Economic contribution and rebound effect of industrial water: The case of the Yangtze River Delta

Abstract

Water scarcity can constrain industrial development, while industrial development can exacerbate the high consumption of industrial water, resulting in the industrial water rebound effect. This study measures the economic contribution of industrial water to industrial economic growth with the help of the Cobb-Douglas Production Function. Then industrial water rebound effect is estimated in the context of technological progress. The empirical results suggest that the production elasticity of industrial water in the Yangtze River Delta is 0.121 and the industrial water rebound effect is 55.11%. Particularly, Shanghai has achieved industrial economic growth by strictly controlling the total amount of water use. While Anhui has the higher economic contribution of industrial water, its industrial economic growth mainly relies on water input. The overall industrial water rebound effect is relatively prominent in Zhejiang, Anhui and Jiangsu. Accordingly, the Yangtze River Delta urgently needs to advocate the development of the water economy, strengthen the rigid constraints on water use indicators, and promote water use efficiency in industrial enterprises.