Living at the Water’s Edge: A World-Wide Econometric Panel Estimation of Arable Water Footprint Drivers

Abstract

As part of the Sustainable Development Goal (SDG) for ensuring clean water and sanitation worldwide by 2030, SDG target 6.4 seeks to attain sustainable withdrawals of freshwater through efficiency gains with a view to relieving water stress in vulnerable populated areas. The water footprint (WF) is a key metric to measure this concept, although the dynamics of the drivers of the WF through space and time remain relatively under-researched, whilst in foresight studies, the WF is often subject to simplistic assumptions. Thus, constructing a panel dataset of 130 countries and 156 crops for the period 2002–2016, this paper empirically assesses the sign and magnitude of WF drivers of agricultural crop activities, employing a careful selection of demographic, economic and climatic drivers. The study uncovers evidence of significant deviations in WF drivers across regions segmented by relative wealth, relating specifically to the stage of economic development and the presence (absence) of economies of scale, whilst we confirm that geographical coordinates have a major bearing on the climatic WF driver. Moreover, examining the temporal dimension, there is compelling evidence supporting a structural break in the role that technical progress exerted on the WF prior to, and in the wake of, the 2008 financial crisis.