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The Role of Water in Manufacturing


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  • Diane Dupont


  • Steven Renzetti


Water's role in manufacturing technologies has received limited attention. A KLEM model of the sector's technology is extended to include two facets of water use: intake and recirculation. Three annual cross-sectional surveys on plant-level water use are pooled and combined with census data to estimate this extended model for the Canadian manufacturing sector over the period 1981–1991. While Canada's water allocation regulations influence private water withdrawals, statistical tests support representing water intake as a variable input. Water intake is found to be a substitute for water recirculation, energy, labour and capital. The relationship between water intake and recirculation is stronger when water intake is process-related rather than related to cooling and steam production. Technological change has been biased in the direction of increased water intake and decreased water recirculation. Copyright Kluwer Academic Publishers 2001

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 18 (2001)
Issue (Month): 4 (April)
Pages: 411-432

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Handle: RePEc:kap:enreec:v:18:y:2001:i:4:p:411-432

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Keywords: cost function; demand; manufacturing; recirculation; water;


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  1. Steven Renzetti, 1992. "Estimating the Structure of Industrial Water Demands: The Case of Canadian Manufacturing," Land Economics, University of Wisconsin Press, vol. 68(4), pages 396-404.
  2. Halvorsen, Robert & Smith, Tim R, 1984. "On Measuring Natural Resource Scarcity," Journal of Political Economy, University of Chicago Press, vol. 92(5), pages 954-64, October.
  3. Renzetti, S. & Dupont, D., 1996. "Water Use in the Canadian Food and Beverage Industry," Working Papers 1996-03, Brock University, Department of Economics.
  4. Michael R. Moore & Ariel Dinar, 1995. "Water and Land as Quantity-Rationed Inputs in California Agriculture: Empirical Tests and Water Policy Implications," Land Economics, University of Wisconsin Press, vol. 71(4), pages 445-461.
  5. Halvorsen, Robert & Smith, Tim R, 1986. "Substitution Possibilities for Unpriced Natural Resources: Restricted Cost Functions for the Canadian Metal Mining Industry," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 398-405, August.
  6. Gaudet, G O & May, J D & McFetridge, D G, 1976. "Optimal Capital Accumulation: The Neoclassical Framework in a Canadian Context," The Review of Economics and Statistics, MIT Press, vol. 58(3), pages 269-73, August.
  7. Steven Renzetti, 1999. "Municipal Water Supply and Sewage Treatment: Costs, Prices and Distortions," Canadian Journal of Economics, Canadian Economics Association, vol. 32(3), pages 688-704, May.
  8. Glenn D. Schaible, 1997. "Water Conservation Policy Analysis: An Interregional, Multi-Output, Primal-Dual Optimization Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 163-177.
  9. Dinar, A. & Subramanian, A., 1997. "Water Pricing Experiences," Papers 386, World Bank - Technical Papers.
  10. Robidoux, B. & Lester, J., 1988. "Econometric Estimates Of Scale Economies In Canadian Manufacturing," Working Papers-Department of Finance Canada 1988-4, Department of Finance Canada.
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Cited by:
  1. José Féres & Arnaud Reynaud, 2005. "Assessing the Impact of Environmental Regulation on Industrial Water Use: Evidence From Brazil," Discussion Papers 1079, Instituto de Pesquisa Econômica Aplicada - IPEA.
  2. repec:ind:nipfwp:12 is not listed on IDEAS
  3. Nicholas Rivers & Steven Groves, 2013. "The Welfare Impact of Self-supplied Water Pricing in Canada: A Computable General Equilibrium Assessment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 55(3), pages 419-445, July.
  4. Dachraoui, Kais & Harchaoui, Tarek, 2004. "Water Use, Shadow Prices and the Canadian Business Sector Productivity Performance," Economic Analysis (EA) Research Paper Series 2004026e, Statistics Canada, Analytical Studies Branch.
  5. Joel Bruneau & Steven Renzetti, 2010. "A Longitudinal Study of Water Recycling in Canadian Manufacturing Plants," Working Papers 1001, Brock University, Department of Economics.
  6. Seung-Hoon Yoo, 2007. "Urban Water Consumption and Regional Economic Growth: The Case of Taejeon, Korea," Water Resources Management, Springer, vol. 21(8), pages 1353-1361, August.
  7. José Féres & Arnaud Reynaud & Alban Thomas, 2012. "Water reuse in Brazilian manufacturing firms," Applied Economics, Taylor & Francis Journals, vol. 44(11), pages 1417-1427, April.
  8. Christoph Jeßberger & Maximilian Sindram & Markus Zimmer, 2010. "Global Warming Induced Water-Cycle Changes and Industrial Production – A Scenario Analysis for the Upper Danube River Basin," Ifo Working Paper Series Ifo Working Paper Nr. 94, Ifo Institute for Economic Research at the University of Munich.
  9. Strzepek, Kenneth M. & Juana, James S. & Kirsten, Johann F., 2006. "Marginal Productivity Analysis of Global Inter-sectoral Water Demand," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25748, International Association of Agricultural Economists.
  10. Worthington, Andrew C., 2010. "Commercial and Industrial Water Demand Estimation: Theoretical and Methodological Guidelines for Applied Economics Research/Estimación de la demanda de agua comercial e industrial: pautas teóricas y," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 237-258, Agosto.
  11. Linz, Teresa & Tsegai, Daniel W., 2009. "Industrial Water Demand analysis in the Middle Olifants sub-basin of South Africa: The case of Mining," Discussion Papers 49927, University of Bonn, Center for Development Research (ZEF).
  12. Arnaud Reynaud, 2003. "An Econometric Estimation of Industrial Water Demand in France," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(2), pages 213-232, June.
  13. Kumar, Surender, 2004. "Analysing industrial water demand in India: An input distance function approach," Working Papers 04/12, National Institute of Public Finance and Policy.
  14. Dachraoui, Kais & Harchaoui, Tarek, 2004. "Utilisation de l'eau, prix fictifs et productivite du secteur canadien des entreprises," Serie de documents de recherche sur l'analyse economique (AE) 2004026f, Statistics Canada, Direction des etudes analytiques.
  15. Se-Ju Ku & Seung-Hoon Yoo, 2012. "Economic Value of Water in the Korean Manufacturing Industry," Water Resources Management, Springer, vol. 26(1), pages 81-88, January.
  16. Steven Renzetti, 2009. "Wave of the Future: The Case for Smarter Water," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 281, February.
  17. Steven Renzetti & Joel Brueau & Michel Villeneuve, 2009. "Self-selection bias and manufacturing firms' demand for water recirculation," Working Papers 0902, Brock University, Department of Economics, revised Feb 2009.


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