Quantitative Evaluation of Industry-Specific Indirect Economic Losses Using the WIOLP Model: A Case Study of the 2015 Drought in Korea

Climate change-induced instability in water resource utilization affects industries across the board and can cause indirect economic shocks during droughts. This study evaluates the indirect economic losses in the industrial sector - caused by insufficient water availability during the 2015 drought - using the Water-constrained Input-Output Linear Programming (WIOLP) model. The analysis was based on the 2015 input-output table and water use data for the manufacturing, construction, and agriculture sectors. It quantified the indirect economic losses industry-wise under water-use constraint scenarios. The analysis revealed that indirect economic losses in the industrial sector expand as water usage decreases, and when the total water supply decreases by more than 60%, economic activity across the entire industrial sector effectively comes to a halt. Additionally, a structural characteristic was identified in which losses between industries were interconnected and propagated owing to water usage constraints. This highlights the necessity of an integrated analysis that reflects interindustry linkages rather than a fragmented approach focused on a single industry. This study demonstrates that the WIOLP model can quantitatively evaluate indirect economic losses across industries under water-use constraints. The findings can serve as a foundation for developing drought response policies through regional-level analyses and integration with climate change scenarios.