China to impose “strictest control” over water resources: report

Below is Xinhua report on water pricing in China, a seemingly dull and technical question that actually has major consequences for Tibet.

China’s plans for massive dams and canals to capture and divert Tibetan rivers, and China’s insistence on removing nomads so as to convert degrading rangeland to grassland wilderness, are all based on the assumption that lowland China downstream from Tibet is desperately short of water, so Tibet must sacrifice its pastures, nomads and rivers to save China.

The World Bank and many international water experts have for many years tried to persuade China that much of the problem can be dealt with by a policy of demand management, which means trying to reduce demand by increasing prices, especially for rural water use by irrigators, which is highly wasteful because water has long been so cheap. So if there is a new policy that water for agriculture is to be priced in a way that reflects the environmental and social costs, as well as economic costs, that could be good news. It could even make the difference between going ahead with the water diversion in Kham, from south to north, from the tributaries of the Yangtze (and possibly even the Yarlung Tsangpo) to the Yellow River. Officially, that massive project, announced over a decade ago, is still on the books, awaiting implementation of other south to north water diversion routes in lowland China due for completion within the next 3 years. China has also announced a massive government-led investment in water desalination technologies, as an industry China can gain global dominance over, which would also mean those coastal Chinese cities at the end of the great rivers, could utilise desalinated sea water rather than requiring water from Tibet to come down their over used rivers.

Taken together, these price reforms plus the commitment to desalination could mean there is no longer much economic basis for pressing ahead with the capture of the rivers of Kanze and Ngawa to supply Beijing and Tianjin with fresh water.

However, such announcements are seldom so straightforward. If China is serious about raising water prices, farmers will protest, and if that becomes a security concern, the government may back away. Just because Beijing makes announcements doesn’t mean everyone salutes. Lots of US and European think tanks committed to “rational” water policy will salute this new policy, but it may be hard to implement.

A second question is to do with the announced “improved pricing mechanisms” for hydropower. Presumably this is a political euphemism for a price increase. If so, this too has considerable implications for Tibet, since the current 12th Five Year Plan is committed to a massive increase in the hydro damming of Tibetan rivers, both on the plateau and immediately below it, as the great rivers, including their many raging mountain tributaries, fall thousands of metres to the plains of China below.

The huge increase in hydropower serves three purposes.

1: It makes China look good globally, as a vigorous investor in “green” energy, masking the ongoing acceleration in coal use, which, according to Plan, will rise from a colossal 3 billion tons a year in 2011 to 3.8 billion tons by 2015.

The actual uses of hydropower can be split into two directions:

2: much of the hydropower will be used within Tibet, for the fast growing cities, and for the big new mines springing up near Chamdo (Yulong copper & gold), Lhasa (Gyama and Chulong copper and gold) and Shigatse (Shetongmon copper & gold). Most of these large scale mines will not only dig up millions of tons of rock annually, crushing it to powder, in an energy intensive process, they will also concentrate and smelt the ores onsite, even more energy intensive. That’s a major reason for hydropower.

3:Then there are the hydropower plants built, under construction, or scheduled for construction, usually a little lower down the flanks of the Tibetan Plateau, that are for long distance transmission of ultra high voltage electricity to major coastal industrial cities including Guangzhou and Shanghai.

All of these plans are based on a basic policy setting that has remained unchanged for a long time, until now: that hydropower is the cheapest power. If this new policy means hydropower is to be priced higher, it may not affect the hydro dams being built to power Chinese cities and mines in Tibet, because they have no alternative power source. But it could affect the demand for hydro electricity from the foot of the Tibetan Plateau in coastal cities, which have available not only coal from Inner Mongolia but also natural gas shipped in cheaply from many places in Asia.

On the other hand, China’s dam builders, nearly all of them state owned and with intimate connections to central leaders, might find building and operating hydro dams around the rim of Tibet more profitable, if hydropower prices increase. It could even be that a price increase makes it much easier for them to borrow the money needed for dam construction, because the number crunchers will calculate that a higher rate of return means a faster payoff of loans.

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