U. researchers study effects of climate change on water trade

Experts studying the global food trade rarely consider how the trade of food encompasses a virtual trade of the water required to produce the food. In a recent study, a team that included University researchers used an economic approach to forecast through the lens of the global food trade how the global water trade will adapt in response to climate change.

The study, headed by civil and environmental engineer Megan Konar GS ’12 at the University of Illinois, combines a hydrologic model with an economic trade model to examine the future of virtual water trade. It was presented by civil and environmental engineering professor Ignacio Rodriguez-Iturbe at the annual meeting of the American Academy for the Advancement of Science.

Hydrology is central to any study of virtual water trade, as the amount of food produced in a country depends on a region’s climate and soil composition. By altering temperature and rainfall patterns, climate change influences crop yields.

The researchers took expert projections of how crop yield in the five staple crops — wheat, corn, barley, soy and rice — will change over time. They then used those projections, along with an existing economic model forecasting international trade between particular world regions, to map out virtual water trade through the year 2030. While the study’s researchers expect the total amount of virtual water trade to decrease, they predict that the wheat trade will reorganize to become more water-efficient.

The team’s economic approach is novel in the field of hydrology.

“A lot of hydrologists look at the impact of climate on crop yield. As far as I know, this is the first study looking at the impact on virtual water trade,” Konar said.

Rodriguez-Iturbe’s inspiration for examining this relationship came from a freshman seminar he taught for years titled “Water: Keystone for Sustainable Development.” In the seminar, which he most recently taught this fall, students discussed the relative levels of access that various countries have to water, along with the resulting policy implications.

“I wanted to come up with both a descriptive model and, beyond that, an explanatory model,” Rodriguez-Iturbe said.

“I am really interested in the potential for systems that already exist to help us adapt to climate change because these will be relatively cost-effective,” Konar said, noting that the study shows how trade patterns will naturally adjust to the effects of climate change.

Coupling these two models presents some major challenges because the economic model is not necessarily geared to consider the impacts of climate change. According to Rodriguez-Iturbe, quantitative analysis was the most difficult part of the research because the study required a new model to account for variables such as the number of trading partners a country has and the quantity of water traded.

“We need to not just look at the natural system in order to understand hydrologic processes, but we also need to understand how humans modify the flows of the hydrologic cycle,” Konar said. The team’s research contributes to the emerging field of socio-hydrology, which examines the feedback between social and hydrologic systems.

The researchers said they hope that awareness of water flow will inform policy decisions by encouraging trade ministers to consider the natural resources embodied in the products they trade. Agricultural economist Zekarias Hussein of Purdue University, who coauthored the paper, said he thinks this and further studies will allow nations to synchronize their policies in order to best exploit available water.

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Although the study analyzes trade primarily on a global scale and does not take policy interventions into account, it does make some specific predictions. The researchers forecast that the United States will remain the top virtual water exporter due to its efficient agricultural methods, while China and Japan will continue to import the largest volumes of virtual water.

The team plans to further study the implications of policy, hoping to create a new model that incorporates governments’ policy decisions about importing and exporting, allowing policy makers to predict the effects that potential trade policies would have on water trade.

“We want to clarify the decision-making process so that people can have as clear as possible an understanding of policies’ consequences,” Rodriguez-Iturbe said. “The goal is to try to incorporate as much as we can, quantitatively, the decision-making process that different government levels have.”

The new model might allow researchers and decision makers to understand the impacts of free trade policies on water and land use as well as the effects of policy interventions by developed and developing countries on the global water trade.

Denise Mauzerall, a professor in the Wilson School and in the civil and environmental engineering department, also contributed to the project, as did National Institute for Environmental Studies researcher Naota Hanasaki.