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Systemic Input-Output Computation of Green and Blue Virtual Water ‘Flows’ with an Illustration for the Mediterranean Region

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Abstract

The term virtual water refers to the volume of water used in the production of a commodity or service. Accordingly, virtual water ‘trade’ is the amount of water ‘embedded’ in commodities being transferred from one place to another as a consequence of trade. This paper argues that the conventional methods so far adopted for the computation of virtual water ‘flows’ (based on Hoekstra and Hung 2002) have considered only direct water usage and not sufficiently distinguished between blue and green water resources. This has brought about flawed estimates of virtual water ‘flows’, thereby limiting the usefulness of the virtual water concept as a tool for informing water policy. A novel approach for computing virtual water ‘flows’ which applies the Input–output (IO) methodology to account for both direct and indirect water consumption, and simultaneously distinguishes between the different typologies of water, is presented. The study upholds that the integration of these two methods can not only provide a more robust framework for quantifying virtual water ‘flows’, but also enhance the relevance of the concept as a tool for water resource management policy. The implications of these alternative estimation methods are here illustrated using data referring to 11 Mediterranean economies and 7 internationally traded agricultural commodities.

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Notes

  1. The terms ‘trade’, ‘flows’, ‘imports’ and ‘exports’ when associated with virtual water will be used throughout with inverted commas, the reason being that it is in fact goods that are being traded, not water (Merrett 2003).

  2. Only in a few cases, more specifically with regards to livestock products, some intermediate inputs accounted for, thus making the estimates internally inconsistent.

  3. The notion has been used, for instance, to assess the ‘virtual’ carbon content of imports − i.e. the extent to which carbon is embodied in the international trade of goods and services − (Atkinson et al. 2010). Virtual water has also been linked to of water footprint, which is “the volume of water necessary to produce the good and services consumed by the inhabitants of a country” (Chapagain and Hoekstra 2004).

  4. It is the same as vector w in Eq. (1).

  5. It could be argued, however, that the price of agricultural land reflects fertility and peculiar climatic conditions, including green water availability.

  6. Blue water used in irrigated agriculture yields the lowest economic value among all other options while being associated with significant negative environmental externalities—such as water logging, salinisation, soil degradation (Zehnder et al. 2003).

  7. Xeur = Rest of Europe, XMENA = Rest of Middle East and North Africa, RoW = Rest of the World.

  8. Actually, the total variation of blue systemic coefficients is due to the overlapping of two counteracting effects: (a) the inclusion of indirect consumption, (b) the consideration of the blue water share. The second effect dominates.

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Acknowledgments

This study has been partly funded and realised in the context of EU FP7 project WASSERMed (Grant agreement number 244255, http://www.wassermed.eu). The authors are grateful to Tony Allan for his many comments and suggestions on earlier draft of this work, as well as to Holger Hoff for providing data about green/blue water shares.

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Authors and Affiliations

  1. King’s College, London, UK

    M. Antonelli

  2. Department of Economics, Ca’Foscari University, Venice, Italy

    R. Roson

  3. University of Milan, Milan, Italy

    M. Sartori

  4. IEFE, Bocconi University, Milan, Italy

    R. Roson

  5. CMCC, Lecce, Italy

    R. Roson & M. Sartori

Authors
  1. M. Antonelli
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  2. R. Roson
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  3. M. Sartori
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Corresponding author

Correspondence to R. Roson.

Appendix

Appendix

Data for 14 Mediterranean economies was obtained through aggregation from the 7.1 Global Trade Analysis Project (GTAP) database (see http://www.gtap.org). The following countries are considered: Albania, Croatia, Cyprus, Egypt, France, Greece, Italy, Morocco, Spain, Tunisia, Turkey, Rest of Europe, Rest of Middle East and North Africa, Rest of the World. Seven agricultural industries are taken into account: Cereals, Rice, Sugar, Oilseeds, Vegetable and Fruits, Wheat, Other Crops.

Water requirements per crop were derived from Chapagain and Hoekstra (2004), and expressed as water required for one million of dollars value of industry output in agricultural sectors. Green water consumption, by country, has been estimated by the eco-hydrological model LPJmL. Blue water consumption has been estimated by multiplying total blue water availability (in each region) by the percentage of irrigated land over total agricultural area (source: http://faostat.fao.org).

Figure 4 shows, for each country/region, the estimated green and blue water shares.

Fig. 4
figure 4

Shares of blue and green water used in agricultural industries

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Figures 5, 6, 7, 8 and 9 are analogous to Fig. 1 and present the percentage variation, with respect to estimates obtained with the standard method, in water requirement per unit of output for all other agricultural industries.

Fig. 5
figure 5

Percent changes in estimates (from those obtained with the standard method) for water requirements per unit of output (m3/M$). Rice industry

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Fig. 6
figure 6

Percent changes in estimates (from those obtained with the standard method) for water requirements per unit of output (m3/M$). Wheat industry

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Fig. 7
figure 7

Percent changes in estimates (from those obtained with the standard method) for water requirements per unit of output (m3/M$). Cereals industry

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Fig. 8
figure 8

Percent changes in estimates (from those obtained with the standard method) for water requirements per unit of output (m3/M$). Oilseeds industry

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Fig. 9
figure 9

Percent changes in estimates (from those obtained with the standard method) for water requirements per unit of output (m3/M$). Sugar industry

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Table 1 displays virtual water trade flows, computed using the systemic method for blue water, for all pairs of countries/regions.

Table 1 Bilateral blue virtual water trade flows (Mm3, systemic)
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Antonelli, M., Roson, R. & Sartori, M. Systemic Input-Output Computation of Green and Blue Virtual Water ‘Flows’ with an Illustration for the Mediterranean Region. Water Resour Manage 26, 4133–4146 (2012). https://doi.org/10.1007/s11269-012-0135-9

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