Looking backward to look forward: water use and economic growth from a long-term perspective

Abstract

Recent research has examined the relationship between natural resources and economic growth. Considered vitally important, not only for humanity’s well-being but also for ecosystem integrity, the relationship between water use and economic growth has traditionally garnered little attention by analysts. This paper studies water use trends from 1900 to 2000 throughout the world, and their main determinants. To do this, we first analyse historical water use trajectories. Second, to proceed with the determinants of water use, we reformulate the IPAT equation (Ehrlich and Holdren, 1971; Commoner et al. 1971), decomposing water use trends into changes in economic demands and in water use intensity. Finally, a simple scenario analysis is conducted, to project future water use trends under different economic, demographic and technological assumptions. The empirical evidence shows that economic and population growth have been crucial for explaining the increase in water use over the past 100 years, with significant regional differences. Nevertheless, the decline in water use intensity has been responsible for a significant reduction in the growth of total water use.Water use, environmental impacts, economic growth, IPAT model, scenario analysis