Spatially explicit assessment of water embodied in European trade: A product-level multi-regional input-output analysis

Responsible water management in an era of globalised supply chains needs to consider both local and regional water balances and international trade. In this paper, we assess the water footprints of total final demand in the EU-27 at a very detailed product level and spatial scale an important step towards informed water policy. We apply the multi-regional input-output (MRIO) model EXIOBASE, including water data, to track the distribution of water use along product supply chains within and across countries. This enables the first spatially-explicit MRIO analysis of water embodied in Europe's external trade for almost 11,000 watersheds world-wide, tracing indirect ("virtual") water consumption in one country back to those watersheds where the water was actually extracted. We show that the EU-27 indirectly imports large quantities of blue and green water via international trade of products, most notably processed crop products, and these imports far exceed the water used from domestic sources. The Indus, Danube and Mississippi watersheds are the largest individual contributors to the EU-27's final water consumption, which causes large environmental impacts due to water scarcity in both the Indus and Mississippi watersheds. We conclude by sketching out policy options to ensure that sustainable water management within and outside European borders is not compromised by European consumption. (C) 2016 Elsevier Ltd. All rights reserved.