Water content in trade: a regional analysis for Morocco

Abstract

This paper aims at evaluating the virtual water content in trade in an intra-country perspective and discussing potential tradeoffs between the use of natural resources and value added creation. We develop a trade-based index that reveals the relative water use intensities associated with specific interregional and international trade flows. The index is calculated considering the measures of water and value added embedded in trade flows associated with each regional origin-destination pair using an interregional input-output matrix for Morocco together with information on sectorial water use. We add to the literature on virtual water by encompassing the subnational perspective in a country that shows a clear ‘climate divide’. Furthermore, we contribute to the literature by proposing an index that may be applied to different economies to evaluate multidimensional trade-offs associated with the pressure of specific economic flows to the use of natural resources relative to its economic relevance.