Estimating the economic value of green water as an approach to foster the virtual green-water trade

Abstract

Green water – precipitation that is stored in the soil as moisture and consumed in the production of biomass – provides the main source of water for crop cultivation, pasturelands, forestry, and terrestrial ecosystems. At a local level, green water is land-bound and cannot be easily allocated between uses. However, at the global level, agricultural commodities and their embodied virtual water are traded between countries. This trade typically sees the cultivation of crops in water abundant rainfed locations exported to regions that would otherwise have employed local irrigation resources. The result is a global saving of irrigation water and the negative environmental externalities associated with irrigation. In addition, scarce blue water resources are freed up for other (often higher valued) uses.Here we assess whether there is an economic rationale for the virtual green-water trade and the increased and intentional allocation of crop cultivation to water abundant rainfed locations. We model a realistic case study of maize cultivation on representative farms in 16 major maize producing regions (across four continents) and provide the first spatially variable estimates of the economic value of the green water employed. These economic values are contrasted with the economic value of blue water used for irrigation. We find that the volume of green water employed in the cultivation of maize varies between 409 m3/tonne and 1547 m3/tonne; the estimated economic value of green water varies between $ −0.04 m3 and $0.12 m3. We demonstrate how these economic value estimates can inform crop allocation decisions in favour of green water-based cultivation and inform decisions regarding the intensification and horizontal expansion of rainfed agriculture. In so doing, we aim to provide a further rationale for the green water-based measures that have been identified in the literature as the principal means of providing the additional fresh water needed to address pressing global challenges beyond the case study.