WATER POLITICS

During the 26th World Water Week held in Stockholm in August 2021 (see our 3 takeaways here), there were a couple of sessions on Central Asia. A region that urgently needs to collaborate in order to achieve water-food security given the increasing water and climate risks it is facing. One of the sessions, “Central Asia Water security & prosperity: elements for informed cooperation“, highlighted this need for transboundary collaboration through analysis of water footprints and virtual water trade of the region. To learn more about this interesting analysis, we interviewed Ioana Dobrescu from Water Footprint Implementation, one of the panelists of the session. See what the analysis found and what key considerations countries should factor for future trade.

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CWR: Congratulations on your successful presentation at World Water Week 2021! To set the scene, can you briefly share some of the top climate and water risks that Central Asia is facing?

Ioana Dobrescu (ID): Thank you. I’m glad you found the presentation insightful.

Central Asia is facing a worrisome mix of challenges. Few are unaware of the impacts the overuse of water for irrigation has had on the Aral Sea, and equitable water allocation to satisfy both socio-economic and environmental needs continues to be one of the major challenges.

Equitable allocation will be put further to the test by the impacts of climate change on water availability. While the region doesn’t face natural scarcity, it might do so in the future, an effect of the melting glaciers that feed the two main river basins, Amu Darya and Syr Darya.

Decreased water availability will exacerbate competition over the resource and could be a destabilizing factor for peace in the region.

At the same time, climate projections warn of increased drought and changing rainfall patterns. For a region that is highly dependent on both rainfed and irrigated agriculture, and whose upstream countries rely almost 100% on hydropower, decreased water availability coupled with drought will have major impacts on both agriculture and energy production.

Water security always translates into food and energy security. This is part of what we call the water-food-energy nexus.

CWR: How do these risks relate to the findings from your study “Water Footprint Analysis of Central Asia”?

ID: Our study utilized the relatively novel concept of Water Footprint (WF) to perform accounting for water use at regional, national and river basin levels.

The added value of applying the WF method of accounting is that it goes beyond traditional water withdrawal volumes to look at water consumption specified per source: rainwater (green water footprint), surface and groundwater (blue water footprint) and pollution (grey water footprint).

It comes as no surprise that in Central Asia both green (rain) and blue (ground and surface) water resources are mainly consumed for crop production. While irrigation is a widespread practice, our study shows that green water use has the largest share (56%) in the total water footprint of the region. The high dependence on green water use for agri-production activities, while less stressful for the river basins, translates to high vulnerability to drought conditions.

Our study also shows that the largest share of blue water use (irrigation) is, also unsurprisingly, used for cotton production, mainly in Uzbekistan and Turkmenistan. Since most of the cotton production is destined for export and related to economic gains, water scarcity and hydrological droughts can have large negative impacts on the region’s economy.

At the same time, cotton is the main contributor to water scarcity issues in the region through its high blue water footprint.

CWR: The Water Footprint Analysis used the concept of “virtual water trade”. Can you briefly explain what virtual water is and then why it is particularly effective in managing Central Asia’s water risks?

ID: Virtual water, or embedded water, refers to the amount of water required to produce a product or service that is then traded across borders. It should not be confused with the physical water contained in the product as this is negligible compared to the amount of water required in production.

Quantifying and mapping the virtual water trade between Central Asia and the rest of the world helps the region understand if it’s virtually losing or gaining water through its exports and imports. Our study shows that the region is a net water exporter, and thus loses water through its trade.

If Central Asia wishes to mitigate the water availability risks and climate risks to food security, it should also consider retaining more of its water in the region, first by increasing water efficiency in agricultural production and second, by switching part of its exports to less water-intensive goods.

CWR: In your World Water Week presentation you said that virtual water trade is closely connected to international trade. Can you expand on this? What are the implications for global trade now and in the future?

ID: Freshwater availability, use and management have so far been addressed at a local, national and river basin scale. The coupling of international trade with the concept of virtual water has given a global dimension to water issues.

It follows that there is also a global responsibility to address water scarcity, pollution, overconsumption and so forth, wherever they may happen.

One implication is for the supply chains of internationally operating companies. Businesses should aim at reducing their water footprint at every tier of their supply chain, even if they are far removed from the businesses’ place of incorporation.

Another implication is for governments who should base their trade policies on more than economic considerations. For example, knowing the food security of your citizens relies on the water availability for crops production in another country begs the question of shared responsibility for the sustainable use and management of those water resources.

CWR: How is this relationship between virtual water trade and intraregional trade displayed in Central Asia? And how should Central Asian countries work to overcome the challenges?

ID: Our study mapped the virtual water trade between the five Central Asia states and brought to light the interdependencies not through physical water allocations but through the embedded water in the goods they exchange.

For example, Kazakhstan is the main exporter of green water to the rest of the Central Asia countries through rain-fed wheat. Drought or changing rainfall patterns will have implications not just for Kazakhstan, but for all the other Central Asia countries that depend on wheat imports. Turkmenistan and Uzbekistan are the highest blue water users and exporters of blue virtual water through cotton, part of which goes to the neighbouring Central Asia countries. In return, they import fresh fruit and vegetables which require less water to produce.

The water footprint of production coupled with virtual water trade analysis can help national governments save water by choosing to export products with relatively high water productivity (i.e. commodities with a small water footprint) to countries with low water productivity (commodities with a large water footprint).

Of course, this approach cannot be applied unilaterally. The countries should jointly assess their comparative advantages (which commodity is being produced more efficiently in which country) and inform their trade policies in such a way that interregional trade results in a net water saving.

Knowledge of virtual water trade can help the Central Asia governments mitigate water and climate risks not only through better water management practices but also through intra-regional water-smart trade.

CWR: As you mentioned that dependencies are especially high in the agriculture sector, are there any specific findings and recommendations you can share on this front to help the sector?

ID: First and foremost, we recommend reducing the water footprint by increasing water efficiency in agricultural production.

We have seen that the region withdraws an average of 68 billion m3 per year but blue water consumption in agriculture is just 33 billion m3. This tells us that a staggering 50% of all water withdrawn is lost, either through inefficient agricultural practices or in leaky irrigation infrastructure.

Second, we’ve also noticed large differences in efficiency between the countries for the same crops. Cotton for example is produced with almost four times less water in Kyrgyzstan than in Turkmenistan (1823 m3/ton versus 6623 m3/ton), with the rest of the countries occupying the range between. While Kazakhstan is the largest wheat producer of the region, it also uses more than four times as much water to produce a ton of wheat than Uzbekistan, which is the most efficient producer of the region (2900 m3/ton versus 667 m3/ton).

The countries have a lot to learn from each other on best practices for increased water productivity.

CWR: You stressed the importance of incentivizing water users in agriculture by revising water tariffs. Can you walk us through how can governments fast track the regulatory changes and successfully implement them? Are there any best practice examples?

ID: Our study also included an economic water productivity analysis. This is a relatively straightforward exercise that puts a dollar value on the amount of water used to produce goods. It’s a result of combining the water footprint of a commodity with the trade volume and values.

The results show that most of the water resources are exported out of the countries via products such as wheat which have a high water footprint (m3/ton) and a lower economic value ($/ton) than products such as vegetables which have a lower water footprint and a higher economic value.

At the same time, the main source of virtual water exports is cotton, which despite its higher economic value per tonne has a very low economic water productivity, meaning it uses so much water to grow, the economic value per cubic meter of water becomes very low, up to 6 cents of a dollar per m3.

Economic development of the region in the form of processing industries would allow them to gain more economic value per m3 of water used by processing primary products into value added products before export.

The economic water productivity analysis does not take water tariffs into consideration but a comparative analysis of the five countries has shown that irrigation water is highly undervalued, in some cases such as Turkmenistan being provided even for free.

Revising the water tariffs for irrigation would incentivize farmers to cut down on their use and increase efficiency resulting also in increased economic water productivity. Implementing revised water tariffs in the irrigating countries would have major impacts in increased water availability, saving up to a 33billion m3 of water per year.

CWR: To wrap up, is there anything you would like to call for? What do you want to see happen in the next couple, five or ten years?

ID: I think the most important takeaway from this study is that Central Asia is facing water and climate risks but it also has tremendous opportunities at its disposal.

Increasing water efficiency in agricultural production, informing trade policy based on virtual water trade and adapting production based on comparative advantages can all help the region mitigate some of its risks and increase its water, food and energy security. But no country can act alone.

The gains for the region can only be achieved through collaboration. The costs of inaction can translate into socio-economic disasters on the background of increasing droughts and decreasing water availability.

This study brought an additional layer to the already existing wealth of information on the water woes of the region. The governments of the Central Asian states have sufficient knowledge and expertise at their disposal, both intraregional and from their development partners, to set a course of action in mitigating and adapting to the regional water and climate risks.

I hope that in the next couple of years we can speak about Central Asia as the most successful case of transboundary water cooperation.