Water pollution in the Spanish economy: analysis of sensitivity to production and environmental constraints

In this paper, we discuss the relationships between production processes and water pollution based on the recent Satellite Water Accounts (SWA) (INE (Spanish National Statistics Institute), 2002) and the 1997 input-output tables for the Spanish economy. The study focuses on four pollutants [biological oxygen demand (BOD), metals, nitrogen and phosphorus) and seven sector blocks. Firstly, we identify the roles of the various sector blocks as generators and consumers of each type of pollution. Secondly, we examine how pollution responds to changes in unit coefficients of pollution and final demand patterns to obtain the shadow prices for the different pollutants. The results obtained provide a sound basis for the design of improvements in environmental policy.