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This study evaluated greenhouse gas (GHG) emissions from an urban water system in Taiwan using a lifecycle assessment method. The water system of the Taipei region was used as a case study. Both on-site and off-site emissions of GHGs were considered. Total GHG emissions from the urban water system were 151,211.3 t CO2-eq/y in the study period. On-site GHG emissions from water surfaces and chemical additives contributed 3.1% and 18.3% of total emissions. The reservoir accounted for 1% of total off-site GHG emissions from electricity consumption; 60.3% was from purification plants and 38.7% from boosting stations. The environmental cost of GHG emissions from the urban water system was calculated as US$0.001 per ton of water, which implies that the water price in Taiwan should be increased to US$0.27/t. This study explored the principle of 'user pays' in water pricing by monetizing the environmental cost of GHG emissions.