An extended Input-Output framework for evaluating industrial sectors and provincial-level water consumption in Indonesia

Abstract

This paper provides an extended input-output (IO) model of sectoral water consumption for Bali, a province located in Indonesia that is a well-known global tourist destination. Currently, the province is experiencing water shortages, which leads to a burden and heavy competition in water usage among the various economic sectors. We developed a method for determining which industrial/economic sectors directly and indirectly consume the most substantial quantities of water and to what extent available water resources can become a restrictive factor in the development of leading economic sectors. We also used another method, backward and forward linkage indices, to identify the key sectors influencing water consumption. The results confirm that the agriculture sectors, including other food crops, non-food crops, and rice, consume the highest portion of total water consumption. However, indirect water consumption appears to comprise a vital share of total water resources. These sectors - including the livestock industry; food, beverage, tobacco, and coffee industries; the timber industry; wood products, crafts and minerals industry; trading; construction; and other processing industries - have the highest indirect consumption. Our model for direct and indirect water consumption is a useful tool for water and economic planning policymakers for devising water-saving policies and expanding the provincial economy. © 2021 The Authors.