Is the U.S. experience replicable? A decomposition of U.S. water use since 1950

Abstract:

Blue water withdrawals in the United States since 1950 show a remarkable pattern. After doubling between 1950 and 1980, water use slightly declined in spite of a doubling in GDP, 30 percent population growth and a 70 percent increase in per capita GDP since 1980. We relate this remarkable pattern to the changing long-term structural changes of the U.S. economy as it became a service economy, experiencing a decrease in relative share of manufacturing and a secular decline in agriculture. Drawing on Leontief (1970)’s seminal analysis, we decompose the U.S. water use in terms of scale, composition and technology. We find that about 1/3 of water saving can be attributed to shifting final demand by domestic and foreign buyers for U.S. products; slightly more than a 1/3 relates to the changing input output structure that characterizes U.S. production, and less than 1/3 is to be attributed to water productivity gains related to improvements in technology. In addition, our estimates indicate that the vast majority of the water productivity gains due to technological improvements stem from gains in water/KWh in electricity generation. Finally, while globalization and the growing water content of net imports increased for the U.S. since 1950, they by no means overturn the increased water saving due to changing sectoral composition of the U.S. economy.