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New developments in water resource allocation techniques range from local management of green water to international trade in water. A further extension of this is through the virtual water concept, which is the water required to produce a crop or product. The virtual water content of many products is now available at a national and global scale. While these calculations are meaningful in international trade debates, they are not useful to water managers since regional climatic and management conditions are highly variable. The utility of the virtual water concept at a smaller scale is illustrated by a comparison of agricultural crops in the driest and wettest agro-climatic regions in Canada. Results were compared to national and international global calculations. The calculations are highly sensitive to local conditions, and locally collected data needs to be aggregated and compared in order to be made useful to water managers and land use planners.

The success of China’s economic development has brought increasing pressures on its water resources, motivating it to better understand water use characteristics and how scarce water resources are transferred among regions. Virtual water is a term used to refer to the volume of freshwater consumed for producing traded goods and services. It reflects the actual human consumption of water resources and therefore is important for water resources management. The goal of this paper is to evaluate the current inter-regional virtual water trade (VWT) structure and to assess the implications of these trade patterns for water use and water conservation strategies in China. Based on the most recently available multi-regional input–output (MRIO) data, we have developed an extended inter-regional input–output (IRIO) model for eight economic regions in China to account for virtual water flows. The findings show that water use efficiency has increased over the years, but it is still unbalanced among the regions. The total amount of VWT has increased, and the major source of the trade is domestic inter-regional trade, especially intermediate products trade. Moreover, the main direction of virtual water transfer is from water-poor inland regions to water-rich regions, which is unfavorable for water resource allocation and efficiency. Therefore, in addition to enhancing water use efficiency and encouraging water-saving production alternatives, we suggest that China’s government should also adopt a market-based water pricing system.

The efficient and optimal management of water resources is of great importance due to the strong dependence of human life on water. Also, the availability and utilization of the existing water resources in regions with water shortages, such as the Middle East, impose high social, economic, and environmental costs. Therefore, water resource management policies should incorporate all aspects of supply, allocation, control, and monitoring of resources. This study provides a dynamic simulation model for water resource management in the Yazd province of Iran to examine the effect of different policies on the other variables and choose the most suitable policies over time. For this purpose, we used a system dynamics approach to propose an integrated water resources management model, considering a comprehensive view of different aspects. The proposed model included over 230 influential variables in water resources, along with economic, demographic, technological, agricultural, industrial, public policy-making, water demand-supply, and virtual water volume subsystems. After we validate the model, we define three scenarios (optimistic, baseline, and pessimistic) and four policy packages (i.e., business as usual, focusing on economic development, focusing on sustainable development based on ecological balance, and focusing on water conservation) in the time horizons of 10, 20, and 50 years. The simulation results indicated that we require a reform in the Yazd economic development strategies through policies such as changing the cropping pattern and reducing water-consuming industries. Moreover, water supply enhancement by raising the inter-basin transfer of water alone cannot be an effective solution for reducing the water shortage in Yazd province and may even worsen the water shortage in the long run. We conclude that the “Focus on Water Conservation” policy is the best solution to reduce water shortage. The results of the baseline scenario show that adopting the FWC policy changes the increasing trend of water shortage in the province and decreases them from more than 53 billion m³ in the “Business as Usual” policy to less than 20 billion m³ in the year 2040. As the FWC would decrease more than 10 billion m³ of the virtual water level imbalance compared to BAU policy and make more investments in water efficiency plans, it preserves the current resources of water in the long run.

Because of severe water scarcity, it is crucial to quantify water use in China’s water-scarce regions and to analyze the factors driving its use. In this paper, we analyze the driving factors behind the water footprint from 2007 to 2017 in the mildly water-scarce region of Anhui Province, using regional input–output models and structural decomposition analysis. The results show the following: (1) Although the average virtual water intensity of Anhui Province decreased by 52.58% from 2007 to 2017, the water-use efficiency was still low; (2) During the study period, the total water footprint of Anhui Province increased by 25.06%, with an obvious upward trend; (3) From 2012 to 2017, the net export volume of virtual water in Anhui Province was positive, and the flow volume decreased by 78.87%; (4) Technological progress contributed the most to reducing the water footprint of Anhui Province, followed by the increased counter-urbanization rate as the second-largest driving force. The expansion of the scale effect, including the size of the economy and the size of the population, was the main negative driving force for the increase in Anhui’s water footprint. However, the proportion of economic scale in the water footprint drivers gradually decreased.

Challenges to water management in the Middle East are essentially distortions in the water market and their treatment. Domestically, there are discrepancies between supply and demand; between the supplied and the metered water flows; between the real cost of water and the levied charges of water tariffs; between the tariff structure and the income distribution patterns; between the needed qualified manpower and the supply thereof; and between the awareness of consumers and the level of education level needed to manage the resources optimally. Internationally, the challenges are focused on the terms of trade, the attraction of capital and know-how for development, the import and adaptation of technology and the management of internationally shared watercourses and aquifers. Other challenges emanate from the direct links water has with energy and the environment.

Treatment of these distortions varies in the countries of the region, but all find themselves resorting to the import of food commodities to bridge the gap between supply and demand. Shadow water plays an extremely important role in water management in the countries of the Middle East and most arid and semi-arid countries. Its cost is far below the marginal cost of water in any of the countries of the region.

Facing these challenges is a formidable task to be undertaken by water managers and by governments. This paper attempts to identify the major challenges and proposes an approach to face them.