Handbook of Water Economics
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Handbook of Water Economics

Edited by Ariel Dinar and Kurt Schwabe

Water scarcity, whether in the quality or quantity dimension, afflicts most countries. Decisions on water management and allocation over time, space, and among uses and users involve economic considerations. This Handbook assembles research that represents recent thinking and applications in water economics. The book chapters are written by leading scholars in the field who address issues related to its use, management, and value. The topics cover analytical methods, sectoral and intersectoral water issues, and issues associated with different sources of water.
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Chapter 6: Economic analysis of industrial water use

Steven Renzetti


Industrial water demands refer to water use by firms in a variety of economic sectors, including manufacturing, mining, natural resource extraction, electrical power production and transportation. Water use in these sectors is an important issue for water managers for several reasons, including the potential for impacts on water quality, the significance of water withdrawals for regional water supplies, the role of internal water recirculation in determining water use, and the interactions between water demands and demands for other productive inputs (especially energy). The purpose of this chapter is to critically assess the state of economic research related to industrial water use. One of the chapter’s findings is that, despite the economic and environmental significance of water use by the industrial sector, less attention has been paid by researchers to industrial water demands compared to water use in the residential and agricultural sectors. As the last section discusses, this lack of research attention could prove to be an important constraint as increasing numbers of jurisdictions turn their attention to managing industrial water uses.

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