Does Water Efficiency Reduce Water Consumption? The Economy-Wide Water Rebound Effect

Abstract

Governments stimulate efficiency measures to save water resources, particularly in areas with high water stress and those that experience droughts. However, economic theory and some empirical studies tell us that the effects of efficiency improvements of a resource may not lead to a global reduction in the use of that resource. We assess the effects of improving water resources productivity in Spain on the global use of water using a dynamic water-economy computable general equilibrium model. We set an overall annual improvement of water efficiency of 50% and find that the economy-wide water rebound effect is 100.47%. This means that there are no savings of water after an efficiency improvement, and there is actually a slight global increase in water use.

This is a preview of subscription content, log in to check access.

Fig. 1
Fig. 2

Notes

  1. 1.

    http://waterfootprint.org/en/water-footprint/glossary/.

  2. 2.

    The adjustments were mainly made to reduce the dimension of the matrix because some sectors that were originally included were very small and could generate errors when running the models.

  3. 3.

    The Cobb–Douglas production function represents the technological relationship between the amounts of different inputs such as capital, labor, energy, and materials that produces the output of a specific industry.

  4. 4.

    We only test 50% water efficiency improvement as an example because we obtain the same rebound effect with different efficiency improvements.

References

  1. Barker T, Ekins P, Foxon T (2007) The macro-economic rebound effect and the UK economy. Energy Policy 35(10):4935–4946

    Article  Google Scholar 

  2. Berbel J, Mateos L (2014) Does investment in irrigation technology necessarily generate rebound effects? A simulation analysis based on an agro-economic model. Agric Syst 128:25–34

    Article  Google Scholar 

  3. Berbel J, Gutiérrez-Martín C, Rodríguez-Díaz JA, Camacho E, Montesinos P (2015) Literature review on rebound effect of water saving measures and analysis of a Spanish case study. Water Resour Manag 29(3):663–678

    Article  Google Scholar 

  4. Berkhout PH, Muskens JC, Velthuijsen JW (2000) Defining the rebound effect. Energy Policy 28:425–432

    Article  Google Scholar 

  5. Binswanger M (2001) Technological progress and sustainable development: what about the rebound effect? Ecol Econ 36(1):119–132

    Article  Google Scholar 

  6. Broberg T, Berg C, Samakovlis E (2015) The economy-wide rebound effect from improved energy efficiency in Swedish industries–a general equilibrium analysis. Energy Policy 83:26–37

    Article  Google Scholar 

  7. Brookes LG (1979) A low energy strategy for the UK, at G. Leach et al.: a review and reply. Atom 269:3–8

    Google Scholar 

  8. Cao J, Ho S, Jorgenson DW (2013) The economics of environmental policies in China. In: Nielsen CP, Ho MS (eds) Clearer skies over China. MIT Press, Cambridge, pp 329–372

    Google Scholar 

  9. Druckman A, Chitnis M, Sorrell S, Jackson T (2011). Missing carbon reductions? Exploring rebound and backfire effects in UK households. Energy Policy 39(6)3572–3581

  10. FAO (2013) Reviewed strategic framework. Thirty-eighth session. Rome, 15–22 June 2013

  11. Font Vivanco D, McDowall W, Freire-González J, Kemp R, van der Voet E (2016) The foundations of the environmental rebound effect and its contribution towards a general framework. Ecol Econ 125:60–69

    Article  Google Scholar 

  12. Freire-González J (2011a) Methods to empirically estimate direct and indirect rebound effect of energy-saving technological changes in households. Ecol Model 223(1):32–40

    Article  Google Scholar 

  13. Freire-González J (2011b) Assessing the macroeconomic impact of water supply restrictions through an input–output analysis. Water Resour Manag 25(9):2335–2347

    Article  Google Scholar 

  14. Freire-González J, Font Vivanco D (2017) The influence of energy efficiency on other natural resources use: an input-output perspective. J Clean Prod 162:336–345

    Article  Google Scholar 

  15. Freire-González J, Ho MS (2018) Environmental fiscal reform and the double dividend: evidence from a dynamic general equilibrium model. Sustainability 10(2):501

    Article  Google Scholar 

  16. Freire-González J, Ho MS (2019) Carbon taxes and the double dividend hypothesis in a recursive-dynamic CGE model for Spain. Econ Syst Res. https://doi.org/10.1080/09535314.2019.1568969

  17. Grepperud S, Rasmussen I (2004) A general equilibrium assessment of rebound effects. Energy Econ 26(2):261–282

    Article  Google Scholar 

  18. Gutierrez-Martin C, Gomez CG (2011) Assessing irrigation efficiency improvements by using a preference revelation model. Span J Agric Res 9(4):1009–1020

    Article  Google Scholar 

  19. Ho MS, Jorgenson D (2007) Policies to control air pollution damages. In: Ho MS, Nielsen CP (eds) Clearing the air: the health and economic damages of air pollution in China. MIT Press, Cambridge, pp 331–372

    Google Scholar 

  20. Hoekstra AY, Chapagain AK (2008) Globalization of water: sharing the planet’s freshwater resources. Blackwell, Oxford

    Google Scholar 

  21. Jäger K (2016) EU KLEMS growth and productivity accounts 2016 release, Statistical Module. Description of methodology and country notes for Spain

  22. Jevons WS (1865) The coal question. Macmillan and Co, London

    Google Scholar 

  23. Jorgenson DW, Wilcoxen PJ (1993) Reducing U.S. carbon emissions: an econometric general equilibrium assessment. Resour Energy Econ 14:243–268

    Google Scholar 

  24. Khazzoom JD (1980) Economic implications of mandated efficiency standards for household appliances. Energy J 1:21–39

    Google Scholar 

  25. Pfeiffer L, Lin CYC (2014) Does efficient irrigation technology lead to reduced groundwater extraction? Empirical evidence. J Environ Econ Manag 67(2):189–208

    Article  Google Scholar 

  26. Song J, Guo Y, Wu P, Sun S (2018) The agricultural water rebound effect in China. Ecol Econ 146:497–506

    Article  Google Scholar 

  27. Sorrell S (2007) The rebound effect: an assessment of the evidence for economy-wide energy savings from improved energy efficiency. UK Energy Research Centre, London

    Google Scholar 

  28. Sorrell S, Dimitropoulos J, Sommerville M (2009) Empirical estimates of the direct rebound effect: a review. Energy Policy 37(4):1356–1371

    Article  Google Scholar 

  29. Tukker A, de Koning A, Wood R, Hawkins T, Lutter S, Acosta J, Rueda Cantuche JM, Bouwmeester M, Oosterhaven J, Drosdowski T, Kuenen J (2013) EXIOPOL—development and illustrative analyses of a detailed global MR EE SUT/IOT. Econ Syst Res 25(1):50–70

    Article  Google Scholar 

  30. Turner K (2008) A computable general equilibrium analysis of the relative price sensitivity required to induce rebound effects in response to an improvement in energy efficiency in the UK economy. Discussion paper. SIRE-DP-2008-20. University of Strathclyde

  31. Turner K, Lange I, Lecca P, Jung Ha S (2012) Econometric estimation of nested production functions and testing in a computable general equilibrium analysis of economy-wide rebound effects. Stirling Economics Discussion paper 2012–08. University of Stirling

  32. UN (2018) United nations world water development report 2018. UNESCO, Paris

    Google Scholar 

  33. Velázquez E (2006) An input–output model of water consumption: Analysing intersectoral water relationships in Andalusia. Ecol Econ 56:226–240

    Article  Google Scholar 

  34. Wang H, Zhou P, Zhou DQ (2012) An empirical study of direct rebound effect for passenger transport in urban China. Energy Econ 34(2):452–460

    Article  Google Scholar 

  35. Wood R, Stadler K, Bulavskaya T, Lutter S, Giljum S, de Koning A, Kuenen J, Schütz H, Acosta-Fernández J, Usubiaga A, Simas M, Ivanova O, Weinzettel J, Schmidt JH, Merciai S, Tukker A (2015) Global sustainability accounting: developing exiobase for multi-regional footprint analysis. Sustainability 7(1):138–163

    Article  Google Scholar 

Download references

Acknowledgements

The author would like to thank the financial support from the Government of Catalonia, Agència de gestió d’Ajuts Universitaris i Recerca, through a Beatriu de Pinós Fellowship (2017 BP 00009).

Author information

Affiliations

Authors

Corresponding author

Correspondence to Jaume Freire-González.

Ethics declarations

Conflict of Interest

None.

Additional information

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Freire-González, J. Does Water Efficiency Reduce Water Consumption? The Economy-Wide Water Rebound Effect. Water Resour Manage 33, 2191–2202 (2019). https://doi.org/10.1007/s11269-019-02249-0

Download citation

Keywords

  • Water economics
  • Efficiency
  • Rebound effect
  • Computable general equilibrium