizing economies based on water availability, consumptive water-use licensing, rational water pricing, government payment for water conservation and participatory water governance. Such “go-local” demandside management approaches could go much further than thousands of miles of canals built or to be built in addressing the water crisis in North China. “Water from afar cannot quench thirst at hand”, goes aptly one Chinese proverb. Liu Xueming is a senior economist with the Food and Agriculture Organization of the United Nations, and Li Xiaokai is a senior water resource management specialist with theWorld Bank.