THE ECONOMIC DEVELOPMENT EFFECTS ON FRESHWATER ABSTRACTION FROM THE EUROPEAN PERSPECTIVE

Aleksandar Zdravković; Duško Bodroža; Milloš Kolavčić; Elena Jovičić; Dejana Pavlović; Dejan Sekulić

doi:10.59267/ekoPolj2401155Z

Authors

Aleksandar Zdravković Institute of economic sciences, Belgrade, Serbia https://orcid.org/0000-0002-6208-097X
Duško Bodroža Institute of economic sciences, Belgrade, Serbia https://orcid.org/0000-0002-6219-1338
Milloš Kolavčić PhD student, Belgrade Banking Academy – Faculty for banking, insurance and finance https://orcid.org/0000-0001-7987-8032
Elena Jovičić Institute of economic sciences, Belgrade, Serbia https://orcid.org/0000-0002-8356-9678
Dejana Pavlović Faculty of hotel management and tourism, University of Kragujevac, Serbia https://orcid.org/0000-0001-5090-302X
Dejan Sekulić Associate Professor, Faculty of hotel management and tourism, University of Kragujevac

DOI:

https://doi.org/10.59267/ekoPolj2401155Z

Keywords:

freshwater abstraction, economic development, water scarcity, Europe, sustainability

Abstract

Water scarcity is a growing concern across the globe due to climate change and demands for increased economic development. This paper analyses the relationship between economic development and freshwater abstraction in order to investigate its European impact. The analysis focuses on a total of 19 European countries, including 18 EU member states and one candidate, from 2007 to 2018. Using a panel dataset, the impact of a diverse selection of indicators of economic development (per capita GDP, the Human Development Index - HDI, water productivity and volume of international trade) on freshwater abstraction, our analysis finds that all explanatory variables are significant for cross-country variations except for international trade. To maintain scope, the analysis is limited to economicdevelopment indicators themselves, excluding the effects of climate change and the availability of water resources.

Downloads

Download data is not yet available.

References

Alcamo, J. Florke, M., & Marker, M. (2007). Future long-term changes in global water resources driven by socio-economic and climatic changes. Hydrological Sciences Journal 52 (2): 247–275.

Ali, M.H. & Talukder, M.S.U. (2008). Increasing water productivity in crop production-A synthesis. Agricultural water management, 95 (11), 1201-1213.

Allan, J.A. (1993). Fortunately there are substitutes for water otherwise our hydropolitical futures would be impossible. In Priorities for water resources allocation and management, ODA, London, 1993: 13-26

Arrow, K., Bolin, B., Costanza, R., Dasgupta, P., Folke, C., Holling, C.S., Jansson, B.O., Levin, S., Maler, K.G., Perrings, C., & Pimentel, D. (1995). Economic growth, carrying capacity, and the environment. Ecological Economics, 15 (2), 91-95.

Aznar-Sanchez, J.A., Belmonte-Urena, L.J., Velasco-Munoz J.F. & ManzanoAgugliaro, F. (2018). Economic analysis of sustainable water use: A review of worldwide research. Journal of Cleaner Production, 198, 1120-1132.

Barbier, E.B. (2004). Water and Economic Growth. Economic Record, 80 (248), 1-16.

Beecher, J.A. (2020). Policy note: a universal equity–efficiency model for pricing water. Water Economics and Policy, 6 (03), 2071001.

Berrittella, M., Rehdanz, K., Tol, R., & Zhang, J. (2008). The impact of trade liberalization on water use: a computable general equilibrium analysis. Journal of Economic Integration, 23(3), 631-655.

Bhattarai, M., (2004). Irrigation Kuznets curve governance and dynamics of irrigation development: A global cross-country analysis from 1972 to 1991. International Water Management Institute Colombo, Sri Lanka.

Brauman, K.A., Siebert, S. & Foley, J.A. (2013). Improvements in crop water productivity increase water sustainability and food security—a global analysis. Environmental Research Letters, 8 (2), 024030.

Brown, A. & Matlock, M.D. (2011). A review of water scarcity indices and methodologies. White paper, 106 (1), 19.

Cai, X. & Rosegrant, M.W. (2003). World water productivity: current situation and future options. In Water productivity in agriculture: Limits and opportunities for improvement, Kijne, J.W. Barker, R. and Molden, D. (eds.), 163-178. Sri Lanka: International Water Management Institute (IWMI).

Chapagain, A.K, Hoekstra, A., Savenije, H. (2006). Water saving through international trade of agricultural products. Hydrology and Earth System Sciences, 10, 455–468.

Chapagain, A.K. & Hoekstra, A.Y. (2008). The global component of freshwater demand and supply: an assessment of virtual water flows between nations as a result of trade in agricultural and industrial products. Water international, 33 (1), 19-32.

Chen, Z., Ngo, H., Guo, W. & Eslamian, S. (2015). Water shortages, urban water reuse handbook (1st ed.). CRC Press.

Cole, M.A. (2004). Economic growth and water use. Applied Economics Letters, 11, 1-4.

Culas, R.J. (2007). Deforestation and the environmental Kuznets curve: An institutional perspective. Ecological Economics, 61, 429-437.

Cvijanović, D., Trandafilović, S., & Imamović, N. (2013). Marketing concept in terms of agricultural enterprises development in transitional countries. Economics of Agriculture, 60(1), 113-122.

Dang, Q., Konar, M., Reimer, J.J., Baldassarre, G.D., Lin, X. & Zeng, R. (2016). A theoretical model of water and trade. Advances in Water Resources, 89, 32-41.

Dantas, I.R.M., Delzeit, R. & Klepper, G. (2021). Economic research on the global allocation of scarce Water resources needs better data. Water Economics and Policy, 7(03), 1-33.

Desai, M. (1995). Greening of the HDI? Accounting for Change. A McGillivray (ed.), 21-36. London: New Economics Foundation.

Descheemaeker, K., Bunting, S.W., Bindraban, P., Muthuri, C., Molden, D., Beveridge, M., Brakel, M., Herrero, M., Clement, F., Boelee, E. & Jarviset, D. I. (2013). Increasing water productivity in agriculture. In Managing Water and Agroecosystems for Food Security, Boelee, E. (ed.), 10, 104-123. Wallingford, UK: CAB International.

Distefanoa, Т. & Kellyb, C. (2017). Are we in deep water? Water scarcity and its limits to economic growth. Ecological Economics, 142, 130–147.

Djuričin, S., Savić, S., Bodroza, D., Cvijanović, G., Djordjević, S. (2016). Climate change impacts on agricultural water management: Challenge for increasing crop productivity in Serbia, Economic of Agriculture, 63 (4), 1333-1346

Domanović, V., Vujičić, M. & Ristić, L. (2018). Profitability of food industry companies in the Republic of Serbia, Economic of Agriculture, 65(1), 11-32. doi:10.5937/ekoPolj1801011D

El Khanji, S. & Hudson, J. (2016). Water utilization and water quality in endogenous economic growth. Environment and Development Economics, 21(5), 626-648.

Ercin, A.E. & Hoekstra, A.Y. (2016). Water footprint scenarios for 2050: A global analysis. Environment international, 64, 71-82.

European Environment Agency – EEA (2021). Use of freshwater resources in Europe. https://www.eea.europa.eu/data-and-maps/indicators/use-offreshwater-resources-3/assessment-4 [accessed on May 21, 2021]

Fraiture, C. & Wichelns, D. (2010). Satisfying future water demands for agriculture. Agricultural Water Management, 97 (4), 502-511.

Gerveni, M., Avelino, A.F.T. & Dall’erba, S. (2020). Drivers of water use in the agricultural sector of the European union 27. Environmental Science & Technology, 54, 9191-9199.

Gleick, P.H. (2003). Water use. Annual Review of Environment and Resources, 28, 275-314.

Goklany, I.M. (2002). Comparing 20th century trends in U.S. and global agricultural water and land use. Water International, 27(3), 321-329.

Greene, W (2000). Econometric Analysis. 4th Edition, Prentice Hall, Englewood Cliffs.

Hansen, L.P., Heaton, J. & Yaron, A. (1996). Finite sample properties of some alternative GMM estimators. Journal of Business and Economic Statistics, 14 (3), 262-280.

Hausman, J.A. (1978). Specification tests in econometrics. Econometrica, 46, 1251-1271.

Hengsdijk, H., Krogt, W., Verhaeghe, R.J. & Bindraban, P.S. (2006). Consequences of supply and demand management options for integrated water resources management in the Jabotabek- Citarum region Indonesia. International Journal of River Basin Management, 4(4), 283-290.

Hervás-Gámez, C. & Delgado-Ramos, F. (2019). Drought management planning policy: From Europe to Spain. Sustainability, 11 (7), 1862.

Hjalager, A. M. & Richards, G. (2003). Tourism and gastronomy. Routledge, London.

Hoehn, J.P. & Adanu, K. (2008). Do growth, investment, and trade encourage water use or water conservation? Letters in Spatial and Resource Sciences, 1, 127-146.

Hoekstra, A.Y. & Chapagain, A.K. (2007). Water footprints of nations: water use by people as a function of their consumption pattern. Water Resources Management, 21, 35-48.

Hoekstra, A.Y. (2009). Water security of nations: how international trade affects national water scarcity and dependency. Threats to global water security, 27-36.

Hoekstra, A.Y. (2014). Water scarcity challenges to business. Nature Climate Change, 4 (5), 318-320.

Jia, S., Yang, H., Zhang, S., Wang, L. & Xia, J. (2006). Industrial water use Kuznets curve: evidence from industrialized countries and implications for developing countries. Journal of Water Resources Planning and Management, 132 (3), 183-191.

Katz, D. (2015). Water use and economic growth: Reconsidering the environmental Kuznets curve relationship. Journal of Cleaner Production, 88, 205–213.

Kleibergen, F. & Paap, R. (2006). Generalized reduced rank tests using the singular value decomposition. Journal of Econometrics, 133, 97-126.

Koch, H. & Vögele, V. (2009). Dynamic modelling of water demand, water availability and adaptation strategies for power plants to global change. Ecological Economics, 68 (7), 2031-2039.

Konar, M., Reimer, J.J., Hussein, Z. & Hanasaki, N. (2016). The water footprint of staple crop trade under climate and policy scenarios. Environmental Research Letters, 11 (3), 035006.

Kresovic, B., Matovic, G., Gregoric, E., Djuricin, S. & Bodroza, D. (2014). Irrigation as a climate change impact mitigation measure: An agronomic and economic assessment of maize production in Serbia. Agricultural Water Management, 139, 7-16.

Lavrnić, S, Zapater-Pereyra, M. & Mancini, M.L. (2017). Water scarcity and wastewater reuse standards in Southern Europe: focus on agriculture. Water, Air, & Soil Pollution, 228, 1-12.

Lawrence, P., Meigh, J., Sullivan, C. (2002). The water poverty index: An international comparison Keele. Economics research papers, Keele, Department of Economics University of Keele

Li, X., Kang, S., Zhang, X., Li, F. & Lu, H. (2018). Deficit irrigation provokes more pronounced responses of maize photosynthesis and water productivity to elevated CO2. Agricultural Water Management, 195, 71-83.

Liu, J., Hertel, T.W., Taheripour, F., Zhu, T. & Ringler, C. (2014). International trade buffers the impact of future irrigation shortfalls, Global Environmental Change, 29, 22-31.

Masson-Delmotte, V.P., Zhai, H.O., Roberts, P.D., Skea, J., Shukla, P.R., Pirani, A., Moufouma-Okia, W., Péan, C., Pidcock, R., Connors, S., Matthews, J.B.R., Chen, Y., Zhou, X., Gomis, M.I., Lonnoy, E., Maycock, T., Tignor, M. & Waterfield, T. (2018). IPCC, 2018: Global Warming of 1.5 C. An IPCC Special Report on the impacts of global warming of 1.5 C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. Sustainable Development, and Efforts to Eradicate Poverty, 616.

Mekonnen, M.M.& Hoekstra, A.Y. (2016). Four billion people facing severe water scarcity. Science Advances, 2 (2), e1500323.

Mićović, A. (2017). Tourism Development and Evolution of Tourism Related Rules, 2nd International Scientific Conference – Thematic Proceedings II, Faculty of Hotel Management and Tourism, Vrnjačka Banja, 181-202. Retrieved from http://www.hitvb.kg.ac.rs/conference/images/thematic_proceedings/2017_II.pdf

Molden, D., Oweis, T., Steduto, P., Bindraban, P., Hanjra, M.A. & Kijne, J. (2010). Improving agricultural water productivity: Between optimism and caution. Agricultural Water Management, 97, 528-535.

Musolino, D.A., Massarutto, A. & Carli, A. (2018). Does drought always cause economic losses in agriculture? An empirical investigation on the distributive effects of drought events in some areas of Southern Europe. Science of The Total Environment, 633, 1560-1570.

Neumayer, E. (2001). The human development index & sustainability — a constructive proposal. Ecological Economics, 39(1), 101-114.

Pesaran, M.H. (2004). General diagnostic tests for cross section dependence in panels. Cambridge Working Papers in Economics 0435 University of Cambridge.

Reimer, JJ (2014). Water in the international economy. Journal of International Agricultural Trade and Development, 9, 21-52.

Rey, D., Pérez-Blanco, C.D., Escriva-Bou, A., Girard, C., Ted, I.E. & Veldkamp, T. (2019). Role of economic instruments in water allocation reform: Lessons from Europe. International Journal of Water Resources Development, 35 (2), 206-239.

Rock, M.T. (1998). Freshwater Use, Freshwater Scarcity, and Socioeconomic Development. The Journal of Environment & Development, 7(3), 278–301.

Rosegrant, M., Cai, R.X. & Cline, S. (2002). World water and food to 2025. Dealing with Scarcity. International Food Policy Research Institute, Washington DC.

Roson, R. & Damania, R. (2017). The macroeconomic impact of future water scarcity: An assessment of alternative scenarios. Journal of Policy Modeling, 39 (6), 1141-1162.

Sachidananda, M., Webb, D.P. & Rahimifard, S. (2016). A concept of water usage efficiency to support water reduction in manufacturing industry. Sustainability, 8 (12), 1222.

Stern, D.I. (2004). The environmental Kuznets curve. In Companion to Environmental Studies, 49-54. Routledge

Stošić, L. & Stošić, I. (2013). Diffusion of innovation in modern school.International Journal of Cognitive Research in Science, Engineering And Education (IJCRSEE), 1(1), 12-24.

Suri, V. & Chapman, D. (1998). Economic growth, trade and energy: Implications for the environmental. Ecological Economics, 25(2), 195-208.

Sušnik, J. & Zaag, P. (2017). Correlation and causation between the UN Human Development Index and national and personal wealth and resource exploitation. Economic Research-Ekonomska Istraživanja, 30 (1), 1705-1723.

Tchobanoglous, G., Kenny, J. & Leverenz, H. (2021). Rationale for constant flow to optimize wastewater treatment and advanced water treatment performance for potable reuse applications. Water Environment Research, 93 (8), 1231-1242.

The Food and Agriculture Organization of the United Nations (FAO). Retrieved from http://www.fao.org (July 31, 2018)

United Nations Development Programme (2021). Human Development report. http://hdr.undp.org/en/content/human-development-index-hdi [accessed on May 21, 2021]

Viala, E. (2008). Water for food, water for life a comprehensive assessment of water management in agriculture. Irrigation and Drainage Systems, 22, 127-129.

WHO (2021). Progress on household drinking water, sanitation and hygiene 2000‒2020: Five years into the SDGs. WHO/UNICEF Joint Monitoring Programme for Water Supply, Sanitation and Hygiene (JMP).

Wooldridge, J.M. (2002). Econometric analysis of cross section and panel data. Cambridge MA MIT Press.

Wu, X.D., Guo, J.L., Li, C.H., Shao, L., Han, M.Y. & Chen, G.Q. (2019). Global socio-hydrology: An overview of virtual water use by the world economy from source of exploitation to sink of final consumption. Journal of Hydrology, 573, 794-810.

Zhang, Y., Zhang, Y., Shi, K., & Yao, X. (2017). Research development, current hotspots, and future directions of water research based on MODIS images: A critical review with a bibliometric analysis. Environmental Science and Pollution Research, 24, 15226e15239.

Zheng, H., Bian, Q., Yin, Y., Ying, H., Yang, Q. & Cui, Z. (2018). Closing water productivity gaps to achieve food and water security for a global maize supply. Scientific Reports, 8 (1), 14762.