Canadian agriculture trade with the United States, specifically trade in livestock and livestock commodities, has flourished under the NAFTA regime. However, the benefits of this trade liberalization have hidden environmental costs that seldom get noticed or accounted. The purpose of this research was to evaluate the hidden cost on water resources by first assessing the virtual water content (VWC) of various types of livestock and livestock products and then quantifying the virtual water flow (VWF) related to trade in livestock and its products between Canada and United States. The study also examined the North American Free Trade Agreement (NAFTA) and evaluated its implications for Canadian water resources. The research was conducted in three parts. First, the background literature on NAFTA was studied and trade data were collected to understand the NAFTA regime and study the impacts on Canadian exports of livestock and livestock products from the 1990s. The trade data were collected from provincial agricultural ministries and Statistics Canada. Secondly, datasheets were created to calculate the VWC in the various categories of animals and ultimately to estimate VWF between the two countries. Finally, Alberta and Ontario were chosen as case study areas to investigate localized impacts on water resources due to trade under NAFTA. The research results indicate that there is a large difference in the amount of VW being transferred through livestock and livestock commodities from Canada to the U.S. The average difference in trade has been calculated to be 3.6 billion m3 per year. This makes Canada a net exporter of virtual water to the U.S. A closer look at the trade patterns reveals that the U.S. imports mostly water-intensive commodities like cattle and cattle commodities, while it exports mostly less-water intensive commodities like chicken and mutton. By eliminating numerous trade barriers, the agreement has allowed competitive market forces to play a more dominant role in determining agricultural trade flows between the two countries. NAFTA has been criticized and contested at different levels for encouraging bulk water export from Canada to the U.S. What has not received attention in this debate is that water is also being exported in other forms, i.e., the virtual form. The hidden environmental, costs (for the exporting countries) or benefits (to the importing countries) are not reflected in the pricing of agricultural commodities. NAFTA’s mandate for the expansion of trade and investment through the removal of all trade barriers between the two countries is encouraging increased VW trade. This trade, if overlooked, can have deleterious impacts on the water resources of Canada.

Canadian agriculture trade with the United States, specifically trade in livestock and livestock commodities, has flourished under the NAFTA regime. However, the benefits of this trade liberalization have hidden environmental costs that seldom get noticed or accounted. The purpose of this research was to evaluate the hidden cost on water resources by first assessing the virtual water content (VWC) of various types of livestock and livestock products and then quantifying the virtual water flow (VWF) related to trade in livestock and its products between Canada and United States. The study also examined the North American Free Trade Agreement (NAFTA) and evaluated its implications for Canadian water resources. The research was conducted in three parts. First, the background literature on NAFTA was studied and trade data were collected to understand the NAFTA regime and study the impacts on Canadian exports of livestock and livestock products from the 1990s. The trade data were collected from provincial agricultural ministries and Statistics Canada. Secondly, datasheets were created to calculate the VWC in the various categories of animals and ultimately to estimate VWF between the two countries. Finally, Alberta and Ontario were chosen as case study areas to investigate localized impacts on water resources due to trade under NAFTA. The research results indicate that there is a large difference in the amount of VW being transferred through livestock and livestock commodities from Canada to the U.S. The average difference in trade has been calculated to be 3.6 billion m3 per year. This makes Canada a net exporter of virtual water to the U.S. A closer look at the trade patterns reveals that the U.S. imports mostly water-intensive commodities like cattle and cattle commodities, while it exports mostly less-water intensive commodities like chicken and mutton. By eliminating numerous trade barriers, the agreement has allowed competitive market forces to play a more dominant role in determining agricultural trade flows between the two countries. NAFTA has been criticized and contested at different levels for encouraging bulk water export from Canada to the U.S. What has not received attention in this debate is that water is also being exported in other forms, i.e., the virtual form. The hidden environmental, costs (for the exporting countries) or benefits (to the importing countries) are not reflected in the pricing of agricultural commodities. NAFTA’s mandate for the expansion of trade and investment through the removal of all trade barriers between the two countries is encouraging increased VW trade. This trade, if overlooked, can have deleterious impacts on the water resources of Canada.

abstract: There is growing concern over the future availability of water for electricity generation. Because of a rapidly growing population coupled with an arid climate, the Western United States faces a particularly acute water/energy challenge, as installation of new electricity capacity is expected to be required in the areas with the most limited water availability. Electricity trading is anticipated to be an important strategy for avoiding further local water stress, especially during drought and in the areas with the most rapidly growing populations. Transfers of electricity imply transfers of "virtual water" - water required for the production of a product. Yet, as a result of sizable demand growth, there may not be excess capacity in the system to support trade as an adaptive response to long lasting drought. As the grid inevitably expands capacity due to higher demand, or adapts to anticipated climate change, capacity additions should be selected and sited to increase system resilience to drought. This paper explores the tradeoff between virtual water and local water/energy infrastructure development for the purpose of enhancing the Western US power grid's resilience to drought. A simple linear model is developed that estimates the economically optimal configuration of the Western US power grid given water constraints. The model indicates that natural gas combined cycle power plants combined with increased interstate trade in power and virtual water provide the greatest opportunity for cost effective and water efficient grid expansion. Such expansion, as well as drought conditions, may shift and increase virtual water trade patterns, as states with ample water resources and a competitive advantage in developing power sources become net exporters, and states with limited water or higher costs become importers. / Dissertation/Thesis / M.S. Civil and Environmental Engineering 2013

abstract: Water resource management is becoming increasingly burdened by uncertain and fluctuating conditions resulting from climate change and population growth which place increased demands on already strained resources. Innovative water management schemes are necessary to address the reality of available water supplies. One such approach is the substitution of trade in virtual water for the use of local water supplies. This study provides a review of existing work in the use of virtual water and water footprint methods. Virtual water trade has been shown to be a successful method for addressing water scarcity and decreasing overall water consumption by shifting high water consumptive processes to wetter regions. These results however assume that all water resource supplies are equivalent regardless of physical location and they do not tie directly to economic markets. In this study we introduce a new mathematical framework, Embedded Resource Accounting (ERA), which is a synthesis of several different analytical methods presently used to quantify and describe human interactions with the economy and the natural environment. We define the specifics of the ERA framework in a generic context for the analysis of embedded resource trade in a way that links directly with the economics of that trade. Acknowledging the cyclical nature of water and the abundance of actual water resources on Earth, this study addresses fresh water availability within a given region. That is to say, the quantities of fresh water supplies annually available at acceptable quality for anthropogenic uses. The results of this research provide useful tools for water resource managers and policy makers to inform decision making on, (1) reallocation of local available fresh water resources, and (2) strategic supplementation of those resources with outside fresh water resources via the import of virtual water. / Dissertation/Thesis / Ph.D. Civil and Environmental Engineering 2013

Demand for both food and water are projected to increase substantially in the next four decades. Water scarcity is also projected to increase in scale and complexity. Climate change is projected to increase temperatures, spatio-temporal variability in rainfall, frequency and severity of droughts and soil water stresses to crops. Due to the crucial role of water in crop growth and yield formation, prolonged or severe soil water deficits in crop producing areas can result in substantial yield penalties. The potential of food trade to help address food insecurity as a result of insufficient water availability for crop production has been rationalized in the virtual water concept. The aim of this thesis was to improve the evidence base for understanding and evaluating the relationships between future water availability for crop production and food trade (or virtual water flows), and the utility of the virtual water concept to inform policy and management decisions on water-food security. The UK and barley were used as a model country and crop, respectively. Three crop growth simulation models (AquaCrop, CropWat and WaSim) were evaluated for their abilities to estimate the water use of 10 barley genotypes. Subsequently, the effect of projected climate change on UK barley yields in the 2030s, 2040s and 2050s was simulated using the high, medium and low emission scenarios data from the UK Climate Projections 2009 (UKCP09). Projections of total UK feed barley supply and demand were performed to quantify potential virtual water flows and to analyse the implications for food security and policy. The results show that the predicted water use of barley differed between the models but not among the genotypes. Predicted seasonal water use of the barley genotypes ranged from 241.4 to 319.2 mm. Based on the root mean square error (RMSE) and the index of agreement (D-Stat) values, CropWat performed poorly while AquaCrop and WaSim performed excellently. Barley yields under projected climate change increased substantially over baseline yields in all UK regions. Projected mean barley yields for the UK ranged from 6.04 tons ha-1 (2030s) to 7.77 tons ha-1 (2050s). In spite of the projected increase in yields, the UK faces the risk of large deficits in feed barley and meat supply from the 2030s to the 2050s due to a combination of population growth, increased per capita meat demand and reductions in land area allocated to barley production. Finally, current water scarcity concepts were found to be incompatible with water availability and consumption in crop producing areas, a situation that diminishes the usefulness of the virtual water concept for policy. To address this deficiency, a framework for making water scarcity compatible with crop production was proposed. In conclusion, the poor performance of CropWat has implications for its wider use in quantifying global virtual water flows associated with crop trade. Even though UK barley yields are projected to increase under projected climate change, the projected deficits in feed barley and meat supply threatens to destabilize future UK food security. The UK can rely on import to offset the large deficits in feed barley and meat supply but can use the proposed framework to reduce the effect of its imports on water scarcity in the exporting countries. The proposed framework improves understanding and evaluation of the role and usefulness of the virtual water concept in water-food security policy and management decisions.

The first essay compares six common models, linear, quadratic, Cobb-Douglas, translog, logarithmic, and transcendental, to estimate wheat yield and area functions for Saudi Arabia. Data cover 1990-2016 for all the variables that affect wheat supply. After testing the models using Box-Cox, multicollinearity, and autocorrelation tests, we decide that the Cobb-Douglas models provide the best fit for both yield and area. We find the price elasticity of wheat is inelastic. Yield price elasticities are more inelastic than area elasticities. The impact of government policy number 335 has a larger effect on area than yield. The cultivated area of wheat, the one-year lag of yield, and the number of machines per hectare are the most influential factors affecting wheat yield. The primary factors influencing the area models are a one-year lag of both cultivated area and yield, as well as the number of machines per hectare. The second essay estimates the residual demand elasticity that rice exporters face in Saudi Arabia. The inverse residual demand methods, as proposed by Reed and Saghaian 2004, are used for rice exporters to Saudi Arabia during the period 1993-2014. Estimation results of the elasticities of the residual demand indicate that Australia, India, and Pakistan enjoy market power, while Egypt faces a perfectly elastic demand curve. We find Thailand and the US had positive inverse residual demand which means they also have no market power. The last essay is about the virtual water trade in Saudi Arabia. Using the concept of virtual water introduced by Allan 1994 and developed by Hoekstra and Hung (2002), we estimate virtual water trade for 20 crops of Saudi Arabia during 2000-2016. Our result shows the average virtual water trade was 12.5 billion m3/year. Saudi has net virtual water imports, with the most significant virtual water imports coming from cereals & alfalfa and vegetables; and there is net virtual water export of fruit. Saudi virtual water trade reduces pressure on water resources by 52%. Distance plays a role in Saudi virtual water export; we found that more than 90% of exports go to neighboring countries, including 45% to GCC countries. More than 30% of virtual water imports come from Europe. A Gravity model is used to investigate whether water scarcity variables influence trade. We compare the OLS, Fixed effects, Random effects, and PPML estimators to get the best model. The AIC, and tests for multicollinearity, and heteroskedasticity assist in determining estimation procedures and the final models. We cluster the errors by distance to improve the specific country effect variables such as economic mass variables. For the cereals and alfalfa group, we find that water-related variables influence virtual water imports of cereals, millet, sorghum, corn, barley, and sesame. Therefore, we suggest that a basic gravity model be applied to the other crops. In the vegetable group, we find that related water variables impact virtual water trade for all crops except marrow. Dates are the only fruit crop that are not influenced by the water-related variables.

Understanding the relationship between drought and population dynamics is increasingly important, particularly in areas where high population growth corresponds with increasing drought risk due to climate change. We examine the relationship between drought events and population dynamics using a stylized hydrology-demography model that has been calibrated to simulate plausible feedbacks for the population decline of the Ancient Maya of Central America. We employ a deterministic and a stochastic approach. We find that the impact of drought increases abruptly once a critical threshold of population density is exceeded. The critical threshold depends on the intensity and duration of the drought as well as on the level of technology adopted by society, the extent of markets and societal behavior. The simulations show that, for a society to be as food secure post-climate change as they are pre-climate change, strategies would have to be adopted to not only increase the region's capacity to provide sufficient resources for its growing population, but also to buffer the impact of a drier climate on productivity. This study provides suggestions on how technological, societal and economic development can modify the system to mitigate the impacts of climate change on the human population.

The United States is the world's top virtual water exporting nation, but not much is known about the country's internal virtual water flow patterns and the volumes involved. Previous studies have suggested that the import of virtual water, defined as the volume of water required to produce a commodity or service, can relieve pressure on a region's water resources. This study seeks to quantify virtual water flows among U.S. states using the water footprint and input-output analytical methods, and to compare the quantitative results to actual water use volumes in agriculture. The results showed an overall pattern where virtual water is transferred from sparsely populated states mostly in the Midwest, where the country's most fertile agricultural land is located, to the relatively dry Western states, and to the densely populated, but relatively wet coastal regions in the East of the country. For the year 2008, states used 196 Gm3 of water to produce agricultural commodities (crops and livestock) that were exported for consumption in other states. This total virtual water export volume is equivalent to 35 percent of total water withdrawals for all sectors in the U.S., or 41 percent of total rainfall evapotranspiration volume. Gross annual virtual water import volumes were 191 Gm3, giving a net interstate virtual water flow volume of 5 Gm3 for all states. The total virtual water import volume represent 34 percent of total water withdrawals in the U.S., or 40 percent of total rainfall evapotranspiration volume. The estimates in this study cover virtual water flows as a result of trade in 9 primary crops which represent 95 percent of the cultivated area harvested, and trade in nine primary animals that represent nearly 90 percent of animal establishments, and 97 percent of the total national sales in the U.S. for the year 2008. The estimates do not include virtual water flows as a result of trade in processed crop and livestock products and industrial products, which would have resulted in even higher virtual water flow volumes. Commodities making the greatest call on the nation's water resources were corn for grain, with 20 percent of total water use, and milk cows with 17 percent. The total evapotranspiration volume for the nine primary crops analyzed was 332 Gm3/yr. This consists of 93 Gm3 irrigation water (excluding 25 percent irrigation losses), and 239 Gm3 from rainfall, showing that rainfall contributed 72 percent of the total water volumes required to produce primary crops. If irrigation return flows are considered, the proportion contributed by rainfall becomes 65 percent, compared to 35 percent (128 Gm3) for irrigation water. The nine live animals for all states used 636 Gm3 in 2008, with beef cattle taking up 340 Gm3, or 53 percent of the total volumes used for animal production. Net virtual water exports in absolute terms ranged from 91 Mm3/yr in the state of Washington, to 15 Gm3/yr in Iowa, while the minimum net virtual water import value was 47 Mm3/yr in Vermont, to 11 Gm3/yr in Florida. On a per capita basis, the people of North Dakota were responsible for the largest agricultural net virtual export volume (16,011 m3/yr/ca), although the state has only 0.2 percent of the national population. Washington was responsible for the lowest per capita net virtual water export (375 m3/yr/ca). The people of Delaware (0.3 percent the total population) were responsible for the largest net virtual water imports related to agricultural commodities on a per capita basis (1511 m3/yr/ca), with Nevada ranking lowest. In absolute terms, water footprint values in relation to the 18 primary crops and livestock groups ranged from 1157 Mm3/yr in Rhode Island, to 61,471 Mm3/yr in California. Water footprint per capita values ranged from 1,083 m3/yr/capita in New York, to 4,872 m3/yr/capita in Nebraska. Both water footprint and input-output methodologies showed that virtual water transfer constitutes a substantial portion of the water balance in water scarce states such as California, where imports and exports were found to be 13 and 15 percent of total actual water use. The ratios of net virtual water import to agricultural water use volumes were very high for relatively humid states such as Rhode Island (nearly 5,000 percent) and Connecticut (more than 3,500 percent), partly showing that factors related to economic structure dominate climatic factors (water endowments) in shaping virtual water flow patterns in most U.S. states. These results suggest that rather than being the main reason behind observed virtual water flow patterns, water availability is complimentary to other factors of production, mainly the availability of suitable agricultural land. Similar to Japan or some European countries, most highly states in the eastern part of the country rely heavily on virtual water imports to meet their local agricultural consumption requirements, while their economies focus on sectors that are less land and water intensive, such as the services industry. The study also revealed that the volumes of international virtual water imports and exports are dwarfed by internal (interstate) virtual water volumes in the U.S., showing an overall preference for home consumption to international trade. The productive value of water ($/m3 used) was found to be much higher for industry and domestic sectors, in comparison to more water intensive agricultural use. While input-output analysis appears less prone to estimation errors and is less laborious to implement, it is limited in assessing the virtual water content of individual commodities when compared to water footprint analysis. However, the two alternative methodologies both produced results that are to a large extent consistent with production and consumption patterns in the U.S. The study adds new insights and information to earlier global studies that did not elaborate much on the internal virtual water flow dynamics of the world's largest virtual water exporter. The knowledge is relevant for this large country, where there are wide variations in water and other natural resource endowments between regions.

Desenvolvimento sustentável tem se tornado um dos termos mais populares na agenda de empresas e governos. Do relatório Brundtland de 1987 a 15a Conferências das Nações Unidas sobre Mudanças Climáticas – COP15 – em 2009, o tema tem recebido crescente atenção uma vez que os atuais padrões de consumo e produção são claramente insustentáveis dos pontos de vista social, econômico e ambiental. O presente trabalho revisou os principais conceitos, métodos e ferramentas ligados à inclusão de valores ecologicamente sustentáveis no projeto de produtos e em seu ciclo de vida. Além disso, buscou, com a aplicação de um método cada vez mais aceito na literatura, denominado Pegada Hídrica, investigar o impacto do setor de biocombustíveis sobre os recursos hídricos no Brasil. Ao estimar o conteúdo de água virtual presente nas fases agrícola e industrial do ciclo de vida dos biocombustíveis analisados, o presente trabalho também buscou contribuir com a produção de dados que poderão ser utilizados na construção de inventários de produtos que fazem uso de etanol e biodiesel em seu próprio ciclo de vida. Outra contribuição possível visa à economia de recursos naturais, já que dados quantitativos são necessários para permitir comparações e eventuais tomadas de decisão cujo objetivo resulta, em última análise, no aumento de produtividade e redução de custos para as empresas. / Sustainable development has become one of the most popular terms in the agenda of corporations and governments. From 1987’s Brundtland report to the 15th United Nations Conference on Climate Change – COP15 – in 2009, the topic has received increasing attention since the current productin and consumption patterns are clearly unsustainable from the social, economic and environmental point of views. This paper reviewed the main concepts, methods and tools for the inclusion of ecologically sustainable values in design and product life cycle. In addition, we attempted, by applying a method increasingly accepted in literature, called Water Footprint, to investigate the impact of the biofuels sector on water resources in Brazil. In estimating the virtual water content present in agricultural and industrial phases of the life cycle analysis of biofuels, this study also aimed to contribute to the production of data that could be used to build inventories of products that use ethanol and biodiesel in their own life cycle. Another possible contribution is aimed at saving natural resources, since quantitative data are needed to allow comparisons and possible decision-making aimed ultimately in increased productivity and reduced costs for businesses.

Desenvolvimento sustentável tem se tornado um dos termos mais populares na agenda de empresas e governos. Do relatório Brundtland de 1987 a 15a Conferências das Nações Unidas sobre Mudanças Climáticas – COP15 – em 2009, o tema tem recebido crescente atenção uma vez que os atuais padrões de consumo e produção são claramente insustentáveis dos pontos de vista social, econômico e ambiental. O presente trabalho revisou os principais conceitos, métodos e ferramentas ligados à inclusão de valores ecologicamente sustentáveis no projeto de produtos e em seu ciclo de vida. Além disso, buscou, com a aplicação de um método cada vez mais aceito na literatura, denominado Pegada Hídrica, investigar o impacto do setor de biocombustíveis sobre os recursos hídricos no Brasil. Ao estimar o conteúdo de água virtual presente nas fases agrícola e industrial do ciclo de vida dos biocombustíveis analisados, o presente trabalho também buscou contribuir com a produção de dados que poderão ser utilizados na construção de inventários de produtos que fazem uso de etanol e biodiesel em seu próprio ciclo de vida. Outra contribuição possível visa à economia de recursos naturais, já que dados quantitativos são necessários para permitir comparações e eventuais tomadas de decisão cujo objetivo resulta, em última análise, no aumento de produtividade e redução de custos para as empresas. / Sustainable development has become one of the most popular terms in the agenda of corporations and governments. From 1987’s Brundtland report to the 15th United Nations Conference on Climate Change – COP15 – in 2009, the topic has received increasing attention since the current productin and consumption patterns are clearly unsustainable from the social, economic and environmental point of views. This paper reviewed the main concepts, methods and tools for the inclusion of ecologically sustainable values in design and product life cycle. In addition, we attempted, by applying a method increasingly accepted in literature, called Water Footprint, to investigate the impact of the biofuels sector on water resources in Brazil. In estimating the virtual water content present in agricultural and industrial phases of the life cycle analysis of biofuels, this study also aimed to contribute to the production of data that could be used to build inventories of products that use ethanol and biodiesel in their own life cycle. Another possible contribution is aimed at saving natural resources, since quantitative data are needed to allow comparisons and possible decision-making aimed ultimately in increased productivity and reduced costs for businesses.