Brazilian Environmental-Economic Accounting for Water: A structural decomposition analysis

The UN Sustainable Development Goals constitute a bench of directives with a universal scope to establish actions to mitigate poverty and protect the environment. Benefiting from the Environmental-Economic Accounting for Water recently published in Brazil, it is possible to harmonize the demand of water and the economic sectors. To this end, this study conducted an input-output analysis and structural decomposition analysis to explore the water consumption of the Brazilian Economy and its driving forces during an unprecedented drought and economic recession between 2013 and 2015. The results indicate that the total variation of the water consumption in the period is 15%. Between 2013 and 2014, the total effect was positive, causing an increase of 45% in the embodied water consumption, having as main driver the final demand and the intensity effect. In the second period, the total intensity effect was negative, provoking a decrease of -10% in the total water consumption. The "Agriculture, livestock, forestry and fishing" is the main sector responsible for these positive and negative results, while the "Energy and gas natural supply" sector has a strategic position to avoid a structural increase on the economic water demand.