Assessing China's “developing a water-saving society” policy at a river basin level: A structural decomposition analysis approach

China's “Developing a Water-saving Society” policy is an ambitious water conservation strategy. However, there has been little evidence of the policy's effectiveness in terms of saving water at a river basin level. In this paper, we used a basin-scale hydroeconomic input-output model to calculate the water consumption (WC) by producers and consumers (WCp and WCc), respectively in the first pilot area for implementation of this policy, the Heihe River Basin, which belongs to an arid area in inland China. The results show that, after implementation of the policy, WCc decreased sharply but WCp only decreased slightly. A structural decomposition analysis revealed that decreased water consumption intensity played an important role in reducing water consumption. However, this effect was largely offset by the increasing exports of virtual water in goods and services. Our results suggest that in arid river basins, measures in saving water must be accompanied with a cap on total water consumption which is set in accordance with the local water endowments and consideration of environmental water requirement.