Elsevier

Ecological Economics

Volume 63, Issue 1, 15 June 2007, Pages 201-208
Ecological Economics

ANALYSIS
Water trade in Andalusia. Virtual water: An alternative way to manage water use

https://doi.org/10.1016/j.ecolecon.2006.10.023Get rights and content

Abstract

The main idea of this paper is to analyse the relationships between the productive process and the commercial trade with water resources used by them. For that, the first goal is to find out, by means of the estimation of virtual water, the exported crops which have the highest water consumption. Similarly, we analyse the crops that are imported and therefore, might contribute to save water. The second objective is to put forward new ways to save water by means of the virtual water trade.

This first conclusion contradicts not only the comparative advantages theory but also the environmental sustainability logic. The previous conclusion is derived from the great exports of water via potatoes and vegetables, and also via citrus fruit and orchards; and, on the other hand, from the imports, such as cereals and arable crops, with lower water requirements. The second conclusion affirms as Andalusia utilises large amounts of water in its exports, and in turn, it does not produce goods with low water requirements, the potential saving would be very significant if the terms of our trade were the other way round. We are convinced that the agricultural sector must modify the use of water to a great extent in order to reach significant water savings and an environmental sustainability path.

Introduction

We might start by saying that water is nothing but a natural resource in the same way as oil or gas. However, water is much more than that. Apart from being an essential element for life, its features and functions turn water into something completely different from other natural resources. Economic science has traditionally considered that the only role of water was that of participating in the production process. Therefore, this idea never took into account the “particular characteristics that make water different from the rest of economic resources” (Milliman, 1992, 321). This line of argument is also followed by other economists such as Aguilera-Klink (1995, 15), who points out that water is “far more than a production factor”. This is because it satisfies other needs beyond simple economic factors and, in addition, it performs many other functions, namely, supply in both the natural and the economic systems, means of evacuation and, finally, source of energy (Zimmerman, 1967). All in all, water is not only a resource but also an ecosocial asset (Aguilera-Klink, 1995).

This will be the outlook of this paper. If we want to manage water in a sustainable manner, we must consider it not only as a production factor, in other words, as something necessary for production, but also as an ecosocial asset. This idea compels us to link water with the territory where this resource can be found. Accordingly, we must include new concepts involving economics, sociology, technology, environment, geography, institutions and regional elements; also, soil and climatic aspects are right now considered particularly relevant. In this sense, this kind of management obviously remains within an institutional framework which must necessarily be an object of study as well. This way of understanding and feeling water leads us to necessarily put forward systematic and transdisciplinary analyses which could allow us to study all the above-mentioned perspectives. Nevertheless, this work aims to be but a first step in this direction and we will thus limit ourselves to analyse the perspective of physical water flows in Andalusian economy as a sustainability indicator, leaving the rest of the components for future studies.1 Thus, in this article we bring out a recent concept, the so-called virtual water, which deals with a sustainable management of water requirements.

In the dry regions of the planet, where the shortage is not only physical, but also social and economic (Aguilera-Klink, 1994), and where it is difficult to allocate this resource to its appropriate uses, it is absolutely necessary to discover new ways to alleviate the pressure on water resources. It is important to try to identify the type of water scarcity in Andalusia and to determine if that scarcity is only physical or social and economic as well. There are two physical elements which define the water situation in the region: its geographical configuration and its climatic conditions. Considering the first element, Andalusia is shaped as a triangular depression opened to the Atlantic Ocean and bordered by two mountain ranges (Sierra Morena and Cordillera Bética). This configuration conditions the region's main climatic feature, namely the unequal distribution of precipitations in space and time. On the other hand, we can identify two hydrographic areas in Andalusia: the Guadalquivir river basin, that covers more than half the region's territory, and the coastal basins. These are the Atlantic basins (Guadiana and Guadalete–Barbate) and the Mediterranean basins (Sur and Segura). Most of the water resources in the region originate in superficial water (61%); only 21% of them is based on underground water (Consejería de Obras Públicas y Transportes, 1996).

Besides the physical factors, it is important to focus on the use of water in the region. The agriculture sector in Andalusia absorbs almost 80% of the water resources, urban water supply amounts to around 12% and the industrial use exceeds 8% (Consejería de Medio Ambiente, 2002). Irrigated agriculture is the most important specialized subsector, which has to compete with urban supply in the summer period. This situation results in Andalusia clearly being a water-deficient area, and causes not only serious economic problems but also environmental ones. To sum up, Andalusia, despite being characterized by a considerable physical water shortage, has gradually specialized in sectors whose water consumption level is extremely high (Velázquez, 2006). It is also important to point out that Andalusia, not only is specialized in intensive water use sectors, but it is also a net water exporter economy (Dietzenbacher and Velázquez, 2006).

There are two other elements that should be pointed out: the water price and water concessions. Regarding the water price, water in the Andalusian agriculture sector is not paid according to the amount consumed but depending on the number of irrigated hectares. The consequence of it is that there is no clear conscience in the region of the resource's real cost so that it becomes undervalued. At the same time, water concessions are granted by the different Water Regional Federations for extremely long periods (an average of 50 years), introducing a distorting element in the resource's management. So we can say that the physical water shortage in Andalusia has been aggravated by the institutional and economic scarcity due to the productive specialization.

Before this apparently irrational situation, the need arises to reflect upon the possibility of actually managing the region's water resources in a more sustainable manner. On the one hand, the transfer of massive quantities of water is difficult, costly, and most of the times, absolutely unsustainable. On the other hand, the building of hydraulic infrastructures is always expensive and problematical in social and environmental terms. In addition, in spite of the rise in the offer, the demand always ends up unsatisfied. This article supports the voices that defend virtual water as a means to mitigate the pressure on water resources. The most reasonable thing seems to be the import of water-intensive products to areas where the cost of water is very high and the export of other products which do not require so much water.

We propose in this paper an in-depth analysis of the relationship of the agrarian production and its commercial dealings with the amount of water that has been consumed. In view of that, our first goal will be to find out, by means of the estimation of virtual water, the exported crops which have the highest water consumption. Similarly, we analyse the crops that are imported and therefore, might contribute to save water. Our second objective is to put forward new ways to save water by means of the virtual water trade and to focus on the sectors where we should work to improve this water situation.

We are aware that the scope of our paper is far too ambitious and we know that it would be possible only with a more comprehensive work. Obviously, our recommendations for policies involving socio-economic and environmental aspects will be biased by economic, social, environmental, technological and institutional factors. Nevertheless, this paper tries to go one step forward in this field by presenting new questions and breaking fresh ground for future research.

The paper is organised as follows. After this introduction, chapter 2 presents the background and the first definitions of this topic; in addition, we describe the initial approaches supporting the virtual water trade as an acceptable alternative to managing water requirements. Chapter 3 explains the methodology we have used to estimate virtual water. The results are analysed in chapter 4 and the conclusions and final remarks are included in chapter 5.

Section snippets

Background

In the last few years there has been a greater interest in the different alternatives to managing water resources. Thus, we have two apparently contrary alternatives which do not clash with each other, namely, water supply management and demand management.2 The first choice is aimed at enhancing the

Methodology

We have defined virtual water as the water associated to products, in other words, the water which is necessary to produce certain goods. We will estimate here the amount of water used to produce, and then export, agricultural products in Andalusia. However, the estimation of the exported VW also needs a contrast with the imported VW if we want our initial approach to be relatively accurate. We will make use of the concept of real virtual water created by Hoekstra (2003) in order to estimate

Analysis of the results

Table 1 includes the data of exported virtual water (VWX) and the imported virtual water (VWM) so as to determine net virtual water (NVW) aggregate in terms of types of crops, together with data about yields, exports and imports. As far as yield is concerned, we can see that the best yield in 2002 corresponded to fruits and vegetables. The reasons for these good results are their high production (48% the former and 11% the latter), and, particularly, the small area they occupy (7% and 2%

Conclusions and final remarks

Our first aim was to gain a deeper insight in the relationship between the use of water and the Andalusian productive system—particularly the agrarian system. Our purpose was to find out which sectors boost a rational use of this resource and so enable us to save greater quantities of water. On the other hand, we try to detect which agrarian sectors suffer from a not very rational use of water on account of their high water requirements. It is a fact that the sustainable consumption of this

Acknowledgments

I would like to thank Cristina Madrid (Universidad Autónoma de Barcelona) for useful comments and Sergio Mancheño (Instituto Nacional de Estadística) for his help with the data.

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