China to Promote Water Efficiency Through Pricing

China’s latest water conservancy plan will include a system of progressive pricing to discourage excessive consumption. The country’s best known efforts to confront its deepening water crisis have been titanic engineering projects aimed at securing supply. The task of moderating demand is in some ways trickier but at least equally necessary, and pricing can be an effective strategy. One major complication that the government hopes to untangle is the burden on farmers, who use a great deal of water but can ill afford to pay more for it. From Xinhua (via China Water Risk).

China will also adopt high water rates for water-intensive industries and encourage reusing recycled water, according to the plan distributed by the National Development and Reform Commission (NDRC), the top economic planner, and two other ministries on Thursday.

For rural residents, the country will explore ways that give them price discounts when their water use is within set quotas and calculate prices progressively when they use more than the quotas, said the plan, which was made for the 2011-2015 period.

The pricing reforms are part of government efforts to make prices of resource products and energy better reflect market demand and to save natural resources and energy amid growing supply pressure in the world’s second-largest economy.