Virtual water flows in the international trade of agricultural products of China

Assessing the impact of food trade centric on land, water, and food security in South Korea

The observed and predicted changes in climate, as well as the growth in urban population, are creating severe stress on existing water resources in South Korea. By the importation of agricultural products from more water-rich countries through the virtual water concept, a country could save local water resources for other important uses. However, these imports from other countries could lead to certain vulnerabilities in the importing country derived from climate change. Therefore, through the application of the virtual water concept and the climate vulnerability index ((CVI) - measure of a country's vulnerability to indirect climate impacts), this study assessed the implication of virtual water imports and climate change through food trade, on the water, land and food security status of South Korea over the period of 2000-2017. The results showed that significant amounts of national water and land was saved through the importation of major upland crops. Virtual water imports increased significantly over time, rising from 16.2 Bm³ in 2000 to 16.5, 17.4, and 20.7 Bm³ in 2005, 2011, and 2017 respectively, with the USA, China, Australia, Brazil and Canada being the major exporters to South Korea. The study also revealed high CVI values for the oils and grains category of imported food, implying the high vulnerability of South Korea to climate change effects resulting from the import of these crops. The quantitative impacts and structural changes in virtual water trade, as well as the link between climate change, food security, international trade, and domestic water consumption could be evaluated for the sustainable management and allocation of resources. This study successfully identified and quantified the status of food trade and its environmental implications in the study area, providing insight into a better allocation of locally available resources.

Limited water scarcity mitigation by expanded interbasin physical and virtual water diversions with uneven economic value added in China

Interbasin water diversion projects and virtual water transfers embedded in exchanged goods and services are two effective solutions to water deficits. However, the associated real responses in water quantity and quality scarcities and the economic efficiencies remain unclear. Here, we tracked the blue water scarcities, water pollution levels, and economic value added through interbasin physical and virtual water diversions across nine river basins by sector in China from 2007 to 2015. The total national blue and grey water footprints were 365 Gm³yr^-1 and 592 Gm³ yr^-1, in which the Yangtze River basin accounts the most for 32 % and 37 %, respectively, by 2015. The physical water diversions increased by 52 % to 16.9 Gm³yr^-1. The blue virtual water transfers increased by 24 % to 176 Gm³yr^-1, whereas the grey virtual water transfers decreased by 10 % to 266 Gm³yr^-1. Agriculture related interbasin virtual water flows showed opposite directions to those driven by the industry sector. Although with uneven value added while growing, limited effects mitigated water quantity and quality stresses, especially in the drier Yellow, Northwest, and Hai River basins where the capital is located. Half of the basins had low and declining synergy scores, suggesting an urgent need to achieve synergies between resources, the environment, and the economy across basins.

Virtual water transfers in Africa: Assessing topical condition of water scarcity, water savings, and policy implications

Africa is facing an increasing challenge with respect to water scarcity (WS), which is driven by climate change, population growth, and socioeconomic growth combined with inadequate water resources management. In particular, there is significant concern of virtual water (VW) trade, which plays the key role in water resource management and food security sustainability. Using bilateral trade data, this study consistently evaluated the change and balanced trade of major grains, the VW flows, WS status, water dependency (WD), water self-sufficiency (WSS), and water savings/losses within5 African sub-regions and their partners from 2000 to 2020. The ratio of water use to water availability was used to estimate the WS. The WD was quantified by the ratio of the net VW import to the regional water appropriation and the regional water savings/losses were also quantified by multiplying the inter-regional trade by the virtual water content of the imported/exported grains. The overall average trade deficit of African regions was found to increase to -1364.22 × 10⁶ tons and Africa imported 41,359.07 Bm³ of VW from grain products. Green water contributed 79.33% of the total VWI. The WS values for East African countries were >100, indicating overexploitation. Besides, the overall WD in Africa was 465.5% for the studied period. The trade of main grains between Africa and the rest of the planet corresponded to a global water loss of 2820.7 Bm³·yr^-1. However, the inter-continental cereal VW trade pattern and high trend will continue in the future. In view of the rising tension of WS, some African countries need to revise international crop trade and water resources conservation policies to promote a more balanced ecosystem. This study exemplifies that decision makers would consider VW flows and water savings/losses for enhancing water use efficiency and fair trading, thus increasing food production in Africa.

Decline of virtual water inequality in China's inter-provincial trade: An environmental economic trade-off analysis

The trade-off between economic growth and environmental conservation is a significant factor in national environmental management. Previous studies have revealed that there are substantial water resources embodied in the inter-regional trade of China, but there is a scarcity of studies analyzing the cost-benefit inequality in trade, which should be considered when developing water resource allocation and conservation policies. The aim of the present study was to fill the gap in existing research by constructing a novel virtual water inequality index based on the net transfers of virtual water and value added between trading provinces. The results of the present study reveal that the virtual water trade of China accounts for about a third of the annual water use thereof and tends to flow from interior developing provinces to coastal developed provinces. Over 70% of consumption-based water consumption of richer provinces (Beijing, Tianjin and Shanghai) is imported from other regions; however, approximately 60% of the value added triggered by the final consumption of said regions is retained within the region. When trading with rich provinces, several developing provinces with rich water resources, such as Xinjiang and Heilongjiang, not only incur net water outflows but also suffer a negative balance of value added, thereby resulting in the occurrence of virtual water inequality. However, with the coordinated development of China's economy, the problem of virtual water inequality in China's inter-provincial trade has been alleviated to some extent. Advocating water pricing system reform to reflect local water scarcity is suggested, especially in arid regions. Additionally, a virtual water compensation scheme considering cost-benefit inequality in trade may also be a practical solution.

Effect of virtual water trade on freshwater pollution in trading partners: a systematic literature review

Systematic reviews are a more complete, repeatable, and less biased form of literature reviews leading to evidence-based conclusions. A systematic review was conducted on articles that have investigated the trade of virtual gray water (VGW) and its effect on freshwater pollution in importer and exporter partners. Scopus and ScienceDirect databases were searched for journal articles covering VGW trade on global, international, and national scales. The relevant articles then were selected and using snowball approach led to more relevant articles. Then, the required data were extracted and recorded. A total of 34 articles met the inclusion criteria, of which 13 articles studied VGW trade on a national scale, 13 on an international scale, and the rest on a global scale. The present study developed a critical appraisal tool to evaluate the methodological quality of the included articles. The results of the critical appraisal showed that none of the included articles can undergo quantitative synthesis. Research gaps regarding VGW trade were observed in the water-scarce developing countries that need to be covered. One of the policy implications to reduce pollution impacts on water bodies would be agricultural and industrial reforms by VGW exporters. Besides, changes in economic structure in both sides of the trade, and goods or water consumption patterns, especially by VGW importers, can also play an important role in water resource conservation. Therefore, international and multi-stockholder cooperation should be taken to alleviate the environmental impacts of the VGW trade.

How Does China’s Economic Policy Uncertainty Affect the Sustainability of Its Net Grain Imports?

China is a considerable grain importer in the world. However, the sustainability of China’s grain imports has been greatly challenged by its increasing economic policy uncertainty (EPU).This paper constructs the indicators of economic and environmental sustainability of China’s net grain imports and analyzes the impact of its EPU index on these indicators with a Time-Varying Parameter Stochastic Volatility Vector Autoregression (TVP-SV-VAR) model to explore how China’s EPU affects the sustainability of its net grain imports. The main conclusions are as follows.(1) The sustainability of China’s net grain imports fluctuated from 2001 to 2019. (2) China’s EPU has a negative impact on the economic sustainability of its net grain imports. A higher EPU index leads to a lower net import potential ratio and higher trade cost. (3) China’s EPU has a significant negative impact on the environmental sustainability of its net grain imports. It has the greatest negative impact on virtual water imports and smaller impact on virtual land imports and embodied carbon emission. Therefore, China’s EPU affects the sustainability of its net grain imports negatively through its impact on its net grain import potential ratio, trade cost, and virtual land, virtual water, and embodied carbon emissions in net grain imports.

Virtual Water Trade in the Service Sector: China's Inbound Tourism as a Case Study

Research on virtual water and the water footprint is mainly focused on agriculture and industry, and less so on the service sector. The trade in products generates virtual water flow, as does the flow of people. The flow of international tourists will inevitably lead to the transfer and exchange of water resources embedded in the virtual form. This study takes China’s inbound tourism flow as the research object, from the perspective of the water footprint, in order to explore virtual water “exports” to the world. Based on kernel density estimation and ArcGIS spatial analysis, spatial-temporal evolution and structural difference were investigated. Virtual water “exports” showed an increasing trend. The kernel density estimation curves basically exhibited a “single peak” feature which indicated that virtual water “exports” from tourism were not significantly polarized in China. In terms of spatial evolution, this varied greatly at the provincial and regional level and Guangdong was always in the high value area. The south displayed greater values than the north, but this difference in provinces narrowed over the years. The water footprint of food was the largest, more specifically, the green component of this water footprint. Promoting a reasonable diet, reducing food waste, improving agricultural production technology, reducing the frequency of changing hotel supplies, and encouraging the use of new energy helped to reduce the water footprint. Virtual water trade in the service sector provides a new idea for helping to mitigate the global water crisis, in addition to virtual water flow for agricultural products.

Social network analysis of virtual water trade among major countries in the world

This study utilizes multi-region input-output model to calculate the virtual water trade among 19 major countries (the Group 20 countries, except the EU) from 2006 to 2015. Moreover, this paper uses network analysis method to study the characteristics of virtual water trade networks. Results show that: (1) the import and export of the virtual water trade among 19 major countries in 2015 increased in varying degrees. Among them, the growth rates of China's import and Russia's export were the highest. (2) The density(average value) and asymmetry(differences between import and export)of the virtual water trade network among the major countries in 2006-2015 increased throughout the whole industry and the three major industries. In comparison with the secondary and tertiary industries, the virtual water trade network formed by the primary industry is denser. (3) The Out-Degree(corresponding to export) and In-Degree(corresponding to import)of countries in the virtual water trade network of the whole industry increased in varying degrees in 2015. Major countries exhibited the largest export and import within the primary industry, except for Japan and South Korea. Therefore, in order to alleviate the contradiction between supply and demand of water resources in various countries, it is necessary to further strengthen the construction of transportation facilities and reduce the logistics cost of trade in industrial and agricultural products, especially the trade cost of agricultural products such as grain, so as to further expand the virtual water import and export trade to expand the import and export trade of the virtual water network further.

Brazilian Environmental-Economic Accounting for Water: A structural decomposition analysis

The UN Sustainable Development Goals constitute a bench of directives with a universal scope to establish actions to mitigate poverty and protect the environment. Benefiting from the Environmental-Economic Accounting for Water recently published in Brazil, it is possible to harmonize the demand of water and the economic sectors. To this end, this study conducted an input-output analysis and structural decomposition analysis to explore the water consumption of the Brazilian Economy and its driving forces during an unprecedented drought and economic recession between 2013 and 2015. The results indicate that the total variation of the water consumption in the period is 15%. Between 2013 and 2014, the total effect was positive, causing an increase of 45% in the embodied water consumption, having as main driver the final demand and the intensity effect. In the second period, the total intensity effect was negative, provoking a decrease of -10% in the total water consumption. The "Agriculture, livestock, forestry and fishing" is the main sector responsible for these positive and negative results, while the "Energy and gas natural supply" sector has a strategic position to avoid a structural increase on the economic water demand.

Spatial-Temporal Differences in Water Footprints of Grain Crops in Northwest China: LMDI Decomposition Analysis

Agriculture and crop production is the sector with the highest water demand, and because of water shortages and an unbalanced distribution of natural resources in China, improving the efficiency of agricultural water use is essential. In this study, we quantified the total water footprint (WF) of major crop products in Northwest China using the Penman–Monteith formula. The logarithmic mean divisor index (LMDI) was used to explain the four factors driving the spatial and temporal differences in the WFs of the major crops in five provinces and regions in Northwest China. The results showed that from 2006 to 2015, the total WF of the major crops was increasing overall. From a temporal perspective, the crop area and yield effects, which were the factors driving the overall increase in the WF, positively impacted the overall change in the WF of the major crops in Northwest China. The effects of the virtual water content (VWC) and crop structure were both volatile. The effect of the crop structure made a relatively small contribution, while the effect of the VWC played a significant role in changing the overall WF. From a spatial perspective, the changes in the VWC and crop structure negatively inhibited the increase of the WF, widening the difference between these provinces and regions and Shanxi. The increased yields in Xinjiang most clearly increased the WF, followed by those in Ningxia, Qinghai, and Gansu. In comparison with Shanxi, in all the provinces and regions except Xinjiang, the change in cultivated area was less effective in promoting the WF. Therefore, scientific planting plans should be developed for adapting to climate change, considering the differences in natural features among various provinces and regions. Water conservation and advanced agricultural technology should be promoted to enhance the sustainability of agricultural development.

Water Footprint of Food Consumption by Chinese Residents

Water shortages are a worldwide problem. Virtual water and the water footprint link water resources, human beings and agricultural products, and are effective tools to alleviate water-resources stress. The production of agricultural products consumes a large amount of water, and food is the most basic consumer good for human survival, so it is very necessary to study the water footprint of residents’ food consumption, which is also the weak point of current research on virtual water and the water footprint. This paper aimed to conduct a comprehensive analysis on the water footprint of food consumption in China from the perspectives of urban and rural residents, per capita water footprint, water footprint structure and food consumption structure. The results revealed that the average water footprint of residents’ food consumption was 605.12 billion m3/year, basically showing an upward trend. Guangdong residents had the highest water footprint for food consumption due to the highest population and higher consumption of water-intensive foodstuffs such as grain and meat in their diet. The water footprint of Xizang residents’ food consumption was the lowest followed by Ningxia and Qinghai due to having the least population. The water footprint of food consumption consumed by urban residents was on the rise while that consumed by rural residents was on the decline in China, which was consistent with the changing trend of population. On the whole, the rural population consumed more virtual water embedded in food than the urban population. From the water footprint structure point, the contribution rate of the green water footprint is the largest, reaching 69.36%. The second is the gray water footprint and then the blue water footprint, accounting for 18.71% and 11.93%, respectively. From the perspective of the food consumption structure, grain and pig, beef and mutton consumption contributed significantly to the total water footprint of residents’ food consumption, contributing 37.5% and 22.56%, respectively. The study is helpful for water management and water allocation in rural and urban areas, improving agricultural technology to reduce the gray water footprint and optimizing food consumption structure, such as reducing the consumption of grain and meat.

A dynamic view on agricultural trade patterns and virtual water flows in Peru

Increasing integration in global markets can foster economic growth, but also impacts the use of water resources for the production of traded goods. This is particularly critical for low-and middle-income countries where increasing agricultural exports, especially of high-value horticultural products such as fresh fruits and vegetables is promoted as a pro-poor development strategy. The aim of this paper is to quantify the contribution of agricultural trade to virtual water flows and economic gains. The focus is on Peru and trade flows since 1986, as this represents a case of rapidly increasing trade flows and a rapidly changing product composition of trade. We consider long-term trade trends and changes in the product composition of trade, using a product classification, and analyze the implications for trade revenues, VW flows, blue and green water use, and economic water use efficiency. We use an innovative decomposition analysis to disentangle the drivers behind increased virtual water exports. We find that despite sharp increase in agricultural exports Peru is a net importer of virtual water, which implies that participation in international trade has been conducive for both economic growth and saving water resources at national level. We find agricultural exports to have a high economic water efficiency but to increase water scarcity and the use of blue water in producing regions. Our results imply that a focus on high-value export sectors is a valid development strategy for low- and middle-income countries from both an economic and a water perspective but that the strategic location of export production with respect to the availability of water is important for policy-makers to consider. Our approach confirms the importance of considering long-term dynamics and regional differences in research on virtual water trade.

Evolution of China's water footprint and virtual water trade: A global trade assessment

Water embodied in traded commodities is important for water sustainability management. This study provides insight into China's water footprint and virtual water trade using three specific water named Green, Blue and Grey. A multi-region input-output analysis at national and sectoral analysis levels from the years 1995 to 2009 is conducted. The evolution and position of China's virtual water trade across a global supply chain are explored through cluster analysis. The results show that China represented 11.2% of the global water footprint in 1995 and 13.6% in 2009. The green virtual water is the largest of China's exports and imports. In general, China is a net exporter of virtual water during this time period. China mainly imports virtual water from the USA, India and Brazil, and mainly exports virtual water to the USA, Japan and Germany. The agriculture sector and the food sector represent the sectors with both the largest import and export virtual water quantities. China's global virtual water trade network has been relatively stable from 1995 to 2009. China has especially close relationships with the USA, Indonesia, India, Canada, Mexico, Brazil and Australia. Trade relations, resource endowment and supply-demand relationships may play key roles in China's global virtual water footprint network rather than geographical location. Finally, policy implications are proposed for China's long term sustainable water management and for global supply chain management in general.

Industrial water use, income, trade, and employment: environmental Kuznets curve evidence from 17 Taiwanese manufacturing industries

This paper investigated the relationships between industrial water use, income, trade, and employment for 17 Taiwanese industries from 1998 to 2015. We explored cross-sectional dependent unit root, panel cointegration, and causality tests to estimate their long-term relationships and causal nexus. There existed long-term equilibrium relationships among the variables. The long-term elasticity estimates of industrial water use with respect to income, squared income, trade, and employment are 4.27, - 0.15, 0.22, and 0.92, respectively. The results do not confirm an inverted U-shaped environmental Kuznets curve. A unidirectional causal relationship is found between water use and income, and a bidirectional causal relationship is identified between water use and employment. Exports cause industrial water use. As expected, both employment and exports lead to income. Hence, policy makers should promote investment into water efficiency and water recycling. Various governments reward firms for water efficiency and lower consumption without negative long-term effects on economic growth.

Virtual water trade of agricultural products: A new perspective to explore the Belt and Road

The Belt and Road is an initiative of cooperation and development that was proposed by China. Moreover, most of the spanning countries faced water shortages and agriculture consumed a lot of water. Virtual water links water, food and trade and is an effective tool to ease water shortages. Therefore, this paper aims to understand the Belt and Road from the new perspective of virtual water trade of agricultural products. We considered agricultural products trade from 2001 to 2015. On the whole, the results indicated that China was in virtual water trade surplus with the countries along the Belt and Road. However, in terms of each country, >40 spanning countries were in virtual water trade surplus with China and eased water shortages. Russia had the largest net imported virtual water from China. Furthermore, the proportion of the grey water footprint that China exported to the spanning countries was much higher than that imported, no matter from the whole or different geographical regions. Moreover, more than half of the countries' virtual water trade with China conformed to the virtual water strategy, which helped to ease water crises. Furthermore, the products that they exported to China were mainly advantageous products that each spanning countries have. Virtual water trade is a new perspective to explore the Belt and Road. Agricultural products trade with China definitely benefits both the countries along the Belt and Road and China from the perspective of virtual water. The findings are beneficial for the water management of the countries along the Belt and Road and China, alleviating water shortages, encouraging the rational allocation of water resources in the various departments. They can provide references for optimizing trade structures as well.

The spatiotemporal variation analysis of virtual water for agriculture and livestock husbandry: A study for Jilin Province in China

With the rapid development of economic, water crisis is becoming more and more serious and would be an important obstacle to the sustainable development of society. Virtual water theory and its applications in agriculture can provide important strategies for realizing the reasonable utilization and sustainable development of water resources. Using the Penman-Monteith model and Theil index combining the CROPWAT software, this work takes Jilin Province as study area quantifying the virtual water content of agriculture and livestock husbandry and giving a comprehensive evaluation of their spatiotemporal structure evolution. This study aims to help make clear the water consumption of agriculture and livestock husbandry, and offer advice on rational water utilization and agricultural structure adjustment. The results show that the total virtual water (TVW) proportion of agriculture presents a gradual growth trend while that of livestock husbandry reduces during the study period. In space, central Jilin shows the highest virtual water content of agriculture as well as livestock husbandry, the TVW in central Jilin is about 35.8billionm³. The TVW of maize is highest among six studied crops, and the cattle shows the highest TVW in the four kinds of animals. The distribution of TVW calculated by us and the distribution of actual water resources have remarkable difference, which leads to the increase of water consumption and cost of agricultural production. Finally, we discuss the driving force of the spatiotemporal variation of the TVW for agriculture and livestock husbandry, and also give some advises for the planting structural adjustment. This work is helpful for the sustainable development of agricultural and livestock husbandry and realizing efficient utilization of water resources.