Publication: Addressing China’s Growing Water Shortages and Associated Social and Environmental Consequences
Loading...
Date
2006-04
ISSN
Published
2006-04
Author(s)
Editor(s)
Abstract
China has experienced a wide-scale and rapid transformation from an agricultural based economy to the manufacturing workshop of the world. The associated relocation of the population from relatively low density rural areas to very high density urban areas is having a significant impact on the quantity and quality of water available as inputs into the production and consumption process, as well as the ability of the water system to absorb and neutralize the waste byproducts deposited into it. Water shortages are most severe in the north of the country, where surface water diversion is excessive and groundwater is being depleted. In addition, the quality of water is deteriorating because of pollution, thereby aggravating existing water shortages. The biggest challenge ahead will be for national and local governments to craft policies and rules within China's complex cultural and legal administrative system that provide incentives for users to increase efficiency of water use, and for polluters to clean up the water they use and return clean water to stream flows. Using a standard public economics framework, water requirements for public goods-such as ecosystem needs-should be set aside first, before allocating property rights in water (to enable water markets to function and generate efficient allocation signals). Even then, water markets will have to be regulated to ensure public goods, such as public health, are not compromised. Until water markets are implemented, staying the course on increasing water and wastewater prices administratively and encouraging water conservation are necessary to reduce the wasting of current scarce water resources, as well as the new water supplies to be provided in the future.
Link to Data Set
Citation
“Shalizi, Zmarak. 2006. Addressing China’s Growing Water Shortages and Associated Social and Environmental Consequences. Policy Research Working Paper; No. 3895. © World Bank. http://hdl.handle.net/10986/8708 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication The Future of Poverty(Washington, DC: World Bank, 2025-07-15)Climate change is increasingly acknowledged as a critical issue with far-reaching socioeconomic implications that extend well beyond environmental concerns. Among the most pressing challenges is its impact on global poverty. This paper projects the potential impacts of unmitigated climate change on global poverty rates between 2023 and 2050. Building on a study that provided a detailed analysis of how temperature changes affect economic productivity, this paper integrates those findings with binned data from 217 countries, sourced from the World Bank’s Poverty and Inequality Platform. By simulating poverty rates and the number of poor under two climate change scenarios, the paper uncovers some alarming trends. One of the primary findings is that the number of people living in extreme poverty worldwide could be nearly doubled due to climate change. In all scenarios, Sub-Saharan Africa is projected to bear the brunt, contributing the largest number of poor people, with estimates ranging between 40.5 million and 73.5 million by 2050. Another significant finding is the disproportionate impact of inequality on poverty. Even small increases in inequality can lead to substantial rises in poverty levels. For instance, if every country’s Gini coefficient increases by just 1 percent between 2022 and 2050, an additional 8.8 million people could be pushed below the international poverty line by 2050. In a more extreme scenario, where every country’s Gini coefficient increases by 10 percent between 2022 and 2050, the number of people falling into poverty could rise by an additional 148.8 million relative to the baseline scenario. These findings underscore the urgent need for comprehensive climate policies that not only mitigate environmental impacts but also address socioeconomic vulnerabilities.Publication Exports, Labor Markets, and the Environment(Washington, DC: World Bank, 2025-07-14)What is the environmental impact of exports? Focusing on 2000–20, this paper combines customs, administrative, and census microdata to estimate employment elasticities with respect to exports. The findings show that municipalities that faced increased exports experienced faster growth in formal employment. The elasticities were 0.25 on impact, peaked at 0.4, and remained positive and significant even 10 years after the shock, pointing to a long and protracted labor market adjustment. In the long run, informal employment responds negatively to export shocks. Using a granular taxonomy for economic activities based on their environmental impact, the paper documents that environmentally risky activities have a larger share of employment than environmentally sustainable ones, and that the relationship between these activities and exports is nuanced. Over the short run, environmentally risky employment responds more strongly to exports relative to environmentally sustainable employment. However, over the long run, this pattern reverses, as the impact of exports on environmentally sustainable employment is more persistent.Publication The Macroeconomic Implications of Climate Change Impacts and Adaptation Options(Washington, DC: World Bank, 2025-05-29)Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.Publication The Asymmetric Bank Distress Amplifier of Recessions(Washington, DC: World Bank, 2025-07-11)One defining feature of financial crises, evident in U.S. and international data, is asymmetric bank distress—concentrated losses on a subset of banks. This paper proposes a model in which shocks to borrowers’ productivity dispersion lead to asymmetric bank losses. The framework exhibits a “bank distress amplifier,” exacerbating economic downturns by causing costly bank failures and raising uncertainty about the solvency of banks, thereby pushing banks to deleverage. Quantitative analysis shows that the bank distress amplifier doubles investment decline and increases the spread by 2.5 times during the Great Recession compared to a standard financial accelerator model. The mechanism helps explain how a seemingly small shock can sometimes trigger a large crisis.Publication Impact of Heat Waves on Learning Outcomes and the Role of Conditional Cash Transfers(Washington, DC: World Bank, 2025-07-14)This paper evaluates the impact of higher temperatures on learning outcomes in Peru. The results suggest that 1 degree above 20°C is equivalent to 7 and 6 percent of a standard deviation of what a student learns in a year for math and reading tests, respectively. These results hold true when the main specification is changed, splitting the sample, collapsing the data at school level, and using other climate specifications. The paper aims to improve understanding of how to deal with the impacts of climate change on learning outcomes in developing countries. The evidence suggests that conditional cash transfer programs can mitigate the negative effects of higher temperatures on students’ learning outcomes in math and reading.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Addressing China's Water Scarcity : Recommendations for Selected Water Resource Management Issues(World Bank, 2009)This report reviews China's water scarcity situation, assesses the policy and institutional requirements for addressing it, and recommends key areas for strengthening and reform. It is a synthesis of the main findings and recommendations from analytical work and case studies prepared under the World Bank Analytical and Advisory Assistance (AAA) program entitled 'Addressing China's Water Scarcity: from Analysis to Action.' These studies focus on several strategically important thematic areas for China where additional research was needed, as identified by the research team and advisory group based on a review of pressing issues. These areas are governance, water rights, pricing, ecological compensation, pollution control, and emergency response. The approach has been to evaluate Chinese and international experience to identify policy and institutional factors that have proven effective in promoting the adoption of water conservation and pollution reduction technologies. The research was based on literature reviews, qualitative and quantitative policy analyses, household surveys, field trips, and case studies to develop feasible recommendations for a plan of action based on realities on the ground.Publication Mexico : Water Public Expenditure Review(Washington, DC, 2006-09-04)Mexico has critical and urgent water related problems including the overexploitation and contamination of surface water and groundwater resources in the regions where most of the people reside and where the great majority of the Gross Domestic Product, or GDP is generated. Groundwater overexploitation is perhaps the most serious water resources management issue. About 100 aquifers in the central and northern part of the country are being overexploited, with water tables dropping 1 to 4 meters per year. In some areas, essentially all sectors depend on groundwater, and the unsustainable water use regimen will constrain economic development and have serious social impacts. The poor often suffer the most, because they are less able to deal with the added costs associated with falling water tables and water pollution. Water issues are both very complex and very important in Mexico, because they sit at the conjunction of economic development, public finance, infrastructure investment, environmental sustainability, and social justice. They are linked to public finance in three ways, raising resources, providing resources for investment and operations, and setting fees that affect the incentives for using water. The decisions about water investment have a lasting physical impact on what happens with water, as well as major social impacts. The scarcity of water in many parts of the country means that sometimes more water for one sector results in less water (and a different development path) in another sector and for the environment. The national patrimony relating to the ecosystem and groundwater often ends up last in line, as everyone generally agrees on their importance but objects to having his allocation of water or fiscal subsidy be reduced or to paying for wastewater treatment. Finally, making water and water services available equitably to households is a key element in the social justice to which Mexicans aspire. The report aims to integrate the views of the water sector through these different lenses, and to suggest how to improve the management of the sector and thus to make decisions more coherent.Publication Grow in Concert with Nature : Sustaining East Asia's Water Resources through Green Water Defense(Washington, DC: World Bank, 2012)As countries develop, the demand for water increases while water supply becomes less certain and is often not enough to meet demand. In general, pressures from both environment and human activities can increase the likelihood of water scarcity. Such pressures include increased socio-economic development and population growth, change in people's diets, competition for available water among different user sectors and growing climate variability. Climate change is likely to exacerbate the existing demand and supply stresses, particularly when more frequent and extreme droughts and floods, as well as rising sea level are becoming more evident. In temperate, sub-temperate regions, less rainfall and longer dry seasons are expected. In tropical areas, rainfall is predicted to be similar or greater in terms of annual average volumes, more intense and severe storms and seasonal droughts (IPCC, 2007). These pressures will test the effectiveness of water resource management systems in providing a consistent and secure water supply for all users, with minimum externalities. This study will assess advances in management practices, institutional and technological innovations for managing water scarcity sustainably under a changing climate. This study of 'sustaining East Asia's water resources through Green Water Defense (GWD) is a sub-study of the 'towards GWD in East Asia' study and is complemented by another sub-study 'green water defense for flood risk management in East Asia' that focuses on flood management in delta regions.Publication Appropriate Groundwater Management Policy for Sub-Saharan Africa(World Bank, Washington, DC, 2011)This paper provides an overview of major groundwater issues for Sub-Saharan Africa, with an assessment of their policy implications in terms of potential development and appropriate management. In terms of construction time, capital outlay and drought resilience, groundwater is the preferred source to meet most water-supply demands, despite hydro geological complexity, natural constraints on water well yields and quality, and institutional weaknesses. The 'new developmental agenda' relates to improving urban water-supply security and expanding irrigated agriculture to meet these challenges many countries need to undertake strategic assessment of their groundwater and prioritize investment on institutional strengthening so as to facilitate appropriately-managed groundwater development. Without effective use of available groundwater resources, improved livelihoods and climate-change adaptation will prove much more difficult to achieve.Publication Romania : Integrated Water Resources Rapid Assessment(Washington, DC, 2014-01-24)The purpose of this report is to assess the climate change impacts on water resources in Romania from an integrated, multi-sectoral perspective, and to recommend priority actions for addressing the identified risks and opportunities. The analysis is presented from an integrated water resources perspective, thereby including all pertinent water-related sectors, viz. municipal water supply and sanitation, industrial water supply, agriculture, energy generation, environment, and disaster management. More details on specific water-related aspects can be found in the companion rapid assessment reports for the energy, urban, and agricultural and rural development sectors. The recommended priority actions are presented in the context of consideration for possible financing under the operational programs funded by the European Structural and Investment Funds (ESIF) in 2014-2020 planning horizon. This analysis is based on the available information on the current status of water resources sector in Romania, along with the existing knowledge on the anticipated impacts of climate change in this sector.
Users also downloaded
Showing related downloaded files
Publication Governance Matters IV : Governance Indicators for 1996-2004(World Bank, Washington, DC, 2005-06)The authors present the latest update of their aggregate governance indicators, together with new analysis of several issues related to the use of these measures. The governance indicators measure the following six dimensions of governance: (1) voice and accountability; (2) political instability and violence; (3) government effectiveness; (4) regulatory quality; (5) rule of law, and (6) control of corruption. They cover 209 countries and territories for 1996, 1998, 2000, 2002, and 2004. They are based on several hundred individual variables measuring perceptions of governance, drawn from 37 separate data sources constructed by 31 organizations. The authors present estimates of the six dimensions of governance for each period, as well as margins of error capturing the range of likely values for each country. These margins of error are not unique to perceptions-based measures of governance, but are an important feature of all efforts to measure governance, including objective indicators. In fact, the authors give examples of how individual objective measures provide an incomplete picture of even the quite particular dimensions of governance that they are intended to measure. The authors also analyze in detail changes over time in their estimates of governance; provide a framework for assessing the statistical significance of changes in governance; and suggest a simple rule of thumb for identifying statistically significant changes in country governance over time. The ability to identify significant changes in governance over time is much higher for aggregate indicators than for any individual indicator. While the authors find that the quality of governance in a number of countries has changed significantly (in both directions), they also provide evidence suggesting that there are no trends, for better or worse, in global averages of governance. Finally, they interpret the strong observed correlation between income and governance, and argue against recent efforts to apply a discount to governance performance in low-income countries.Publication Design Thinking for Social Innovation(2010-07)Designers have traditionally focused on enchancing the look and functionality of products.Publication Breaking the Conflict Trap : Civil War and Development Policy(Washington, DC: World Bank and Oxford University Press, 2003)Most wars are now civil wars. Even though international wars attract enormous global attention, they have become infrequent and brief. Civil wars usually attract less attention, but they have become increasingly common and typically go on for years. This report argues that civil war is now an important issue for development. War retards development, but conversely, development retards war. This double causation gives rise to virtuous and vicious circles. Where development succeeds, countries become progressively safer from violent conflict, making subsequent development easier. Where development fails, countries are at high risk of becoming caught in a conflict trap in which war wrecks the economy and increases the risk of further war. The global incidence of civil war is high because the international community has done little to avert it. Inertia is rooted in two beliefs: that we can safely 'let them fight it out among themselves' and that 'nothing can be done' because civil war is driven by ancestral ethnic and religious hatreds. The purpose of this report is to challenge these beliefs.Publication Government Matters III : Governance Indicators for 1996-2002(World Bank, Washington, DC, 2003-08)The authors present estimates of six dimensions of governance covering 199 countries and territories for four time periods: 1996, 1998, 2000, and 2002. These indicators are based on several hundred individual variables measuring perceptions of governance, drawn from 25 separate data sources constructed by 18 different organizations. The authors assign these individual measures of governance to categories capturing key dimensions of governance and use an unobserved components model to construct six aggregate governance indicators in each of the four periods. They present the point estimates of the dimensions of governance as well as the margins of errors for each country for the four periods. The governance indicators reported here are an update and expansion of previous research work on indicators initiated in 1998 (Kaufmann, Kraay, and Zoido-Lobat 1999a,b and 2002). The authors also address various methodological issues, including the interpretation and use of the data given the estimated margins of errors.Publication Governance Matters VIII : Aggregate and Individual Governance Indicators 1996–2008(2009-06-01)This paper reports on the 2009 update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2008: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. These aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 35 data sources provided by 33 different organizations. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. The authors also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. They find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time. The aggregate indicators, together with the disaggregated underlying indicators, are available at www.govindicators.org.