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Implications of desalination to water resources in China - an economic perspective


  • Zhou Yuan
  • Richard S.J. Tol

    () (Economic and Social Research Institute, Dublin)


China is a country with severe water shortages. Water becomes scarcer due to population growth, industrialization and urbanization. Recent studies show that by the next 50 years water resources per capita will go down to around 1700 m3, which is the threshold of severe water scarcity. Especially in North China, water shortage has become a critical constraint factor for the socioeconomic development in the long run. To solve or eliminate water shortage problems, seawater desalination draws more and more attention as an alternative water supply source. The objective of the study is to assess the potential of desalination as a viable alternate water source for China through analysis of the costs of desalination, the water demand and supply situation as well as water pricing practices in China. Based on the investment costs and estimated operation and maintenance costs, an economic appraisal for the costs of desalination for two main processes, MSF and RO, has been conducted. The study shows that there is a decline of unit cost of desalination over time and the average unit cost of RO process has been lower than that of MSF process. A unit cost of 0.6 $/m3 for desalting brackish water and 1.0 $/m3 for seawater are suggested to be appropriate for the potential application of desalination in China. The future trends and challenges associated with water shortages and water prices are discussed, leading to conclusions and recommendations regarding the role of desalination as a feasible source of water for the future.

Suggested Citation

  • Zhou Yuan & Richard S.J. Tol, 2003. "Implications of desalination to water resources in China - an economic perspective," Working Papers FNU-22, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2003.
  • Handle: RePEc:sgc:wpaper:22

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    References listed on IDEAS

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    5. Robert J. Gordon, 2000. "Does the "New Economy" Measure Up to the Great Inventions of the Past?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 49-74, Fall.
    6. Heng-Chi Lee & Bruce McCarl & Uwe Schneider & Chi-Chung Chen, 2007. "Leakage and Comparative Advantage Implications of Agricultural Participation in Greenhouse Gas Emission Mitigation," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(4), pages 471-494, May.
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    8. Katrin Rehdanz & Richard S.J. Tol, 2002. "On National and International Trade in Greenhouse Gas Emission Permits," Working Papers FNU-11, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2003.
    9. Katrin Rehdanz, 2002. "Hedonic Pricing Of Climate Change Impacts To Households In Great Britain," Working Papers FNU-13, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2002.
    10. Jacqueline M. Hamilton, 2002. "Climate and the Destination Choice of German Tourists," Working Papers FNU-15, Research unit Sustainability and Global Change, Hamburg University, revised Aug 2003.
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    12. Richard S.J. Tol & Wietze Lise & Benoit Morel & Bob C.C. van der Zwaan, 2001. "Technology Development And Diffusion And Incentives To Abate Greenhouse Gas Emissions," Working Papers FNU-6, Research unit Sustainability and Global Change, Hamburg University, revised Feb 2001.
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    15. Richard S.J. Tol & Thomas E. Downing & Samuel Fankhauser & Richard G. Richels & Joel B. Smith, 2001. "Progress In Estimating The Marginal Costs Of Greenhouse Gas Emissions," Working Papers FNU-4, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2001.
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    More about this item


    desalination; cost analysis; water shortage in China; water demands; south-north water transfer;

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water


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