CHINA’S WATER-ENERGY-FOOD R ADMAP A Global Choke Point Report By Susan Chan Shifflett Jennifer L. Turner Luan Dong Ilaria Mazzocco Bai Yunwen February, 2015 Acknowledgements The authors are grateful to the Energy Our CEF research assistants were invaluable Foundation’s China Sustainable Energy in producing this report from editing and fine Program and Skoll Global Threats Fund for tuning by Darius Izad and Xiupei Liang, to their core support to the China Water Energy Siqi Han’s keen eye in creating our infographics. Team exchange and the production of this The chinadialogue team—Alan Wang, Huang Roadmap. This report was also made possible Lushan, Zhao Dongjun—deserves a cheer for thanks to additional funding from the Henry Luce their speedy and superior translation of our report Foundation, Rockefeller Brothers Fund, blue into Chinese. At the last stage we are indebted moon fund, USAID, and Vermont Law School. to Katie Lebling who with a keen eye did the We are also in debt to the participants of the China final copyedits, whipping the text and citations Water-Energy Team who dedicated considerable into shape and CEF research assistant Qinnan time to assist us in the creation of this Roadmap. Zhou who did the final sharpening of the Chinese We also are grateful to those who reviewed the text. Last, but never least, is our graphic designer, near-final version of this publication, in particular, Kathy Butterfield whose creativity in design Vatsal Bhatt, Christine Boyle, Pamela Bush, always makes our text shine. Heather Cooley, Fred Gale, Ed Grumbine, Jia Shaofeng, Jia Yangwen, Peter V. Marsters, Sun Qingwei, Vincent Tidwell, Yang Fuqiang, Zhang Chao, and Zhao Lijian. All errors and omissions are those of the authors and not those acknowledged here. The views expressed in this report are those of the authors and not necessarily those of the Wilson Center, Greenovation Hub, or the funders. Woodrow Wilson International Center for Scholars Jane Harman, Director, President and CEO Thomas R. Nides Chairman of the Board Sander R. Gerber Vice Chairman PUBLIC CITIZEN MEMBERS: James H. Billington, Librarian of Congress; John Kerry, Secretary, U.S. Department of State; Albert Horvath, Acting Secretary, Smithsonian Institution; Arne Duncan, Secretary, U.S. Department of Education; David Ferriero, Archivist of the United States; William Adams, Chairman, National Endowment for the Humanities; Sylvia Mathews Burwell, The Secretary, U.S. Department of Health and Human Services Fred P. Hochberg Chairman and President, Export-Import Bank of the United States PRIVATE CITIZEN MEMBERS: John T. Casteen, III, Charles E. Cobb, Jr., Thelma Duggin, Lt. Gen. Susan Helms, USAF (Ret.), Barry S. Jackson, Nathalie Rayes, Jane Watson Stetson WILSON NATIONAL CABINET: Eddie & Sylvia Brown, Melva Bucksbaum & Raymond Learsy, Ambassadors Sue & Chuck Cobb, Lester Crown, Thelma Duggin, Judi Flom, Sander R. Gerber, Ambassador Joseph B. Gildenhorn & Alma Gildenhorn, Harman Family Foundation, Susan Hutchison, Frank F. Islam, Willem Kooyker, Linda B. & Tobia G. Mercuro, Dr. Alexander V. Mirtchev, Wayne Rogers, Leo Zickler Woodrow Wilson International Center for Scholars One Woodrow Wilson Plaza 1300 Pennsylvania Avenue, NW Washington, DC 20004-3027 (202) 691-4000, fax (202) 691-4001 www.wilsoncenter.org ii Table of Contents About the Roadmap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 China’s Choke Points: Where’s My Water?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Water for Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Coal is the Thirsty King. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Polluting Too . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Hydropower – China’s Energy Queen. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Natural Gas—The Emerging Energy Prince . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 The Promise of Clean (but Thirsty) Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Renewables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Nuclear Power Boom. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Energy for Water. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Re-plumbing the Nation: The South-North Water Transfer Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 A Bet on Desalination to “Make” New Freshwater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Wastewater Treatment: The Forgotten Energy Intensive Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 A Path Forward: Energy for Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Adding Food Choke Points to the Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Water for Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 High and Dry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Multicolored Toxic Rivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Energy for Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Food for Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Biofuels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Ways Forward for Food Choke Points . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Insights from Choke Point Issues in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 U.S. Government Choke Point Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Regional and Basin-level Choke Point Planning and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Research and Nongovernmental Organization Choke Point Activities. . . . . . . . . . . . . . . . . . . . . . . . . . . 35 U.S. Business Choke Point Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Finding Solutions in Connections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Action Area #1. Identify the Magnitude of Water-Energy-Food Issues. . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Action Area #2. Optimize Water-Energy-Food Nexus Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Action Area #3. Strengthen Collaborative Networks Between China and the United States . . . . . . . . . . 41 China’s Opportunities to Address the Choke Points . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Appendix A: China Water-Energy Team Itinerary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Appendix B: China Water-Energy Team Member Bios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 iii About the Roadmap The water-energy-food choke point is forcing a Water-Energy Team (China WET) exchange in August new reckoning. Three colliding trends—declining 2013. During the week-long exchange, the team freshwater reserves, booming energy demand, and participated in six closed and two public roundtable uncertain grain supplies—are disrupting economies, discussions in Beijing with Chinese government governments, and environments around the world. research institutes, think tanks, environmental NGOs, As the world’s most populous country and biggest universities, and businesses. energy consumer, China’s energy, food, and environmental security is threatened as it hits these choke points. How Chinese policymakers deal with these water-energy-food confrontations will have significant domestic and global consequences. In 2010, the Woodrow Wilson Center’s China Environment Forum (CEF) teamed up with the This Roadmap captures insights from the China WET exchange and numerous in-depth interviews with Chinese and U.S. environmental and energy practitioners. The three main goals of this Roadmap are to: 1. Provide a snapshot of the water-energy-food 2. Identify research and policy gaps for Michigan-based Circle of Blue to launch the Choke Point: China initiative, which created a broad assessment and narrative of the water-energyfood confrontations in the world’s second largest economy. We were the first to report that 20 percent of China’s annual water use goes to produce energy from coal. Our reporting also raised sobering questions on the large and overlooked energy footprint of water in China. Over 20 multimedia reports on China’s choke points have attracted considerable interest from policymakers, researchers, and NGOs in and outside China, catalyzing new research, policy discussions, and programming. To deepen these dialogues and highlight potential solutions, the China Environment Forum began a partnership with the Beijing-based environmental group Greenovation Hub to organize the first China Jennifer L. Turner Director, China Environment Forum trends and major players in China; addressing China’s water-energy-food choke points; and, 3. Propose potential solutions moving forward, with an emphasis on the role of China-U.S. collaboration to address the water-energyfood confrontations in both countries. The work of the China Environment Forum and Greenovation Hub aims to cross silos both within and across the U.S. and Chinese governments, research, business, and NGO communities to inform, and hopefully catalyze, better policymaking and a greener environment. We hope this Roadmap will play a small part in helping both countries better address the water-energy-food challenge. Lo Sze Ping Founder, Greenovation Hub Woodrow Wilson Center v Executive Summary The water-energy-food nexus is creating a sector, and the third outlines the water and energy complicated challenge for China and the world. demands of China’s food sector. The Roadmap then Energy development requires water. Moving and pulls in lessons from the U.S. experience dealing cleaning water requires energy. Food production at with water-energy-food challenges, and closes with all stages—from irrigation to distribution—requires suggestions on how Chinese policy practitioners, water and energy. As the most populous country and businesses, and civil society groups could embark on the world’s manufacturing hub, China demands all a comprehensive assessment of the current situation three resources in ever increasing amounts, leading and initiate action to address China’s choke points. to shortages that are creating serious choke points to the country’s development. Pressure on water is at the heart of these resource constraints facing China. This report builds on the China Environment Forum’s (CEF) extensive research in partnership with Circle of Blue, and draws heavily on a weeklong exchange Roadmap for the Roadmap with American and Chinese water, energy, and food How China can secure enough clean water to Since 2010, CEF and Circle of Blue have raised maintain agricultural and energy production to meet its population’s needs is a challenge that holds farreaching consequences for the country’s future. As a systematic attempt to summarize China’s choke point challenges and spark innovative thinking and pragmatic action, the Roadmap begins with an overview of the water-energy-food nexus trends in China, starting with the energy sector’s thirst for water—from coal and hydropower to renewables and natural gas. The second section examines the often-overlooked energy footprint of China’s water experts that took place in China in August 2013. awareness of the water-energy-food confrontation in China and served as “matchmakers,” helping to build knowledge partnerships among the government, NGOs, and the private sector to further choke point research. We were greatly encouraged when, in November 2014, President Barack Obama and President Xi Jinping jointly announced—as part of a new climate accord to curb carbon emissions—the launch of a $50 million water-energy nexus program under the U.S.-China Clean Energy Research Center (CERC). This partnership could serve as a model for 1 future bilateral and multilateral water-energy management large and highly energy-intensive water transfers (e.g., cooperation. With this Roadmap we seek to provide a the South-North Water Transfer Project) and desalination comprehensive look at the water-energy-food challenges plants. Water pollution is also placing pressure on China’s China faces and highlight further opportunities for U.S.- energy resources. As the government steps up its efforts China cooperation. to reduce water pollution from municipalities, industries, and agriculture, more wastewater treatment plants will be Water for Energy needed, consuming even more energy. Coal remains China’s main energy source; according to Adding Food to the Choke Point Mix the International Energy Agency (IEA), about 80 percent of the country’s power in 2013 came from coal.1 Initial research While often overlooked, the inter-linked role that food plays into coal’s thirst in China estimates that between 11 and 20 in the choke point must not be understated. At every step percent of all water used in the country goes to coal mining, of the process, from irrigation to processing to distribution, processing, coal ash control, and cooling of coal-fired power food production requires both water and energy. Droughts plants. The lifecycle of coal is water intensive around the coupled with competition over water access with cities world, however its “thirst” presents a significant quandary and power plants (especially coal plants) are reducing crop for a country already facing a water scarcity crisis; China’s yields. Moreover, as more Chinese people adopt meat- water availability per capita is only one-third of the global rich diets, industrial farms specialized in animal husbandry average. Moreover, most water resources are in the south are expanding. These farms are more energy and water while much of the agricultural production and coal reserves intensive, and the animal waste they produce is often left are in the north. untreated and leaches into soil and water, creating soil 2 3 pollution and toxic algae blooms. The country’s efforts to alleviate air pollution may add pressure on water resources given a new energy strategy4 Finally, China’s shift to a more industrial agricultural model to to replace some coal-fired power generation with more improve food security and raise rural incomes also requires increasing amounts of water and energy. China’s agricultural water-intensive coal-to-gas plants. Hydropower is currently the second-largest source of electricity in China and the 12 th Five Year Plan has accelerated dam construction to increase hydroelectric generation capacity from 199 GW in 2010 to 420 GW by 2020. However, increasingly frequent droughts and damage to downstream communities could hinder this continued hydropower development.5 While nuclear, natural gas, wind, and solar power production have a relatively low carbon footprint, they have significant water requirements. Electricity generation requires significant inputs of water globally, and in China its use is aggravated by massive and growing energy demand and significant water use inefficiencies in agriculture and industrial production. Energy for Water While water use efficiency is gaining traction as a policy priority in China, policymakers continue to emphasize supply-side management solutions, such as building 2 sector alone uses over half the country’s water due to heavy reliance on irrigation and high levels of water wastage.6 Insights from Choke Point Issues in the United States: Finding Solutions in Connections China is not alone in facing the water-energy-food confrontation. The United States faces similar resource clashes. A historic three-year drought in California has hammered the state’s hydropower production and forced the state to rely more on natural gas, wind, and solar power.7 California’s farming industry has been pummeled; some farmers have been forced to shrink production, switch to less water-intensive crops, or simply stop farming altogether.8 Moreover, debates surrounding the U.S. shale gas “revolution” and biofuels have brought more attention to the water-energy-food nexus issues. Over the past decade, U.S. national energy laboratories, more comprehensive and integrated regulations on water think tanks, universities, and NGOs have been at the use. In addition to mandated energy intensity reductions forefront of global research on water-energy-food choke and water consumption limits, Chinese planners need points, raising the issue on policy and business agendas. to strengthen integrated approaches that look at the These developments in the United States could offer link between water and energy use, particularly in the valuable insights on a possible path forward for China. Action Areas The Roadmap identifies three main areas for choke point research and policy development in China that are 1 particularly promising areas for collaboration. 3 Strengthen Collaborative Networks between China and the United States , identifying opportunities for China-U.S. collaboration on choke point issues. While some U.S. researchers, NGOs, and foundations are starting to address waterenergy-food confrontation issues in China, the U.S. and Identify the Magnitude of Choke Point Issues Fill data gaps on choke point issues, particularly on the energy use for water. A top priority for Chinese government and business communities have Chinese researchers and policymakers should be to forward was the announcement of a new water-energy calculate the financial and environmental costs of waterenergy-food interactions in China. Having concrete, quantifiable numbers will help to create the case and framework for implementing comprehensive water, energy, and food management policies and laws. Data needs to be collected not just nationally, but at provincial and municipal levels, as water resources vary significantly throughout the country. While the water footprint of energy has gained some recognition as an important development challenge, the energy footprint of water is often overlooked—generally because water is seen as a free or low cost resource. Once collected, data regarding 2 building and industrial sectors. the energy demand of water will help shape policies to achieve important water, energy, and food savings. Ramp Up Demand-Side Management Practices and Policies, focusing on integrated planning to reshape water, energy, and food conservation policies. Data revealing the costs of energy use for water treatment and irrigation will likely add more urgency to existing energy efficiency policies—such as lagged behind in engaging on these interconnected natural resource challenges in China. A promising step nexus program under CERC as part of the November 2014 U.S.-China climate accord announced at the APEC Leaders’ meeting in Beijing. Institutionally, bilateral and multilateral choke point collaboration should continue to be integrated into existing energy and environmental programs. Moreover, because states, provinces, and cities in the United States are some of the most innovative in dealing with water-energy-food linked constraints, local-to-local cooperation across countries will be crucial. Finally, from a corporate perspective the United States and China are significant markets for water and energy saving technologies, creating opportunities for joint technology development in these sectors. While there are no easy solutions to these water-energyfood issues, this Roadmap aims to spark discussions and debates empowering Chinese stakeholders and their partners to explore appropriate frameworks to address China’s water-energy-food chokepoints. the Chinese Energy Conservation Law and the DemandSide Management (DSM) Regulation. Existing policies and projects for energy DSM should be used to shape 3 China’s Choke Points: Where’s My Water? Water shortage is the most important challenge to China right now, the biggest problem for future growth. It’s a puzzle that the country has to solve. —Wang Yahua, Deputy Director of the Center for China Study at Tsinghua Universityi China’s unprecedented economic growth over the Climate change is further aggravating China’s past three decades has relied on three inextricably water scarcity. Over the past 20 years, main stem linked resources: water, energy, and food. Water water flows have decreased by 41 percent in the is essential through the entire energy life cycle, Hai River Basin and 15 percent in the Yellow and energy is needed to move and clean water, and Huai river basins—these declines are particularly food production is increasingly demanding more of concerning because these three rivers supply both resources. water to much of China’s populous and dry Water is at the center of China’s interlinked choke points. While the country has the fifth largest endowment of fresh water resources in the world, by per capita standards it is strained northeast.11 Climate change has contributed to 65 percent of that change in river flow 12 and the rest is from the overexploitation by cities, industry, agriculture, and mining. at one-third of the world average.9 As in many Water quality is as dire a challenge as water other countries, China’s water resources are quantity in China, where the World Bank estimates considerably undervalued leading to overuse, that pollution accounts for nearly half of the 2.3 waste, and contamination. Consequently, the percent of GDP lost annually to the country’s water central government warns that despite existing crises.13 The Chinese government, in an effort to water-saving measures China’s water demand will emphasize the interconnection between water exceed supply by 2030,10 with much of the added quantity and water quality, coined the term “water pressure coming from China’s energy sector. pollution-induced scarcity.” The following sobering Photo courtesy of Circle of Blue © J. Carl Ganter 5 statistics illustrate the severity and urgency of China’s water 41 percent of its population, 56 percent of its cultivated pollution: land, and a majority of the country’s coal bases.18 The Hai • Overall, water quality in most river basins in China has been improving since 2009, yet in most urban areas approximately three-quarters of the surface water and 55 percent of the groundwater is still considered River Basin, which supplies water to Beijing and Tianjin, has just 1.5 percent of China’s water resources to support 10 percent of the country’s total population (or 130 million people).19 During the summer of 2014, China’s Shaanxi province unsuitable for drinking.14 • Nearly 15 percent of the water in China’s major rivers is not fit for any use.15 suffered from its worst drought in a century, affecting a quarter of a million people.20 This was the first time corn harvests shrunk in the greater North China Plain since • In 2013, Chinese environmental regulators categorized 28 percent of water in China’s main rivers as so polluted to be unfit for human contact.16 • About 4.05 million hectares (7.4 percent) of the nation’s irrigated lands are irrigated with polluted water. 17 The geographic distribution of China’s water resources is uneven, which affects energy development choices. Eighty-three percent of the country’s water resources are concentrated in provinces south of the Yangtze River, providing rich potential for hydropower generation there. North China, in contrast, is an arid region where 17 percent of the country’s water supply is overexploited to support 2009.21 Even in the traditionally water-abundant south, droughts have become increasingly frequent and intense since 2010. China’s projected water demand for 2030—818 billion m3—is expected to outstrip supply, which currently amounts to 618 billion m3.22 Significant industrial and domestic wastewater pollution makes the “quality adjusted” supplydemand gap even greater.23 As some 350 million more people move into urban areas over the next 15 years, groundwater around urban centers is being pumped faster than it can be naturally recharged and water levels are falling fast. China’s Water Crisis Water is scarce; water is dirty; water is not distributed equally in China. Supplying water, treating wastewater and transporting water requires large amounts of energy. Percentage of ground water classified as polluted 60% Compare to the global average per capita freshwater availability GDP loss due the water crisis 1/4 China Global How much energy used for China’s water sector Sources: The 2030 Water Resources Group, Circle of Blue, World Bank. 6 ¥¥¥¥¥¥¥ ¥¥¥¥¥¥¥ ¥¥¥¥¥¥¥ ¥¥¥¥¥¥¥ ¥¥¥¥¥¥¥ ¥¥¥¥¥¥¥ ¥¥¥¥¥¥¥ 2.3% In 2030 water demand will exceed supply by 25% Box 1. Water Definitions Terminology about water can be a bit “slippery,” below is how we used the following terms.28 • Water withdrawal is the water taken from a source and used for some human need. It includes water that is consumed, as well as water that is not. • Water use is used interchangeably with water withdrawal in this roadmap. • Water consumption is water withdrawn from a source and made unavailable for reuse in the same basin, because of conversion to steam, losses to evaporation, seepage to a saline sink, or contamination. For example, water that is incorporated into goods or plant and animal tissue is unavailable for reuse, and thus is also considered a consumptive use. • Water footprint is the total volume of fresh water that is consumed in the production of goods and services; one can calculate the water footprint of a product, a city, or a country. 7 . .?lull x" 1'1 Water for Energy While water use in China is near its peak, energy demand will double by 2040. How to meet this energy demand and quench its thirst is more serious than the current water crisis. — Jia Shaofeng, Deputy Director, Center for Water Resources Research at the Chinese Academy of Sciences24 Among all energy sources in China, coal is the thirstiest. International Affairs estimated China’s total annual Yet other growing energy sources—from hydropower energy production is responsible for 61.4 billion m3 water to nuclear power and natural gas—are also impacting withdrawals, 10.8 billion m3 water consumption, and 5.0 water supply and quality in profound ways. Wind billion m3 wastewater discharges in China, which are and solar power use the least amount of water per equivalent to 12.3%, 4.1%, and 8.3% of the national megawatt of electricity produced, but their contribution totals for each water category respectively.26 Our own to water saving is still minimal as they only make up Choke Point China research found that coal production’s 5.2 percent of the overall electricity generation full lifecycle accounts for approximately 20 percent capacity.25 Few countries prioritize the water footprint of water withdrawals in the country and is driving the of energy in their development plans—an omission that increases in water use in north China to levels exceeding leads to investments and development that undermine the available resources. Chinese researcher Liu Pei water security. estimated that coal’s water use was closer to 11 There is a paucity of data on water use in energy globally, underscoring the need for greater attention and research on this issue. A recent study done at Harvard University’s Belfer Center for Science and Photo courtesy of Circle of Blue © J. Carl Ganter percent.27 These varying estimates point to the need for more data and uniform standards for measurement and terminology. (See Box 1 on previous page for water definitions). 9 Water for Energy Coal is King, Thirsty and Dirty In 2011 China accounted for Currently coal supplies 47% of global coal consumption. 70% of China’s electricity. 47% 70% Hydropower China’s Energy Queen 3 1 2 Hydropower is China’s 2nd largest source of electricity 20% of China’s national water withdrawals* goes to coal mining, processing, coal ash control, and coal-fired power plants. Clean Energy - China’s Emerging Prince - Needs Water Too 22% of total installed electricity capacity Lifetime water requirement (tons/MW) 494 48667 1767 Besides changing water flows and damaging river ecosystems, the current hydropower boom in southwest China is also fostering energy- and pollution-intensive industries such as aluminum and steel production. Solar PV** Wind * lifecycle water withdrawals ** mono- and poly- crystalline silicon Sources: U.S. Energy Information Administration, China Country Analysis, Chao Zhang and Laura Diaz Anadon. 10 Concentrated Solar Coal is the Thirsty King China has been the world’s largest coal consumer since China’s State Council also issued an Airborne Pollution 1986. In 2011, China accounted for 47 percent of global Action Plan in September 2013 with several sweeping coal consumption—almost as much as the rest of the measures, which includes mandated nationwide air quality 29 world combined. (See Figure 1). Since 2000, China has improvements. Vice Premier Zhang Gaoli recently pledged accounted for 82 percent of the global growth in coal that by 2020 the country will reduce its carbon intensity by demand. Coal’s contribution to air pollution has become 40 to 45 percent from 2005 levels. On-the-ground efforts a major sociopolitical flashpoint, catalyzing swift responses that could support this pledge are the commitments by 12 in Chinese policy. For example, in August 2014, Beijing provinces that account for 44 percent of the country’s coal announced it would ban all coal use in the city’s six major consumption to control coal use; six have even included districts by 2020 and in September 2014, policymakers caps in their action plans.34 (See Box 2). 30 31 32 announced limits on low-quality, smog-producing coal imports.33 Figure 1. Energy Mix and/or Coal Consumption Figure 5 BILLION SHORT TONS 4.3 4.0 4 4.2 3 COAL CONSUMED BY THE REST OF THE WORLD COAL PRODUCED BY CHINA 2 COAL 69% 1 COAL CONSUMED BY CHINA 0 1980 1990 2000 ‘10 1980 1990 2000 ‘10 Source: Energy Inf Sources: Richard Martin (2014),35 and Energy Information Administration (2014).36 11 Box 2. Cracking Down on Air Pollution In response to mounting public outcry over the level of air pollution in major cities, China’s State Council issued the Airborne Pollution Prevention and Control Action Plan in September 2013. The Action Plan includes a number of unprecedented policy measures: • Decrease coal consumption: Construction of new coal-fired power plants is banned in the Beijing, Shanghai, and Guangzhou metropolitan areas. Known as the “key-three-city clusters,” these three major metropolises must also achieve negative coal consumption by 2017. • Ramp up regional fine particulates reduction targets: The Beijing-TianjinHebei cluster must reduce the concentration of small particulate matter (PM2.5) by about 25 percent by 2017, based on the 2012 level. The target reduction for the Yangtze River Delta and Pearl River Delta regions is 20 and 15 percent, respectively. • Mandate nationwide air quality improvements: By 2017, the concentration of PM10 in China must fall by at least 10 percent compared to 2012. • Diversify energy sources: The plan pushes the construction of another 150 billion cubic meters of natural gas pipeline capacity by 2015. Nuclear power installed capacity is slated to reach 50 million kilowatts, raising the share of nonfossil fuels in China’s overall energy consumption from 10 percent in 2013 to 13 percent by 2017. The Action Plan is not a panacea for China’s air pollution problems, but it indicates Beijing is serious about decreasing coal’s share in China’s energy mix. In November 2013, the Third Plenum of the 18th Communist Party of China Central Committee listed environmental protection as an urgent priority. The political momentum continued in the spring of 2014 with Li Keqiang’s declaration of a “war on air pollution” and the National People’s Congress approval of the first amendments to China’s Environmental Protection Law in 25 years. The amendments include higher fines against polluters, opportunities for public interest litigation in environmental matters, and moves to strengthen environmental tribunals. These changes are significant efforts to strengthen enforcement at the local levels, which has been typically weak in China. The high-level priority to take on the coal problem is underscored by the central government’s pledge to peak coal consumption before or by 2030 as part of the U.S.-China climate accord announced at the 2014 APEC Leaders’ meeting. The enormous water footprint of coal, however, has only recently become an area 12 of interest to Chinese policymakers and international sixteen coal-power generation bases in China’s west—one of organizations engaged in energy and environmental issues the most water-stressed regions in the country. in China. Freshwater used for mining and processing coal accounts for the largest share of industrial water use in China, though statistics on water withdrawals for coal are scarce. Even partial analyses underscore the magnitude of coal’s thirst. For example, a World Resources Institute analysis of the water footprint of China’s coal mining, chemical production, and conversion, but not water used for power plant cooling or ash pond control, estimated that if all coal plants planned in 2012 were built, by 2015 China’s coal sector would account for 10 billion m3 of water withdrawals every year.37 That is equivalent to one-fourth of all water available for withdrawal every year from the Yellow River, the third longest river in Asia. (See Box 3). China’s 12th Five-Year Plan, the central government issued social and economic development roadmap for 2011-2015, calls for the consolidation of the country’s coal production and coal-fired power generation capacity in the country’s northwest. In theory the policy would better contain pollution, promote resource recycling, and safeguard coal miners, who work in one of the world’s most deadly mining sectors. The plan calls for fourteen large-scale coal-mining bases and Based on projections from 2012, Greenpeace China estimated that by 2015 water demand in the coal sector (including mining, power, and coal-to-chemicals) in Inner Mongolia, Shanxi, Shaanxi, and Ningxia will exceed current water consumption of the region’s entire industrial sector.38 Greenpeace China also predicted water demand in these and other existing large-scale coal bases will reach a yearly 9.975 billion m3 in 201539—more than one-quarter of the water volume of the Yellow River available in a normal year. Approximately two-thirds of this water demand will be for mining, 11 percent for coal-to-chemicals, and the remaining 22 percent for power plants.40 Some of the water is used to cool power plants and some evaporates, but much is returned to the waterways. The coal sector can recycle water for washing and mining, however that water still needs to be available for use in the coal industry, which limits its allocation to other sectors. Coal companies that operate illegally in protected areas, such as those denounced by Greenpeace China in Qinghai, or those violating regulations on wastewater management pose a further challenge; this translates into additional withdrawals and pollution which may not be accounted for in official statistics.41 13 Box 3. Thirsty at Every Stage Coal is the most water-intensive form of energy—water is needed in every stage of its life cycle. Circle of Blue and Wilson Center Choke Point research found that in 2010, China’s coal sector used 120 billion cubic meters of water, or about 20 percent of the 599 billion cubic meters that were used nationally. Other studies have placed the percentage of water used for coal between 11 and 17 percent, highlighting the need for more and better data. By 2020 the coal life cycle is expected to use 28 percent of the 670 billion cubic meters of total water used in the country.42 Water’s role at each stage is outlined below: • Mining: During mining, water is predominantly used for cooling equipment, reducing dust levels, and washing tunnels. • Washing: Coal is washed to reduce the levels of ash and sulfur and thereby improve the energy content. Fifty-five percent of all coal in China is now washed, up from 30 percent a decade ago. Washing coal requires 0.11 to 0.15 cubic meters of water per metric ton, or 178 million to 238 million cubic meters of water annually.43 • Generating Power: In the generation stage, power plants withdraw large quantities of water for producing steam and for cooling. Around 95 percent of China’s thermal power plants use water for cooling. Though most of the water remains in the power station and is re-circulated, around 12 percent is lost through evaporation.44 • Disposing of Coal Ash: Coal ash control is the second most water-intensive process in the coal lifecycle, following cooling. Half of a coal-fired power plant’s water use is for controlling coal ash, often in ponds or “irrigated” fields. Runoff from such ponds contains heavy metals, and sometimes mercury, and can contaminate surrounding surface and groundwater. • Coal Conversion: China’s growing coal-conversion sector is also increasing water use. Depending on the product—diesel fuel, chemicals, or natural gas—for every metric ton of coal converted, 3 to 15 cubic meters of water is used. China’s coal conversion program is currently consuming more than 5 billion cubic meters of water annually, and it will continue to expand as this use of coal is significantly more profitable than that in coal-fired power plants.45 14 Polluting Too in reservoirs, hydropower draws water away from other Besides gulping down water, the coal industry also pollutes industries less resilient to drought.51 Changing water flows water that is returned to nearby water bodies, often with heavy metals like lead and arsenic. Without proper treatment or recycling, water used in power plant boilers and cooling systems can be discharged into lakes or rivers. Sludge and coal ash waste is often disposed in unlined landfills and reservoirs. Heavy metals and toxic substances contained in the waste can contaminate drinking water supplies and harm local ecosystems. Water ecosystems are also threatened by sulfur dioxide and nitrous oxides emitted through coal burning that create acid rain, which increases the acidity of sectors and makes downstream communities, farms, and damage river ecosystems, which can threaten livelihoods and biodiversity. Finally, the current hydropower boom in southwest China is also facilitating the growth of energy- and pollution-intensive industries such as aluminum and steel production that contaminate water sources for agriculture, fisheries, and local communities.52 Policymakers in China have yet to adopt policies addressing the connections between hydropower and pollution. lakes and streams. Natural Gas – The Emerging Energy Prince Hydropower – China’s Energy Queen With large conventional and unconventional gas reserves, Hydropower has played a significant role in supporting China’s economic growth over the past few decades. More than 46,000 hydropower dams have been constructed on virtually every river in the country.46 Approximately half of all dams in China are used to produce energy; the remainder serve for a combination of agricultural and flood control uses.47 Today hydropower is the second largest source of electricity in China and constitutes 22 percent of the country’s total electricity generation capacity,48 making it the queen of electricity. By the end of 2013, the country reached an installed capacity of 280 GW of hydropower—just 10 GW shy of the 12th FiveYear Plan’s 2015 end goal, and well on the way to reach the government’s targeted 420 GW by 2020.49 Serious droughts have plagued the country’s southwest over the past five years and are set to limit the expansion and effectiveness of China’s ambitious dam rush. In early 2010, a prolonged drought gripped the flows of the Mekong, Salween, and Yangtze rivers, and nearly shut down the 6.4 GW Longtan Dam, China’s second largest. At the peak of the spring 2011 drought, water levels at the Three Gorges Dam reservoir were four meters (13 feet) below the minimum level required to run its turbines effectively.50 China’s natural gas development has been heralded as a potential game changer to help the country reduce its dependence on coal. As the government embarks on a “war on pollution,” Hengwei Liu of the Harbin Institute of Technology says, “A central part of the battle includes capping coal use to below 65 percent of total energy consumption by 2017, down from 69 percent in 2012. To this end, the central government is boosting the share of natural gas in the energy mix from 4.7 percent in 2012 up to an ambitious 10 percent by 2020.” This represents a 178 percent increase in production volume in only eight years—from 144 billion m3 to 400 billion m3. To put this in perspective, U.S. natural gas production over the last eight years—the so-called shale gas revolution—only increased 31.2 percent, says Liu.53 As demand for cleaner fuels in China has soared and pressure has increased to reduce emissions, Chinese national oil companies are pursuing a broad strategy in the gas sector, ramping up investments into conventional natural gas, tight gas, synthetic natural gas (SNG), and gas imports to meet the country’s short-term demand. Though it emits less air pollution than coal-fired power plants, production of SNG from coal tends to be highly water intensive. Each While dam reservoirs facilitate irrigation upstream and cubic meter of SNG produced requires 6 to 12 liters of play a role in flood control, they also have negative social water —50 to 100 times more than shale gas, which is often and environmental impacts. Due to high evaporation rates criticized for its intensive water use.54 Only two coal-to-gas 15 plants are currently in operation, but four dozen are under does not encourage the entry of small and experimental construction or planned, with five of these in arid Xinjiang or producers—two factors that were critical to accelerating Inner Mongolia. These areas already have significant water U.S. shale gas production. In fact, China’s 100 shale gas shortages, and while these plants may seem like a good test wells in 2013 were dwarfed by the over 100,000 in the option in the short run, eventually they could prove both United States.63 However, this relative slowness has the damaging to the environment and unwise economically. upside of giving Chinese regulators time to integrate lessons 55 Water availability may also be a serious constraint to the much-hyped shale gas development in China. While the country is estimated to have the world’s largest technically recoverable shale gas reserves, the current recovery process requires large quantities of water.56 In the United States, the amount of water used in hydraulic fracturing for shale gas varies between 7,570 and 18,927 m3 per well (See Table 1). With thousands of wells drilled in each shale play this translates to a significant growth in water demand.57 In China, reaching a production target of 6.5 billion m3 – China’s stated shale gas output goal for 201558 – would require 13.8 million m3 of water. Although water use for hydraulic fracturing is modest when compared to total industrial water usage, this increase in water particularly on protecting and conserving water. The Promise of Clean (but Thirsty) Energy While China leads the world in coal and hydropower generation, it has also, since 2010, become the world’s largest and fastest growing market for nuclear, wind, and solar power. The 12th Five-Year Plan promotes further increases in clean energy in China’s energy mix, setting targets of 11.4 percent of primary energy consumption from non-fossil sources by 2015 and 15 percent by 2020.64 consumption can have a significant impact locally.59 In 2010, Renewables five relatively water-rich provinces in China’s southwest Though most non-fossil energy sources require far less (Chongqing, Guangxi, Guizhou, Sichuan, and Yunnan) that hold 40 percent of the national shale gas reserve, suffered a six-month severe drought.60 Drier areas have witnessed competition for water between fracking and other end uses: officials in northern Shaanxi Province temporarily cut off a city’s water supply during a shale drilling test.61 to reduce the amount of water used in shale gas operations, yet the challenge also lies in regulating pollution. Water used during fracking—often called flow back or produced water—can contain chemicals from the fracturing fluid, salts dissolved from the source rock, various minerals, volatile organic chemicals, and radioactive nucleotides; all of these pose potential environmental and public health risks. water than coal-fired power plants, the extensive scale of planned deployment of renewables translates into burgeoning water use.65 According to Lawrence Berkeley National Laboratory researchers, the projected 813 million m3 of water needed for wind and solar development from 2010 to 2030 in China is roughly a year’s worth of total Hydraulic fracturing (fracking) technology is evolving quickly 62 Despite the ambitious targets and accelerated investment into this sector, the Chinese shale gas industry is still nascent and growing slowly. This slower rate of shale 16 learned from the United States into their laws and practices, water supply for all Beijing residents—a population greater than that of the entire state of New York.66 Water is used both in the actual production of wind and solar equipment, and for cleaning panels at solar farms. The life-cycle water requirement (water use) of an on-shore wind turbine is 1,767 m3 per MW, and that of solar PV ranges from 25 m3 per MW to 615 m3 per MW depending on the specific cell technology.67 Most of the water is used in manufacturing and production of wind turbines and solar panels, thus as these two industries grow, so will their water consumption. development is linked to the relative lack of geologic Unlike the molten salt technology recently deployed in the mapping of China’s basins and a fairly closed market that United States, China’s concentrated solar power (CSP) projects are still using water to generate steam and spin more than a threefold increase in nuclear capacity to at least turbines. Consequently, they require by far the most water 58 GW by 2020.72 among renewable technologies, with a lifetime average of Nuclear is perhaps one of the few energy sources in 48,000 m3 of water per MW.68 While CSP is still in its pilot China for which water has been taken into account in the project stage, future plans are big—China’s current 50 MW planning process, likely drawing lessons from shutdowns of capacity is projected to increase to 1 GW by 2015 and to nuclear power plants in the United States and Europe due 3 GW by 2020.69 CSP is a promising type of large-scale to droughts.73 These shutdowns are expected to become distributed generation that can supply power to local users even more frequent due to climate change; the likelihood of and feed into the grid; however water consumption should extreme drops in nuclear power generation, either complete be a critical factor determining whether and where the CSP technologies used in these pilot projects should be scaled up. Both wind and solar resources are heavily concentrated in or almost-total shutdowns, is projected to almost triple in the United State and Europe.74 The 27 nuclear plants that are currently under construction China’s dry northwest. The four leading provinces for wind in China are all located on the coast, strategically placed development—Inner Mongolia, Hebei, Liaoning, and Jilin— to be near steady water supplies for cooling.75 A standard all rank in the bottom 10 provinces in terms of water nuclear plant in China that uses seawater for direct once- resource availability.70 As development scales up, even through cycle cooling uses 8 million m3 of water per day, renewable energy will not be able to escape north China’s greater than the average water usage in a conventional fossil water choke point. fuel plant.76 The central government has reportedly advised caution in the development of inland nuclear plants, yet it is Nuclear Power Boom likely that some of the already planned pilot inland nuclear plants will be built during the 13th Five-Year Plan period to While nuclear power only constituted 2.1 percent of all electricity production in 2013 with 14 GW,71 Chinese officials have high hopes for nuclear power. China currently has 20 nuclear plants and 28 under construction and hopes to have test new technologies and safety measures.77 In this light, the addition of nuclear plants may add to the water stress of China’s inland regions. Energy Industry as a Major User of China’s Water* Water Withdrawal % of national total 12.3 % 61.4 billion m3 Water Consumption 10.8 billion m3 4.1 % Wastewater Discharge 5.0 billion m3 8.3% * Lifecycle water withdrawls Sources: U.S. Energy Information Administration, China Country Analysis, Chao Zhang and Laura Diaz Anadon. 17 Energy for Water Population and economic growth, as well as climate change, will require China to develop new and more energy-intensive ways to obtain and use water. — Wang Dong, Water Researcher, Chinese Academy for Environmental Planning78 With its mismatch between geographic distribution of water availability and centers of water usage, China is looking to engineer its way out of future water shortages—a feat that demands largescale, energy intensive engineering projects. If any country has the engineering expertise and financial resources at hand to out-engineer water scarcity, it would be China. However, there has been only limited discussion among policymakers of the tremendous energy costs involved in transporting water to arid regions. One 2004 study estimated that electricity accounted for 33 percent of the cost of producing and distributing water in China, and since then, the energy footprint of water diversion and pumping clean, and use water, for example: • Saudi Arabia uses up to nine percent of its total annual electricity energy consumption for ground water pumping and desalination.80 • In the United States, 13 percent of energy use is devoted to water extraction, conveyance, treatment, distribution, end use, and wastewater collection, treatment, and disposal.81 • California has by far the most energy intensive water sector in the United States, consuming 19 percent of the state’s energy for the whole cycle of water use from source to user to treatment.82 recent study has fully calculated the percentage Re-plumbing the Nation: The South-North Water Transfer Project of electricity used for water supply, transfer, and For centuries, China has excelled at constructing has risen dramatically.79 To our knowledge, no treatment in China. Around the world, countries are using increasing amounts of electricity to move, Photo courtesy of Circle of Blue © Aaron Jaffe massive water infrastructure projects—such as the Beijing-Hangzhou Grand Canal—to irrigate 19 agriculture and tame floods. In 1952, while reflecting on embedded energy in construction materials—have not been North China’s dryness, Mao Zedong is quoted as saying calculated. Another energy intensive piece of the project that “it would be good to borrow some water from the that merits scrutiny is the extensive network water treatment south to the north.”83 Fifty years later, construction began plants. The low quality of water being pumped out of the on the largest water-transfer project in human history: the Yangtze for the eastern route has required the construction $62 billion South-North Water Transfer Project (SNWTP).84 of more than 400 sewage treatment plants to clean the The SNWTP seeks to divert approximately 28 billion m3 of water before it is transferred to Tianjin. Water pollution freshwater each year—ten times the volume of the California control on the eastern route takes up a whopping 44 state water transfer project—for hundreds of miles to percent of the $5 billion investment.87 There are 474 water slake the thirst of the North China Plain and its 440 million treatment plants planned for the central route. However, people.85 The eastern canal was the first of three major as of December 2013—half a year before the route was routes to be completed. The central route opened and scheduled to come online—only 10 percent of these facilities began piping water to Beijing in December 2014. The far had been completed.88 (See Box 4). western route, which would bring much needed water to the coal-rich northwest, is still being planned as it will take over a decade to construct through the high mountains on the Tibetan plateau.86 The project cost and energy input significantly raised the price of transferred water. While the higher cost of water could be viewed as a way to incentivize conservation, it has actually prompted many northern cities to favor seawater Moving water demands energy. But statistics of the SNWTP desalination—an energy intensive water supply strategy that energy consumption—both for moving the water and for the is discussed below. Box 4. China’s South-North Water Transfer Project While the South-North Water Transfer Project is currently the largest water transfer infrastructure project in the world, water transfers have long been used to relieve regional water shortages across the China, particularly to rescue the parched capital, Beijing. Since the 1980s, at least 20 major cross-basin water transfer projects have been built within, and sometimes between, Jiangsu, Tianjin, Guangdong, Hebei, Shandong, Gansu, Shanxi, Liaoning, and Jilin,89 and countless more middle- and small-sized projects have connected water sources to urban regions to meet municipal demand, quench industrial thirst, feed agricultural irrigation, and facilitate pollution reduction. In the United States, the dry state of California has its own costly water diversion project. The California State Water Project moves water from the north to the south, sustaining Los Angeles and agriculture where rainfall cannot sustain current population and rate uses. This lift, the largest in the world, carries 7.4 billion cubic meters of water per year across 200 kilometers crossing through rich Central Valley agricultural regions and then up nearly 2,000 feet over the Tehachapi Mountains, consuming 2-3 percent of the entire state’s electricity. 20 Energy for Water Wastewater Treatment: The Forgotten Energy Intensive Industry With diminishing water resources, water treatment and recycling have become critical for providing clean water needed for human consumption and ecosystem health. China’s municipal wastewater treatment rate (%) 100 80 40 0 2006 2013 2015 Moving Water Demands Energy The South-North Water Transfer Project moves 12 Trillion Gallons of freshwater each year. 10 times the volume of the California state water project or equivalent to covering the entire state of Texas with a 2.6-inch layer of water 52% ¥ 70% 85% expected Chinese local governments do not consistently turn on wastewater treatment plants due to high energy costs. Eastern Line Western Line Central Line Desalination to “Make” New Freshwater Removing salt from seawater can require twice as much energy as wastewater treatment. China is expanding its desalination plans, seeking to engineer its way out of water scarcity. Desalination Wastewater Treatment To produce 1M3 2.3-4 kWh of Water But statistics of the SNWTP energy consumption – both for moving the water and for the embedded energy in construction materials – is unknown. 0.8-1.5 kWh SOURCES: Pacific Institute, U.S. Energy Information Administration, G.K. Pearce, Office of the South-to-North Water Diversion Project Commission of the State Council. Sources: Pacific Institute, U.S. Energy Information Administration, G.K. Pearce, Office of the South-to-North Water Diversion Project Commission of the State Council. 21 Following the footsteps of water-stressed countries such as China’s desalination plants consume 2.3-4 kWh of electricity Israel and Saudi Arabia, the Chinese government has heralded to produce one cubic meter of freshwater, making it more than desalination as another key strategy for China to engineer its twice as energy intensive as wastewater treatment, which uses way out of water scarcity. The desalination industry in China 0.8-1.5 kWh/m3 of water.94 The central government’s seawater marked its start in 2011, with the opening of a desalination desalination target in 2015—2.2 million m3 per day—would industrial park in Hangzhou.90 Besides quenching residential equal about two to four percent of the Three Gorges Dam’s and industrial thirst along China’s coastline, Chinese planners total electricity generation. Much of the electricity supplied to have considered using desalinated water to help the water- desalination plants is sourced from coal-fired power plants, stressed coal industry inland. underscoring that China’s most water-intensive forms of energy By the end of 2012, 95 seawater desalination plants scattered are being used to produce more water. (See Box 5). across China’s coastal provinces produced 778,182 m3 of Energy use significantly raises the price of desalinated freshwater every day,91 which represents less than one percent freshwater. In the coastal city of Zhoushan, energy inputs are of the country’s daily 1.6 billion m3 of water consumption. With responsible for 58 percent of the cost of desalinated water.95 plans to increase its seawater reverse-osmosis desalination Although the cost of China’s desalinated water is on par with capacity threefold by 2015, the critical question is how to the global average,96 seawater desalination is fundamentally an balance growing energy demands from existing consumers energy intensive, capital intensive, and land intensive way to and this added industry. Desalination requires more energy than help address China’s dire water challenges.97 92 most other water supply and treatment options.93 Currently, Box 5. Desalination: A Fledgling But Growing Industry China’s 12th Five-Year Plan designates Tianjin, Dalian, and Qingdao—cities along the northeast coast—as research bases for seawater desalination. The Beijiang Power and Desalination Plant, China’s biggest of such plants to date, is located in the Tianjin Binhai New Area and carries a hefty price tag of $4 billion.98 With 64 percent state investment, Beijiang is a cornerstone for an ambitious national desalination industry, in which China will invest some 20 billion yuan ($3.2 billion) by 2015.99 This growing infusion of money is aimed at catalyzing expansion and technology innovation in desalination to satisfy not only domestic thirst, but also to build up a new major residential and industrial users paid 4 yuan and 7 yuan per ton, respectively, while desalinated water was 8 yuan per ton. According to David Cohen-Tanugi at MIT, desalination is “multiple times the cost of water-saving measures, with local governments subsidizing the extra cost.”102 More often than not, local governments cannot afford to keep subsidizing desalination. Several desalination plants in China have had to reduce or shut down their operations; the Beijiang plant reportedly only produced 18,000 tons of water every day in technology export industry. Costly Technology Pricy Fluid Another challenge facing the Beijiang and other Chinese plants is that most of the desalination technology comes from abroad. Currently only four of the large (capacity larger than 160,000 tons/day) desalination plants in China are built without foreign technological support—the equipment for the Beijiang plant is imported from Israel. The price of these machines, the steep learning curve to train Chinese technicians, and the inconvenience in maintenance hinder the development of China’s slow-growing desalination industry. In light of these hurdles, tapping the significant potential in expanding water treatment and reuse could be a more cost-effective strategy to The Beijiang Plant is a model of China’s circular economy policy, which encourages recycling and reuse of waste resources. Following this idea, four 1 GW coal-fired plants power the seawater pump and desalination system that is used to produce freshwater.100 The concentrated seawater produced after desalination is then used to produce industrial salt, while the cinder from the power plants is put into construction materials.101 Even with the waste reuse efforts, desalinated water is more expensive than China’s current water prices. In 2012, Tianjin’s 22 2012, much lower than its 100,000 ton capacity.103 ensure water supplies. Wastewater Treatment: The Forgotten Energy Intensive Industry While the skies over many Chinese cities are blanketed in grey smog, the country’s rivers and lakes are turning a rainbow of colors from pollutants emitted by industries, crop production, and factory farms. According to Hong Kong-based China Water Risk, in 2012 the total discharge of wastewater in China reached 68.5 billion m3, which is comparable in volume to the annual flow of the Yellow River.104 It may prove more costly to clean up China’s rivers and lakes than to clean up the air pollution. In Yale University’s 2014 Environmental Performance Index, China ranked 67th out of 178 countries for wastewater treatment, falling behind other emerging economies such as Mexico (49th) and South Africa (56th).105 The indicator tracks how well countries treat wastewater from residential and industrial resources before releasing the water back into the environment.106 In September 2013, the State Council released a municipal infrastructure development plan that aims for an 85 percent treatment rate by 2015.107 This goal is admirable, but as China lacks infrastructure for tertiary treatment of solid sludge waste, most wastewater treatment plants only address secondary treatment of water. Unchecked dumping of this often toxic sludge has exacerbated contamination of soil, water, and crops in China, which is very difficult to clean up. Preventing this type of toxic pollution justifies increased energy use to implement tertiary treatment; it also calls for improving the efficiency of waste management. In the United States, nearly all wastewater goes through tertiary treatment, which makes the process very energy intensive, accounting for up to 30 to 40 percent of the energy consumption in some and human health.108 Some U.S. cities are exploring off-grid renewable energy and waste-to-energy options to lower the energy footprint of wastewater treatment.   Wastewater treatment represents a major outlay for local governments—sometimes as much as a third of the total budget of a small county or a city.109 Thus, despite the impressive expansion of wastewater treatment plants over the past decade, local officials often will turn off these plants to save money. Without any support from Beijing, many governments have no choice but to let the treatment plants sit idle, and let the wastewater pollute other water sources. In June 2014, China’s Ministry of Environmental Protection (MEP) submitted the draft Water Pollution Action Plan to the State Council for approval. The final plan includes a $321 billion (2 trillion yuan) investment into this sector, adding facilities for water and sludge treatment, recycling, and grey water utilization across the country.110 These long-overdue steps to improve water quality could result in an increased, but necessary, energy footprint for water treatment in China. A Path Forward: Energy for Water Looking ahead, as water is arguably the most critical element of the nexus—inexorably involved in both food and energy development—regulating and monitoring its use will become increasingly crucial to China’s continued ability to develop and prosper. Current Chinese policy reflects a historical tendency to try and engineer away problems, but as water scarcity and water pollution continue to spur popular discontent and require ever larger financial and engineering commitments, the role for conservation and demand side management will likely become more evident. U.S. municipalities, but also much safer for the environment 23 Adding Food Choke Points to the Mix Soil and water are being lost, the land is degrading, crop diversity is falling, natural disasters are frequent, and the excessive and inappropriate use of fertilizer and pesticides mean that both farms and villages are badly polluted. Agricultural and rural pollution will cause a range of problems, including with food security. — Zhang Yang, Central Rural Work Leading Group Office111 Every step of the food production process—from With rising incomes and rapid urbanization, Chinese irrigation to processing to distribution—requires both citizens are adopting more meat-rich diets, which is water and energy. While often overlooked, the water- significant because meat requires significantly larger energy-food chokepoint is intense and growing in water and energy inputs than vegetables. Urbanites China’s agricultural sector. Crops and livestock use consume more meat than their rural counterparts, 62 percent of the China’s total freshwater112 and so as the urban population more than doubled from produce 17-20 percent of the nation’s greenhouse 300 million in 1990 to 721 million people last year,115 gas emissions.113 Interviews conducted by Circle of meat demand has quadrupled.116 Blue in China revealed that industries and cities often “save” energy by turning off wastewater treatment facilities; the resulting emissions have polluted nearly 10 million of China’s 120 million hectares of cultivated land.114 The agricultural sector is also a culprit in water pollution with fertilizer, pesticides, and animal waste runoff ranked as the top polluters of rivers and lakes in China. Coal development in north China notably clashes with agriculture for access to water. (See Box 6). Photo courtesy of Circle of Blue © J. Carl Ganter The mass exodus from rural to urban China has caused a precipitous decline in the number of farmers in the country. Furthermore, “the food system is much more fossil-fuel dependent as human and animal resources are replaced with diesel-powered equipment and synthetic fertilizer,” says Fred Gale, senior economist at U.S. Department of Agriculture (USDA) Economic Research Service.117 25 To respond to its citizens’ changes in food demand, the Chinese government has not announced any new official Chinese government is implementing land consolidation nationwide land consolidation policy, there is a push to and accelerating agricultural modernization. According improve land management irrigation systems, and overall to Christine Boyle, co-author of a World Bank report on agricultural productivity. However, in China’s dry north, China’s water and food security, “modern China has only agricultural expansion requires pumping more groundwater, gone through major rural land restructuring twice, in the which in turn requires more electricity as groundwater early 1950s and early 1980s.”118 She argues that while the levels drop. Photo courtesy of Circle of Blue © J. Carl Ganter Box 6. Coal and Agriculture: Water Competition or Cooperation? Extracts from Choke Point: China Reporting by Keith Schneider and Nadya Ivanova 119 With one of the country’s largest coal bases, 20 power plants and coal-to-chemical facilities, 20,000 workers, and buildings in Ningxia. The water that is saved—64 million cubic meters annually—is transferred from agriculture to industry. 20 GW electrical generating capacity, the Ningdong Energy In order to effectively use the water traded, Ningxia Base in Ningxia Autonomous Region illustrates China’s electricity generators are adopting cutting-edge water-saving capacity to fuel the world’s second largest economy, while technologies. Huadian Power Corporation is operating a 1 also contending with national anxiety about northern China’s GW, supercritical, air-cooled coal-burning unit at the Lingwu steadily diminishing freshwater supplies. Agriculture uses Power Plant. It uses 9,000 cubic meters of water a day about 93 percent of Ningxia’s water resources, but by the for industrial operations and cooling, while a similarly sized end of the decade, agricultural water use is projected to conventional coal-fired plant would use 44,660 cubic meters drop to 78 percent in order to provide more water to cities of water daily, or nearly five times as much. Mines here also and to coal production, coal combustion, and coal-based recycle 100 percent of the water needed to process coal, chemicals. and the power plants recycle more than 95 percent of the To reconcile the potential conflict over water between water used for operations. energy and agriculture, Ningxia’s energy sector, which Such water rights trading programs illustrate how setting uses enormous amounts of Yellow River water, has a value for water can trigger powerful behavioral changes begun financing irrigation improvements to conserve in the energy sector. Such water trading mechanisms are water for agricultural users. Under this water trading almost certain to become more common in the basin as program industries and electricity generators invested in China’s coal production and consumption rise as water the remodeling of more than 60 kilometers (37 miles) of supplies drop. centuries-old canals and about 170 kilometers (105 miles) of 26 substreams, along with rebuilding more than 2,500 ancillary Water for Food 70 percent, while with drip irrigation as much as 90 percent At the heart of China’s quest for food security and food safety is not only ensuring sufficient water resources, but the of water used can reach crops.132 Changes in China’s dietary demands, particularly the availability of clean freshwater. increase in meat consumption, are further straining its High and Dry production to more than triple between 1961 and 2003, Henan Province, located in central China, is the second significantly more water than crops; the water footprint freshwater supplies, which has caused water use in food from 255 to 860 m3.133 Per calorie, meat production uses largest food producing region in the country and in 2014 experienced its worst drought in 40 years. 120 Crops withered of one calorie of beef is twenty times that of one calorie of cereal.134 and nearly 260,000 people and 80,000 head of cattle were affected by the lack of water.121 Water scarcity has plagued much of northern China for decades, but growing pressure on water has increased the region’s vulnerability to droughts, which are growing more numerous and lasting longer.122 Figure 2. Water Use in China (By Sector) 100% 90% China feeds approximately 20 percent of the world’s 1 1 2 11 13 80% population with just 6.5 percent of the world’s water resources123 and 9 percent of the world’s arable land.124 70% The central challenge to China’s food security is a spatial 60% mismatch between available freshwater and arable land. 50% China’s north is home to two-thirds of the country’s arable 40% land but only one-fifth of its water resources,125 so its 30% farmers are overexploiting aquifers in an area where 70 percent of water used for irrigation is fed by groundwater.126 From the 1950s to the 2000s, groundwater extraction increased tenfold,127 and as a result, the water table under 24 97 62 20% 10% 0% the North China Plain is dropping by roughly three meters per year.128 1949 Agriculture Rapid industrialization and urbanization over the past 60 years in China has gulped an increasingly larger share of 88 1978 Industry 2011 Residential Source: Wang, Jinxia, Jikun Huang, and Scott Rozelle (2014)135 the country’s water; the portion used for agriculture has Multicolored Toxic Rivers declined dramatically from 97 percent in 1949 to 62 percent Increasingly, polluted water – from livestock manure, in 2011.129 (See Figure 2). The government invested to improve irrigation infrastructure during the 1960s and 1970s, which helped to raise crop yields and farmer incomes, but the water efficiency of irrigation in China remains low.130 Only 45 percent of the water withdrawn for agriculture is actually consumed by the target crops because of poor infrastructure and use of inefficient irrigation methods. 131 For example, traditional flood irrigation uses water very inefficiently; sprinklers can raise efficiency of water usage to industrial runoff, and over-fertilization – bleeds into drinking water supplies, irrigates the farmlands, and feeds the fisheries, raising alarm over the integrity of the nation’s food supply. While maintaining adequate supplies of water for food production is increasingly problematic, so too is ensuring that water is clean and safe. With one-fifth of China’s arable land contaminated with heavy metals and other toxins136 and 27 three-quarters of urban surface water unsuitable for drinking in China’s waterways is massive. As a consequence or fishing,137 public concern over food safety is mounting.138 calculating the growing energy footprint of water use and Investigative journalism, such as the now-famous 2011 water pollution merits more attention from researchers and Century Weekly report that 10 percent of China’s rice is policymakers both in China and worldwide. contaminated with cadmium from industrial runoff, has raised awareness on the magnitude of the problem within the country as well as abroad.139 In 2010, China’s first National Pollution Census found that agriculture, and livestock in particular, was a greater source of water and soil pollution than industry.140 The dominance of livestock pollution stems from the shift in pork production from a predominantly smallholder farm structure to larger, confined animal feeding operations, or “factory farms,” that amplify certain types of environmental damage.141 Currently, more than one-third of the world’s meat is produced in China and half of the world’s pigs reside in the country.142 While factory farms are arguably a more efficient use of land, Fred Gale of the USDA says that the manure created by such concentrated livestock is now seldom used for fertilizer as most farms prefer using chemical fertilizers. Nearly 80 percent of the waste from factory farms is released untreated into rivers and streams, posing grave environmental and food safety threats.143 Pathogens, heavy metals, and high concentrations of nitrates hidden in dung can form toxic algae blooms that create dead zones, killing off fish and causing fishermen and others who come in contact with the water to develop skin rashes. Industrial waste is another threat to China’s food safety, as waste from heavy metal and mining leaches into soil and water sources.144 In 2013, the city of Guangzhou found that roughly half of the rice tested at restaurants had levels of cadmium, a cancer-causing heavy metal, above the level deemed safe for human consumption.145 A significant portion of the cadmium-laced rice was traced back to Hunan Province, which is one of the top-producing provinces for both non-ferrous metals and rice. The online news journal chinadialogue cited a report that Hunan’s non-ferrous metals industry is responsible respectively for 32 percent, 59 percent, and 25 percent of China’s emissions of cadmium, mercury and lead.146 Given the magnitude of the problem, the amount of energy required to clean up the pollution 28 Energy for Food From growing, processing, and packing to storing and distribution, energy is a critical input at every stage of the food system. For example, natural gas and petroleum are used to manufacture chemical pesticides and fertilizers and power agricultural machinery, while fossil fuels are burned to produce electricity for food refrigeration, processing, and packaging. In an effort to increase food quality, Chinese food manufacturers, trucks, warehouses, and retailers are installing new cold storage systems, all of which ramp up the energy needs for the food sector.147 Although China does not have comprehensive nationwide data on the total energy use of the food system, worldwide it is estimated that the food sector accounts for 30 percent of the world’s total energy consumption and for 22 percent of total greenhouse gas emissions.148 As China’s food system moves towards larger farms and a more supermarket-based distribution system, greater investments are made in irrigation, machinery, transport, and infrastructure, all of which require significant energy inputs.149 For example, increased fertilizer use and substituting mechanization for human and animal labor is improving production efficiencies but also raising the energy intensity of China’s agriculture.150 According to Gale, government subsidies to promote agricultural ‘modernization’ are encouraging China’s food system to become more energy intensive. Since 2006, the government has also given farmers general input subsidies to offset any increases in fertilizer and diesel fuel prices. The government subsidizes agricultural machinery purchases by as much as 30 percent, and farmers access irrigation water and electricity at reduced rates. The downside of these policies is that farmers have little incentive to invest in improving the efficiency of their irrigation infrastructure and electricity usage. In fact, irrigation systems are one of the government’s largest items of expenditure on agriculture. Food market vendors also get reduced electricity rates, says Even though a 2012 World Bank report predicts that it is unlikely Gale.151 that China will be able to meet its overall 2020 biofuel targets Facing falling water-table levels, Chinese farmers are using more energy to pump water from deeper aquifers in order to sustain irrigated agriculture.152 Irrigation in China releases 33 million tons of carbon dioxide, which is equivalent to the entire annual emissions of New Zealand.153 At the consumer level, as China’s burgeoning middle class demands more refrigerators, microwaves, and dishwashers, food-related household energy consumption will continue to rise. From 1995 and 2007, China’s domestic refrigeratorownership numbers jumped from just 7 percent to 95 percent of urban families.154 In 2007, China’s refrigerated storage capacity was 250 million cubic feet; by 2017, it is due to lack of non-grain feedstock, poor policy incentives, and slow growth in advanced technology, China’s use of grains for biofuels used in the transportation sector is still large in absolute numbers.160 Even though second and third generation biofuels do not affect food stocks directly, their production is water intensive. According to the IEA, 30 percent of the 70 billion m3 of water needed for energy production globally between now and 2035 will be attributed to biofuel production.161 In this respect, biofuels may siphon away some of the available water needed for food crops. expected that the capacity will be 20 times the 2007 level.155 Ways Forward for Food Choke Points Refrigerators and freezers account for an estimated 40 As Chinese policymakers implement structural changes percent of household food-related energy use.156 Food for Energy Biofuels While the government views biofuels as a strategic source of renewable energy, it is cautious not to promote the industry at the expense of the country’s food security. Because China is relatively poor in terms of arable land, the government to facilitate agricultural modernization, there are many opportunities to reduce the water and energy footprint in the agricultural sector. Addressing these choke points will require focusing both on supply-side efficiencies in production and reducing food and water waste. (See Box 7). In order for Chinese policymakers to create appropriate and efficient agricultural and water pricing reforms, they must first gain a better understanding of virtual water flows between provinces and in China’s food exports. instituted a ceiling for first-generation biofuels, which are made from sugars and vegetable oils found in arable crops. This cap is set at 1.8 million metric tons annually.157 In the early 2000s, the Chinese government put in place Water for Food China’s water use by sector in 2013 Inefficiency in irrigation Water actually consumed by the target crops biofuel-friendly subsidies and incentives, approving four plants to use corn and wheat to produce bioethanol.158 Nevertheless, in an effort to reduce the country’s dependence on imported oil, the National Development and 12% 23% Water wasted during irrigation Reform Commission (NDRC) in 2005 set a target that 15 percent of transportation energy needs should be met with biofuels by 2020.159 To this end, the government has made bioethanol use mandatory in six grain producing provinces since 2008 (Anhui, Guangxi, Heilongjiang, Henan, Jilin, and Liaoning). Within these provinces, PetroChina and Sinopec 45% 63% Agricultural Industrial 55% Municipal Ecological are required to incorporate a 10 percent blend of ethanol into their petroleum. Sources: See page 31 29 Box 7. Big Footprint of Waste in China’s Food Sector Where there is food loss, water and energy are also embedded in that loss. According to a rough estimate by the United Nations Food and Agricultural Organization, one-third of food produced in the world is wasted through food loss and food waste.162 Food loss refers to losses along the supply chain at the production, post-harvest, and processing stages, while food waste refers to waste that occurs at the retail and consumer levels.163 While there are no official statistics on food-sector inefficiency in China, research shows that China suffers from significant postharvest loss.164 Because China’s agricultural system is still largely decentralized with 240 million small-holder farmers, a lot of the work is still done manually, reducing efficiency and increasing processing time.165 For example, over 80 percent of grain is unloaded and loaded by hand,166 and last year China lost 35 million tons of cereal grains because of inadequate loading and handling systems;167 this represents a significant waste of not only food, but also water. There are encouraging signs of increasing awareness of food waste—many restaurants in Beijing and Shanghai are putting up signs reminding customers not to waste food. As part of Xi Jinping’s “eight rules” (ba xiang gui ding), the Chinese leadership has ordered crackdowns on lavish government banquets partly to reduce food waste. In light of the magnitude of the problem in China, continued public awareness campaigns and improving supply chains for distribution would serve an important purpose in reducing food waste and its related water and energy consumption. 30 Energy and Water for Food At every step, food production—from growing, processing, packing to storing and distribution—requires water and energy, putting increasing pressure on China’s already-scarce resources. The “Juicy” Meat Industry Pumping to Rock Bottom Rising meat consumption is further straining its freshwater supplies. Facing declining water table levels, Chinese farmers are using more energy to pump water from deeper aquifers in order to sustain irrigated agriculture. Total Meat Production (Million tons) Agricultural Water Usage (Trillion m3) 10 388 358.6 358 366.4 360 8 66.1 6 69.4 70.9 68.7 366.3 72.8 372.3 368.9 374.4 76.5 79.3 79.7 390 83.9 85.4 Also, don’t forget there are climate costs to the price of irrigation. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CO2 Water requirement for producing a kilogram of... 33 million tons emissions per year Beef 15 m3 of water 17%-20% of China’s equivalent to the greenhouse gas entire emissions emissions of New Zealand Refridgerators Have Big Appetites for Electricity Too As China’s burgeoning middle class demands more refrigerators, microwaves, and dishwashers, food-related household energy consumption will continue to rise. Pork 4.9 m3 of water Domestic refrigerator ownership (%) 7% of urban families 1995 95% 2007 Refrigerators and freezers account for an estimated Chicken 3.9 m3 of water 40% of household foodrelated energy use. Sources: FAO, Ministry of Water Resources of China, The Guardian, National Bureau of Statistics of China, Junlian Zhang, New York Times. 31 Luammw. 1 ma" Insights from Choke Point Issues in the United States The U.S. Department of Energy can bring its strong science, technology, and analytic capabilities to bear to help the Nation move to more resilient energy-water systems. — U.S. Secretary of Energy, Ernest Moniz 168 Chinese policymakers, research institutes, and to address water-energy-food confrontations in the environmental NGOs are increasingly recognizing United States. the importance of the water-energy-food nexus, which has been catalyzed in part by the Wilson Center/Circle of Blue Choke Point: China research and convenings. This nascent trend opens up new opportunities for Sino-U.S. collaboration building on nearly 44 years of energy and environmental cooperation by government agencies, NGOs, and research institutes. Below we provide an overview of how the United States is starting to address growing choke point issues, which will lay the groundwork for potential steps China could take and highlights areas in which the two countries can collaborate. This overview of choke point activities by U.S. government agencies, NGOs, research centers, and businesses is by no means exhaustive, but is meant to highlight a range of organizations which have been helping to lead integrated research and action U.S. Government Choke Point Activities • U.S. Department of Energy Water-Energy Roadmap Program: In 2008 Congress tasked the Department of Energy (DOE) with undertaking a detailed scoping study to understand how water-energy nexus issues were challenging the United States.169 DOE invited Sandia National Laboratory to form a Water-Energy Nexus team—made up of national laboratory and university scientists—to build a National Energy-Water Roadmap Program. The subsequent research and convenings were integral in assessing the vulnerabilities in the U.S. energy system from major choke 33 point trends and evaluating the effectiveness of existing use of alternative sources of water and coproduction of programs within DOE and other federal agencies in water with carbon capture, utilization, and storage; and addressing water and energy linked issues. (3) policy and regulatory developments in APEC member • U.S. Department of Energy’s Water-Energy Tech Team (WETT): In the fall of 2012, DOE initiated the department-wide WETT to increase awareness of the water-energy nexus. In June 2014, WETT published a report—Water-Energy Nexus Challenges and Opportunities—that frames the integrated waterenergy challenges facing the United States and sets six priorities for coordinating research between DOE and its partners.170 • U.S. Engagement with APEC on Water-Energy Initiatives: The United States is working with other countries in the Asia-Pacific Economic Cooperation (APEC) forum to develop modeling capabilities to examine water use in energy production and energy use in water production, and identify potential vulnerabilities—especially in urban areas. The project, co-sponsored by the United States, China, and Australia, and carried out under APEC’s Energy Smart Communities’ Initiative, aims to develop standardized definitions and data collection strategies for waterenergy nexus issues and to gather relevant data from APEC economies. These activities will help develop a baseline understanding of the energy-water nexus in the region, and identify water-energy data gaps and potential vulnerabilities the countries face from waterenergy confrontations. The goal is to help prioritize strategies to mitigate energy-water nexus impacts and encourage more efficient and sustainable use of energy and water.171 APEC’s Energy Working Group’s Expert Group on Clean Fossil Energy also started looking into the energy-water nexus, particularly coal-based energy systems. This project—cosponsored by the United States, China, Japan, and Australia—will share information on: (1) developments to make coal-based energy systems, including power generation and conversion to synthetic natural gas and chemicals, more efficient and less-water intensive; (2) recovery and reuse of water from coal-based energy production, including 34 economies related to the water-energy nexus for coalbased energy production. Regional and Basin-level Choke Point Planning and Action • Great Lakes Energy-Water Nexus (GLEW) Initiative: This initiative developed new metrics to measure the impact on aquatic resources of water used for power generation. GLEW also examined policies that govern electric energy markets, utilities, and power plant siting, to identify opportunities for better integrating environmental resource impacts into future energy policy and regulatory efforts. With support from the Great Lakes Protection Fund, this 21-month effort was led by the Great Lakes Commission under the guidance of a diverse Project Advisory Team. Principal project partners included: Cornell University, Sandia National Laboratories, the Great Lakes Environmental Law Center, and the Environmental Law and Policy Center.172 • Delaware River Basin Commission (DRBC): Since 1961 the DRBC has been charged with water resource planning, development, and regulation in a river basin that supplies water to more than 15 million people, or roughly five percent of the U.S. population, across Delaware, New Jersey, New York, and Pennsylvania. Core mandates of the commission’s compact are to apportion water equitably, balance competing demands on river flows, and maintain high water quality in the main stem Delaware River. The water-intensive shale gas development boom targeting the Marcellus Shale formation poses significant new water quality and quantity challenges for the basin. The DRBC has played a central role in engaging community members, NGOs, and the shale gas industry to find solutions to protect the basin’s waters, which are vital to the economic future and quality of life of residents in all four states. Research and Nongovernmental Organization Choke Point Activities • Pacific Institute: The California-based NGO, Pacific Institute, has conducted extensive research on the energy usage of California’s water diversion project. A member of our China Water-Energy team, Heather Cooley, leads the Institute’s work examining the energy footprint of water and identifying strategies to reduce water-energy conflicts in the United States and abroad. • Union of Concerned Scientists: This nonprofit science advocacy organization has published several reports that offer in-depth analyses of the connections between energy and water, looking at how much water is used by power plants fueled by natural gas, nuclear, and coal. They published the 2011 report, Freshwater Use by U.S. Power Plants: Electricity’s Thirst for a Precious Resource.173 • Alliance to Save Energy: In 1997, the Washington D.C.-based NGO launched the Watergy program to address the link between water and energy in municipal water and wastewater treatment systems. The Alliance offers a portfolio of services that include energy assessments, training, outreach, and advocacy with electric and gas utilities, as well as financing mechanism research and policy analysis. Since 1997, the Watergy program has designed and carried out projects in over 100 cities across the globe and has saved more than 20.8 million kWh of electricity and $5 million in operating costs. U.S. Business Choke Point Investments Water has become a significant concern for many businesses.174 Corporate leaders are increasingly aware of how choke point issues pose serious risks to their businesses. In 2013 when the U.S. Chamber of Commerce Foundation held a meeting to help companies better manage their energy and water use, companies expressed shortages.” The next year the Foundation published the report, The Energy-Water-Food Nexus: Insights for the Business Community. According to a survey by Vox Global and Pacific Institute, 60 percent of companies surveyed indicated that water would negatively affect profitability within the next five years. And 80 percent of the respondents said that water availability would affect companies’ choice of where to locate their facilities. Some noteworthy examples of U.S. companies prioritizing choke point issues include: • Coca-Cola: The global beverage and food giant has set a 2020 goal to safely return to communities and nature an amount of water equal to what the company uses in its finished beverages and production processes. The company is increasingly addressing water stewardship in the context of the water-energyfood nexus in its work with the World Resources Institute and 2030 Water Resources Group. • Dow Chemical: Dow Water and Process Solutions, a business unit of The Dow Chemical Company, has published several reports, including The Sustainability Challenge: Meeting the Needs of the Water-Energy Nexus175 and China’s Thirst for Water. The company uses a concept known as valuation of ecosystem services to account for and incorporate the value of nature in its business decisions.176 • General Electric (GE): The multinational conglomerate has made a company-wide effort to improve the water-efficiency of its operations, focusing especially on its plants located in water-scarce areas like Bangalore, India. The corporation and one of its subsidiaries have also committed $20 million to building infrastructure and healthcare in Africa, which includes a program to improve access to clean and safe water in hospitals by installing water-scarcity systems.177 GE has also been a supporter of the World Resources Institute Aqueduct project, which began its water-energy risk analysis tool building in China. that their “most pressing challenge was to create business operations that are resilient to energy, water, and food 35 Finding Solutions in Connections We need to find a new growth model. This is especially true in the water and energy areas…This is the choke point for the country. — Zhang Yongsheng, Senior Fellow at the Development Research Center of the State Council of China179 With China’s rapid urbanization and industrialization, its water-energy-food choke points are tightening and Chinese policy, research, and civil society communities have not yet coalesced around a unified and comprehensive strategy to address these growing challenges. The country’s power and agricultural sectors are competing for an ever-decreasing water supply, and at the same time, more energy is needed to move and treat its increasingly polluted waters. China is facing a confluence of pressures that are threatening its already vulnerable resources, catalyzing risks to its water, energy, and food security. However, just as there can be a negative domino effect in the interlinked competition for water, energy, and food, there can also be a positive multiplier effect when all three are effectively managed together. Specifically, efficient management practices for one of these resources could have significant cobenefits for the others. For example: • Energy efficiency reduces water use in the energy sector, leaving more water available for food production and other sectors; • Preventing water pollution lowers the energy requirements of treatment plants and avoids contamination of food crops; • Promoting less water-intensive crops and lowering food waste help to save significant amounts of water and energy and enhance rural livelihoods; • Incorporating the cost of water in electricity production and reforming energy pricing policies accordingly could be an effective market tool to promote more efficient energy use. Recognizing the connections between these different issues creates opportunities for new thinking on policies, regulations, incentives, and investments for more aggressive resource conservation. Through our 37 Choke Point: China research, exchanges, and interviews, we research, and civil society communities to take action to have identified three priority action areas that Chinese policy, reduce water-energy-food confrontations and improve research, and civil society organizations could focus on to management of these resources. Box 8 outlines some build a strong foundation for action on water-energy-food examples of data and analysis priorities: management: 1. Identify the magnitude of choke point issues in China. 2. Optimize water-energy-food nexus management. 3. Strengthen China-U.S. collaborative networks. 3 Action Area #1. Identify the Magnitude of Water-Energy-Food Issues Integrating the management of water, energy, and food is a significant hurdle for China due to the paucity of baseline data, particularly concerning the amount of energy needed for the water sector. Some of the data exists, but is spread across different agencies and research centers that do not generally collaborate or do not use the same methodology. To overcome this fragmented data management, China needs to create permanent research hubs and networks to collect baseline data and analyze the complete life cycle use of water, energy, and food, by sector and by region. Below are recommendations on how to build information clearinghouses 1 on choke point research and dialogue in China. Create permanent centers and research networks for multidisciplinary choke point research. To help the collection of baseline data on choke point issues, it will be valuable for the Chinese government to assemble a crosscutting R&D team made up of top researchers from energy, water, and agriculture policy think tanks and universities. Ideally, a relevant Chinese government agency, for example the NDRC, Ministry of Water Resources, or Ministry of Science and Technology could provide some of the initial funding for this data collection and research. The National Energy Administration under the NDRC has begun to study water-energy issues. 2 38 Thus, the NDRC could be the logical hub for further choke point research. Collect baseline data. China urgently needs more complete baseline data on water and energy interactions. Filling such vital data gaps will inform more accurate projections in models guiding Chinese policy, Generate water-energy-food models. Drawing from challenges and lessons learned in the U.S., China could develop models that help policymakers better understand the current situation and project future needs. Models should: • Integrate the management and planning of water, energy, and food resources, and consider climate change, population growth, urbanization, economic development and technology evolution; • Evaluate how smart agriculture techniques could lower water use and maintain yields in the most cost-effective manner; • Inform the timing and severity of choke point issues; • Evaluate the efficacy and unintended consequences of alternative mitigation and adaptive strategies to deal with choke points; • Create tools that help household users understand the energy and climate impacts of their daily water use, looking to the Pacific Institute’s Water-Energy-Climate Calculator as an example;183 • Equip energy-water policymakers and managers with tools to help them evaluate energy-water interactions— examples of this include the Brookhaven National Laboratory model for New York City Energy-Water analysis184 or the National Renewable Energy Laboratory Regional Energy Deployment System model. These models have incorporated water constraints into a long-term capacity-expansion model for the deployment of electric power generation technologies and transmission infrastructure throughout the United States. China’s ambition to maintain prolonged growth in a resourceconstrained environment calls for a new, proactive model of decision-making that sets development priorities according to local water conditions. The data, research, and modeling discussed above will help to establish a choke point framework to help central and local policymakers and researchers better evaluate tradeoffs and costs of various water, energy, and food production and conservation goals. With sufficient data and modeling Chinese experts will be able to: • Establish joint planning exercises among water, energy, and food managers at all levels of government in China; • Undertake a comprehensive, nationwide assessment of hydropower and its impacts on water flows and • Coordinate data collection across key government and research entities. For example, in the United States, the U.S. Energy Information Administration and U.S. Geological Survey were required to set standards on how to collect uniform data on water usage by power plants as a result of the Department of Energy’s push to better manage the water-energy nexus. pollution; Box 8. Water and Energy Research Agenda for China Energy for Water Data • Calculate water intensity (differentiating withdrawal and consumption) of all power generation technologies. • Conduct lifecycle water use analysis of energy production, manufacturing, food production, processing, and distribution. As the world’s factory, it would be valuable to estimate how much water is embedded in products China imports and exports (e.g., through importing water-intensive crops and energy, and exporting clothes, electronics, and fuels). Life cycle analysis of energy and water flows used in food processing is also a critical gap and this type of tracking could also be used to strengthen food safety oversight. • Estimate national, provincial, and city data for energy that is used for conveying and treating water. This would include pumping water for irrigation, water transfers, and wastewater and desalination plants. Water for Energy Data • Water for Coal. As China’s main source of electricity, securing accurate data on coal’s water footprint is critical. Currently, the few estimates made by international and Chinese organizations vary considerably, in part because of differing measurement criteria and also because accurate data is often hard to come by in such a rapidly developing and vast country. Some estimates also do not take into account the entire lifecycle of coal production; rather they focus only on water use at the point of electricity generation. For example, one recent Ministry of Water Resources report cited China’s total industrial water withdrawals as 22.5 percent of the national total, and indicated that thermal power with once-through cooling systems accounted for 7.5 percent of the national total water withdrawals. However, this estimate for thermal power focuses exclusively on the plantlevel use, rather than a full assessment of the supply chain and does not include coal-to-gas or coal-to-liquids industries in the estimate.180 • Water for fuels. Studying the amount of water used in fuel extraction (particularly for coal and natural gas) and production (especially SNG and oil) combined with basinwide water surveys will be vital in managing choke points. Baseline Data to Assess Choke Point Risks • Gather and analyze provincial and/or regional water-energy data. Subnational water-energy nexus analyses will be vital to make assessments on the future water needs in key regions of the country. The Pacific Institute’s Water for Energy: Future Water Needs for Electricity181 and Energy Down the Drain182 are useful models for studies that quantify energy requirements for water systems at regional levels. • Examine supply chain water risks. These risks include mapping out the magnitude of water pollution and waste created by China’s energy and industrial supply chains, as well as understanding the problems energy and other industries face in accessing clean water. • Calculate the co-benefits of addressing choke point issues. This will require estimating how decreasing the energy footprint of water could lower air pollution and greenhouse gas emissions, among other benefits. 39 Action Area #2. Optimize WaterEnergy-Food Nexus Management China’s coal plants and coal producers in early 2014. Increasing efficiency in the management of water, energy, and municipalities would be a vital step to protecting the and food—often referred to as demand-side management country’s vulnerable water resources. Expanding and rigorously enforcing water efficiency targets in the energy sector as well as in other industries strategies—warrants greater attention in China. Policies • Reducing water pollution through cleaner for improving efficiency should target water use in energy energy. China is also losing considerable water to pollution. The new top-down measures production, electricity generation, and consumer end use. Policies should also address energy efficiency in water from the 2013 Pollution Action Plan to the amended management, treatment, distribution, and end use operations. Environmental Protection Law represent important The water pricing reform announced in 2014 by the NDRC steps in improving pollution control to protect could be a good first step in this direction.185 The push by China’s water quality. Filling the governance gaps to Chinese policymakers to prioritize energy efficiency in the past promote accountability at the local level will be crucial two Five-Year Plans has led to significant energy savings, to enforcement of existing water pollution control as well as improvements in the efficiency of irrigation and regulations. The high-energy costs can hinder water reducing water pollution.186 Targets included decreasing treatment—so much so that tertiary treatment is almost energy intensity by 16 percent and obtaining 11.4 percent nonexistent in China. This treatment gap is saddling of total energy from non-fossil energy sources.187 There are the country with mountains of often toxic sludge. To many opportunities to make China’s economy even more 1 address this energy burden that hampers wastewater energy efficient – saving energy ultimately saves water. treatment, the central and provincial governments could: Standards and Efficiency Codes for Water and Energy: Another way that government can help 1) Prioritize off-grid distributed renewable energy incentivize energy and water-saving consumption generation for wastewater treatment; patterns would be to implement and enforce standards and codes of conduct. For instance, California has set maximum flow rates for showerheads, toilets, and other appliances and created rebates to encourage individuals and industry to switch out older inefficient appliances and fixtures for water or energy saving 2 ones.188 Moreover, there are significant opportunities for improving lighting, heating, and cooling efficiency in Chinese buildings. 3 Water Efficiency and Pollution Control Priorities: • Reigning in energy’s water footprint. While the Chinese government has been quick to create comprehensive policies and investments to promote energy efficiency and the development of renewables, it has lagged behind in its response to the country’s water wastage, particularly in the energy sector. The 12th Five-Year Plan for Energy Development highlighted for the first time that the water footprint of coal is an issue for the government to begin addressing. The Ministry of Water Resources issued water allocation rules for 40 2) Deploy biodigesters on factory farms to prevent animal waste from entering river and lakes. Increase incentives for end-use conservation by industries and consumers: • Continue to raise efficiency targets. A recent study by the Natural Resources Defense Council and Tsinghua University concluded that during the 11th Five-Year Plan period, the water saved through efficiency programs across China’s entire power sector could satisfy Beijing’s water demand for three years.189 Energy efficiency’s positive implications for water management should be further emphasized. Conversely, water conservation could prove more appealing if the energy savings are compared to the costs of building desalination and water transfer infrastructure. • Raise water prices and improve tracking of water use. Although water prices in China have gradually increased in the past twenty years, water is still underpriced compared to other countries, especially point research and technology development by teams in the agricultural sector.190 Raising fees and expanding of university, industry, government, and NGO scientists, pilot water rights trading markets would promote water engineers, and policy experts. Potentially fruitful areas of conservation and efficiency. joint work include: • Interactive mapping of virtual water flows in • Create public awareness campaigns. Besides the economy. Such mapping could use models from targets and pricing, highly visible public awareness existing studies193 to make it easier for policymakers campaigns on energy-saving, food-saving, and to comprehensively visualize water in production, water-conservation could also be a powerful tool, as consumption, and trade stages both within and beyond evidenced by Chinese basketball superstar Yao Ming’s each country’s borders. heralded involvement in a campaign against shark fin soup, which likely contributed to the 70 percent • Enhance joint research and development into reduction in sales.191 water and energy saving technologies. For • Educate local officials about choke point example, a recent study of 11 Chinese provinces found that the use of improved irrigation management linkages. Water conservation and pollution control measures such as flow metering, irrigation scheduling, regulations have been on the policy agenda for many or simply regular maintenance can reduce the amount years in China, but enforcement has generally been of pumped water by up to 20 percent.194 Many of weak. Inclusion of water-energy-food nexus classes and training in Party schools, both at the central and local levels would provide officials with a basic foundation of how integrated water-energy-food nexus management could be used to alleviate water and energy stresses while working towards greater food security. Action Area #3. Strengthen Collaborative Networks Between China and the United States 2 As the two largest energy producers and users in the world, the inter-linkages among water, energy, and food are having great impacts on the economic and ecological health of the United States and China. The establishment of a water-energy nexus program under the existing Clean Energy Research Center (CERC) mechanism, which is slated to begin in October 2015, is a positive development. The program will receive $50 million over five years and aims to catalyze joint research to address water-energy challenges facing both countries.192 The funding will be evenly shared by the two countries through a mix of government and private sources. Other recommendations for collaboration include: 1 these technologies have been already launched as pilot programs at the local level. Build subnational collaboration. In the United States some of the most creative and innovative solutions to water-energy-food management have emerged from city governments and regional organizations. Chinese cities are already being pushed to quickly address increasingly severe energy, water, and pollution challenges and therefore represent ideal partners for testing new policies and pilots to increase their water, energy, and food resilience. • Incorporate water into local energy planning. In the United States, Arizona and Colorado have moved to the forefront of incorporating water into state energy planning. For example, the Arizona state electricity regulatory agency has included water consumption in its electric resource planning for over a decade. The agency has denied permits for proposed natural gas power plants to protect groundwater supplies and encouraged the state’s largest electric company to build new solar farms to lower water use.195 Another example is the Watts to Water Program, a metro-wide Establish a bilateral water-energy-food nexus sustainability program based in Denver, Colorado research center that focuses on mutual choke dedicated to the reduction of energy and water point challenges in both countries. The new CERC water-energy program provides a platform for joint choke consumption. Buildings and businesses in the city that opt-in share their energy and water consumption data 41 in exchange for complimentary technical support from will face increased risks as energy and food production Energy Star technicians, and they receive rebates to squeeze the country’s water supplies.200 Therefore it make building operations more efficient and materials will be important to engage the private sector to help that will lower their water and energy consumption.196 raise awareness on how water and energy waste is • Encourage city-to-city exchanges. Cities often lack data on how water, energy, and food flows interact in their communities. Generating such metrics would help guide leaders identify where they can make the greatest impact. For instance, in some regions, pipeline leaks and uneven pressure means that significant water, and thus energy, is lost in distribution. As an indication of economic 4 loss, 50 percent of London’s municipal water cost is non-revenue; in China, that number is 20-30 percent in large cities and 6-7 percent in smaller or newer cities.197 U.S. and Chinese cities are participating in growing networks focused on urban climate collaboration (e.g., C-40), creating smart cities, and even some U.S.-China sister city programs are becoming more committed to environmental issues. Brookhaven National Laboratory paired up eight U.S. cities with seven Chinese cities for collaboration on energy and environment and led a U.S.China Joint EcoCities project involving six Chinese cities and four U.S. cities.198 Recently, the Ports of Los Angeles and Shanghai have formulated an EcoPartnership under a program managed by the U.S. Department of State and the NDRC.199 Cities in the United States and China that face similar water-energy challenges, such as port cities in Oakland, CA and Shenzhen or Guangzhou, could build business and policy dialogues under existing sister city or 3 EcoPartnership programs that share knowledge on best practices on lowering their energy and water footprints. Expand engagement with civil society, multilateral, and business communities. Box 8 provides an overview of some water-energy-food-related initiatives that have been launched in China over the past two years. These nongovernmental players could be valuable to help bring business, community, and policy stakeholders together for choke point research, projects, and policy development. NGOs can help shine a light on the impacts of unsustainable water use on communities and encourage more transparent and participatory decision making in future project development. As industrial water withdrawals rise in China, Chinese businesses 42 exacerbating risks to sustainable business. Incorporate water-energy-food programming in the U.S.-China Agriculture and Food Partnership and pursue further trade opportunities in agribusiness between the two countries. • Trade may offer the most sustainable way forward for China to meet its domestic grain demand and would also create an opportunity for U.S. agricultural exports. China’s growing imports of grain and other foods are driven in part by water shortages and represent an import of “virtual” water. Greater understanding of the role of trade, with respect to managing virtual water flows interprovincially and internationally, will be critical for China’s food and resource future. The United States has arable land that could more sustainably meet China’s meat demand if the right policies are in place to incentive such investments. According to Fred Gale, senior economist at the United States Department of Agriculture, “Importing meat from more land abundant countries, like the United States…is probably going to reduce the environmental footprint of Chinese people eating more meat compared to China being self-sufficient, producing all its own pork and all its own chickens.”201 • In April 2014, the U.S. agribusiness community launched the U.S. Agriculture and Food Partnership as the key public-private sector coordinator for bilateral food and agriculture cooperation between the two countries. The partnership has seven key task forces including: crop chain, livestock chain, machinery, food processing, investment, financial services, and food safety. Particularly under the livestock chain and food safety task forces, there is a ripe opportunity for U.S. agribusiness to reevaluate their supply chain practices in China from a water-energy-food management perspective and in doing so, also work with China’s agri-food industries to introduce best practices that conserve these crucial resources and limit pollution. Box 9. Examples of Emerging Choke Point Work in China • The Wilson Center’s China Environment Forum is continuing its Choke Point: China work with Circle of Blue and other U.S. and Chinese partners to expand research and dialogue on water-energy-food confrontations in China and to continue identifying opportunities for U.S.-China collaboration. The next major initiative is the Choke Point: Port Cities that is investigating the water-energy choke points in Shenzhen and Oakland, California, with an eye on the pollution • transparency initiatives and citizen pollution monitoring of coal and heavy industries. • Chinese Universities and think tanks are beginning to dive into choke point analyses. BP-Tsinghua Clean Energy Center was the first Chinese university research center to assess the water footprint of China’s coal production cycle. On the flip side of the water- reduction co-benefits. energy confrontation, Nanjing University Center The World Bank’s Thirsty Energy Initiative the first Chinese research group to begin estimating recently began working in China to design and implement an integrated water and energy model for the National Energy Administration (NEA), as part of the institution’s 2016-2020 National Energy Five-Year Plan. Besides NEA, the Bank will work with the Institute for Water and Hydropower Resources—which works directly with China’s Ministry of Water Resources—to ensure that the country’s energy planning tools properly incorporate water constraints and investment required to produce power and cooling in the major energy basins in the country. Preliminary results are expected to be ready by February of 2015 in time to be used for the design of the 13th Five-Year Plan. • The Natural Resources Defense Council’s China Coal Consumption Cap Plan and Policy Research, which is bringing together China’s leading energy and environmental think tanks to conduct in-depth research and dialogues, has incorporated water into its Coal Consumption Cap Co-Benefits research. This broad-ranging research work will produce policy recommendations and concrete action plans on • of coal on air and water through local industry for Environmental Management and Policy is and modeling the energy footprint of water in China, focusing in part on how conserving urban water can decrease pollution and greenhouse gas emissions.203 China’s Energy Resources Institute under the National Development and Reform Commission has undertaken some initial analyses of the water footprint of different energy technologies in China. • The World Resources Institute (WRI) Water Team in Beijing is reviewing the policies and regulations on energy and water resources management at the national and provincial levels in China with the goal of identifying gaps that pressure water ecosystems in the country. WRI’s Aqueduct project has created online maps and tools to help companies, investors, governments, and communities better understand where and how water risks are emerging around the world. Their initial prototype tool focused on the Yellow River in China. • Greenpeace China continues its Thirsty Coal campaign, undertaking on-the-ground research and decreasing coal consumption in China. advocacy on how expanding coal bases in north China Water Risk, a Hong Kong-based NGO, has A 2014 Thirsty Coal report on pollution and excessive expanded its water risk research and reporting heavily into coal-water confrontations since 2012—most notably with the No Water No Power: Is There Enough Water to Fuel China’s Power Expansion report for HBSC and an extensive series of stories and infographics on the coal-water link.202 • The Pacific Environment and Waterkeeper Alliance are working with grassroots environmental groups across China to reduce the country’s reliance on coal by engaging in public outreach on the impacts China are exacerbating China’s current water crises. water extraction from Shenhua coal-to-liquids plants highlighted the growing groundwater depletion and contamination problems linked to coal production in China’s north. • In the spring of 2014, the World Coal Association— based out of the Shenhua Science and Technology Institute—published a special issue on coal and water that featured several articles focused on China by not only Shenhua researchers, but also by WRI and the BPTsinghua Clean Energy Center.204 43 . - ft . China’s Opportunities to Address the Choke Points To reconcile the water-energy confrontations, the only way out is to manage the whole thing in a more efficient way—from the design, through the construction, to the operation. — Ma Jun, Director, Institute for Public and Environmental Affairs and Wilson Center Global Fellow205 China’s ability to manage its tightening water-energyfood choke points may seem like a battle of Goliathan proportions. Water pollution and shortages are shrinking the amount of cropland that can be used safely for food production; this has pushed China dangerously close to the government’s “red line” of 120 million cultivated hectares required to ensure its grain security. Northern cities are increasingly thirsty; Beijing was estimated to be 515 million m3 short of water for the year 2011, and even with the SNWTP the deficit will still be 190 million m3.206 Meanwhile, the country’s coal powered generation capacity is set to rise to 1,250 GW by 2020.207 Even with the new fleet of efficient coal plants, this increase in capacity translates to roughly 34 billion m3 of water used annually by 2020.208 Chinese policymakers have only recently begun to recognize these choke points, but as this Roadmap has outlined, some progressive steps are already being taken, such as the recent announcement of the U.S.-China Clean Energy Research Center’s water-energy nexus program. Here are some other promising trends to build on: China has shown that when there is the political will, changes will be enacted, though implementation lags. The central government has earmarked $608 billion (4 trillion yuan) this decade to clean up its rivers and lakes, fix its water supply systems, and boost water conservation.209 Chinese officials are also pushing policies to raise water efficiency in the agricultural sector. In the energy sector, the government now requires use of dry cooling on new ultra-super critical coal-fired power plants in the northern provinces, making them among the most water-efficient power plants in the world. Improvements in China’s infrastructure offer more conservation opportunities. Beijing is erecting new buildings that include gray water systems to deliver recycled wastewater for washing cars and flushing toilets.210 The city has reduced industrial water use by more than 40 percent, is set to increase its wastewater recycling rate to 75 percent and sewage treatment rate to 98 percent by 2015.211 Since 1995, Shanghai has spent $8.1 billion (50.3 45 billion yuan) to construct a network of 52 sewage plants that now treat nearly 80 percent of the city’s wastewater.212 If the Shanghai municipality expands its rooftop solar investments and policy incentives into the wastewater treatment sector, they could launch a new model for low-carbon development that has the co-benefit of protecting water. In rural areas, as the country transitions from family farms to industrial agriculture, there are also new opportunities to implement water and energy saving technologies. China’s strong manufacturing base and large population gives the country an unparalleled ability to scale-up effective technologies. The Chinese government’s investments and policies to encourage clean energy have made the country a leader in solar, wind, and Photo courtesy of Circle of Blue © J. Carl Ganter 46 cleaner coal technologies. China has become a global laboratory for testing and improving clean energy technologies from carbon capture and sequestration to integrated gasification combined cycle. China has the opportunity to also play a leadership role in addressing its water-energy-food confrontations, including more energy efficient desalination and wastewater treatment, and new waste to energy technologies. Water-energy-food confrontations are complex and no single document can solve these problems, but we hope that this Roadmap lays out some foundational ideas that can empower Chinese stakeholders and their partners to develop a comprehensive framework for alleviating China’s growing choke points. Appendix A: China Water-Energy Team Itinerary August 4-7, 2013 Strategic Water-Energy Roundtables • Natural Resources Defense Council • Syntao Co., Ltd. – held at Johnson & Johnson’s Beijing office • Development Research Center of the State Council • Institute of Public and Environmental Affairs • Institute for Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences • Energy Research Institute of the National Development Pamela Bush is the Secretary and Assistant General Counsel of the Delaware River Basin Commission. Heather Cooley is Co-Director of the Pacific Institute’s Water Program. Jia Shaofeng is the Deputy Director of the Center for Water Resources Research at the Chinese Academy of Sciences. Jia Yangwen is Vice Director of Department of Water Resources, China Institute of Water Resources & Hydropower Research. Keith Schneider is Senior Editor at Circle of Blue where he leads their Choke Point work. and Reform Commission • Chinese Academy of Environmental Planning • Beijing University • Beijing Energy and Environment Roundtable (BEER) Appendix B: China Water-Energy Team Member Bios Vatsal Bhatt is Senior Policy Advisor at Brookhaven National Laboratory of the United States Department of Energy and is a senior policy advisor to the U.S.-China EcoPartnerships Secretariat. Sun Qingwei previously worked with Greenpeace East Asia as a Climate and Energy Campaigner where he led the coal-water nexus research. Vincent Tidwell is a Distinguished Member of the Technical Staff at Sandia National Laboratories conducting basic and applied projects in water resource management. Yang Fuqiang is Senior Adviser on climate change, energy and environment at the Natural Resources Defense Council, Beijing office where he leads the Coal Consumption Cap Program. 47 ENDNOTES 1 International Energy Agency. “The Impact of Global Coal Supply on Worldwide Electricity Prices.” 2014. http://www.iea.org/publications/ insights/insightpublications/ImpactGlobalCoalSupply_WorldwideElectricityPrices_FINAL.pdf 2 Pan, Lingying; Liu, Pei; Ma, Linwei; and Li, Zheng. “A Supply China Based Assessment of Water Issues in the Coal Industry in China.” Energy Policy. 2012. 48:93-102. China’s Water Resources Bulletin; The Ministry of Water Resources of the People’s Republic of China. “2012 China Water Resources Bulletin.” December 15, 2013. http://www.mwr.gov.cn/zwzc/hygb/ szygb/qgszygb/201405/t20140513_560838.html; Cai, Beiming; Zhang, Bing; Bi, Jun; and Zhang, Wenjing. “Energy’s Thirst for Water in China” Environmental Science & Technology. 2014. 48(20):11760-11768 http://dx.doi.org/10.1021/es502655m 3 World Bank. “Renewable Internal Freshwater Resources Per Capita (cubic meters).” World Bank Data Bank. 2012. http://data.worldbank.org/ indicator/ER.H2O.INTR.PC 4 Cai, Beiming; Zhang, Bing; Bi, Jun; and Zhang, Wenjing. “Energy’s Thirst for Water in China,” Environmental Science & Technology. 2014. 48(20):11760-11768 http://dx.doi.org/10.1021/es502655m 5 “China Falling Behind on 2020 Hydro Goals.” China Digital Times. March 11, 2014. http://chinadigitaltimes.net/2014/03/china-falling-behind- 2020-hydro-goals/ 6 China Water Risk. “Sectors: Agriculture.” http://chinawaterrisk.org/ sectors/ 7 Garthwaite, Josie. “California Drought Dries Up Hydro, But Power Stays On.” National Geographic. March 11, 2014. http://news.nationalgeo- graphic.com/news/energy/2014/03/140311-california-droughtdries-up-hydro-but-power-stays-on/ 8 Bjerga, Alan. “California Drought Transforms Global Food Market.” Bloomberg. August 11, 2014. http://www.bloomberg.com/ news/2014-08-11/california-drought-transforms-global-food-market.html 9 World Bank. “Renewable Internal Freshwater Resources Per Capita (cubic meters).” World Bank Data Bank. 2012. http://data.worldbank.org/ indicator/ER.H2O.INTR.PC 10 The 2030 Water Resources Group. “Charting Our Water Future: Economic Frameworks to Inform Decision-Making.” 2009. http://www.2030water- resourcesgroup.com/water_full/Charting_Our_Water_Future_Final. pdf 11 National Development and Reform Commission. “China’s National Climate Change Programme.” June 2007. http://en.ndrc.gov.cn/newsre- lease/200706/P020070604561191006823.pdf 12 Piao, Shilong; Ciais, Philippe; Huang, Yao; Shen, Zehao; Peng, Shushi; Li, Junsheng; Zhou, Liping, et al. “The Impacts of Climate Change on Water Resources and Agriculture in China.” Nature. 2010. 467:43-51. 13 Xie, Jian; Lieberthal, Andres; Warford, Jeremy; Dixon, John; Wang, Manchuan; Gao, Shiji; Wang, Shuilin, et al. “Addressing China’s Water Scarcity: Recommendations for Selected Water Resource Management Issues.” 48 The World Bank. 2009. http://documents.worldbank.org/curated/ en/2009/01/10170878/addressing-chinas-water-scarcity-recommendations-selected-water-resource-management-issues 14 China Water Risk. “Big Picture: Pollution Status.” 2011. http://chinawaterrisk.org/big-picture/pollution-status/; Turner, Jennifer. “In Deep Water: Ecological Destruction of China’s Water Resources.” Water and Energy Futures in an Urbanized Asia. 2007. Center for Strategic and International Studies. http://www.wilsoncenter.org/sites/default/files/ turner_csis_article.pdf. 15 Ivanova, Nadya. “Toxic Water: Across much of China, Huge Harvests Irrigated With Industrial and Agricultural Runoff.” Circle of Blue. January 18, 2013. http://www.circleofblue.org/waternews/2013/world/tox- ic-water-across-much-of-china-huge-harvests-irrigated-with-industrial-and-agricultural-runoff/ 16 China Water Risk. “2013 State of Environment Report Review.” July 9, 2014. http://chinawaterrisk.org/resources/analysis-re- views/2013-state-of-environment-report-review/ 17 Xie, Jian; Lieberthal, Andres; Warford, Jeremy; Dixon, John; Wang, Manchuan; Gao, Shiji; Wang, Shuilin, et al. “Addressing China’s Water Scarcity: Recommendations for Selected Water Resource Management Issues.” The World Bank. 2009. http://documents.worldbank.org/curated/ en/2009/01/10170878/addressing-chinas-water-scarcity-recommendations-selected-water-resource-management-issues 18 National Bureau of Statistics. “China Statistical Yearbook.” 2005. China Statistics Press, Beijing. 19 Xie, Jian; Lieberthal, Andres; Warford, Jeremy; Dixon, John; Wang, Manchuan; Gao, Shiji; Wang, Shuilin, et al. “Addressing China’s Water Scarcity: Recommendations for Selected Water Resource Management Issues.” The World Bank. 2009. http://documents.worldbank.org/curated/ en/2009/01/10170878/addressing-chinas-water-scarcity-recommendations-selected-water-resource-management-issues 20 Ministry of Water Resources of the People’s Republic of China. “China Focus: Central, North China Hurt by Drought.” August 1, 2014. http://www. mwr.gov.cn/english/Medianews/201408/t20140801_572264.html 21 Bloomberg News. “China’s Drought to Shrink Corn Harvest First Time Since 2009.” Bloomberg. August 8, 2014. http://www.bloomberg.com/ news/2014-08-08/china-s-drought-to-shrink-corn-harvest-firsttime-since-2009.html 22 The 2030 Water Resources Group. “Charting Our Water Future: Economic Frameworks to Inform Decision-Making.” 2009. http://www.2030waterre- sourcesgroup.com/water_full/Charting_Our_Water_Future_Final.pdf 23 The 2030 Water Resources Group. Ibid. 24 China Water-Energy Team exchange at the Chinese Academy of Environmental Planning. August 7, 2013. 25 U.S. Energy Information Administration. “China Country Analysis.” February 4, 2014. http://www.eia.gov/countries/cab.cfm?fips=CH 26 Zhang, Chao; Anadon, Laura; Mo, Hongpin.; Zhao, Zhongnan.; and Liu, Zhu. “The Water-Carbon Trade-off in China’s Coal Power Industry.” October 7, 2014. 48:19. Environmental Science and Technology. 27 China Environment Forum. “The Thirsty King: Digging into the Water Footprint of China’s Coal.” Woodrow Wilson Center, 5th Floor. July 24, 2012. Event. http://www.wilsoncenter.org/event/the-thirsty-king-digging- the-water-footprint-china’s-coal 28 Interview via email with Heather Cooley, Director of Water Program, Pacific Institute. June 27, 2014. 29 Sun, Guodong. “Coal in China: Resources, Uses, and Advanced Coal Technologies.” 2010. Coal Initiative Reports. Pew Center on Global Climate Change. http://www.circleofblue.org/waternews/wp-content/up- loads/2011/03/Coal-in-China.pdf. 30 U.S. Energy Information Administration. “China Consumes Nearly as Much Coal as the Rest of the World Combined.” January 29, 2013. http://www. eia.gov/todayinenergy/detail.cfm?id=9751 31 U.S. Energy Information Administration. Ibid. 32 Al Jazeera. “China Plans to Ban Coal Use in Beijing by 2020.” August 5, 2014. Al Jazeera America. http://america.aljazeera.com/arti- cles/2014/8/5/china-to-ban-allcoaluseinbeijingby20201.html 33 Hornby, Lucy; Smyth, Jamie; and Hume, Neil. “China Ban on Low Grade Coal Set to Hit Global Miners.” September 16, 2014. 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Circle of Blue. http://www.circleofblue.org/ waternews/2011/world/desalinating-the-bohai-sea-transcontinental-pipeline-could-open-chinas-northern-coal-fields/ 44 Chan, Wai-shin. “The Water Challenge Facing China’s Coal and Power Sector is ‘Inescapable’.” July 8, 2013. Chinadialogue. https://www. chinadialogue.net/article/show/single/en/6187-The-water-challenge-facing-China-s-coal-and-power-sector-is-inescapable45 Schneider, Keith. “Bohai Sea Pipeline Could Open China’s Northern Coal Fields.” April 5, 2011. Circle of Blue. http://www.circleofblue.org/ waternews/2011/world/desalinating-the-bohai-sea-transcontinental-pipeline-could-open-chinas-northern-coal-fields/ 46 China Census for Water. “Bulletin of First National Census for Water.” March 26, 2013. Chinese Ministry of Water Resources, and Chinese National Bureau of Statistics. http://www.mwr.gov.cn/2013pcgb/ merge1.pdf 47 China Census for Water. Ibid. 48 U.S. Energy Information Administration. “China Country Analysis.” February 4, 2104. http://www.eia.gov/countries/cab.cfm?fips=CH http://fortune.com/2014/07/11/coal-china/ 36 Energy Information Administration. “China Country Analysis.” February 2014. http://www.eia.gov/countries/cab.cfm?fips=ch 37 Luo, Tianyi; Otto, Betsy; and Maddocks, Andrew. “Majority of china’s Proposed Coal-Fired Power Plants Located in Water-Stressed Regions.” World Resources Institute. August 26, 2013. http://www.wri. org/blog/2013/08/majority-china’s-proposed-coal-fired-power-plants-located-water-stressed-regions 38 Greenpeace East Asia. “Thirsty Coal: A Water Crisis Exacerbated by China’s New Mega Coal Power Bases.” August 2012. Greenpeace. http:// www.greenpeace.org/eastasia/publications/reports/climate-energy/2012/thirsty-coal-water-crisis/ 39 Greenpeace East Asia. Ibid. 49 David Stanway. “China Falling Behind on 2020 Hydro Goals as Premier Urges New Dam Building.” March 10, 2014. Reuters. http://uk.reuters.com/article/2014/03/10/china-parliament-hydropower-idUKL3N0M70VN20140310 50 Ivanova, Nadya. “Rains bring relief for six-month China drought, but chronic water problems loom.” June 10, 2011. Circle of Blue. http://www. circleofblue.org/waternews/2011/world/rains-bring-relief-for-sixmonth-china-drought/ 51 Ivanova, Nadya. Ibid. 52 Luan, Dong. “Rock, Metal, and Electronic: Yunnan’s Environmental Discord Between Mining, Aluminum, and Hydropower.” 2013. Wilson Center. http://www.wilsoncenter.org/sites/default/files/Rock, Metal %26 Electronic_1.pdf 40 Greenpeace East Asia. Ibid. The Ministry of Water Resources has strictly controlled water allocations in the Yellow River Basin since the late 1990s when the river stopped flowing to the ocean for over 250 days each year. 53 Luan Dong (Ed.). “Clearing the Air: Is Natural Gas China’s Game Changer for Coal?” 2014. Insight Out: Expert Voices on China’s Energy and Environmental Challenges. Issue 1. Page 2. Woodrow Wilson Center. 41 Kalman, Jonathan. “Illegal Coal Mine Encroaching on Nature Reserve in North-West China.” August 6, 2014. The Guardian. http://www. 54 Gass, Henry and ClimateWire. “China Push into Synthetic Natural Gas has Pollution Consequences.” Scientific American. October 2, 2013. http:// theguardian.com/environment/2014/aug/07/illegal-coal-mine-nature-reserve-china; Greenpeace International. “World’s Biggest www.scientificamerican.com/article/china-push-into-synthetic-natural-gas-has-pollution-consequences/ 49 55 Liu, Coco and ClimateWire. “Can China’s Bid to Turn Coal to Gas Be Stopped?” October 29, 2014. Scientific American. http://www.scientifi- camerican.com/article/can-china-s-bid-to-turn-coal-to-gas-bestopped/ 56 Wall Street Journal, China Edition. “China’s Shale Gas Reserves Rank First in the World: Begin Mining or Disaster.” September 3, 2014. 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Wall Street Journal. http://blogs.wsj.com/chinareal- time/2014/06/19/beijing-now-has-almost-as-many-people-asaustralia/ and Schneider, Keith. “Building China’s 21st-Century Megacity: 201 Shifflett, Susan C. “Surf and Turf: The Environmental Impacts of China’s Growing Appetite for Pork and Seafood.” May 7, 2014. New Security Beat. Shanghai’s Experiment with Water and Nature.” September 30, 2011. Circle of Blue. www.circleofblue.org/waternews/2011/world/manmade- http://www.newsecuritybeat.org/2014/05/surf-turf-environmental-impacts-chinas-growing-appetites/ 202 Tan, Debra. “No Water No Power: Is There Enough Water to Fuel China’s Power Expansion?” October 2012. China Water Risk. http://chinawater- risk.org/resources/analysis-reviews/china-no-water-no-power/ 203 Zhou, Yuanchun; Zhang, Bing; Wang, Haikun; and Bi, Jun. “Drops of Energy: Conserving Urban Water to Reduce Greenhouse Gas Emissions.” Environmental Science and Technology. June 11, 2013. http://pubs.acs. lake-and-nature-preserve-at-center-of-new-shanghai-borough/ i Schneider, Keith. “Choke Point: China—Confronting Water Scarcity and Energy Demand in the World’s Largest Country.” February 15, 2011, Circle of Blue. http://www.circleofblue.org/ waternews/2011/world/choke-point-chinaconfronting-water-scarcity-and-energy-demand-in-the-worlds-largest-country/ org/doi/abs/10.1021/es304816h 55 Roadmap Authors Susan Chan Shifflett is program associate at the Wilson Center’s China Environment Forum where she focuses on China’s food safety and food security. She previously interned at the U.S. Department of State’s Office of Global Food Security, working on the Feed The Future initiative. From 2007-2010, she lived in Beijing where she worked as a program assistant at China’s Center of Disease Control and Prevention researching high-risk HIV/AIDS populations in Yunnan Province. Susan received an M.A. in International Economics from Johns Hopkins University’s School of Advanced International Studies and a B.S. in Biology from Yale University. Jennifer L. Turner has been the director of the China Environment Forum at the Woodrow Wilson Center for 15 years where she creates meetings, exchanges and publications focused on a variety of energy and environmental challenges facing China. Water-energy nexus challenges and environmental civil society are at the heart of her current research interests. She received a Ph.D. in Public Policy and Comparative Politics in 1997 from Indiana University, Bloomington where she examined local government innovation in implementing water policies in China. Luan “Jonathan” Dong is a project assistant at the Natural Resources Defense Council office in Beijing where he works on their Coal Cap project. From January 2013 to July 2014 he was a research assistant and consultant for the Wilson Center’s China Environment Forum. Jonathan also worked as the Global Warming Research Assistant at Greenpeace in Washington DC and as a research assistant for the Institute of Public and Environmental Affairs in Beijing. He completed a Master’s in International Affairs and Sustainable Development at George Washington University in 2013. Ilaria Mazzocco is a research intern at the Woodrow Wilson Center’s China Environment Forum and a program associate at the SAIS China Africa Research Initiative. She is currently pursuing an M.A. in International Relations and International Economics at the Johns Hopkins School of Advanced International Studies. Previously she worked at the Asia Society in New York City and was a research fellow at the Global Environmental Institute in Beijing. She holds a Master’s in International Relations and European Studies from Central European University in Hungary and a B.A. from Bard College. Bai Yunwen is the co-founder and the deputy director of Greenovation Hub where she leads the Climate and Finance Policy Centre. Her research focuses on international financial flows, climate and energy policy and financing schemes. She leads Greenovation Hub’s evidence-based research and policy analysis, which aims to influence debates to accelerate China’s green development. She has over 10 years of experience working with international NGOs and foundations on climate issues. She also serves on the board of the China Climate Action Network. Yunwen holds MSc degrees in Environmental Science and Environmental Policy & Management. 56 One Woodrow Wilson Plaza 1300 Pennsylvania Avenue, N.W. Washington, DC 20004-3027 www.wilsoncenter.org/cef cef@wilsoncenter.org facebook.com/chinaenvironmentforum @WilsonCEF 202.691.4000