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Biewald, A., Rolinski, S., Lotze-Campen, H., Schmitz, C., & Dietrich, J. P. (2014). Valuing the impact of trade on local blue water. Ecol. Econ., 101, 43–53.
Abstract: International trade of agricultural goods impacts local water scarcity. By quantifying the effect of trade on crop production on grid-cell level and combining it with cell- and crop-specific virtual water contents, we are able to determine green and blue water consumption and savings. Connecting the information on trade-related blue water usage to water shadow prices gives us the possibility to value the impact of international food crop trade on local blue water resources. To determine the trade-related value of the blue water usage, we employ two models: first, an economic land- and water-use model, simulating agricultural trade, production and water-shadow prices and second, a global vegetation and agricultural model, modeling the blue and green virtual water content of the traded crops. Our study found that globally, the international trade of food crops saves blue water worth 2.4 billion US$. This net saving occurs despite the fact that Europe exports virtual blue water in food crops worth 3.1 billion US$. Countries in the Middle East and South Asia profit from trade by importing water intensive crops, countries in Southern Europe on the other hand export water intensive agricultural goods from water scarce sites, deteriorating local water scarcity. (C) 2014 Elsevier B.V. All rights reserved.
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Schmitz, C., Lotze-Campen, H., Gerten, D., Dietrich, J. P., Bodirsky, B., Biewald, A., et al. (2013). Blue water scarcity and the economic impacts of future agricultural trade and demand. Water Resource Research, 49(6), 3601–3617.
Abstract: An increasing demand for agricultural goods affects the pressure on global water resources over the coming decades. In order to quantify these effects, we have developed a new agroeconomic water scarcity indicator, considering explicitly economic processes in the agricultural system. The indicator is based on the water shadow price generated by an economic land use model linked to a global vegetation-hydrology model. Irrigation efficiency is implemented as a dynamic input depending on the level of economic development. We are able to simulate the heterogeneous distribution of water supply and agricultural water demand for irrigation through the spatially explicit representation of agricultural production. This allows in identifying regional hot spots of blue water scarcity and explicit shadow prices for water. We generate scenarios based on moderate policies regarding future trade liberalization and the control of livestock-based consumption, dependent on different population and gross domestic product (GDP) projections. Results indicate increased water scarcity in the future, especially in South Asia, the Middle East, and north Africa. In general, water shadow prices decrease with increasing liberalization, foremost in South Asia, Southeast Asia, and the Middle East. Policies to reduce livestock consumption in developed countries not only lower the domestic pressure on water but also alleviate water scarcity to a large extent in developing countries. It is shown that one of the two policy options would be insufficient for most regions to retain water scarcity in 2045 on levels comparable to 2005.
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