Human Freshwater Demand for Economic Activity and Ecosystems in Taiwan

Freshwater is necessary to economic activity, and humans depend on goods and services generated by water-dependent ecosystems. However, national freshwater management usually focuses on direct use of domestic freshwater. With an increasing scarcity of freshwater, attention has turned to two indirect uses of freshwater by humans. The first indirect use is freshwater used by foreign countries when producing products for export. The second use is freshwater required by local ecosystems: human survival and development depend on goods and services generated in these ecosystems. This work adopted Taiwan as a case study. In addition to two widely recognized ecosystem freshwater demands, evapotranspiration and reversed river flow, this study suggests that freshwater is a constituent of some abiotic components, such as groundwater in aquifers, because excessive withdrawal has already caused significant land subsidence in Taiwan. Moreover, the estimated results show that Taiwan’s net imports of freshwater through trade amounts to approximately 25% of its total freshwater use for economic production. Integrating industrial policy, trade policy, and national freshwater management is a useful approach for developing strategies to limit the growing use of freshwater in Taiwan. Policy implications are then developed by further analyzing withdrawal sources of freshwater (domestic and foreign) for supporting economic production in Taiwan and identifying the factors (domestic final demand and export) driving freshwater-intensive products.