Abstract
The Water Framework Directive (WFD) defines common objectives for water resources throughout the European Union (EU). Given this general approach to water preservation and water policy, the objective of this paper is to analyse whether common patterns of water consumption exist within Europe. In particular, our study uses two methods to reveal the reasons behind sectoral water use in all EU countries. The first method is based on an accounting indicator that calculates the water intensity of an economy as the sum of sectoral water intensities. The second method is a subsystem input-output model that divides total water use into different income channels within the production system. The application uses data for the years 2005 and 2009 on water consumption in the production system of the 27 countries of the EU. From our analysis it emerges that EU countries are characterized by very different patterns of water consumption. In particular water consumption by the agriculture sector is extremely high in Central/Eastern Europe, relative to the rest of Europe. In most countries, the water used by the fuel, power and water sector is consumed to satisfy domestic final demand. However, our analysis shows that for some countries exports from this sector are an important driver of water consumption. Focusing on the agricultural sector, the decomposition analysis suggests that water usage in Mediterranean countries is mainly driven by final demand for, and exports of, agricultural products. In Central/Eastern Europe domestic final demand is the main driver of water consumption, but in this region the proportion of water use driven by demand for exports is increasing over time. Given these heterogeneous water consumption patterns, our analysis suggests that Mediterranean and Central/Eastern European countries should adopt specific water policies in order to achieve efficient levels of water consumption in the European Union.
Similar content being viewed by others
Notes
The Directive is available here: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:327:0001:0072:EN:PDF
See Timmer (2012) for a list of the sectors and countries presented in this database.
Croatia joined the EU in the summer of 2013, however, it is not included in our analysis as it is not covered by the WIOD database.
http://epp.eurostat.ec.europa.eu/portal/page/portal/short_term_business_statistics/data/database. Data are missing for Ireland in the Eurostat series for years prior to 2005, therefore we use the wholesale price index published by Ireland’s Central Statistics Office for these years. Furthermore, producer price deflators are missing for Portugal in all years, and thus we deflate the Portuguese I-O tables using the producer price deflator for Spain. Similarly data are missing for Slovakia in some years, and for these years we use the deflator for the Czech Republic.
Mendiluce et al. (2010) proposed a similar method to measure energy intensity in the Spanish economy.
Specifically, we will consider the four activities that show a level of water intensity above the EU median (see Table 1).
The literature on input-output subsystems usually assumes that the final demand in one subsystem is zero and, accordingly, this subsystem is thought to only produce for the intermediate demand (see, for instance, Alcántara and Padilla (2009)). Unlike other similar studies, expression ( 4) captures all the income relations within the production system.
Note that if we are interested in the S subsystem, this part of the M production can be avoided.
The domestic final demand includes sectoral private consumption, public consumption and investment.
Results for all the EU countries are available by the authors upon request.
Note that data on water use in the Electricity, Gas and Water Supply sector is incomplete for Malta and Cyprus, and thus these countries are excluded from any analyses of this sector.
References
Alcántara V (1995) Economía y contaminación atmosférica: hacia un nuevo enfoque desde el análisis input-output. Doctoral Thesis Dissertation. University of Barcelona
Alcántara V, Padilla E (2009) Input-output subsystems and pollution: an application to the service sector and CO2 emissions in Spain. Ecol Econ 68:905–914
Butnar I, Llop M (2011) Structural decomposition analysis and input-output subsystems: an application to CO2 emissions of Spanish service sectors (2000–2005). Ecol Econ 70:2012–2019
Cardenete MA, Fuentes P (2011) Energy consumption and CO2 emissions in the Spanish economy. In: Llop M (ed) Air pollution: measurements and control policies. Bentham E-Books, 46–64
Deprez J (1990) Vertical integration and the problem of fixed capital. J Post Keynes Econ 13:47–64
Dietzenbacher E, Velázquez E (2007) Analysing Andalusian virtual water trade in and input-output framework. Reg Stud 41(2):185–196
EPA (2012) Nuclear energy. Available at: http://www.epa.gov/cleanenergy/energy-and-you/affect/nuclear.html. Accessed 11 Sept 2012
European Union (2012) EU energy in figures—pocketbook 2012. Publications Office of the European Union, Luxembourg
Genty A, Arto I, Neuwahl F (2012) Final database of environmental satellite accounts: technical report on their compilation. WIOD Documentation
Guan DB, Hubacek K (2007) Assessment of regional trade and virtual water flows in China. Ecol Econ 61:159–170
Hoekstra AY, Hung PQ (2002) Virtual water trade: a quantification of virtual water flows between nations in relation international crop trade. Value of Water Research Report Series No. 11. UNESCO-IHE, Delft, the Netherlands
Lenzen M, Foran B (2001) An input-output analysis of Australian water usage. Water Policy 3:321–340
Llop M, Tol R (2013) Decomposition of sectoral greenhouse gas emissions: a subsystem input-output model for the Republic of Ireland. J Environ Plan Manag 56:1316–1331
Mendiluce M, Pérez-Arriaga I, Ocaña C (2010) Comparison of the evolution of energy intensity in Spain and in the EU15. Why is Spain different? Energy Policy 38(1):639–645
Pasinetti L (1973) The notion of vertical integration in economic analysis. Metroeconomica 25:1–29
Pasinetti L (1988) Growing subsystems, vertically hiper-integrated sectors and the labour theory of value. Camb J Econ 12:125–134
Sánchez-Choliz J, Duarte R (2003) Analysing pollution by vertically integrated coefficients, with an application to the water sector in Aragon. Camb J Econ 27:433–448
Scazzieri R (1990) Vertical integration in economic theory. J Post Keynes Econ 13:20–46
Sraffa P (1960) Production of commodities by means of commodities. Cambridge University Press, Cambridge
Timmer M (ed) (2012) The World Input-Output Database (WIOD): contents, sources and methods. April 2012, Version 0.9
Zhao X, Chen B, Yang ZF (2009) National water footprint in an input-output framework—a case study of China 2002. Ecol Model 220(2):245–253
Acknowledgments
Useful comments and suggestions by two anonymous reviewers have substantially improved the manuscript. The usual disclaimer applies.
Author information
Authors and Affiliations
Corresponding author
Additional information
Maria Llop acknowledges funding by the Spanish Ministry of Education and Culture (grant ECO2010-17728) and the Catalan Government (grants SGR2009-322 and “RDI Reference Network in Economics and Public Policies”).
Rights and permissions
About this article
Cite this article
Di Cosmo, V., Hyland, M. & Llop, M. Disentangling Water Usage in the European Union: A Decomposition Analysis. Water Resour Manage 28, 1463–1479 (2014). https://doi.org/10.1007/s11269-014-0566-6
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11269-014-0566-6