Using Economic Instruments for Water Demand Management: Introduction

Abstract

Water is an important input for many industrial sectors including manufacturing, mining and energy generation. Industrial water use differs from other sectors in its high reliance on self-supplied water, the potential for internal water recycling and the possibility of use leading to diminished water quality. Furthermore, industrial water use has a number of interrelated components including intake, internal recirculation, treatment prior to and following use and discharge. In principle, each of these activities can be expected to depend upon the economic and regulatory environment facing the firm. This paper examines the economic characteristics of Canadian industrial water use and considers the experiences of other jurisdictions in employing economic instruments to promote industrial water conservation. The paper then assesses the potential efficacy of economic instruments as a means of promoting integrated water resources management in the Canadian industrial sector. The paper concludes by identifying the opportunities and barriers for enhanced reliance on economic instruments. © 2005, Taylor & Francis Group, LLC.