Water Trade Research Articles

Redefining virtual water allocation in China based on economic welfare gains from environmental externalities

As water scarcity intensifies worldwide, the equitable allocation of water resources has emerged as a critical challenge. This research investigates the intricate issue of allocating responsibility for virtual water, a concept that quantifies the water embedded in traded commodities. In pursuit of an effective allocation mechanism, we refine an innovative accounting scheme grounded in economic welfare gains arising from externalities. The results show that water-stressed areas in China, such as Xinjiang, significantly contribute to exporting virtual water and is responsible for 70%–85% of the virtual water outflow. Furthermore, more than 50% of virtual water imported from water-rich regions is attributed to these water-stressed areas while their trade partners bear the rest water responsibility. In contrast, southern China's abundant water resources reduce dependence on virtual water trade, leading to fewer responsibilities. Globally, the allocated responsibility for the new accounting mechanism reaches up to 7.5 times higher than for production-based accounting (PBA) and consumption-based accounting (CBA). Our study also reveals that the degree of dependency (price elasticities) plays a pivotal role in shaping the allocation outcomes. The implications of this research are significant for establishing a transparent and accountable framework for sustainable water resource management and facilitating seamless transitions toward sustainability. As global water scarcity intensifies, the redefined responsibility accounting according to the economic welfare is indispensable in addressing immediate and long-term water-related challenges.

Water footprint and production of rain-fed saffron under different planting methods with ridge plastic mulch and pre-flowering irrigation in a semi-arid region

Most of the saffron cultivation areas in Iran are irrigated and with pre-flowering irrigation being necessary to facilitate flower emergence. However, the growers face shortage of water. Post- flowering rain-fed (PFRF) saffron cultivation could be a solution, and ridge and furrow rainfall harvesting (RFRH) with plastic mulch could be used to collect runoff in the field planting areas. In this regard, the objectives of this study were to determine the effects of interaction of two different saffron planting methods (basin and furrow planting), using plastic mulch and without plastic mulch on ridge of the furrow planting, using irrigation at pre-flowering and without irrigation on saffron growth, yield, yield components, economic water productivity (EWP) and water footprint of saffron in two growing seasons with low (167 mm) and high (367 mm) seasonal rainfall in a semi-arid region. Without irrigation in pre-flowering (NPFI) produced a saffron yield reduction of 70% compared with pre-flowering irrigation (PFI). It is concluded that 90 mm of irrigation water should be applied as PFI for adequate flowering and yield. In addition, the use of the RFRH system resulted in a runoff coefficient of 0.85 and increased soil water storage (48% at low seasonal rainfall), saffron yield (51%), leaf dry matter, LDM (90%) and EWP (17%). The blue water footprint (BWF) with low rainfall (165 mm) was higher than that with abundant rainfall (367 mm), because saffron yield in the second year was lower due to the older age of saffron in field, which resulted in lower yield and consequently higher BWF. Likewise, green water footprint (GWF) was higher (4810 m3 kg−1) than those that obtained as BWF (739 m3 kg−1) due to the fact that pre-flowering irrigation is necessary for onset of flower and the regional rainfall is insufficient to initiate flowering. The effects of low seasonal precipitation (less than 200 mm) on saffron were manifested in yield and LDM reduction of 70% and 42%, respectively, compared to high seasonal precipitation, decreasing as seasonal precipitation increased. Precipitation reached around 300 mm in rain-fed with pre-flowering irrigation caused no reduction in saffron yield and LDM. Therefore, in PFRF conditions, furrow planting with ridge plastic mulch and pre-flowering irrigation is recommended. The economic water footprint of saffron under PFRF conditions with PFI was 50% of that obtained for irrigated saffron production, which is preferable in virtual water trade.

Preserving global land and water resources through the replacement of livestock feed crops with agricultural by-products.

While animal-source foods contribute to 16% of the global food supply and are an important protein source in human diets, their production uses a disproportionately large fraction of agricultural land and water resources. Therefore, a global comprehensive understanding of the extent to which livestock production competes directly or indirectly with food crops is needed. Here we use an agro-hydrological model combined with crop-specific yield data to investigate to what extent the replacement of some substitutable feed crops with available agricultural by-products would spare agricultural land and water resources that could be reallocated to other uses, including food crop production. We show that replacing 11-16% of energy-rich feed crops (that is, cereals and cassava) with agricultural by-products would allow for the saving of approximately 15.4-27.8 Mha of land, and 3-19.6 km3 and 74.2-137.8 km3 of blue and green water, respectively, for the growth of other food crops, thus providing a suitable strategy to reduce unsustainable use of natural resources both locally or through virtual land and water trade.

Inversed virtual water flow pattern and its influencing factors in Northwest China

Northwest China faces an imbalance between scarce water resources and increasing water use demands for agricultural production and economic growth. However, the shifts in virtual water flow (VWF) patterns in Northwest China and its the driving factors are still unclear. In this study, we employed the Multiregional Input–Output (MRIO) method to investigate the evolution of VWF patterns among Northwest China’s primary, secondary, and tertiary industries and analyze their driving factors through Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) model. The results show that (1) Northwest China changed from 7.24 × 108 m3 net inflow to 175.70 × 108 m3 net outflow from 2002 to 2007. (2) More than 90 % of virtual water of the primary industry was used locally, but both secondary and tertiary industries depended more on virtual water inflow in Northwest China. (3) The virtual water outflow from Northwest China is mostly to the Jing-Jin Region, followed by the Northern Coast, and the main inflow is from the Central Region. (4) Population, economy, and technology affect virtual water from inflow to outflow, and technological development helps to decrease virtual water flow volumes. In conclusion, dramatic decrease of second and third industries inflow is the main reason for the changes from net inflow to net outflow of Northwest China. Meanwhile, it is feasible to increase technological support to further reducing virtual water consumption in primary industry, and strengthen virtual water trades of secondary and tertiary industrial virtual water inflows by promoting population and economic conditions.

Hydrological sustainability of international virtual water trade

International virtual water (VW) trade helps to balance water stress across regions. However, it can be questioned whether such trade can remain sustainable as water resources are redistributed across regions resulting from changes in our climate. A conceptual framework to compare VW trade volumes with water fluxes within the water cycle is introduced. We evaluate the distribution of traded water surpluses and deficits associated with crop, animal, and industrial products over 157 countries and 182 global watersheds. About 7% of the countries are identified to conduct VW trade unsustainably. Regions within Africa, North America, central Asia, and Europe exhibit unfeasible VW trading resulting from higher appropriation of freshwater resources than availability influenced by precipitation and evaporation. Assessment at the watershed scale captures overexploitation at finer resolution, generally overlooked in country level analysis. An evaluation into the future reveals more watersheds becoming vulnerable to water storage depletion under future climate trends.

Can International Freshwater Trade Contribute to the SDG 6

Freshwater is fundamental for all aspects of human well-being and sustainable development. The supply of freshwater resource largely depends on the natural water cycle, leading to extremely unequal distribution over the world. This uneven distribution and increasing freshwater demand results in spatial and temporal physical freshwater shortage. By discussing the limitations of desalination techniques and the shortcomings of existing pathways for freshwater transfer including water transfer projects, bottled water market, and virtual water trade, we suggest that international freshwater trade as an additional pathway is necessary. The analysis of the cost structure of freshwater production and transportation and the hypothetical examples between potential exporting and importing countries show the feasibility of international freshwater trade. The establishment of a global freshwater market is confronted with six challenges, namely, natural sustainability, ecological safety, opinions of stakeholders, market access mechanism, pricing mechanism, and infrastructure system. We conclude that a global freshwater market is expected to make contributions to achieving SDG 6 by mitigating spatial and temporal freshwater scarcity and by resolving transboundary freshwater conflicts and managing local freshwater consumptions.

Mapping the virtual water trade in water-scarce basin: an environmentally extended input-output analysis in the Yellow River Basin of China.

China's Yellow River, the nation's second-longest, grapples with severe water scarcity, impeding the high-quality development of its basin. Our study meticulously examines the intricate virtual water trade network inside and outside the basin, providing essential insights to combat its acute water scarcity. We calculated water consumption coefficients for seven pivotal sectors across diverse Chinese provinces, forming the foundational data for quantifying virtual water trade both inside and outside the basin. Utilizing the 2015 Multi-Regional Input-Output Table, we assessed the Yellow River Basin's reliance on external water resources. Despite enduring chronic water scarcity, the basin annually exports a substantial 27.2 billion m3 of virtual water, equivalent to half of its yearly runoff. This outflow predominantly flows to the economically advanced eastern coastal region, with Agriculture and Manufacturing sectors dominating. Significantly, an irrational industrial layout leads to a substantial transfer of virtual water from economically disadvantaged areas to more affluent regions, exacerbating water scarcity in the basin's less privileged areas. Our study yields critical insights for mitigating water shortages in the Yellow River Basin and provides a transferrable framework for regions worldwide grappling with analogous challenges.

Role of Virtual Water Trade Under the Generalized Trade Framework in Xinjiang’s Economic Sustainable Development

Xinjiang had been suffering from acute water scarcity, which is an important constraint factor for its economic sustainability. Virtual water plays an important role in its sustainable development, and this paper tries to re-investigate the role of virtual water trade among the generalized trade framework in its sustainable development. The term generalized trade encompasses both physical and virtual trade. Physical trade refers to the transfer of commodities in monetary or barter form, and virtual trade refers to the transfer of inputs embodied in physical form (e.g., virtual water, energy, or land). It was in the water-scarce status, but it transported a net volume of about 13.1 billion tons of water to other economies, 94.6% of which was transported to other provinces. This phenomenon is contradictory to the comparative advantage theory. Water is a critical input in the production of commodities, but it is only one factor from the perspective of generalized trade. It is rich in energy resources but imports a large amount of external virtual energy from other provinces. Many labors come to Xinjiang both in physical and virtual senses. This situation indicates that generalized trade plays a more important role, and suggests that it should continue to improve its industrial system and optimize its business environment.

Dual water-electricity cooperation improves economic benefits and water equality in the Lancang-Mekong River Basin

Transboundary river cooperation provides an effective pathway to maintain regional security and sustainable development; however, its implementation is a pressing and prominent concern due to lack of appropriate compensation measures and effective incentive strategies. Here we develop a dual water-electricity cooperation (DWEC) framework that combines water and electricity trading to meet the often-conflicting demands of participating countries. The results from the Lancang-Mekong River Basin reveal that substantial benefits in both economic and social aspects can be achieved through coupling regional water and electricity trades. Economic benefits can be obtained by expanding cooperation space and thereby greatly improving the willingness of countries to participate in basin-wide cooperation. Electricity trading plays a key role in loss compensation for water exporters, ensuring no loss for any party and maximizing basin-wide benefits. Furthermore, the DWEC improves regional water use equality, especially in water shortage periods when there is severe competition among water users. The proposed cooperation framework provides a viable way to implement cooperation in transboundary river basins.

Optimal allocation of agricultural water and land resources integrated with virtual water trade: A perspective on spatial virtual water coordination

Agricultural production consumes the majority of global freshwater resources. The worsening water scarcity has imposed significant stress on agricultural production when regions seek food self-sufficiency. To seek optimal allocation of spatial agricultural water and land resources in each water function zone of the objective region, a multi-objective optimization model was developed to tackle the trade-offs between the water-saving objective and the economic benefit objective considering virtual water trade (VWT). The cultivated area of each crop in each water function zone was taken into account as the decision variable, while a set of strong constraints were used to restrict land resources and water availability. Then, a decomposition-simplex method aggregation algorithm (DSMA) was proposed to solve this nonlinear, bounding-constrained, and multi-objective optimization model. Based on the quantitative analysis of the spatial blue and green virtual water in each agricultural product, the proposed methodology was applied to a real-world, provincial-scale region in China (i.e., Jiangsu Province). The optimized results provided 18 Pareto solutions to reallocate the land resources in the 21 IV-level water function zones of Jiangsu Province, considering four major rainy-season crops and two dry-season crops. Compared to the actual scenario, the superior scheme increased by 7.95% (5.6 × 109 RMB) for economic trade and decreased by 1.77% (2.0 × 109 m3) for agricultural water consumption. It was mainly because the potential of spatial blue and green virtual water in Jiangsu was fully exploited by improving spatial land resource allocation. The food security of Jiangsu could be guaranteed by achieving self-sufficiency in the superior scheme, and the total VWT in the optimal scheme was 2.2 times more than the actual scenario. The results provided a systematic decision-support methodology from the perspective of spatial virtual water coordination, yet, the methodology is widely applicable.

Optimal design of two-dimensional water trading considering hybrid “three waters”-government participation for an agricultural watershed

Optimal design of two-dimensional water trading considering hybrid “three waters”-government participation for an agricultural watershed

Analysis of social network effects on water trade in an informal water market

This paper proposes a novel agent-based model (ABM) to assess actual informal water market (IWM) trade—a highly common form of reallocating water globally, but where analysis is challenging due to data paucity. Because, typically, there is not an integrated or centralized institution coordinating transactions in IWMs, social networks and communications between farmers play a key role. This makes applications of ABMs in the informal space appealing and useful. Survey and interview data are used for the model development via a sample of farmers in Mojen Area, Iran. Also, in the final model, some critical human behaviors (e.g. adaptability and self-interest) are described in the form of parameters and formulas, with optimum values calibrated based on the Mojen sample as well as making possible a detailed assessment of the effects on water transaction and farmers’ profit margins. The result of the simulation reveals that IWM trade frees up water for use by other farmers in the Mojen area, especially when stronger social networks are in place where the average number of water transactions will be increased—about 50%. The presence of IWMs also contributes to a more stable cultivation area in dry years, where water trading helps protect perennial crops that have become an increased production system choice in recent years. Further, informal water markets help farmers to optimally use water supply in order to deal with lower rainfall years and fulfil water needs during higher rainfall years due to increasing cultivation areas.

A Review of Virtual Water Research

A comprehensive and objective understanding of the amount of water resources occupied by human activities is an important way to improve the existing water resources management. The theory of virtual water is a brand-new concept proposed at the end of the 20th century to solve the problems of water resource shortage and water resource security. Based on a brief analysis of virtual water and its related concepts, this paper introduces the research status of related theories at home and abroad, discusses from the perspectives of water footprint, virtual water quantitative calculation, virtual water trade, virtual water strategy, etc., and points out that virtual water plays a vital role in maintaining regional peace. Stabilizing and promoting regional economic development is of great significance. It also examines the imperfections in the existing theories of virtual water and looks forward to the future research directions of virtual water.

Unveiling the inequalities in virtual water transfer in China: The environmental and economic perspectives

To alleviate the geographical mismatch between supply and demand of water resources, virtual water trade had attracted extensive attention. Many studies had estimated the virtual water flow and measured the virtual water inequality using Environmental Input-Output (EIO) model. However, EIO model ignores the feedback effect in the trade, which may lead an overestimation or underestimation of virtual water transfer. Moreover, while considering the relation between economic benefits and environmental costs, the studies of virtual water inequality are still limited in both number and methodology. Here, to address these gaps, we recalibrated the virtual water and value-added transfer in China's 30 provinces in 2017 using a new Environmental Spillover-Feedback Effects (ESFEs) model, and then measured the inequality between virtual water transfer and the resource endowments taking the value-added into account. Our results show that the virtual water transfer of half of provinces changed exceeding 50 %, with a maximum of 428 %. The ratio of net virtual water outflow to one-way virtual water inflow (which is called virtual water plunder index in this study) in Xinjiang is up to 935 %, which directly contributing to the inequality among regions. Moreover, the virtual water transfer in different regions is not compensated equally from the perspective of economy. As a result, some regions are getting both water resources and economic benefits, while others are getting the opposite. Our study highlights the importance of considering both the pressure on water resources and economic benefits when measuring the virtual water inequality. Our findings support policymakers in developing adequate responses, i.e., clarifying regional responsibilities of virtual water trade, building a whole industrial chain, and balancing the transfer of value-added and virtual water.

LESOTHO’S WHITE GOLD: A POTENTIAL SOURCE FOR VIRTUAL WATER TRADE

In literature, the significance of virtual water trade takes many different shapes. In order to increase regional water use efficiency and attain water security in water-scarce regions and/or countries of the world, virtual water trade among nations and even continents could be utilised as a tool. The economy, diplomacy, and internal and international food security are all benefited by Lesotho’s water resources. One of Lesotho’s most precious resources, water, makes a significant contribution to the country’s prospects for long-term, sustainable economic development. In a setting with significant natural climatic volatility, the World Bank determined that improving water security will be crucial to meeting future demand. Water is widely considered as “white gold” in Lesotho. Water is abundant in Lesotho, a blessed nation. Given its plenty of water and low present water consumption, Lesotho is unlikely to develop either water stress or scarcity in the foreseeable future. Thus, there is still opportunity for expanding water use as a source of income, including virtual water trading. Lesotho needs to take into account the water and food shortages in the waterscarce Gulf region and the idea of virtual water trade, which has significant social, economic, and political advantages. The aim of this paper is to assert the importance of Lesotho’s abundant water resource to the global political and economic landscape, and the discourse of virtual water trade. While countries are minimising their direct or indirect water use of producing strategic agricultural and industrial goods, Lesotho can make use of this situation in order to maximise revenue.

Does bilateral trade in cereals within SADC reflect virtual trade in water between countries with different water endowments?

ABSTRACT This paper examines intraregional bilateral trade in virtual water embedded in cereal flows between the Southern Africa Development Community (SADC) states. A gravity model is employed to examine whether annual bilateral trade depends on differences in water endowments, but also includes socio-economic and political determinants that affect trade. There is evidence that the abundance of water resources in a country influences trade for a product that is water dependent. Thus, the adverse effect of water scarcity in a country may be ameliorated by encouraging exports of water-intensive cereal crops where water is in abundance and imported where water is scarce.

Virtual water flows of Turkey's agricultural products: A gravity approach

In this study, we use a gravity model to analyze virtual water flows due to the trade of agricultural products for Turkey. We calculate virtual water flows of agricultural trade for 326 products and 192 trade partners for 2002–2019. The empirical model of virtual water trade flows for Turkey is formed where the dependent variable is the total amount of water embedded in the trade of agricultural products. Besides the baseline equations, which include conventional explanatory variables like income, population, geographical distance, and affinity dummies, we estimate expanded models that include two measures of water availability and two measures of water pressure. Additionally, variables showing the size of agricultural activity and availability of agricultural land in the partner country are included in the analysis. Furthermore, the gravity models for total virtual water flows are disaggregated into intermediate and consumer goods, providing further insights.

Water footprint assessment and its importance in Indian context: a meta-review

Abstract With the increasing population and per capita demand for freshwater, the burden of natural resources has increased many folds. Indian agriculture is still largely dependent on conventional methods of crop production that are mainly inefficient. Water security is essential for social and economic development, having an indispensable role in enhancing health, well-being, and economic progress, particularly in a developing country like India. Water footprint (WF) is an important indicator that helps ascertain the direct and indirect use of water in any process. WF modeling in agriculture enables us to pinpoint the impacts and limitations of the current crop production system. Assessing vulnerabilities across various regions and time helps us prepare actions to improve water productivity and promote sustainable water use. There is considerable spatial variability in blue, green, and gray WF among the different states of India due to their varied climate, soil, and topographic characteristics. WF assessment is critical for developing water allocation strategies, planning water trade, making policies, and implementing remedial measures. This paper describes the significance of WF and its proper management for sustainable crop production in India.

Water Trade (Selling Water) from an Islamic Sharia Perspective (Comparative jurisprudence and analytical study)

Water Trade (Selling Water) from an Islamic Sharia Perspective (Comparative jurisprudence and analytical study)

The short-range and remote analysis of virtual water trade in China

The pattern of virtual water trade within a region or region has a certain complexity. This paper uses multi-regional input-output models, local and tele-coupling theory, and geographical detectors to analyze the short-range and remote spatial pattern, change trends, and influencing factors of China's virtual water trade, which has essential research significance for the sustainable development and utilization of water resources. The results are as follows: (1) The water footprint and virtual water trade of each province in China are more likely to occur between the provinces close to each other, the local distance average distance is below 500 km, and the remote average distance is between 1100 km and 2000 km; (2) China's short-range inflow and outflow water footprint has always been the main dependent part of China's consumption and production end water resources, especially the local water footprint. The contribution of the remote water footprint has gradually been "replaced" by the short-range water footprint, and water resources only form a "small cycle" between the local and surrounding areas, becoming the main pattern of sustainable utilization of water resources in China; (3) The flow pattern of water resources in China still has a spatial imbalance and agglomeration effects. Regions with abundant water resources are net inflow and net import regions in both short-range and remote, and the net inflow and net outflow values in remote are higher than those in short-range; (4) The virtual water trade in all provinces of China tends to be close to each other. The "flow" in the trade network is mainly concentrated in the link path below 800 km. The interaction of various "flows" in short-range and remote virtual water trade results in fewer "flows" on one side and more on the other side in the industrial link path. Local virtual water trade has become an important guarantee and foundation for the utilization of water resources in all provinces and an important auxiliary to the total import virtual water trade; (5) The correlation of socio-economic factors to China's short-range and remote virtual water trade is higher than that of natural factors and scientific and technological factors. The interaction of factors contribution of a single factor more thoroughly and even far exceeds the sum of the contribution of two single factors, which can better explain the formation and change of near and long-distance virtual water trade patterns and flow on the link path.