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Analysis of the factors influencing water recirculation decisions by Canadian manufacturing firms

Congress: 2008
Author(s): Joel Bruneau, Michel Villeneuve
Joel Bruneau: Assistant Professor, Dept. of Economics, University of Saskatchewan Michel Villeneuve, Manager, Environmental Stewardship Branch, Environment Canada

Keyword(s): industrial water demand, water recirculation, demand estimation
AbstractRelatively little is known of the factors which might influence firms’ water recirculation decision-making. This paper estimates a double hurdle model that considers two facets of firms’ recycling behaviour separately: first, the discrete decision of whether to recycle and, second, the decision of how much to recycle. The model is estimated using data from Environment Canada’s Industrial Water Use Survey. In the estimated first stage, the marginal costs of intake water and recirculation have positive and negative impacts on the likelihood of adopting recirculation, respectively. Higher levels of plant output and the need to treat water make it more likely that a plant will recycle. In the estimated second stage, the marginal costs of internal water recirculation and treatment have negative and positive influences on the volume of water recirculated, respectively. In addition, higher levels of plant output and the need to treat water both have a positive influence on the volume of water recirculation.
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