203
spawned a niche academic subdiscipline (Allan 2003; Chapagain and Hoekstra
2004; Konar et al. 2011).
Energy use, greenhouse gas emissions, minerals, land use, photosynthetic capacity, and other goods and materials are likewise “embedded” virtually in every international trade (Bruckner et al. 2012). The field of life cycle analysis generally, and
“footprint” analysis specifically, is concerned with measuring these embedded virtual flows. Because a great deal of energy and water use is embedded in nearly every
kind of good or service, it is generally true that nations with limited domestic energy
or water resources rely heavily on trade in virtual energy or water resources as substitutes for scarce local resources. This virtual trade reflects the comparative advantages of energy-rich and water-rich nations, especially in the production of
energy-or-water-intensive bulk grains and raw materials. The comparative advantage
driving virtual trade is real, although it tends to be modest (Debaere 2014).
7.6 Modeling Trade in FEW Systems
In addition to IMPACT, which focuses on the trading of agricultural commodities,
there are other modeling tools and approaches to analyze FEW systems, including
trade at the local, regional, and global scales. In Chap. 15, we discuss modeling
approaches that include the trade of food (directly and virtually through land and
water) and energy at various scales. In one of these approaches, referred to as
Integrated Assessment Modeling (see Sect. 15.2.4), trade of food and energy commodities is explicitly included in the calculations of supply and demand of land,
extractive, and water resources that need to be considered in improved accounting
efforts of FEW.
Another approach worth mentioning is Multi-Region Input/Output (MRIO).
MRIO analysis is a widely used modeling approach, which enables analysts to
explore the entire supply chain and the associated (“embodied”) emissions or natural resource use. At its core, it is an accounting procedure relying on regional economic input–output (IO) tables and interregional trade matrices, depicting the flows
of money to and from each sector within and between the interlinked economies and
thus revealing each sector’s entire supply chain. The MRIO modeling approach has
been frequently used in water and land footprint and virtual land/water studies by
utilizing the IO ability to quantify direct and indirect (upstream supply chain) land
and water consumption for sectorial production at regional, national, or global scales.
The integration of trade modeling with modeling of FEW systems remains an
important area of research and innovation. Given the intensity of the exchanges of
FEW brought by trade, this is likely to remain an important area of activity in the
years ahead.
Key Points
• Trade is an ancient institution, but globalization has dramatically accelerated trade.
• Nations trade to buy goods and services that are not available locally or that are
available at lower prices from other nations.
7 Trade
spawned a niche academic subdiscipline (Allan 2003; Chapagain and Hoekstra
2004; Konar et al. 2011).
Energy use, greenhouse gas emissions, minerals, land use, photosynthetic capacity, and other goods and materials are likewise “embedded” virtually in every international trade (Bruckner et al. 2012). The field of life cycle analysis generally, and
“footprint” analysis specifically, is concerned with measuring these embedded virtual flows. Because a great deal of energy and water use is embedded in nearly every
kind of good or service, it is generally true that nations with limited domestic energy
or water resources rely heavily on trade in virtual energy or water resources as substitutes for scarce local resources. This virtual trade reflects the comparative advantages of energy-rich and water-rich nations, especially in the production of
energy-or-water-intensive bulk grains and raw materials. The comparative advantage
driving virtual trade is real, although it tends to be modest (Debaere 2014).
7.6 Modeling Trade in FEW Systems
In addition to IMPACT, which focuses on the trading of agricultural commodities,
there are other modeling tools and approaches to analyze FEW systems, including
trade at the local, regional, and global scales. In Chap. 15, we discuss modeling
approaches that include the trade of food (directly and virtually through land and
water) and energy at various scales. In one of these approaches, referred to as
Integrated Assessment Modeling (see Sect. 15.2.4), trade of food and energy commodities is explicitly included in the calculations of supply and demand of land,
extractive, and water resources that need to be considered in improved accounting
efforts of FEW.
Another approach worth mentioning is Multi-Region Input/Output (MRIO).
MRIO analysis is a widely used modeling approach, which enables analysts to
explore the entire supply chain and the associated (“embodied”) emissions or natural resource use. At its core, it is an accounting procedure relying on regional economic input–output (IO) tables and interregional trade matrices, depicting the flows
of money to and from each sector within and between the interlinked economies and
thus revealing each sector’s entire supply chain. The MRIO modeling approach has
been frequently used in water and land footprint and virtual land/water studies by
utilizing the IO ability to quantify direct and indirect (upstream supply chain) land
and water consumption for sectorial production at regional, national, or global scales.
The integration of trade modeling with modeling of FEW systems remains an
important area of research and innovation. Given the intensity of the exchanges of
FEW brought by trade, this is likely to remain an important area of activity in the
years ahead.
Key Points
• Trade is an ancient institution, but globalization has dramatically accelerated trade.
• Nations trade to buy goods and services that are not available locally or that are
available at lower prices from other nations.
7 Trade