14. Non-household Water Demand: The Industrial and Commercial Sectors

Whereas households are the largest water users in most urban centres, non-residential water use accounts for as much as 30–40 % of a typical water utility’s total output. Thus, for many water utilities facing the rising costs of developing new sources for potable water, improvements in water use efficiency in the industrial and commercial sector are seen as a virtual new source. The purpose of this chapter is to briefly examine what is known regarding the economics of water use by industry and commerce and to investigate how this knowledge could be used to promote efficient water use. The chapter begins by illustrating some of the important characteristics of industrial and commercial water use. Of particular interest is the role of energy consumption in affecting demand for water, as well as the ways in which this sector’s water use differs from its residential counterpart. The chapter then considers economic techniques for modeling and measuring industrial and commercial water use. An important output from these modeling efforts is an estimate of price elasticity of a firm’s demand for intake water. The chapter concludes by presenting several case studies that demonstrate water agencies’ efforts to promote water conservation among industrial and commercial users.