Globalization of Water Resources through Virtual Water Trade

Hong Yang Alexander Zehnder

Swiss Federal Institute for Aquatic Science and Technology (eawag) 1 Contents

1. Concept of virtual water

2. Global virtual water flows in association with international food trade

3. The role of virtual water in compensating for water deficiency

4. ‘GREEN’ vs ‘BLUE’ virtual water trade

2 1. Concept of virtual water

1.1. Terminologies concerning virtual water

Virtual water: water required for the production of food commodities (crops, meat, etc.),

Why ‘virtual‘ ?

Exogenous, embedded, external, etc.

3 Virtual water concept

• Established in the early 1990s by Tony Allan (199), ‘father’ of the virtual water.

• Many water scarce countries import water intensive crops, which reduced the water demand in domestic food production. E.g., Middle Eastern and North African countries.

• Water scarce countries can oft for importing a portion of water intensive crops to compensate for domestic water scarcity.

• ……..

4 Virtual water content

• Definition: water required to produce a unit of food commodity, measured in m3/kg. e.g. wheat: 1m3/kg, beef: 10-13m3/kg

• In value term, virtual water content is the inversion of water productivity, in kg/m3

5 World average virtual water content of crops

3.5 /kg

3 3.0 2.5 2.0 1.5

1.0 0.5 Virtual content, water m 0.0 Rice

Millet Maize Barley Wheat Beans Apples Lemon Onions Orange Grapes Banana Sorgum Soybean Potatoes Grapefruit Tomatoes Groundnut Sugarbeet Sugarcane

6 Global average virtual water content of crops and animal products

virtual water content m3/kg

16 14 12 10 8 6 4 2 0

l ef y e Milk eges B ultr Pork eggs Cerea v o P Cheese Oil seeds rds Bi uits & Fr 7 1.2 Variations in virtual water contents across regions, (m3/kg) Virtual water content is a function of climate conditions, agronomic practices, field management, etc.

Wheat: USA 1.30 Morocco 4.14 Algeria 7.22 Maize: France 0.35 USA 0.38 Mexico 1.34

Rice: China 1.07 Thailand 4.05 USA 1.33 8 Global map of water productivity of wheat, estimated with GEPIC (GIS based EPIC model)

9 Simulated wheat virtual water content (WR) in the USA

10 Simulated winter wheat water productivity under irrigation

11 2. Global virtual water flows associated with food trade

The gross volume of virtual water import (GVWI) to a CI country is the sum of crop imports ( c) multiplied by their CVWC associated crop water contents ( c) in that country: GVWI = CI × CVWC ∑ ( c c ) (1) c The gross volume of virtual water export (GVWE) from a CE country is the sum of crop exports ( c) multiplied by their CVWC associated crop water contents ( c) in that country: GVWE = CE ×CVWC ∑( c c ) (2) c 12 Net virtual water trade for individual countries

NVWT = GVWI - GVWE

13 Net virtual water import/export by country (average over the period 1997-2001)

Legend unit: cubic km no d ata - 100- - 50 - 50- - 2 5 - 25 - - 15 - 15 - 0 0 - 5 5- 10 10- 15 15- 20 20- 30 30- 60

14 Virtual water flows from export and import perspectives

Exporter VW Importer VW (km3) (km3) N-America 73 E-Asia 149 30 C-Am. 64 22 N-W-Af. 58 17 M-East 55 12 W-Eur. 17 27 Others 71 S-America 30 W-Eur. 26 21 E-Asia 25 18 M-East 35 12 N-W-Af. 21 15 Others 38 Oceania 15 E. Asia 20 11 S-E-Asia 24 10 M-East 14 13 Others 24 15 Total amount of crop-related global virtual water flows

• Total water use by crops in the world: 5400km3/year

• Total virtual water flows (annual average of 1995-1999): 695 km3/year (exporting perspective)

• About 13% of the water used for crop production in the world is for external consumption

16 Components of global crop related virtual water trade (%)

others 12% Wheat raw sugar 31% 7%

soybean 18%

Rice Other 16% cereals Maize 7% 9%

Cereal has a large share 17 3. The role of virtual water in compensating for national water deficiency

Net virtual water import by country groups, average of 1997-2001 (viewed from the importing side).

Of which, Of which, Of which, All net Countries with Countries with Countries with water availability water availability water availability virtual water below between 1700­ above import 1700m3/capita. 2500m3/capita. 2500m3/capita. countries year year year

Net virtual water import, km3 /year 715.5 145.8 82.1 487.1

As percentage of total net virtual water import, % 100 20.4 11.5 68.1 Not all the food trade is related to water scarcity 18 Cereal import and water resources

Israel Emirates (Yang et al., 2003) a] Jordan Libya cap

Saudi Arabia

300 400 500 600 Korea Rep Lebanon Japan Mauritius Tunisia Mauritania Algeria 200 Lesotho Armenia Yemen Egypt Morocco

Iran Uzbekistan Eritrea Korea Dem People's Rep Senegal

Net cereal importcereal [kg Net Sri Lanka Azerbaijan

100 Rwanda Malawi Togo Kenya South Africa Ethiopia Benin Niger 0 Burundi China Nigeria Ghana Turkey Zimbabwe Somalia Afghanistan Burkina Faso Tanzania Uganda Pakistan Syria India

C96-00 -100 0 1000 2000 3000 4000 500019 Water [ m3 cap a] Water resource indicators in the MENA countries

Percentage of Per capita water Water use per Ratio of irrigated water use as total resources capita in 2000 area to total crop water resources (m3/capita, year) (m3/capita, year) area (%) (%) Country Algeria 452 201 44.40 15.77 Cyprus 1009 311 30.86 33.37 Egypt 831 1011 121.72 100.00 Israel 265 287 108.30 57.87 Jordan 169 207 122.32 37.62 Lebanon 1122 392 34.98 40.21 Libya 108 870 805.56 64.59 Morocco 991 399 40.26 18.14 Syria 1514 844 55.74 26.98 Tunisia 517 312 60.38 13.37 Turkey 3280 563 17.16 21.08

MENA 1533 652 42.55 24.00 Some countries are >100% 20 Food import vs. domestic supply in the MENA countries

Cereal import dependence 100

80

60

40

20

Import/total supply, % supply, Import/total 0 l a s t eI n n a o a y ri u p a o y c ri ia e r y ra d n c y is k -20 e p g s r a ib o n r lg y E o b L r S u u A C J e o T T L M

21 Edible oil import dependence 100

80

60

40

20 Import/total supply, % 0

t n y us yp ael ya e pr r rda b cco k Eg Is anon Li o Syria Algeria Cy Jo b or Tunisia Tur Le M Sugar import dependence 100

80

60

40

20

0

Import/total supply, % a ia -20 rus an y isia p gypt rael ib yr n 22 y E Is L S Algeria C Jord Tu Turkey -40 Lebanon Morocco Net virtual water import in MENA countries (million m3) (1995-2000) Cereal Vegetable Sugar Sum of Net virtual water COUNTRY oil net virtual import as a water % of water import resources Algeria 7539.9 2417.8 1275.8 11233.5 79.2 Cyprus 439.3 70.8 45.0 555.1 67.5 Egypt 10048.8 2840.2 1006.4 13895.5 23.5 Israel 2700.6 436.0 429.8 3566.4 207.4 Jordan 1249.6 326.3 247.8 1823.7 195.7 Lebanon 833.9 274.5 188.4 1296.8 28.7 Libya 2214.4 729.3 248.5 3192.2 557.1 Morocco 3944.8 1934.7 694.6 6574.1 21.9 Syria -315.4 553.5 809.3 1047.4 3.6 Tunisia 3486.5 1018.9 411.3 4916.6 96.9 Turkey 621.8 2446.9 -451.3 2617.5 0.7 0.0 Sum 32764.4 13048.9 4905.7 50719.0 13.3 23 Changes and sources of per capita cereal supply, 1961–1998 (kg/capita) 600

500 Israel

400

300 Import 200

100

kg cereal per capita and year capitaand per cereal year kg Domestic production 0 1961 1966 1971 1976 1981 1986 1991 1996 Year 24 Data from Yang & Zehnder, 2002 4. ‘Blue’ vs ‘green’ virtual water trade

Marlin Falkenmark (1995): ‘Mother’ of the green water

Definition:

-Blue Water: refers to the water in rivers, lakes, reservoirs, ponds and aquifers. Irrigated agriculture typically uses blue water.

Green Water: water stored in the unsaturated soil and can - be used by plants for evapotranspiration. Green water is the water source of rainfed agriculture.

25 Characteristics of blue and green water Type of water Blue Green Sources rivers, lakes, reservoirs, stored in the unsaturated ponds, aquifers soil and can be used for evapotranspiration Mobility highly mobile highly immobile Substitution of possible impossible sources Competitive uses many few Conveyance facilities required not required Cost of use high free Impact on significant ? less significant ? hydrological system Adverse effects on significant (e.g., salinization less significant? soil and water logging)? 26 Efficiency of blue and green water use in agriculture

• Opportunity costs: blue water > green water.

• Environmental impacts: blue water > green water.

• For individual countries: exporting green virtual water is more efficient than exporting blue virtual water in terms of resources utilization.

27 Green water proportion in food production

28 Blue and green virtual water export

150 80% Green virtual water export Blue virtual water export /year] 3 120

90

96% 60 97% 91% 96%

30 92%

Total Net Virtual [km Total Export Net Water 82% 96% 82% 98%

0 USA India Brazil France Ukraine Canada Australia Argentina Paraguay

Kazakhstan 29 Conclusion I:

• Virtual water plays an important role in compensating for water scarcity in water scarce countries,

• Virtual water import is a matter of fact, not an imposed idea,

• Virtual water import can effectively reduce the blue water use in the recipient countries and regions.

• Water scarce countries should seek ways to consciously and efficiently utilize virtual water to alleviate domestic water scarcity. 30 31