Physical water use and water sector activity in environmental input-output analysis

Oluwafisayo Alabi, Max Munday, Kim Swales, Karen Turner

Research output: Working paperDiscussion paper

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Abstract

This paper uses input-output accounting methods to identify the direct, indirect and induced physical demand for water. Previously the seminal work by Leontief (1970) has been employed to motivate a fuller account of issues related to sectors that generate and sectors that clean/treat polluting outputs (Allan et al 2007). The present paper extends this approach to deal with sectors that use a natural resource and the sector(s) that supply it. We focus on the case of water use and supply and a case study for the Welsh regional economy. The analysis shows how the proposed method, using both the quantity input-output model and the associated price dual, can be used to consider economy wide implications of the deviation between actual expenditure on the output of the water sector and actual physical water use. The price paid per physical amount of water appears to vary greatly amongst different uses. This may occur for various reasons. We argue that such analysis and information is essential for policy makers and regulators in understanding the demands on and supply of UK regional water resources, their role in supporting economic expansion, and can ultimately inform water sustainability objectives and strategies.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-30
Number of pages30
Publication statusPublished - 2016

Publication series

NameStrathclyde Discussion Papers in Economics
PublisherUniversity of Strathclyde
No.16-12

Keywords

  • water resources
  • full leontief environmental model
  • input-output
  • multipliers
  • wales

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  • Cite this

    Alabi, O., Munday, M., Swales, K., & Turner, K. (2016). Physical water use and water sector activity in environmental input-output analysis. (pp. 1-30). (Strathclyde Discussion Papers in Economics; No. 16-12). University of Strathclyde.