Index number analysis of Namibian water intensity

Abstract

There has long been a great deal of interest in methods for analyzing energy use and energy use intensities. Many methods developed within energy studies are also applicable in other areas where materials use is of interest, but in several cases these methods have not been applied to other materials. Index number analysis is a method that is often used in energy economics to analyze changes in the aggregate energy intensity of an economy and to determine whether these changes are due to shifts in the composition of the economy, changes in the energy efficiencies of individual sectors, or both. In order to be useful, index number analysis requires detailed data on the materials usage in individual economic sectors over time. One reason why this method has not been used outside energy studies could be that other materials are rarely regarded as critical enough for this extensive data collection to seem meaningful. However, water is also a crucial resource for many economic sectors, and there are many developing countries where limited water availability is a major issue. In countries that place sufficient priority on water issues to keep track of water use by individual economic sectors, index number analysis provides a methodology which can readily be adapted to analyze changes in water use. This study uses index number analysis to study changes in Namibian aggregate water intensity between 1993 and 2001. The results show that despite considerable increases in water tariffs during this period, sectoral water efficiency has not improved at all. Sectoral water intensities have actually increased, and the only reason why overall water intensity has not increased more than it has is that there has also been a structural shift towards less water intensive economic sectors.