China: The Implications of Bottling Tibet’s Water

25 November 2015 FDI Team

The growth of the bottled water industry in Tibet is creating concern about the sustainability and political prudency of draining Asia’s water tower.

 

Background

The government of the Tibetan Autonomous Region (TAR) released a ten year plan in October 2015 to expand the bottled water industry. China’s high pollution rates and desire for convenience has driven demand for bottled water, making the country the world’s largest consumer of the product. Tibetan water is viewed as a premium resource within China and, with a large influx of bottling companies, consumption of Tibet’s water is expected to grow even further.

Comment

In 2014, the TAR Government set up a 250 million Yuan development fund ($AUD 54 million) to promote the bottled water industry in Tibet. By year end, it had given approval to 28 companies to bottle water in the region. Pharmaceutical, confectionary, petroleum and biotechnology companies also seek investments in the region. Companies that invest in the bottled water industry receive low-interest loans, preferential tax rates, and income tax exemptions. There is little record that environmental impact assessments have been conducted by bottled water companies. Few have released reports on pollution control or stated the benefits for local people living in the Tibetan Plateau. Those that do disclose such information, such as Tibet 5100, claim they do not withdraw enough water to have any substantial effect on the water supply.

Environmentalists claim the stakes are high if the bottled water industry expands. With glaciers melting at an increased rate as a result of climate change, increased industrial activity in the Tibetan Plateau may put additional pressure on dwindling water sources in the region. Tibet’s Baishui ‘Glacier No. 1’ has been melting at an increasingly rapid rate over the last three decades, increasing river run-off. Melting glaciers increase the capacity to bottle water in the short-term but in the long-term this activity may decrease water supply for China’s neighbours downstream. It takes four bottles of water and a quarter of a bottle of oil to produce one bottle of water that can be retailed, further draining water sources and affecting the environment. Minimal recycling of plastic bottles is creating cities surrounded by bottle waste, known as ”plastic walled cities” in China.

The expansion of the bottled water industry could have dire consequences for regional water security. Geopolitical tensions already exist between China and countries downstream over plans to build additional hydropower facilities on transboundary rivers. According to Jennifer Turner, Director of the China Environment Forum at the Woodrow Wilson International Centre, in Washington, bottling activity in the plateau is not sustainable, particularly when combined with China’s increased damming and plans for hydropower facilities. Neighbouring states have not complained as yet about the growth of the industry since countries like India have created their own bottled Himalayan glacier water industry. The potential for future tension exists, however, if China continues to alter the water supply of the Tibetan Plateau.

The Chinese bottled water industry is expected to grow to meet domestic demand but the TAR Government’s plans to develop the industry appear to be misaligned with the Chinese Government’s conservation policies. Billions of Yuan have been invested by the central government to protect the region’s shrinking glaciers. Industry is expected to be affected with cuts to demand and profits if the Chinese Government moves to bring the TAR Government’s policies on water into line with Chinese environment policy.

Tibet’s fragile ecological system may be damaged if the TAR Government continues to incentivise companies to invest in bottled water. Any development within China could have a massive effect on the entire region’s water security, particularly as growing water scarcity is expected to further challenge the region in the future. China should not rely on bottled water as a source of safe drinking water. Demand for bottled water could decrease when public water drinking facilities become mandatory in urban and rural spaces and, given the high costs involved with bottling glacial water, investors should rethink the sustainability of investing in the bottled water industry. The government should also adopt education programmes to highlight the cost of drinking bottled water and emphasise the need to protect Tibet’s precious glacial sources.

Madeleine Lovelle
Research Analyst
Global Food and Water Crisis Research Programme

 

 

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