Estimating water scarcity risks under climate change: A provincial perspective in China

Water is a crucial raw material in economic production activities. Research indicates that water scarcity can lead to significant economic output losses (water scarcity risk, WSR), affecting not only the local area (referred to as local water scarcity risk, LWSR) but also causing economic losses to other regions through trade networks (referred to as virtual water scarcity risk, VWSR). With climate change exacerbating this challenge, understanding the water scarcity risk under changing climatic conditions is essential. However, few studies have addressed this issue comprehensively. To fill this gap, we developed a comprehensive model incorporating environmental flow requirements, water withdrawal, supply, economic output, and trade networks to assess LWSR and VWSR among China's provinces under climate change. Our analysis reveals a growth in China's WSR from $4.6 trillion in 2020 to $5 trillion in 2030. Specifically, both local water scarcity risk (LWSR) and virtual water scarcity risk (VWSR) amounted to $0.9 trillion and $3.7 trillion, respectively, in 2020, increasing to $1.0 trillion and $4.0 trillion by 2030. We also identified hot-spot provinces and sectors with high WSR and proposed relevant policy implications. Our findings contribute to China's climate change mitigation efforts, particularly in formulating strategies to address water scarcity risk. Practitioner points: Spatial heterogeneity-based environmental flow requirement is considered. The water scarcity risk of the Chinese agricultural sector in 2017 amounted to $1.1 trillion. LWSR and VWSR are 0.3 and 0.8 $trillion, respectively. Hotspot Chinese provinces and sectors are identified.