Challenges for Sustainable Water Use in the Urban Industry of Korea Based on the Global Non-Radial Directional Distance Function Model

Abstract

Since water stress and industrial water pollution pose a huge threat to South Korea’s sustainable water use, it is an urgent task to assess industrial water green use efficiency (GUEIW). Based on the global non-radial directional distance function (GNDDF) model, this paper calculated GUEIW in 16 Korean local governments from 2006 to 2015 using two decomposition indicators: Economic efficiency of industrial water use (ECEIW) and environmental efficiency of industrial water use (ENEIW). The growth of GUEIW is mainly driven by ECEIW, and subsequent environmental problems are obstacles to achieving green use of Korean industrial water. The regional heterogeneity of GUEIW is so important that the downstream region outperformed the upstream region in all three indicators. The government’s efforts to ensure water quality inhibits industrial development in upstream areas, where incomes are much lower than in downstream areas, and downstream industrial areas have to pay upstream industrial areas extra for water. However, regarding upstream industrial areas, low prices easily promote water waste. Because of relatively high water use costs, downstream producers are encouraged to save water. To improve the economic efficiency of industrial water use in upstream areas, advanced water technology should be developed or introduced to make full use of water resources in industrial production.