Industrial water-use technical efficiency and potential reduction of CO2 emissions: evidence from industry-level data

This article analyzes the relationship between industrial water-use efficiency and carbon dioxide for 14 industries from 1998 to 2015 using a true fixed-effects stochastic frontier model. The highest water-use efficiency is that of the rubber products manufacturing industry, approaching 0.62. The average water-use efficiency score across industries is 0.30 for the period. The potential water conservation for the various industries ranges from 4.07 to 212.67 million cubic meters. Further examination of potential reduction for CO2 emissions shows that it ranges from 0.63 to 32.33 million kilograms. The reduction of CO2 emissions for the various industries on average is 12.19 million kilograms. These results exhibit great room for improvement in water-use efficiency; making these improvements will eventually improve CO2 emissions. Water conservation can be viewed as a part of policy to reduce CO2 emissions. The results obtained from this study can help in formulating appropriate policies to face both water supply crises and climate change.