Virtual water and its effect in Huaihe River basin: an analysis using a dynamic multi-region computable general equilibrium model

A dynamic multi-region computable general equilibrium (CGE) model is used to analyze virtual water and its effect in the Huaihe River basin, which includes Jiangsu, Anhui, Shandong and Henan provinces. The baseline scenario was first constructed to describe the trade situation and virtual water among different regions and sectors from 2009-2020. Then two hypothetical policy scenarios were set to analyze the economic, water consumption and virtual water trade impacts under different policy shocks. The results show that (1) the Huaihe River basin was a net virtual water outflow region, with 13.977 x 10(9) m(3) virtual water transferred outside the river basin in 2009, and 26.653 x 10(9) m(3) VW transferred to outside in 2020. Jiangsu is the largest virtual water outflow province (mainly flows to outside), followed by Anhui. Anhui suffers from severe water shortage, but provides a net virtual water outflow to Henan, Jiangsu and Shandong and outside; (2) reducing Anhui's agricultural output (S1 scenario) and Anhui's agricultural virtual water outflow (S2 scenario) can not only reduce virtual water trade but also save water, but S1 scenario reduced net virtual water outflow by more, and saved more water. S1 had a positive effect on gross domestic product (GDP), but reduced the employment rate.