The Economic Impact Analysis of Water Supply in Kaohsiung Area

Ke-Chang Chang

Kaohsiung area, the second biggest city in Taiwan has been suffering from water shortage for a long time due to uneven rainfall temporal distribution. The water source for Kaohsiung area mainly comes from the rainy season which begins from May to September, the rainfall of that period accounts nearly 90% of annual rainfall. However, it rarely rains in dry season which begins from October to April, this uneven rainfall temporal distribution makes water retention a tough task. A research project from Southern Region Water Resource Office indicates that the daily average water supply cannot meet the daily water demand by the amount of 265,100 cubic meters, hence the agricultural water is inevitably transferred to industry and residential sector to fill up the gap. However it is not always a good way to solve the problem, although the industry and residential sector get benefits from that transfer, it shall pose potential impact to agriculture sector. To meet the water demand of Kaohsiung area and enhance the reliability of water supply in the future, thus, the local government officials have been seeking to construct water resource facility to save and retain water in Kaohsiung area.

　　In the above point of view, this study used regional input and output (I-O) model which were established by location quotient method to evaluate the economic effects of the three feasible water resource facilities: reclaimed water plant, seawater desalination plant and Gaoping lake-phase one and provide the information to decision makers. The evaluations include the economic effects of facility construction and the amount of water supplied by each water resource facility, and also the economic effects of transferred agricultural water. However, most of I-O studies on water resource-related are focused on water shortage, different from those studies, this study created a residential sector in I-O table and estimated the economic effects of increased water resource in industry and residential sectors. v

　　The results revealed that the construction of reclaimed water plant would create 2,235.6 million NTD output effect, 771.86 million NTD income effect and 900 job opportunities; the construction of seawater desalination plant would create 7,423.99 million NTD output effect, 2,563.21 million NTD income effect and 2,989 job opportunities; while the construction of Gaoping lake-phase one would create 7,852.57 million NTD output effect, 2,711.18 million NTD income effect and 3,162 job opportunities annually to Kaohsiung area during their construction period. As for the economic effects of water resource, the increase of 16.425 million cubic meters of reclaimed water use a year in industry sector would create 1,776.71 million NTD output effect annually to Kaohsiung area, moreover, the increase of 36.5 million cubic meters of water resource from seawater desalination plant or Gaoping lake-phase one a year in industry and residential sectors would create 2,731.1 million NTD output effect annually to Kaohsiung area. Besides, the construction of reclaimed water plant will cause the industry sector to return 6.75 million cubic meters of water back to agriculture sector, this return would increase 92.96 million NTD output effect annually to local agriculture sector in Kaohsiung; as for seawater desalination plant and Gaoping lake-phase one, after the construction, they both will cause the industry and residential sectors to return 36.5 cubic meters of water back to agriculture sector, and they also have same output effects on it, both could increase 203.62 million NTD output effect annually to local agriculture sector in Kaohsiung area.

　　Among the three different water resource facilities, Gaoping lake-phase one would be the better choice to be constructed to enhance the reliability of water supply and also to stabilize the development of agriculture sector in Kaohsiung area due to its relative low unit cost of water and the relative largest output effect, income effect and employment effect on facility construction.

Key words: Regional Input and Output Model, Industry Linkage Effects, Water Resource