Water and energy are two essential resources of modern civilization and are inherently linked. Indeed, the optimization of the water supply system would reduce energy demands and greenhouse gas emissions in the municipal water sector. This research measured the climatic cobenefit of water conservation based on a water flow analysis. The results showed that the estimated energy consumption of the total water system in Changzhou, China, reached approximately 10% of the city's total energy consumption, whereas the industrial sector was found to be more energy intensive than other sectors within the entire water system, accounting for nearly 70% of the total energy use of the water system. In addition, four sustainable water management scenarios would bring the cobenefit of reducing the total energy use of the water system by 13.9%, and 77% of the energy savings through water conservation was indirect. To promote sustainable water management and reduce greenhouse gas emissions, China would require its water price system, both for freshwater and recycled water, to be reformed.