The Spanish Food Industry on Global Supply Chains and Its Impact on Water Resources

Abstract

The study of the impact of economic activities on natural resources through global supply chains is increasingly demanded in the context of the growing globalization of economies and product fragmentation. Taking Spain as a case study and a sector with significant economic and environmental impacts, the agri-food industry, the objective of this work is two-fold. First, we estimate the associated water impact, both from the production and consumption perspectives, paying special attention to the water embodied in production exchanges among countries and sectors. To that aim, we use an environmentally-extended multiregional input-output model (MRIO). Second, we assess the main driving factors behind changes in direct and embodied water consumption between the years 1995 and 2009 by means of a structural decomposition analysis. The MRIO model provides a comprehensive estimate of the economic linkages among regions and economic sectors and, therefore, allows calculating the environmental impacts over international value chains. The results indicate that the food industry exerts large impacts on global water resources, particularly given the remarkable interactions with the domestic and foreign agricultural sectors, These growing linkages show how consumption patterns, and, therefore, lifestyles, involve large environmental impacts through the whole and global supply chains