Virtual Water Trade in a General Equilibrium Analysis

Maria Berrittella, Katrin Rehdanz, Roberto Roson and Richard Tol

No 331352, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: Water problems are typically defined and studied at the level of the river catchment. Yet, 80% of all water is used for agriculture, and agricultural products are traded internationally. A complete understanding of water use is therefore impossible without understanding the international markets for food and other agricultural products, such as textiles. The water embedded in commodities is also called virtual water. Based on a general equilibrium model this study offers a method for investigating the role of water resources and water scarcity in the context of international trade by analysing virtual water flows. We run four alternative scenarios, some with variants. The first three scenarios are directly concerned with water resource policies. The first two scenarios are quantity scenarios. The third is a water pricing scenario. In the fourth scenario we consider a trade liberalization reform in the agricultural sector. Unlike the first three scenarios, the latter deals with trade policy in water-intensive industries.

Keywords: Resource/Energy Economics and Policy; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 32
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331352

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