Water Scarcity and International Agricultural Trade

Jing Liu, Thomas Hertel, Farzad Taheripour, Tingju Zhu () and Claudia Ringler

No 332335, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: There is increasing interest in the water-food nexus, and the potential implications of future water scarcity for food production. However, little is known about the macro-economic implications of future water scarcity, and the potential impacts on global trade and economic welfare. In this paper, we utilize a recently developed model, GTAP-BIO-W, in order to study the global economic e_x001b_ects of projected water scarcity for 126 river basins, globally in the year 2030. Projected irrigation shortfalls are obtained from the IMPACT-WATER model, and these are imposed upon the present day economy. We _x001c_nd that regional production impacts are quite heterogeneous, depending on the size of the shortfall, the irrigation intensity of crop production, as well as the global commodity price e_x001b_ects. Projected 2030 scarcity leads to signi_x001c_cant output declines in China, South Asian, Middle East and North Africa, with increases in crop production sub-Sahara Africa. We _x001c_nd that projected irrigation shortfalls signi_x001c_cantly alter the geography of international trade. The global welfare loss amounts to $3.7 billion (2001 prices) both due to the reduction in irrigation availability, as well as due to interactions with domestic support for agriculture.

Keywords: Resource/Energy Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 29
Date: 2013
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Working Paper: Water Scarcity and International Agricultural Trade (2013)
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