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National Water Footprint of Thailand and Tax Simulation

  • Supawat SukhaparamateEmail author
Article

Abstract

Water shortage and water pollution problems are among the serious environmental problems facing Thailand today. A pricing scheme had been proposed as a tool for solving the problem, but it was impractical as many parts of the country still have water usage rights issues, and lack of will by the authorities to collect fees. Thus, indirect implements such as water-related taxation should be imposed. In order to choose the proper sector to tax, information on water usage and production in each sector is required. Therefore, objectives of this study are to calculate the national water footprint (NWF) of Thailand, the amount of water usage and water discharge for each production sector, and to find results of changes in production and water consumption caused by the change in water-related taxation. This study calculated the NWF by using the input-output technique, and examined which sectors are water-intensive sectors by considering the national water footprint intensity. The study found that the highest water footprint sector is agriculture with 10,649.31 million cubic meters, or about 19.92 percent of the national water footprint. Trade sector and services sector become the second and third highest share of the national water footprint respectively. The NWF intensity indicates that (1) paper industries and printing, (2) agriculture, (3) trade, (4) rubber, chemical and petroleum are high intensity sectors. The study examined several tax simulations, when all water intensive sectors were levied separately at the same rate, 1 percent of sales price. The results showed that taxation of the trade sector could save the highest amount of NWF by 0.25 percent or 131.10 million cubic meters. Moreover, imposing tax on any other water intensive sector will result in a relatively high change in output of the trade sector, because the trade sector has many linkages with other sectors. In order to lessen the effect, policy makers should spend tax revenue to subsidize efficient water use following revenue-recycling scheme.

Key words

National Water Footprint Input-Output Analysis Tax Simulation Thailand 

JEL Classification

Q56 D57 

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Copyright information

© Japan Economic Policy Association (JEPA) 2013

Authors and Affiliations

  1. 1.Graduate School of International DevelopmentNagoya UniversityFuro-cho Chikusa-ku Nagoya AichiJapan

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