Local-scale systems input-output analysis of embodied water for the Beijing economy in 2007

Abstract

Using the most detailed and recent statistics available for Beijing, a local-scale embodiment analysis on water use was conducted, employing a systems input-output analysis that integrates economic systems with natural resources data. Systems analysis for water research at the local scale is a crucial part of a systems oriented water accounting framework. To our knowledge, however, related works have not been thoroughly conducted. In this paper, a set of embodied water intensity inventory data is presented, which is applicable to both intermediate input and final demand. Also, detailed analyses of Beijing’s embodied water use accounting are presented. The embodied water intensity of the Water Production and Supply Industry Sector turns out to be the highest among the 42 sectors. For water embodied in final demand, the total amount is 3.48 km³, of which the water embodied in urban household consumption makes up nearly a half proportion. As a net virtual water importer, Beijing’s water embodied in commodity trade totals 5.84×10⁸ m³. As a result, in addition to improvements in technology and water use efficiency, adjustments in industrial structure and trade policies are also of significant importance to water conservation efforts.

Keywords

input-output analysis / Beijing / embodied water intensity / virtual water trade

Introduction

Only 0.5% of water worldwide is available to satisfy human beings’ freshwater needs (Lambooy, 2011). Water is considered to be a scarce natural resource in many regions, especially in China. The availability of fresh water in terms of volume in China is low (about 2,300 m³/capita), which is about one third of the world’s average value (Guan and Hubacek, 2007). The unbalanced distribution of fresh water makes it particularly difficult for people in some parts of the world to get access to it. Water grabbing, through commodity trade, has been a technique used by some water-scarce regions to meet local fresh water requirements (Rulli et al., 2013). As trade plays a crucial role in alleviating the imbalanced distribution of water, it is important to analyze the water used in consumption processes and commodity trade activities.

Derived from a systems ecology model (Odum, 1971, 1983), the concept of virtual water was first introduced by Allan (1993, 1994) to highlight the water embodied in agricultural products trade, also known as embodied water. Water footprint is a concept closely linked with virtual water (Hoekstra and Chapagain, 2006); and it is defined as the volume of water needed for the production of goods and services consumed by a country, region, sector/industry, or an individual (Hoekstra et al., 2009). Considering the large share of water extracted for food production, studies on virtual water have focused primarily on water resources embodied in food products. Virtual water values for different products, such as coffee, tea, rice, cereal, and meat (Fraiture et al., 2004; Oki and Kanae, 2004; Chapagain and Hoekstra, 2007, 2011; Hoekstra, 2012), and the water footprint of agricultural production processes (Hoekstra and Mekonnen, 2012) have been explored. Analyses of global embodied water flows associated with international food trade have been conducted as well (Hoekstra and Hung, 2002, 2005; Yang et al., 2003, 2006). Some other studies have focused on water embodied in non-food products (Hoekstra and Chapagain, 2006), and have presented calculations for the water footprints of different countries in the period 1997-2001 (Hoekstra and Hung, 2002, 2005; Chapagain and Hoekstra, 2003).

It is noteworthy that all of the aforementioned studies are based on a bottom-up framework, in which the diversity of commodities makes it impossible to cover all economic outputs on a consistent basis. On the contrary, a top-down approach, which distributes total water use into corresponding economic flows, can cover all of the commodities based, on macro-scale accounting. Input-output analysis (IOA), a frequently used top down approach, has been employed extensively to analyze virtual water on different scales. On the national scale, the water embodied in trade or consumption of Spain (Duarte et al., 2002), Australia (Lenzen and Foran, 2001), UK (Yu et al., 2010), and China (Guan and Hubacek, 2007, 2008; Hubacek et al., 2009; Zhao et al., 2009; Zhang et al., 2011a, c) have been evaluated. On the regional scale, the water footprints of Zhangye City (Wang et al., 2009), the Liaoning Province (Dong et al., 2013), the Haihe River Basin (Zhao et al., 2010), Yellow River Basin (Feng et al., 2012), Victoria (Lenzen, 2009), Andalusia (Velázquez, 2006; Dietzenbacher and Velázquez, 2007) and Beijing (Zhang et al., 2010, 2012; Dong et al., 2013; Wang et al., 2013) have been assessed. An evident improvement can be witnessed in the study on the Liaoning Province, where the input-output table is broken down into domestic and import rows (Dong et al., 2013).

All of the IOA studies mentioned above are based on the conventional environmental IOA. A direct emission coefficient is assigned as the local emission divided by the total output. The total emission coefficient based on final demand is then obtained as the direct emission coefficient multiplied by the Leontief inverse matrix, expressing the total output as a function of final demand (Chen and Chen, 2010). These efforts have contributed significantly to the development of embodied water analyses. However, several limitations, especially double-accounting, are also observed in the above studies.

Stimulated by the oil crisis, systems IOA was developed around the 1970s. Founded on the concept of embodiment put forward by Odum (1983), Costanza (1980) established an association between embodied energy and monetary value for the U.S. economy. Using the systems ecology model (Hannon et al., 1983; Casler and Wilbur, 1984; Costanza and Herendeen, 1984), through a critical mathematical derivation, systems IOA was established based on biophysical balance to get a critical mathematical expression (the basic formula is presented in the Algorithm Section). This formula reflects the embodiment in total product delivery as the total output of both final physical entries and intermediate ones (Chen and Chen, 2010).

This approach has been extensively developed to investigate various ecological issues and processes, such as environmental emissions and natural resources at different economic scales. Studies in terms of global scale (Chen and Chen, 2011a, 2011b), national scale (Chen and Chen, 2010; Chen et al., 2010), and local scale (Chen et al., 2013; Guo and Chen, 2013; Guo et al., 2012a, b; Li and Chen, 2013; Li et al., 2013; Yang et al., 2013; Zhou et al., 2010) have been published. This approach has also been applied to assess nonrenewable energy cost and greenhouse gas emissions of wetlands (Shao and Chen, 2013; Shao et al., 2013a), solar power tower plants (Chen et al., 2011b), wind farms (Yang et al., 2011), biomass systems (Yang and Chen, 2013), and buildings (Chen et al., 2011a; Han et al., 2013; Shao et al., 2013b).

As the political and economic center of China, Beijing held the second largest gross domestic product (GDP) among all the cities in China 2007, second only to Shanghai (CCSY, 2008). The municipality covered an area of 16,410.54 km² and had a population of 16.33 million at the end of 2007 (BSY, 2008). According to the Beijing water resources bulletin, (Beijing Water Authority, 2007), the total amount of water use in Beijing in 2007 was 3.48×10⁹ m³. Thus, Beijing is under severe water resource pressure, with an annual water resources availability of about 200 m³/capita, far below the internationally recognized minimum standard of 1,000 m³/capita (Wang and Wang, 2005; Zhang et al., 2010, 2011b). Confronted with such a crisis, a holistic picture is necessary here to draw an embodied water consumption structure. Systems IOA has been used to analyze embodied water resources on a global scale (Chen and Chen, 2013; Chen et al., 2012), and a national scale (Chen and Chen, 2010; Chen et al., 2010), respectively. It is thus essential to calculate and analyze embodied water resources at a local scale, which is one of the most significant influences in the systems water accounting framework.

Taking the Beijing economy 2007 as a case, the purpose of this study is to set up a specification process based on systems IOA, to present another set of embodied water intensity inventory data, and to give detailed analyses on the accounting results of Beijing’s embodied water distribution. This paper is organized as follows: first, the introduction of systems IOA method and the data sources for this study are presented; secondly, another set of embodied water intensities is compiled in detail; thirdly, the water embodied in final demand for the Beijing economy 2007 is presented and analyzed; and finally, Beijing’s virtual water trade balance is evaluated and discussed.

Method and data sources

Algorithm

Issued by the Beijing Statistics Bureau, the Beijing input-output table 2007 was adopted to reflect the systems structure and industrial interaction of the Beijing economy. The input-output table for the urban economy (shown in Table 1), which is extended from the economic input-output table, is built up to integrate the economic system and its physical driving forces as energy resources and environmental emissions. Q₁, Q₂, and Q₃ from the monetary balance represent inter-industrial flows, final demand from industries, and net economic inputs to industries, respectively. The extended part of Q₀ represents the external environmental inputs with separate biophysical indicators (in raw units) and aggregated biophysical indicators (in unified ecological measures), i.e., water resources in this paper.

Based on systems IOA, a physical balance can be expressed as follows:

w_i+{\displaystyle \sum _{i=\mathrm{1}}^n{ϵ}_j^L{z}_{i,j}^L}+{\displaystyle \sum _{i=\mathrm{1}}^n{ϵ}_j^D{z}_{i,j}^D}+{\displaystyle \sum _{i=\mathrm{1}}^n{ϵ}_j^F{z}_{i,j}^F}={ϵ}_i^L\left({\displaystyle \sum _{j=\mathrm{1}}^n{z}_{i,j}^L}+f_i\right),

where w_i is the amount of direct water resource inputs of Sector i, ϵ_i is embodied water intensity of Sector i, L, D, and F, respectively, represent local, domestic and foreign, z_{i, j} is the output from Sector i to Sector j, and f_i is the final demand of Sector i.

It is assumed that the embodied water intensities are equal for all commodities from the same industrial sector, and for both domestic imports and foreign imports, and that imported commodities have the same embodied water intensities as local ones. As such, the formula can be simplified as:

w_i+{\displaystyle \sum _{i=\mathrm{1}}^n{ϵ}_j{z}_{i,j}}={ϵ}_i{x}_i,

x_i={\displaystyle \sum _{j=\mathrm{1}}^n{z}_{i,j}^L}+f_i,

Where, x_i is the gross output of Sector i.

The embodied water flows for a typical sector in an urban economy can be described as in Fig. 1, in which, ϵ_ix_i represents the embodied water use flow of final demand activities, {\displaystyle \sum _{i=1}^n{ϵ}_j{z}_{i,j}} represents the embodied water use flow of intermediate inputs, and w_i represents the direct water use flow.

Subsequently, the matrix form can be expressed as:

W+EZ=E\widehat{X},

in which, W={[w_i]}_{\mathrm{1}\times n}, E={[{ϵ}_i]}_{\mathrm{1}\times n}, Z={[z_{i,j}]}_{n\times n}, and diagonal matrix \widehat{X}={[x_{i,j}]}_{n\times n}, where i,j\in (\mathrm{1},\mathrm{2},\cdots ,n), x_{i,j}=x_i(i=j), and x_{i,j}=\mathrm{0} (i\ne j).

With a properly given direct water use matrix W, an intermediate input matrix Z, and a total output matrix X, the concerned embodied water intensity matrix E is obtained as:

E=W{(\widehat{X}-Z)}^{-\mathrm{1}}.

The intensity obtained via systems IOA is principally applied to all of the economic flows, including both final demand and intermediate economic activities. It is different from that obtained by environmental IOA, though under extreme approximations there may be, incidentally, a similar expression for the concerned intensity in some simple cases. E is the water consumed directly and indirectly during the production process to meet one monetary output of this sector, representing the relationship between monetary value and the water embodied in products.

Data sources

To ensure data consistency, the direct external water resources data for this study are derived from the Beijing Statistical Yearbook (BSY, 2008). Water is directly delivered to major water users such as agricultural production, industrial production, municipal ecological protection, and household use, for which the amounts are 1.24×10⁹ m³, 5.80×10⁸ m³, 2.70×10⁸ m³, and 1.39×10⁹ m³, respectively. It is assumed that freshwater used for agricultural production is directly extracted by cultivators to irrigate farms, while that used for industrial production, municipal ecological protection, and household use is extracted and pretreated by water plants. Green and grey water are not considered due to data limitations, which omits the assessment of the impact of plants and environmental pollution during production. Corresponding sector incorporation and allocation are carried out to obtain a sectoral distribution as listed in Table 2. Beijing’s 42 economic input-output sectors (one agriculture sector, 25 industry sectors, and 16 service sectors) are obtained from the Beijing Bureau of Statistics (shown in Table 3).

Results

Embodied water intensity

Table 4 shows embodied water intensities, associated with water extraction, for the 42 sectors of the Beijing economy 2007, that were calculated based on systems IOA.

Presented in Fig. 2 are the embodied water intensities of the 42 sectors presented graphically The embodied water intensity of Sector 25 (Water Production and Supply Industry) is the highest one (6538.36 m³/(10⁴ CNY)), followed by that of Sector 1 (Agriculture, 270.85 m³/(10⁴ CNY)), indicating that the water embodied in per unit of output associated with water production and agriculture production is higher than that within other sectors. The highest agricultural and industrial embodied water intensities are found in Sector 1 (Agriculture, 265.50 m³/(10⁴ CNY)) and 25 (Water Production and Supply Industry, 6536.67 m³/(10⁴ CNY)), respectively. From the perspective of industries, the average intensity of primary industries (270.85 m³/(10⁴ CNY)) is of the same magnitude of that of secondary industries (267.74 m³/(10⁴ CNY)), and much larger than that of tertiary industries (16.47 m³/(10⁴ CNY)) (more analyses presented in Discussion Section).

Water embodied in final demand

Across the seven final demand categories of rural household consumption, urban household consumption, government consumption, fixed capital formation, inventory increase, export to other domestic regions, and export to foreign regions (see Fig. 3); the total water embodied in final demand is 3.48 km³. Water embodied in urban household consumption provides the largest component (1.42 km³), accounting for 40.91% of the total, followed by that embodied in exports to other domestic regions (0.71 km³). Water embodied in fixed capital formation, government consumption, and export to foreign regions share almost the same value, around 4.00×10⁸ m³. The total of water embodied in exports (foreign regions and other domestic regions) is 31.85%, mainly attributable to their substantial exports to other domestic regions and foreign regions, respectively. Water embodied in household consumption (rural and urban) accounts for 43.65% of the total, of which water embodied in urban household consumption (1.42×10⁹ m³) is much higher than that embodied in rural household consumption (9.54×10⁷ m³).

As illustrated in Fig. 4, considering that the largest component in final demand is water embodied in urban household consumption, Sector 25 (Water Production and Supply Industry) accounts for the largest percentage due to its significant position in the lives of residents. Despite a small proportion in the final demand, more than 45% of water embodied in rural household consumption is consumed by Sector 1 (Agriculture). Meanwhile, Sector 1 provides the largest fraction of water embodied in export to foreign regions as a pillar industry in China. Following is Sector 19 (Electronic and Telecommunications Equipment), which accounts for a large fraction (22.83%) of water embodied in export to foreign regions, mainly attributable to their substantial exports to foreign regions (1.59×10¹¹ CNY). Sector 6 (Food Processing, Food Production, Beverage Production, Tobacco Processing) accounts for the largest fraction of water embodied in export to other domestic regions (10.75%).

Only nine sectors (eight tertiary sectors and one primary sector) make contributions to embodied water for government consumption. Sector 42 (Public Management and Social Organization), 39 (Education), and 40 (Health, Social Security and Social Welfare) contribute 24.73%, 20.47%, and 18.15%, respectively, to embodied water for government consumption.

As illustrated in Fig. 5, secondary industries account for more than half (62.07%) of water embodied in urban household consumption, due to their significant position in the international metropolis. By comparison, primary industries play a significant role (46.54%) in rural household embodied water consumption. For water embodied in exports, tertiary industries account for large shares (60.41% for other domestic regions and 44.21% for foreign regions), while primary industries share a negligible fraction, especially for water embodied in export to other domestic regions. In addition, the tertiary industries provide the dominant component for water embodied in the government consumption (94.53%), and secondary industries provide the dominant component for water embodied in fixed capital formation and inventory increase, accounting for 61.58% and 71.26%, respectively.

Water embodied in trade

Water embodied in export

Virtual water trade indicates the virtual water flows embodied in commodity trade, and is evaluated as the magnitude of virtual water required to produce the traded commodities. Fig. 6 shows the distribution, by sector, of water embodied in exports for Beijing. The total of water embodied in exports is 1.11×10⁹ m³, within which; the water embodied in exports to domestic regions (7.31×10⁸ m³) is much larger than that embodied in exports to foreign regions (3.95×10⁸ Gm³). For total water embodied in exports, Sector 6 (Food Processing, Food Production, Beverage Production, Tobacco Processing) accounts for the largest volume (1.50×10⁸ m³, 13.55% of total), followed by 36 (Polytechnic Services, 1.03×10⁸ m³), and 31 (Hotels, Catering Service, 9.22×10⁷ m³). In addition, Sectors 1 (Agriculture), 19 (Electronic and Telecommunications Equipment), and 29 (Information Transmission, Computer services and Software) also account for considerable embodied exported water (8.20%, 8.13%, and 6.39%, respectively).

From the perspective of industry, secondary and tertiary industries are responsible for the majority of water embodied in exports (37.17% by secondary industries and 54.63% by tertiary industries); while the water embodied in primary industries is very small (8.20%). For primary industries, the water embodied in export to foreign regions provides almost 99.33% of the total, which is much higher than that to domestic regions. Due to Beijing’s significant role in high-tech industry in China, tertiary industries account for a large amount of water embodied in exports, especially to other domestic regions.

Water embodied in import

Total water embodied in imports for Beijing is 1.69×10⁹ m³ (shown in Fig. 7).Of this total, values for water embodied in imports from domestic regions (1.13×10⁹ m³) are more than twice those for foreign regions (5.60×10⁸ m³). Sector 1 (Agriculture) is the leading sector for water embodied in imports from both other domestic regions (4.81×10⁸ m³), and foreign regions (3.01×10⁸ m³). Following, are Sector 6 (Food Processing, Food Production, Beverage Production, Tobacco Processing, 2.10×10⁸ m³) and 19 (Electronic and Telecommunications Equipment, 1.03×10⁸ m³). In addition, Sector 12 (Chemical Products Related Industry), 31 (Hotels, Catering Service), and 26 (Construction Industry) also account for considerable water embodied in imports (5.14%, 4.52%, and 3.41%, respectively).

As a whole, primary, secondary and tertiary industries contribute 46.26%, 38.85%, and 14.89% to the total of water embodied in imports, respectively. Primary and secondary industries provide a larger share of water embodied in imports, especially for imports from other domestic regions (88.40%).Tertiary industries contribute a less important portion, accounting for 14.89% of the total. Water embodied in imports from other domestic regions in primary industry is a little larger than that embodied in imports from foreign regions. Water embodied in exports to foreign regions provides almost 99.33% of that embodied in exports. Thus, it can be seen that water embodied in the agriculture industry in Beijing is mainly from other domestic regions, and water exported to foreign countries from Beijing accounts for only a small fraction of total water embodied in exports from the agriculture industry.

Water embodied in trade balance

The distribution of embodied water from trade balance in 42 sectors is presented in Fig. 8. Beijing is a net virtual water importer, and the total water embodied in commodity trade is 5.84×10⁸ m³. Net virtual water imports to Beijing (1.69×10⁹ m³) are much higher than that of exports (1.11×10⁹ m³). 17 of the 42 sectors show a net virtual water surplus, while the other 25 show a net virtual water deficit. Sector 1 (Agriculture) is the leading virtual water importer (net virtual water import of 7.83×10⁸ Gm³) as well as trade deficit receiver (net virtual water import of 6.92×10⁸ m³). In contrast, Sector 6 (Food Processing, Food Production, Beverage Production, Tobacco Processing) is the leading exporter (net virtual water export of 1.50×10⁸ m³); and Sector 36 (Polytechnic Services) is the leading trade surplus receiver (virtual water export of 8.42×10⁷ m³).

Sectors 1 (Agriculture), 6 (Food Processing, Food Production, Beverage Production, Tobacco Processing), and 26 (Construction Industry) are the three leading net importing sectors in Beijing, whose production rely highly on raw materials and other intermediate inputs from external economies. However, Beijing’s net embodied water exports accounts for only a small fraction. Among all the sectors, Sectors 36 (Polytechnic Services) and 29 (Information Transmission, Computer services and Software) are the two largest net virtual water exporters.

According to the results, the water embodied in imports to Beijing is accounted for in large part by food related activity (7.51×10⁸ m³, more 50%). Generally, agricultural production in Beijing relies significantly on external inputs (such as agricultural machinery, fertilizer, seed, etc.), which makes it a net importer of embodied water. All tertiary industries, except for Sector 42 (Public Management and Social Organization), are net exporters of embodied water, which shows that Beijing is an important supplier of technologies and services for other places. In contrast, all secondary industries, except for Sector 16 (Ordinary Machinery, Equipment for Special Purpose) and 17 (Transportation Equipment), are net importers of embodied water. In spite of the fact that direct water use for agriculture and food processing sectors account for about one third of water withdrawal in volume, the above results highlight the necessity of including not only food, but also non-food product, to reveal the overall virtual water transaction between Beijing and other regions.

Discussions

Water resources directly consumed by Beijing throughout the year 2007 totaled 3.48 billion m³ (BSY, 2008); and the available surface water and recycled water supply was 0.93 billion m³ in the same year, implying a gap volume of 2.16 million m³. Until now, this gap has been filled by over drafting groundwater. As a result, over-exploitation of ground water has resulted in an average ground water depth decrease of 1.1 m/year and has formed a subsidence area of 2,650 m² (Wen and Zhu, 2012).

To ease this stressful situation, one billion m³ of water will be sent to Beijing through the Middle Route of the South-to-North Water Transfer Project by 2015 (Beijing Municipal Government, 2011). By 2020, Beijing is estimated to be receiving approximately 12 billion m³ of freshwater annually (Kim, 2003). Part of the water is transferred from other provinces, e.g., the Hebei Province, a water shortage region as well. Of course, this project can resolve the water crisis partly; however, it has its dark side as it may cause damage to the ecological environment. The same objective can be achieved by shifting trade structure via importing primary water intensive products from other provinces. This is a more effective way, not only to alleviate the water resources pressure of Beijing, but also to reduce the negative impact on the local environment.

In order to find better solutions to the problem, it is necessary to obtain detailed analyses of the embodied intensity across the 42 economic sectors that constitute the Beijing economy. The embodied water structure presented in this study shows inefficiencies in the Beijing economic structure and unveils the sectors that should be a priority to rebalance.

The embodied water intensity of the Water Production and Supply Industry is the highest one, with a value of 6538.36 m³/(10⁴ CNY), followed by that of Agriculture (270.85 m³/(10⁴ CNY)). Corresponding to the direct intensities, the indirect water intensities can be obtained by subtracting embodied ones from direct ones. The top two indirect water intensities are calculated as 50.25 m³/(10⁴ CNY) and 47.29 m³/(10⁴ CNY) for the Agriculture Sector and Water Conservancy, Environmentand Public Facilities Management Sector. Sectors with high embodied water intensities may contribute to a water saving strategy significantly if appropriate measures are implemented. Generally, sectors with high embodied water intensities possess high potential to save water resources through improving direct water use technologies (e.g., improving irrigation efficiency), or indirect water use approaches (e.g., reducing material input). Thus, according to a direct and indirect intensity inventory, different sectors can take different measures, such as altering the inputs or improving the efficiency of water use.

As for water embodied in final demand, with an amount of 3.48 Gm³, urban household consumption is the largest embodied water using activity for Beijing, accounting for more than 1/3 of the total. Secondary industries contribute more than half of the water embodied in Beijing’s urban household consumption, due to their significant position in the international metropolis. This high proportion indicates that the implementation of water-saving measures in secondary industries can significantly help to reduce Beijing’s embodied water use. Several approaches can be considered to decrease the embodied energy consumption of secondary industries, for instance, the expansion of small and medium-sized enterprises, and the introduction of advanced technology.

Net virtual water export embodied in commodity trade totaled 5.84×10⁸ m³, with about half of the net embodied water import driven by the demand for food products. Agricultural products and processed food account for 73% and 6% of the total net embodied water imports, respectively. According to the virtual water trade structure in Beijing, water embodied in agriculture is mainly from other domestic regions, and water exported to foreign countries from Beijing accounts for only a small fraction of total water embodied in exports from the agriculture industry. From the standpoint of whole country, the agriculture industry is the trade deficit receiver as well (Chen and Chen, 2010). All secondary industries except for Sectors 16 and 17 are net importers of embodied water. On the contrary, all tertiary industries except for Sector 42 are net exporters of embodied water, revealing that Beijing is an important hub that provides technologies and services for other places, especially for other domestic regions as a result of Beijing’s significant role in high technology and high-end service in China. In addition, the virtual water trade embodied in the service industry for Beijing does not rely highly on other countries.

Due attention has been paid to water crises due to limited supply and surging demand. In order to tackle these issues, a lot of work has been undertaken for Beijing, including technological advances, improvements in sectoral water use efficiency, water price adjustment, and real-time monitoring (Beijing Municipal Government, 2012; National Development and Reform Commission, 2005). Still, more studies can be carried out to fill the gap between embodied water consumption and actual water input.

From an industrial perspective, some specific measures can be taken into consideration. The total final consumption of the primary sectors is 1.94×10⁶ CNY/year, accounting for only 1% of the total final consumption; but the water embodied in primary industries accounts for more than 15% of that embodied in final demand. The primary industries have a low final consumption but a high water footprint. To address water shortage problems in Beijing, reducing the proportion of water consumption in the agriculture sector should receive particular attention. Besides, agricultural water saving measures should be encouraged to enhance the effectiveness of local water consumption, such as micro-irrigation, and low-flow technology that delivers water directly to plant roots at rates that help to prevent deep percolation and runoff losses. Importing primary products from other provinces is also an effective way to alleviate the water resources pressure on Beijing. Secondary industries are of prominent significance in the local economy. Water saving should focus on technology improvement, manufacturing process adjustments, raw material import modification, etc. Most secondary industries are net water importers, even for exports to foreign countries. Tertiary industries are taken as the direction of future water-saving oriented industrial development. Rapid urbanization and the city’s position as a political center drive Beijing to adjust its economic structure, to develop tertiary industry, and to decrease the proportion of primary and secondary industries in its economy. Corresponding financial and tax policies can be introduced to internalize the true costs of water intensive industrial sectors, while encouraging the growth of less water intensive industrial sectors (Geng and Yi, 2006).

Conclusions

In this study, embodied water analyses of the Beijing economy 2007, based on systems IOA, are conducted in order to improve the systems water accounting framework, which is of great significance in calculating and analyzing embodied water distribution at the local scale. This study sets up a specification process and establishes a set of intensity inventory data that is applicable to not only final demand, but also to intermediate economic activities. This study also conducts detailed analyses of Beijing’s embodied water use.

As for sectoral intensity, the average intensity of primary industries is of the same magnitude as that of secondary industries, and much larger than that of tertiary industries. The sectoral-level results indicate that the primary sector of Beijing has the highest water footprint. The secondary sectors’ importance can be reflected in both local livelihood, and water saving, which account for 53% and 44% of final consumption, and the water footprint of all industries. The tertiary sectors account for 11% of the total final water consumption and 45% of the total final consumption, showing their superiority in water-saving strategy.

From the perspective of trade, primary and secondary industries are net water importers. In contrast, most tertiary industries are net water exporters, making Beijing a net virtual water importer. Analyses of the water embodied in trade balance can be used to rebalance embodied water distribution among sectors, and may play an important role in relieving water scarcity in Beijing.

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