Municipal Water Use Kuznets Curve

Abstract

The relationship between per capita municipal water use (PCMWU) and per capita gross domestic product (PCGDP) (purchasing power parity, constant 2011 US$) is statistically analysed for each country in the world. The results indicate that PCMWU will increase with the rising PCGDP at the beginning, which will then decrease when PCGDP reaches a certain level. This trend follows the rules of the Water Use Kuznets Curve, an inverted U-shape curve that describes the relationship between water use and gross domestic product (GDP). The unbalanced panel data analysis of world 183 countries and 22 developed countries revealed that the PCGDP at the peak point of the Municipal Water Use Kuznets Curve (MWUKC) is approximately US$33,000. The specific reason for the MWUKC is the saturation of municipal water demand. At the same time, the driving forces include technological advancements, growth in water prices, effective environmental regulations and policies, and water-saving consciousness. Most of these mechanisms benefit from economic development. The experiences of developed countries provide guidance and positive indicators for developing countries or countries with increasing PCMWU. Due to the accelerated economic growth in developing countries, these countries could reach a turning point more rapidly.