What exacerbates this shortage is the vicious circle of energy and water - if power-generating plants need water then water treatment and supply facilities need energy. The Third World Centre for Water Management estimates that the water sector consumes as much as 25 percent of the electricity generated globally. Though China's water sector is not yet among the country's most energy-intensive industries, it will gradually become so with new hubs of growth emerging in the water-scare western region and the increasing demand for wastewater treatment. Already, about 52 percent of China's economic output comes from water-scarce regions.
Unfortunately, China does not have much water to begin with. It is home to almost 20 percent of the world's population but has only 7 percent of its freshwater reserves. Water is one of its scarcest resources. And it is extremely inefficient in the use of water and a world leader in water pollution.
China is the world's largest producer and consumer of coal, which meets more than 70 percent of its energy needs. The country produced 3.8 billion tons of coal in 2011 - almost half of the world's total. Coal may be considered a cheap source of energy, but the air and water pollution caused by the mining and use of the mineral is devastating. According to Greenpeace, 2.5 tons of water is polluted for each ton of coal produced. About 25 percent of all wastewater in China comes from washing coal, and it contains large amounts of chemicals and heavy metals that are almost impossible to recycle. All this makes the true cost of coal in China as high as 1.7 trillion yuan ($272.82 billion), or about 7 percent of its GDP.
So what can the country do to combat these problems? As a first step toward tackling water pollution, China needs to rapidly reduce its reliance on coal. A more ecological alternative could be shale gas. According to the US Energy Information Administration, China has the world's largest shale gas reserves - up to 36.1 trillion cubic meters . And China does want to increase its shale gas production to 6.5 billion cubic meters by 2015.
Natural gas emits 45 percent less CO2 per unit of energy produced compared to coal. And though hydraulic fracturing, the technique used to exploit shale gas, requires about 4.5 million gallons of water per well, it is equal to what a 1,000-megawatt coal-fired power plant consumes in just 10 hours. Fracturing, nevertheless, could contaminate groundwater. No wonder, France banned hydraulic fracturing in 2011. The use of shale gas, therefore, may not result in cleaner water in China.
If China takes the water-energy-growth nexus into account, it would most certainly seek a more balanced energy mix and not focus solely on exploiting shale gas, for its planned rapid exploitation of shale gas may reduce its CO2 footprint but it will also exacerbate its water shortage.
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