Water use in the Spanish economy: an input–output approach

Against the background of the water limitations that often appear in Spain, the aim of this paper is to study the behaviour of the productive sectors of the Spanish economy as direct and indirect consumers of water. To that end, we employ input–output analysis, with the particular methodology being based on the linkages analysis known as the Hypothetical Extraction Method (HEM). We have introduced three modifications to this method. First, the valuation is made in terms of water consumption. Secondly, we obtain the components of the impacts of each block of activity into which the economy is divided, with these components being described as the internal effect, mixed linkage, net or external backward linkage, and net or external forward linkage. Thirdly, this methodology is used to detect key sectors. Our results confirm the marked importance of the Agriculture, Food and Other Services blocks as regards the direct and indirect consumption of water in general. We also find that Other Services, Chemicals, Metals and Electronics and Agriculture blocks play an important role in explaining the consumption of drinking water. Moreover, the HEM analysis allows us to classify productive sectors according to their forward or backward linkage character in a way that is more precise than that permitted by earlier methods. Finally, this methodology can be extended to other types of environmental pressures.