Observed and Potential Global Pathways of Virtual Water Trade

The international trade of food commodities links water and food systems, with important implications for both water and food security. The embodied water resources associated with food trade are referred to as `virtual water trade'. We quantify, for the first time, the impacts of scenarios of future climate change on both the global structure and bilateral flows of virtual water trade.  First, we present the potential impacts of climate change on the global structure of virtual water trade. To do this, we utilize a theoretical fitness model capable of reproducing the directed and weighted network properties of virtual water trade, using national data on GDP, mean annual rainfall, agricultural area, and population as sole controls. The future global structure of virtual water trade is then estimated using climate and socio-economic projections, showing that volumes of virtual water trade are likely to become more heterogeneous, with dominant importing nations becoming increasingly important. Second, we present the potential impacts of climate change on bilateral flows of virtual water trade. To do this, we utilize the Global Trade Analysis Project (GTAP) economic model to estimate bilateral crop trade flows under changes in agricultural productivity and the H08 global hydrologic model to estimate the water-use efficiency for each crop in each country of production under climate change. We then combine these results to obtain the link-specific virtual water trade flows and associated savings under climate change. We find that, although the total volume of virtual water trade is likely to decrease, the food trade is projected to save more water across most climate change scenarios, largely because the wheat trade re-organizes into a more water-efficient structure. These findings indicate that trade should be considered in the suite of policy options to address water and food security under climate change.