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4610.0.55.001 - Proposed Methodology for Producing Regional Water Use Estimates, 2004-05  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 18/09/2006  First Issue
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Note: Additional information is being added to this product which outlines the likely data quality and reliability of the outputs that will result from the project.



Introduction
Background
Data Sources
Methodology for deriving water use estimates
Producing regional water use estimates
Outputs from the regional water use estimates project
Expected Data Quality and Reliability
Acknowledgement


INTRODUCTION

The Australian Bureau of Statistics (ABS) Water Account, Australia (cat. no. 4610.0), describes the flow of water from the environment through the economy. The primary objective of the Water Account is to integrate data from different sources into a consolidated dataset to assist decision-making and inform policy development and direction. The core features of the Water Account are water supply and water use tables, collectively called flow tables. These flow tables show the volumes of water supplied and used by the various sectors and industries within each Australian state and territory.

There is great demand for small area water statistics; that is, information for areas smaller than state/territory boundaries. As issues of water availability and use are often localised in nature, the development of a methodology and associated output for producing small area (or regional) water use statistics will help meet this demand.

This paper outlines a methodology for producing total water use estimates for water management areas (WMAs). WMA boundaries are defined by each of the states and territories. The methodology could also be used for other regions. The methodology is a starting point and will be refined during the course of applying it to produce WMA estimates of total water use.

Total water use estimates for up to 200 WMAs will be produced using this methodology and released in 2004-05 Regional Estimates Total Water Use, Australia (cat. no. 4610.0.55.002), in mid-December 2006. The final methodology for producing these regional total water use estimates will be released as explanatory notes to this publication.

BACKGROUND

The ABS Water Accounts have been developed using the System of Integrated Environmental and Economic Accounting (SEEA). SEEA complements the System of National Accounts (SNA) 1993. Environmental accounts extend the boundaries of the SNA framework to include environmental resources, which occur outside the production and asset boundaries typically measured in the SNA. For further details of SEEA see http://unstats.un.org/unsd/envAccounting/seea.htm. The methods used to compile the three ABS Water Accounts (1993-94 to 1996-97, 2000-01 and the 2004-05 edition that is currently in progress) have varied between each edition, largely as the result and availability of better quality and more reliable information on the volumes of water flowing through the economy.

In compiling the first two editions of the Water Account, Australia, the ABS drew on readily available water resource data from various government and non-government organisations, and aggregated these data to produce flow tables. The process did not duplicate existing data collection activities, but drew together industry, regional and state data into a single system showing the supply and use of water within the Australian economy.

To simplify the process and reduce the time required to produce the third edition of the Water Account, Australia, the ABS collected water supply data from the Water Supply Industry, and water use information from the Agriculture, Manufacturing, Mining, and selected Service Industries, as well as Australia's household sector. These surveys provide valuable information to assist in producing regional estimates. They also improve the comparability and consistency of data over time, which will enable better analyses and evaluation.

As with previous editions of the Water Account, readily available data from other sources will also be used to compile the Account as well as for reviewing data consistency.

The methodology presented in this paper builds on other ABS activities designed to improve the availability of regional estimates including the development of:
    • meshblock coding for the 2006 Census of Population and Housing and the 2005/06 Agricultural Census;
    • land parcel trials in the Eurobodalla and Fitzroy/Livingstone Shires (Cat.no.4651.0) ; and
    • methods for estimating regional agricultural water use.

    DATA SOURCES

    The data sources used in the compilation of the Water Account continue to evolve. A review of the 2000-01 Water Account highlighted a need for more direct collection of water flow information for input into supply and use tables. This resulted in the ABS developing a number of purpose-designed surveys (such as the Water Supply Survey, 2004-05) and water-specific questions for incorporation into existing ABS surveys, such as on the Agricultural, Mining, Manufacturing and Service Industries Surveys, conducted in respect of 2004-05.

    Data for both the 2004-05 Water Account and 2004-05 Regional Estimates of Total Water Use will be sourced from ABS survey data, where possible. The use of surveys to collect water supply and use data allows the major water-supplying and water-using businesses and organisations to directly report data to the ABS. However, not all businesses or organisations record or keep actual records of water use. In these cases, estimates of water use will be developed using information from like businesses.

    ABS data sources that will be integrated into the 2004-05 Water Account, Australia, and 2004-05 Regional Estimates of Total Water Use will include:
          • ABS Business Register;
          • Agriculture Survey 2004-05 (cat.no.4618.0);
          • Water Supply Survey 2004-05;
          • Water Use Survey (Electricity Generators) 2004-05;
          • Service Industry Survey 2004-05 (for sporting, recreation and racing clubs);
          • Manufacturing Survey 2004-05;
          • Mining Survey 2004-05;
          • Monthly Population Survey; and
          • 2001 Population Census, adjusted for the 2004-05 Estimated Resident Population.
    The non-ABS data sources that will be integrated and used include:
          • Australian Business Register;
          • Industry reports such as the Australian National Committee on Irrigation and Drainage (ANCID) and Water Services Association of Australia (WSAA) Benchmarking reports based on their survey activity;
          • State/Territory Government reports, such as the Victorian Water Report;
          • State/Territory water registers and water allocation databases;
          • Points of Interest database (used to locate large water users); and
          • Annual, environment and sustainability reports for individual businesses.

    METHODOLOGY FOR DERIVING WATER USE ESTIMATES

    The methodology to be used for compiling the 2004-05 Water Account, Australia and estimating 2004-05 Regional Estimates of Total Water Use has been designed to be an enduring methodology. That is, it is able to be repeated in the future. The basic methodology has also been designed to allow for estimates to be produced at different spatial levels. The same methodology can be used to produce both the state/territory level and the regional estimates of water use.

    Most of the data used to produce water use estimates will be sourced from ABS survey data. However the units from which water use data are collected are not located exactly in the landscape but are often able to be placed into geographic area according to the 2001 edition of the Australian Standard Geographical Classification (cat.no.1216.0) - i.e. State/Territory, Statistical Divisions (SD) or Statistical Local Areas (SLA). Thus the National and State/Territory water accounts require limited additional spatial allocation of the data. In contrast, the production of the regional estimates of total water use requires more precision in the spatial location of the data.

    PRODUCING REGIONAL TOTAL WATER USE ESTIMATES

    ABS surveys are typically designed to produce estimates at the state/territory or SD level, and this was the case for all of the 2004-05 ABS surveys that were inputs to the 2004-05 Water Account. Ideally, to produce detailed regional level data, a census or large sample survey would be conducted for each region. However, the resources required and reporting burden imposed does not often support this approach.

    Given that direct estimation of regional total water use from the 2004-05 survey results is not possible, a methodology that uses the survey results and makes use of other existing data is needed.

    The simplest method of producing regional estimates is often to take known higher-level estimates, eg. State/territory level estimates, and apportion the estimate according to some variable. Ideally the methodology applied must allow for regional variability, especially as water use can be very localised, e.g. specific mine sites or manufacturing plants. In other words, for the apportioning method to be used homogeneity or uniformity in water use is required. Since water use across regions is not uniform, a simple proportional distribution model will result in estimates with large errors (see Research Paper: A Methodology for Estimating Regional Agriculture Water Use (cat. no 4616.0.55.001)).

    To address the need to allow for regional variability, a methodology designed around using the 2004-05 ABS survey data that captured major water users within each Australian state and territory is proposed. The methodology involves:
      1. Building a profile of the regions for which an estimate is required. In this case, the WMAs will form the basic spatial units and the profile will involve establishing the totality of individuals, businesses and organisations within the WMAs. The profile will be derived from ABS population statistics, and, the ABS business register and Australian Business Register. The profile for Australia resulted in identifying approximately 3 million businesses, 20.5 million people and 7.5 million households.
      2. For each WMA, individual businesses and organisations within the WMA will be identified and then stratified by water-using "industry" and employment size.
      3. Once the basic profile and industry structure of the each WMA is developed, the large water-users (businesses such as mines, paper mills, race courses, golf courses, abattoirs, irrigators, etc) will be spatially located and assigned to a specific WMA.
      4. The surveys used in the production of the ABS 2004-05 Water Account will be used for identifying the large water-using industries and businesses that need to be spatial assigned. These surveys include the Agriculture Survey, Water Supply Survey, Manufacturing Survey, Mining Survey,and the Service Industries Surveys.
      5. As some of the businesses surveyed may operate at more than one site, the data reported by a particular business may need to be split into its major production units e.g. individual factories, mines etc. For each of these major production units the water use reported by a multi-site business will need to be allocated to each individual site. For some businesses, water use may be available for each site, however where it is not, an allocation will be made based on the size of the production units defined by either production output or employment. It should be noted that the majority of businesses only operate in a single site or at least within a single WMA, however these businesses are typically small in size and not significant water users.
      6. After the large water-using businesses have been assigned to a WMA (which should account for the majority of water use within each region), the water use of the remaining businesses will have to be derived. The process involves first locating the remaining sampled units in WMAs, and then using these actual survey units to calculate an water use estimate for all non-major water-using businesses within the WMA.
      7. For some industries, more specific methodologies will be developed and trialed to produce regional estimates. For example, for Agriculture businesses a variety of regional methods may be trialed and compared, including spatially locating the large agricultural water users identified in Agricultural Surveys to WMAs. The balance will be estimated by applying one of the following methods:
            1. using State level water use ratios to produce synthetic estimates for WMAs
            2. using Agricultural Census relationships to model SD level information from the 2004-05 Agricultural Survey to WMAs
            3. direct estimation at WMA level of 2004-05 Agricultural Survey information by utilising an SLA to WMA concordance, recognising that the sample was designed at the SD level
            4. using rural Water Supply Survey information for the distributed water and then estimating for the self extracted water.
      8. Similarly, for households, a specific methodology has to be developed to produce WMA level estimates. The estimate will include information from a number of sources including the ABS Water Supply Survey and the ABS Monthly Population Survey. For States where local governments supply water data for the household sector, a concordance between Local Government Area (LGA) and WMA will be used to allocate data. For other states/territories, estimated population and volume of water supplied for domestic use will be used to prorate to WMA.
      9. The total water use for each WMA will be derived from the sum of the large water-using businesses and organisations, plus the estimate for the smaller water users, plus any sector specific industries, plus any households.
      10. Finally, as part of standard ABS quality assurance process, the WMA total water use estimate will be cross checked with the state/territory level estimates and any other known regional sources.

      OUTPUTS FROM THE REGIONAL WATER USE ESTIMATES PROJECT

      The ABS intends to use the methodology described here to produce estimates of total water use for up to 200 WMAs. The methodology may be adapted in light of new understanding gained over the course of the project. Water use by broad sectors, along the lines of agriculture, household and industrial, may also be available. However, the level of detail finally presented will be dependant on the structure of each WMA, the data available for the businesses and organisations occurring in each WMA, and the need to preserve the confidentiality of data providers.

      The results from applying the methodology will be reported in 2004-05 Regional Estimates of Total Water Use, Australia (cat. no. 4610.0.55.002), which will be released in mid-December 2006. The final methodology used to produce the regional total water use estimates will be released as explanatory notes to this publication.


      EXPECTED DATA QUALITY AND RELIABILITY

      The surveys and data used to produce the supply-use tables for the Water Account, Australia 2004-05 were purposefully designed to produce high quality State and Territory level estimates. The regional estimates will be derived from these data using a number of methodologies. As such the regional estimates will be of lower quality and reliability than the State level estimates presented in the ABS Water Account.

      Data for the ABS Water Account and subsequent regional estimates of water use are compiled from a range of sources. The water use data provided is of variable degrees of reliability and consistency. While the main data suppliers were asked to indicate the reliability of the data provided, reliability indicators were not provided by all respondents.

      In terms of the various data sources, the following applies:
      • All water supply data regarding distributed water use and reuse water was collected by the ABS. This information can be used with a high degree of confidence at the national and state levels and a moderate degree of confidence at the regional level.
      • Data on self-extracted use was compiled from a range of sources. The degree of confidence that can be attached to these estimates is variable:
          1. Water supply and electricity and gas estimates were based on the ABS 2004-05 Water Supply Survey and the 2004-05 Electricity Generators Survey of Water Use and can be used with a high degree of confidence at the national and state levels and a moderate degree of confidence at the regional level.
          2. Mining and manufacturing industries estimates were based on ABS surveys and can be used with a moderate degree of confidence at the national and state levels and a low degree of confidence at the regional level.
          3. Agriculture industry estimates were based on the ABS 2004-05 Agriculture Survey, and can be used with a moderate degree of confidence at the national and state levels and a low degree of confidence at the regional level.
          4. For the other industries only a limited amount of survey data was available and the estimates were mostly based on coefficients of water use. These estimates can be used with a low degree of confidence at the national, state and regional levels.
          5. For households, self-extracted water use was based on coefficients of water use and can be used with a moderate degree of confidence at the national and state levels.

      Data from various sources will be aggregated at the regional level to form a water use estimate for each region. In general, the regional water use data should be able to be used with a moderate degree of confidence. If data quality and confidentiality allows, the ABS will present the water use data for each region by broad categories of use (eg agriculture, household, industry), but the degree of confidence in the disaggregated data will be lower.

      The final publication will include further advice on the quality and reliability of the estimates presented.

      ACKNOWLEDGEMENT

      The ABS is compiling the regional estimates of water use as part of the Australian Water Resources 2005 (AWR2005), a project funded by National Water Commission (NWC). Many individuals and organisations provided data for inclusion in this Water Account and the associated regional estimates. The ABS wishes to acknowledge the contribution from federal, state/territory and local government agencies, water authorities and a range of private sector organisations and individuals that provided data for the accounts. Without their contribution the Water Account would not have been possible. Without the financial resources provided by the NWC the regional water use estimate project would not have been possible.

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