Applying input-output analysis method for calculation of water footprint and virtual water trade in Gansu Province

Abstract

In recent decades, China′s fast economic and social development has put a heavy burden on its water demand. Located in the northwest of China, Gansu Province is facing more and more serious water crisis. Waterfootprint is an indicator that is used to measure the water use derived from the consumed products. The water footprint concept will help the policymakers to make more rational policies for water resources management. Another relevant concept is the virtual water, which measures the embodied water in the traded products. For water scarce regions, the virtual water import of water intensive products will relieve the local pressure for water supply. Four methods can be used for the water footprint calculation, in which an input-output model provides a reliable and constantly updated framework for the disaggregated sectors. The quantification results are ready for the local government to carry out a better water resource management practice. This paper presents a framework of calculating and evaluating the water footprint and the virtual water trade of three sectors in Gansu Province with a single regional input-output model. The results showed that the virtual water intensity (water use per final demand, m3/Yuan) for the primary sector is the highest among the three sectors. However, the primary sector contributes most to the decrease of the total virtual water intensity in 2007. The primary sector also has the highest direct water use rate (80%), which is calculated as the proportion of direct virtual water intensity to the total virtual water intensity. While the direct water use rate of the second and third sectors is under 20%. The above mentioned results indicate that reducing the agricultural water use is one of the key measures to the water foot print reduction. Compared to the water footprint in 1997, the water footprint of the three sectors all increased in 2002 (from 11. 9billion m3 to 14. 5 billion m3). However, the water footprint has seen a sharp decrease in 2007. It can be concluded that the main reason of the water footprint decrease is the successful water saving practice in agriculture. As for a region suffering from water scarcity, externalizing the water footprint is one of the methods to alleviatethe region′ s pressure for water supply. The proportion of the external water footprint to the total water footprint has been increasing for the three years considered in Gansu Province. However, the external water footprint of the primary sector only accounts for 10% of the water footprint of the primary sector, which means that the food demand in Gansu Province largely depends on its own production. In addition, Gansu Province continuously exported its agricultural virtual water to other regions for the three years considered. In 2007, the virtual water export of the primary sector amounts to 10% of the total water resource and 25% of the total water use in the Province. The paper finally suggests that the policymakers in Gansu Province should keep reinforcing the water saving achievement, adjusting the industrial structure and trade patterns, as well as seeking for the possibility of the virtual water strategy for the province.