Industrial Wastewater Treatment and Reuse in a Developing Country Context: Evidence at the Firm Level from Ecuador

Wastewater reuse constitutes an alternative supply source of water. It not only increases the amount of water available but also reduces water pollution. The benefits and costs of this practice, and the public perception of reuse are the focus of several studies. However, the evidence on industrial wastewater reuse at the firm level remains scant. This paper is aimed at filling this gap by presenting evidence on the determinants of both wastewater treatment and reuse practices in a developing country context. I use firm level data from the Survey on Firms’ Environmental Practices of Ecuador. My results show that wastewater management in general, and reuse in particular, are still limited practices in the industrial sector of the country. My results suggest that firm’s decisions to treat and reuse depends on long-term firm’s characteristics, such as annual investment, the nature of the production process and local conditions, as well as the scale of production and water consumption. Volumes of wastewater treated and reused depend positively on the amount of water used in the production process and the firm’s annual level of investment or expenditure. The cost of the practice only affects the volume treated. The results suggest that targeting water-intensive industry sectors and the costs of wastewater treatment can play an important role for a more sustainable use of water in the industrial sector of Ecuador.