Identifying critical sectors and supply chain paths for virtual water and energy-related water trade in China

Abstract

Investigations on water consumption of economic processes have been widely conducted, few of which, however, traced the water embodied in supply chain paths within trading activities. In this study, we quantified the contributions of various nodes and paths in national virtual water (VW) supply chain with structural path analysis (SPA) for inter-provincial blue and grey water accounting. First, we inventoried net blue and grey VW flows of 30 provinces in China, and identified major flows between energy-related sectors and others based on multi-regional input–output analysis and water stress index. Then, the pollution-oriented water consumption ratio (PWR), indicating the proportion of grey VW consumption to the sum of the grey and blue one, was proposed. The relationship between PWR and economic development was also analyzed. Finally, we investigated the contributions of each production layer in blue and grey VW supply chain and the contributions of supply chain paths driven by different final demand by SPA. The results showed that for blue VW, major exporter and importer were Xinjiang and Zhejiang, respectively, while that for grey VW were Heilongjiang and Jiangsu. Energy-related sectors’ VW outflows were mainly driven by Transport equipment, Construction and Other services, and inflows were mainly supported by Agriculture and Other manufacturing. Service-related sectors allocated more of their total VW consumption for pollution dilution while manufacturing-related sectors spent less. The amount of blue VW consumed at zeroth, first, and the rest production layers accounted for 45.0%, 35.0% and 20.0% of the total, respectively, and grey VW consumption shared the similar proportion. The specific nodes and supply chain paths identified in the study can provide insights for reducing water use in trading activities and achieving sustainable water saving roadmap.