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Disentangling water usage in the European Union: A decomposition analysis

Author

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  • Di Cosmo, Valeria
  • Hyland, Marie
  • Llop Llop, Maria

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. JEL codes: N5; C67 Keywords: Water use, Subsystem input–output model; Water intensity, European Union.

Suggested Citation

  • Di Cosmo, Valeria & Hyland, Marie & Llop Llop, Maria, 2014. "Disentangling water usage in the European Union: A decomposition analysis," Working Papers 2072/225298, Universitat Rovira i Virgili, Department of Economics.
  • Handle: RePEc:urv:wpaper:2072/225298
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    Cited by:

    1. Llop Llop, Maria, 2018. "Decomposing the Changes in Water Intensity in a Mediterranean Region," Working Papers 2072/321558, Universitat Rovira i Virgili, Department of Economics.
    2. María M. Borrego-Marín & Carlos Gutiérrez-Martín & Julio Berbel, 2016. "Estimation of Cost Recovery Ratio for Water Services Based on the System of Environmental-Economic Accounting for Water," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(2), pages 767-783, January.
    3. repec:gam:jsusta:v:10:y:2018:i:1:p:205-:d:127192 is not listed on IDEAS
    4. Francisco Silva Pinto & Rui Cunha Marques, 2016. "Tariff Suitability Framework for Water Supply Services," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 30(6), pages 2037-2053, April.

    More about this item

    Keywords

    Aigua -- Consum; Anàlisi d'entrada/sortida; Unió Europea; Països de la; 33 - Economia;

    JEL classification:

    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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