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Water Reuse In Brazilian Manufacturing Firms

Listed author(s):
  • José Gustavo Féres
  • Alban Thomas
  • Arnaud Reynaud

This paper examines the factors influencing water reuse in manufacturing firms and analyzes whether the structure of intake water demand differs between firms that adopt water reuse practices and those which do not. To this purpose, we estimate a two-stage econometric model based on a sample of 447 industrial facilities located in the Paraíba do Sul river basin. The first stage applies a probit model for the water reuse decision and the second stage employs an endogenous switching regression to estimate the intake water demand equations. Results suggest that water charges may act as an effective mechanism in inducing firms to undertake water reuse investments and reducing intake water demand. Estimates of the water demand price elasticities indicate that plants reusing water are more sensitive to water price increases than plants without access to reuse technologies. Este artigo examina os fatores que influenciam a decisão das firmas de adotar práticas de reúso de água e avalia se essa decisão afeta o comportamento delas em relação à demanda por recursos hídricos. Para isso, estima-se um modelo econométrico em dois estágios, a partir de informações coletadas em 447 estabelecimentos industriais situados na região da bacia do Rio Paraíba do Sul. O primeiro estágio analisa a decisão da firma de reutilizar ou não a água através de um modelo probit. No segundo estágio são estimadas equações de demanda de água separadamente para os estabelecimentos industriais que reutilizam água e as demais. Os resultados sugerem que a implementação da cobrança pelo uso da água pode ser um instrumento eficaz de incentivo à adoção de práticas de reúso e também na redução da demanda de água, promovendo, dessa forma, a conservação de recursos hídricos. A estimação das elasticidades-preço das demandas de água mostra ainda que os estabelecimentos que reutilizam água reagem de maneira mais forte a variações no preço da água que aquelas que não adotam práticas de reúso.

(This abstract was borrowed from another version of this item.)

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Paper provided by ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics] in its series Anais do XXXIV Encontro Nacional de Economia [Proceedings of the 34th Brazilian Economics Meeting] with number 181.

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Date of creation: 2006
Handle: RePEc:anp:en2006:181
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Order Information: Postal: Secretaria da ANPEC Rua Prof Marcos Valdemar de Freitas Reis s/n Campus do Gragoatá Bloco F Niterói, RJ 24210-201 Brazil

References listed on IDEAS
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  1. Diane Dupont & Steven Renzetti, 2001. "The Role of Water in Manufacturing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(4), pages 411-432, April.
  2. Arnaud Reynaud, 2003. "An Econometric Estimation of Industrial Water Demand in France," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(2), pages 213-232, June.
  3. José Féres & Arnaud Reynaud, 2005. "Assessing the Impact of Environmental Regulation on Industrial Water Use: Evidence from Brazil," Land Economics, University of Wisconsin Press, vol. 81(3).
  4. 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.
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