An Extended Input Output Table Compiled for Analyzing Water Demand and Consumption at County Level in China

Abstract

This paper attempts to propose hybrid methodology of compiling water resource extended input-output (IO) table at county level (According to administrative structure of China, a county is subordinate to its province, and provincial level is parallel to state level of other countries). By combining Non-Survey-based RAS-technique for possible iterated results and Partial-Survey-based current situation for actual ongoing resource-consumption, we aimed to depict a more accurate structure for water resource consumption and regional economic impact analysis at a county level in the arid area. Additionally, non-parameter methodology was adopted to interpolate missing data. Since human interventions continually have impacted on the natural environment that would finally lead to over-consumption of natural resources, we introduced water consumption caused by cultivation in the Primary Industry and water usage in other industries into a local input-output matrix of Shandan County in Gansu Province, China. Evidence of empirical analysis shows that the modified IO table can more accurately describe economic structure than weighted provincial average IO table does. Moreover, industrialization is ongoing with economic diversity and continually generating water use demand even though also stimulating imports of light industrial products according to the Partial-Survey reports. It demonstrates that industrialization and increasing household consumption drive a high speed of economic growth but with a high cost of water consumption through the Secondary and Tertiary Industries, even at a far rural area. Hence, water scarcity would be a constraint on sustainable development in regions such as Shandan County when taking economic valuation of natural water consumption into account.