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Water Scarcity and Virtual Water Trade in the Mediterranean

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  • Roberto Roson
  • Martina Sartori

Abstract

Virtual water trade refers to the implicit content of water in the production of goods and services. When trade is undertaken, there is an implicit exchange of water. Furthermore, when water gets scarce, water intensive goods become more expensive to produce and the economy compensates through higher water imports. This paper is about applying the concept of virtual water trade to the problem of future water scarcity in the Mediterranean area, also induced by the climate change. The aim is assessing to what extent water trade is a viable adaptation option to the problem of water scarcity.A computable general equilibrium model is extended with satellite data on sectoral water consumption, and used to assess future scenarios of water availability.It is found that virtual trade may curb the negative effect of water scarcity, yet the consequences in terms of income and welfare remain quite significant, especially for some regions. This suggests that specific water policies (water supply and demand management) will be needed.

Suggested Citation

  • Roberto Roson & Martina Sartori, 2011. "Water Scarcity and Virtual Water Trade in the Mediterranean," EcoMod2011 2827, EcoMod.
  • Handle: RePEc:ekd:002625:2827
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    References listed on IDEAS

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    1. Maria Berrittella & Katrin Rehdanz & Roberto Roson & Richard S.J. Tol, 2008. "The Economic Impact Water Taxes: a Computable General Equilibrium Analysis with an International Data Set," Working Papers 2008_05, Department of Economics, University of Venice "Ca' Foscari".
    2. Dixon, Peter B., 1990. "A general equilibrium approach to public utility pricing: determining prices for a water authority," Journal of Policy Modeling, Elsevier, vol. 12(4), pages 745-767.
    3. Velazquez, Esther, 2007. "Water trade in Andalusia. Virtual water: An alternative way to manage water use," Ecological Economics, Elsevier, vol. 63(1), pages 201-208, June.
    4. Noelwah R. Netusil & Thomas R. Harris & Chang K. Seung & Jeffrey E. Englin, 2000. "Impacts of water reallocation: A combined computable general equilibrium and recreation demand model approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 34(4), pages 473-487.
    5. Brockmeier, Martina, 2001. "A Graphical Exposition of the GTAP Model," GTAP Technical Papers 311, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    6. Erik Dietzenbacher & Esther Velazquez, 2007. "Analysing Andalusian Virtual Water Trade in an Input-Output Framework," Regional Studies, Taylor & Francis Journals, vol. 41(2), pages 185-196.
    7. Maria Berrittella & Katrin Rehdanz & Roberto Roson & Richard S.J. Tol, 2006. "The Economic Impact Of Water Pricing: A Computable General Equilibrium Analysis," Working Papers FNU-96, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2006.
    8. Velazquez, Esther, 2006. "An input-output model of water consumption: Analysing intersectoral water relationships in Andalusia," Ecological Economics, Elsevier, vol. 56(2), pages 226-240, February.
    9. Atkinson, Giles & Hamilton, Kirk & Ruta, Giovanni & Van Der Mensbrugghe, Dominique, 2010. "Trade in'virtual carbon': empirical results and implications for policy," Policy Research Working Paper Series 5194, The World Bank.
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    Citations

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    Cited by:

    1. Roberto Ponce & Francesco Bosello & Carlo Giupponi, 2012. "Integrating Water Resources into Computable General Equilibrium Models - A Survey," Working Papers 2012.57, Fondazione Eni Enrico Mattei.
    2. Paolo Prosperi & Thomas Allen & Martine Padilla & Luri Peri & Bruce Cogill, 2014. "Sustainability and food & nutrition security: A vulnerability assessment framework for the Mediterranean region," Post-Print hal-01189996, HAL.
    3. Andrea Fracasso & Martina Sartori & Stefano Schiavo, 2014. "Determinants of Virtual Water Flows in the Mediterranean," IEFE Working Papers 75, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    4. Sartori, Martina & Schiavo, Stefano, 2014. "Virtual water trade and country vulnerability: A network perspective," MPRA Paper 59210, University Library of Munich, Germany.
    5. Michael Gilmont, 2015. "Water resource decoupling in the MENA through food trade as a mechanism for circumventing national water scarcity," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 7(6), pages 1113-1131, December.
    6. Roberto Roson & Martina Sartori, 2012. "Climate Change, Tourism and Water Resources in the Mediterranean:a General Equilibrium Analysis," Working Papers 2012_05, Department of Economics, University of Venice "Ca' Foscari".
    7. Marta Antonelli & Martina Sartori, 2014. "Unfolding the Potential of the Virtual Water Concept. What is still under debate?," IEFE Working Papers 74, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    8. repec:spr:waterr:v:32:y:2018:i:8:d:10.1007_s11269-018-1941-5 is not listed on IDEAS
    9. Roberto Roson & Martina Sartori, 2012. "Climate Change Impacts on Tourism in the Mediterranean," EcoMod2012 4624, EcoMod.
    10. Jorge Bielsa & Ignacio Cazcarro, 2014. "Implementing Integrated Water Resources Management in the Ebro River Basin: From Theory to Facts," Sustainability, MDPI, Open Access Journal, vol. 7(1), pages 1-24, December.

    More about this item

    Keywords

    Global; with focus on the Mediterranean.; General equilibrium modeling; Agricultural issues;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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