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China’s water–energy nexus
Abstract
As China continues to sustain high rates of economic growth, it is important to better understand patterns of
resource use within the Chinese economy and the vulnerability of its growth to resource scarcity. This paper
examines relationships between two of China’s scarcest resources—energy and water—focusing on the energy
implications of water use. Based on an analysis of economy-wide resource flows using China’s input-output tables,
we draw three overarching conclusions: First, the energy used both directly and indirectly in providing
non-agricultural water currently represents only a small fraction of China’s total energy consumption. However,
this share is set to increase as the country expands its water treatment capacity and hydraulic infrastructure. A
lifecycle assessment framework for evaluating these projects would aid policymakers as they choose between
more and less energy-intensive modes of water provision. Second, energy-water price interactions are currently of
little relevance to policymakers because water prices are low, but the high electricity-intensity of water treatment
facilities and their need to recover costs may change this situation. Third, water “migration” from agriculture to
non-agricultural uses will have important energy dimensions, which will be important for policymakers to bear in
mind as they design water pricing and conservation efforts.
Keywords: China; Energy policy; Input-output analysis; Water policy
1. Introduction
China’s recent growth experience has established new standards for economic growth among
developing countries. Many low income economics aspire to the Chinese example and, although few are
likely to replicate such sustained, rapid expansion, China’s precedence for export and resource-intensive
growth has given strong impetus to outward-orien
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