Abstract:
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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. |