Chapter 6: A Closed-Loop Future By adopting all three of the solutions discussed in this report—methane capture, use of digestate, and water recycling—China’s wastewater sector can transform its waste into profit. Doing so will mitigate greenhouse gas emissions, reduce waste entering landfills, save water, and create a revenue stream for utilities. Successful large-scale efforts to use the waste from wastewater could help mitigate China’s extreme water pollution, water scarcity,225 and enhance urban climate resilience,226 and thereby improve the quality of life in Chinese cities. To close the loop on wastewater in China, a multipronged approach of policy, public outreach, and infrastructure solutions is necessary. While previous chapters proposed some targeted solutions, this closing section outlines opportunities to lower the sector-wide barriers of implementation for wastewater methane capture, digestate use, and water recycling in China.
SECTOR-WIDE CHALLENGES The Challenge: Return on Investment Timeline. Implementing the technologies required to close the loop—from new water recycling systems to anaerobic digesters— is a costly venture. If properly operated and regularly used, these technologies will eventually pay for themselves and generate income for the wastewater treatment plant. However, initial investments can be a major barrier to the majority of China’s wastewater plants that generally operate at an economic loss. Possible Solutions: Controlled Subsidies and an Accurate Water Price. As discussed in Chapter 2, while massive renewable energy subsidies from the National Development and Reform Commission (NDRC) rapidly increased wind and solar energy installations, power transmission infrastructure could not keep up. Thus, China faced high rates of “garbage” solar and wind farms that were not connected to the electricity grid. For lasting change, subsidies to construct new wastewater infrastructure should be combined with a long-term income source for wastewater utilities from water customers. Currently, the cost of water in China does not cover supply and treatment costs.227 Controlled by the state, China’s residents pay the lowest price for water out of 19 major world economies.228 Water for commercial and industrial users also is priced below the cost of treatment and delivery. Low costs can also incentivize users to waste water. China’s government should continue their policies to slowly raise the price of water, ensuring the increase in tariffs is returned directly back to water utilities. As the overall price increases, subsidies for low-income residents should remain in place to ensure water remains accessible to all.
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