Abstract

http://ssrn.com/abstract=2148413
 


 



The Role of Scarcity in Global Virtual Water Flows


Manfred Lenzen


University of Sydney

Anik Bhaduri


University of Bonn - Center for Development Research (ZEF)

Daniel Moran


affiliation not provided to SSRN

Keiichiro Kanemoto


affiliation not provided to SSRN

Maksud Bekchanov


Universitaet Bonn

Arne Geschke


affiliation not provided to SSRN

Barney Foran


affiliation not provided to SSRN

September 18, 2012

ZEF - Discussion Papers on Development Policy No. 169

Abstract:     
Recent analyses of the evolution and structure of trade in virtual water revealed that the number of trade connections and volume of virtual water trade have more than doubled over the past two decades, and that developed countries increasingly draw on the rest of the world to alleviate the pressure on their domestic water resources. Our work builds on these studies, but fills three important gaps in the research on global virtual water trade. First, we note that in previous studies virtual water volumes are lumped together from countries experiencing vastly different degrees of water scarcity. We therefore incorporate water scarcity into assessments of virtual water flows. Second, we note that some previous studies assess virtual water networks only in terms of immediate water used for food production, but omit indirect virtual water used throughout the supply chains underlying all traded goods. In our analysis we therefore use input-output analysis to also include indirect virtual water. We note existing conflicting views about whether trade in virtual water can lead to overall savings in global water resources. We re-visit the Heckscher-Ohlin Theorem in the context of direct as well as indirect virtual water in order to determine whether international trade can be seen as a feasible demand management instrument in alleviating water scarcity. We find that the structure of global virtual water networks changes significantly after adjusting for water scarcity. In addition, when indirect virtual water is appraised the Heckscher-Ohlin Theorem can be validated.

Number of Pages in PDF File: 28

Keywords: Virtual water, multi-region input-output analysis, regional aggregation, scarcity, international trade

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Date posted: September 20, 2012  

Suggested Citation

Lenzen, Manfred and Bhaduri, Anik and Moran, Daniel and Kanemoto, Keiichiro and Bekchanov, Maksud and Geschke, Arne and Foran, Barney, The Role of Scarcity in Global Virtual Water Flows (September 18, 2012). ZEF - Discussion Papers on Development Policy No. 169. Available at SSRN: http://ssrn.com/abstract=2148413

Contact Information

Manfred Lenzen (Contact Author)
University of Sydney
University of Sydney
Sydney, NSW 2006
Australia
Anik Bhaduri
University of Bonn - Center for Development Research (ZEF) ( email )
Walter-Flex-Str. 3
Bonn, NRW 53113
Germany
Daniel Moran
affiliation not provided to SSRN ( email )
Keiichiro Kanemoto
affiliation not provided to SSRN ( email )
Maksud Bekchanov
Universitaet Bonn ( email )
Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany
Arne Geschke
affiliation not provided to SSRN
Barney Foran
affiliation not provided to SSRN ( email )
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