The effect of globalisation on water consumption: A case study of the Spanish virtual water trade, 1849-1935

- We study the role of international trade in global pressures on water resources.
- Water embodied in Spanish exports of agricultural products rose from 1849 to 1935.
- Growing exports and compositional change made virtual water exports to increase.
- Yield improvements made water consumption to slow down.
- From 1860 to 1930, 30% of the rise in blue water demands was due to exports rise.

This paper aims to analyse the impact on water consumption of trade expansion in the first era of globalisation. To that end, we have chosen the case of Spain, a semi-arid country with significant cyclical water shortages.More specifically, we are interested in answering the following questions. What volume of water was required for exports of agricultural and food products? How did this variable evolve over time? Which factors drove this evolution? In short, we wish to understand the impact on water resources of Spain's entry into world agriculture and food markets.Firstly, we examine virtual water trade flows in the long run. Secondly, we attempt to disentangle certain major driving forces underlying these trajectories. In order to establish the role played by trade in the final net balance of water, a Decomposition Analysis (DA) is applied. Our findings show the great pressures that the first globalisation imposed on not only domestic but also foreign water resources. Trade volumes as well as trade patterns were essential factors driving rising virtual water flows, while yield improvements contributed smoothly to moderation in the expansion of water flows.