From Water-Use to Water-Scarcity Footprinting in Environmentally Extended Input–Output Analysis

Environmentally extended input–output
analysis (EEIOA) supports
environmental policy by quantifying how demand for goods and services
leads to resource use and emissions across the economy. However, some
types of resource use and emissions require spatially explicit impact
assessment for meaningful interpretation, which is not possible in
conventional EEIOA. For example, water use in locations of scarcity
and of abundance are not environmentally equivalent. Opportunities
for spatially explicit impact assessment in conventional EEIOA are
limited because official input–output tables tend to be produced
at the scale of political units, which are not usually well-aligned
with environmentally relevant spatial units. In this study, spatially
explicit water-scarcity factors and a spatially disaggregated Australian
water-use account were used to develop water-scarcity extensions that
were coupled with a multiregional input–output model (MRIO).
The results link demand for agricultural commodities to the problem
of water scarcity in Australia and globally. Important differences
were observed between the water-use and water-scarcity footprint results
as well as the relative importance of direct and indirect water use,
with significant implications for sustainable production and consumption-related
policies. The approach presented here is suggested as a feasible general
approach for incorporating spatially explicit impact assessments in
EEIOA.