The External Water Footprint of Italy. A Comparative Analysis of Webt and Mrio Approaches

Abstract The water footprint (WF) of Italy is calculated using two top-down approaches, Water Embodied in Bilateral Trade (WEBT) and Multiregional Input-Output Analysis (MRIO). The most recent table (2014) of the World Input-Output Database (WIOD) is used, including 56 economic sectors and 44 regions. We find that Italy's WF is 137.415 Mm3 (WEBT) and 136.543 Mm3 (MRIO). The results are also similar for the domestic component of WF; however, larger differences emerge for the external WF, particularly when it is disaggregated by industry and country. When considering the breakdown by industry, the Manufacture (-10%, MRIO greater) and Services (14%, WEBT greater) macrosectors presents the largest differences. Disaggregating by country, France (-12%), Hungary (-15%) and USA (14%) show the most important differences; where the first two countries are dominated by the Inter-regional Indirect effect and USA by the Re-Exports effect (the two effects incorporated as a methodological innovation in order to better understand the differences). Disaggregating by industry and country, it stands out USA (15%) in the Agriculture industry and Brazil (21%) in the Food Industry, revealing undetected differences at the aggregate country level; and the most important differences can be seen in the Services (USA, 108%) and Manufacture sectors (Brazil, -24%). JEL Classification: C67, Q25, Q50