The water crisis in North China



(published at chinabiz)
The WTO-column “Are we doomed?” on the impact of the environmental degradation on China’s future has sparked off a wide range of reactions from our readers. One of them pointed at a recent presentation by John T. McAlister, PhD, for the Deutsche Bank on the water crisis in North China. With the kind permission of Mr. McAlister we republish here his summery of his viewpoints, while you can download the whole presentation here.

The crisis
China's annual renewable per capita water supply falls 50% below the UN-defined danger threshold for minimum social and economic stability in North China, a regionthat produces 45% of the country's economic output and is home to 40% of itspeople.

Policy promotes scarcity
China uses about 7-15 times more water to produce a unit of GDP thandeveloped economies. Chinese water prices do not reflect scarcity: they are 70- 80% below prices in countries with adequate water per capita. Unrealistic water prices and lax pollution policies are accelerating depletion of dangerously low watersupplies.

Risk of catastrophe: flu pandemic
About 700 million people, over half of China's population, have access only to drinking water of a quality below World Health Organization (WHO) standards. The water is contaminated by industrial pollution, and by human and animal waste. Lack of water for animals is a source of disease passing from poultry to pigs to humans and a threat of "Avian Flu". WHO warns of the high risk of a globalpandemic.

Investor risk
Capital projects that lack autonomous, proven, renewable water supplies for their operation are at risk. Projects whose success depends on China's domestic market consumption are at risk of economic reversal due to the water crisis. Internationally financed projects lacking full disclosure of water dependency and assurance of supply could face litigation.

Crisis manageable, solution profitable
Rational pricing of water and recycling for reuse can help avert catastrophe. Recycling is believed to be too costly. With historical "Industrial Age" mechanical methods, this may be true, but "Information Age" recycling offers convenient, profitable methods for turning China's most serious vulnerability into one of its most historic achievements.

John T. McAlister is founder/CEO of ecological services company that developed from university research an all-natural-biotechnology to recycle pollutants in water and other resources for their profitable reuse. Co-Founder/Director of Stanford University’s Center for Technology Assessment and Resource Policy.

Books by John T. McAlister