The Shanghai Water Authority said yesterday it will employ a new pricing system setting lower rates for frugal water use.

Other measures include education and upgrading water-consuming facilities like flush toilets. Old residential flush toilets are a major cause of waste.

The authority launched a weeklong water conservation campaign running until Saturday. It includes displays of government conservation measures and spot checks of big water users.

The new pricing system will set quotas for different rates, to encourage all users to be frugal. Details of pricing system were not yet disclosed, but officials said it's likely to go into effect this year.

"It is crucial that a water conservation mechanism allows economic measures to play a major role," said the authority's water supply administration.

Currently the residential water consumption per capita per day is 0.165 cubic meters. Most home water is used for flushing toilets and taking baths. It is estimated that urban residents use 30 percent to 40 percent of their water to flush their toilets.

Toilets meeting old standards waste a lot of water, flushing away an unnecessary amount of water. Old toilet tanks contain 13 liters and often leak. The current standard is 9 liters.

The government has upgraded 68,000 toilets in old apartments at no cost since 2003. But some 600,000 homes are still using inefficient toilets that waste 24,000 cubic meters of water a day.

Officials are also preparing to revise water quotas for different industries and businesses to make the quotas more practical. The current quota was issued in 2001 and doesn't satisfy current conditions and requirements for water saving.

The city will closely monitor heavy water-using industries, such as power generation, metallurgy and chemical companies, which consume more than 20,000 cubic meters of water a month. More recycling will be required.

Forty-five major water users will be tested to calculate a reasonable water consumption level.

The city used nearly 3 billion cubic meters of tap water last year, an increase of 4.8 percent year on year, with the peak daily demand approaching 10 million cubic meters.