Do water-saving policies improve water-use technical efficiency? Evidence from the water-receiving cities of China’s South–North Water Transfer Project

Abstract

ABSTRACT China has implemented a series of water-saving policies in response to the growing threat of water shortages. However, it remains unclear whether these water-saving policies, which aim to reduce water-use intensity, will actually improve water-use technical efficiency. This study scrutinizes water-use technical efficiency within an extended human-environment framework by using the case of China's South–North Water Transfer Project (SNWTP). An improved estimation method for water-use technical efficiency based on stochastic frontier analysis is adopted to empirically investigate the variations in water-use intensity and technical efficiency in the SNWTP's water-receiving cities. This study argues that there is no definitive link between improvements in water-use technical efficiency and decreases in water-use intensity, and thus water-saving policies oriented toward reducing water-use intensity do not necessarily increase water-use technical efficiency. In addition, achieving the goals of water-saving policies by reducing water use intensity alone remains challenging and requires improving the water-use technical efficiency caused by endogenous technological progress. Finally, setting a unified target to reduce water-use intensity leads to inequitable sharing of water-saving tasks between regions, resulting in conflicts of interest among government bureaucracies.