Extract

ABSTRACT: This paper evaluates the effect of increased water prices to the wider economy on the
Australian construction industry. This research explores the uncertain effects of future water policy on
the construction industry by depicting the consequences of possible scenarios. The effect increased
water prices on the cost of construction was determined by initially calculating the embodied water of
eight residential case studies. An input-output based hybrid embodied water analysis was undertaken.
A range of water pricing scenarios was then applied to the case studies. It was found that despite the
considerable amount of water embodied in construction, increased water prices would impact
minimally on the cost of construction. This is primarily because water costs are initially such as small
proportion of total building price that even quite large price increases have a minimal effect. Extremely
large price increases were found to have an impact on construction price, but it is not envisaged that
such prices will be applied in the foreseeable future, unless rainfall predicted reductions in rainfall from
the enhanced greenhouse effect happen almost immediately. Although this appears to be a nearneutral
result for economic activity, the environmental impact of development in terms of embodied
water are considerable.

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