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Identifying critical supply chains: An input-output analysis for Food-Energy-Water Nexus in China
Ecological Modelling 392 (2019) 31–37
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Ecological Modelling journal homepage: www.elsevier.com/locate/ecolmodel
Identifying critical supply chains: An input-output analysis for Food-EnergyWater Nexus in China Zhengyan Xiaoa, Meiqin Yaob, Xiaotong Tangc, Luxi Sund,
T
⁎
a
School of Statistics, Renmin University of China, Beijing, 100872, China School of Information Engineering, Hangzhou Dianzi University, Hangzhou, 310018, China c The Department of Accounting, Tianjin University of Finance and Economics, Tianjin, 300222, China d School of Economics and Business Administration, Chongqing University, Chongqing, 400030, China b
A R T I C LE I N FO
A B S T R A C T
Keywords: Food-Energy-Water Nexus Structural chains Input-output analysis
As the most populous country over the world, China has great pressure on food and resources security. In this study, we set the national economy of China as a whole system, and apply supply chains analysis based on the input-output structures, to identify the food-water linkage, food-energy linkage, and the energy-water linkage in the system. The results show that agriculture and animal husbandry contribute most use of resource in supply chains. Animal husbandry sector, agriculture, slaughtering and processing of meat contribute large amount of embodied water consumption. While agriculture, other food sector and animal husbandry sector consumes most embodied primary energy, although the direct primary energy use by animal husbandry sector is not significant. Meanwhile, by importing or exporting resources, international trade impacts on the resources flow through input-output structures. When making polices, the interactions of various resources and international trade should be considered by applying food energy water nexus (FEWN) approach.
1. Introduction According to the UN World Urbanization Prospects 2018, at the mid-year of 2018, the world’s population has reached 7.63 billion people, and it is expected to reach around 9.77 billion people by 2050. In particular, more people live in urban areas rather than in rural areas, with 55% of the world’s population residing in urban areas until 2018. In 1950, only 30% of the world’s population lived in cities, however, by 2050, 68% of the world’s population will live in cities. Since the increase in demands of food, energy and water driven by population growth, urbanization, and economic development, the supplies of these three resources face significant challenges. Traditional thinking treats energy, water and food in completion (Owen et al., 2018). In fact, these three factors are relevant. It is clear that water and energy are the crucial inputs along the whole food supply chain (e.g., from production of rice and wheat, to harvesting, processing, storage and transportation). Energy production process consumes a large amount of water, while a lot of energy consumption is embodied during the production and distribution of water. It is essential to focus on the interrelationships and dependencies between them. Nexus thinking represents a sustained effort to recognize the interconnections among the three resources, and uses an integrated perspective on the management of them
⁎
(Al-Saidi and Elagib, 2017; Sharmina et al., 2016). Actually, policies need to look at the interlinks that one policy target on one resource inevitably has effects on another one (Wang et al., 2017). The Food-Energy-Water Nexus (FEWN) analyses integrate these three factors into an interconnected system, investigating the relationships among them, while considering the impacts from human activities. The FEWN is widely used in analyses of ecological processes and for the resources management. Studies approach the nexus by using a variety of methods, tools and frameworks (Al-Ansari et al., 2015; Balkema et al., 2002; Chang et al., 2015; Feng et al., 2014; Hamiche et al., 2016; Li et al., 2018; Mannan et al., 2018; Nair et al., 2014). A difficulty in nexus issue is the lack of a unified base for energy and water flow analysis, which hinders sustainable energy and water resource utilization (Wang et al., 2017). Given that, Input-Output Analysis (IOA) serves as a foundation for defining the relations among the three resources. As one of the main methodologies for evaluating the interactions between economic factors and natural resources, it provides effective tools to investigate both the physical flows and monetary flows through economic trade networks, and detects the driving force of resources consumption from an economic structure perspective (Fang and Chen, 2017; Su et al., 2013). The IOA method is useful to examine the interactions and trade-offs between multiple entities. For example,
Corresponding author. E-mail address: [email protected] (L. Sun).
https://doi.org/10.1016/j.ecolmodel.2018.11.006 Received 1 June 2018; Received in revised form 13 November 2018; Accepted 13 November 2018 0304-3800/ © 2018 Elsevier B.V. All rights reserved.
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applying IOA method, both direct and indirect flows embodied in interactive chains of production and consumption, both direct and indirect flows can be investigated (Chen and Chen, 2015). This framework can be used in a wide range, such as different metabolic flows in urban metabolism (Chen and Chen, 2017), global trade of energy (Duan and Chen, 2017), virtual water tracking (Yang et al., 2012). From the perspective of nexus, IOA approach also applies an effective way to assessing the supply and demand relations between the food, energy and water resources. On the global level, Yang et al. (2012) apply ecological network analysis to shed insight into the complicated system interactions, and find that control and utility relations can well depict the mutual relation in trade system, and direct observable relations differ from integral ones with indirect interactions considered. Holland et al. (2015) reveal that energy-driven pressures on freshwater resources and the consequences of energy production should be considered when designing policy. Chen et al. (2018a) follow nexus thinking to expound global land-water nexus by tracking agricultural land and freshwater use flows along the global supply chains, and reveal that developed countries (e.g., USA and Japan), and major large developing economies (e.g., mainland China and India) are the overriding drivers of agricultural freshwater comsumption globally. On the national level, White et al. (2018) demonstrate the hidden virtual flows of water, energy, and food embodied in intra-regional and transnational inter-regional trade. They claim that China’s prioritization of economic growth and trade in low value added and pollution intensive sectors consumes a great amount of nexus resources within its territory to satisfy consumers’ demands in Japan and South Korea. Owen et al. (2018) take UK as a case, use input-output analysis techniques to investigate the interaction between the energy, water and food impacts of products, and recognize that strategies that aim to reduce environmental impacts should not harm the socioeconomic well-being of the UK. On the regional level, Chen et al. (2018b) present a demonstration of the waterenergy mixed-unit input-output approach by analyzing Hong Kong and its associated hinterland in mainland China. Their study shows that the current water infrastructures will meet the demand for water treatment in 2050, and suggests that all types of water for energy and energy for water will increase by 7.8–9%. By using Beijing as an example Chen and Chen (2015), find that the impact of nexus on energy networks is larger than water networks and the most urban sectors rely on manufacturing in the energy-water nexus. Similarly, Wang et al. (2017) propose a modified input-output analysis which provides a unified framework to balance urban energy and water comsumption, by using the case of Beijing. The results show that manufacture provides the largest outflow of hybrid energy, and agriculture is the largest receiver. Compared with Beijing, Yang et al. (2018) find that Shanghai is facing greater environmental challenges in the process of urban sustainability. As the world’s most populous country and fastest growing economy, China has a population of 1.42 billion people and keeps fast economic growth rate during the last three decades. With the development in society and economy, China has great challenges in food, energy and water. In particular, China is poor of water resources with 2300 m3 of per capita availability, which is less than one third of the world's average (Guan and Hubacek, 2008). China's per capita water availability is low and unevenly distributed, both spatially and temporally, which is inconsistent with the rising socio-economic need for water (Jiang, 2015). Therefore, to investigate the relations among food, energy and water in China from the perspective of nexus thinking is valuable to the global food and resources security. The study by Qin et al. (2015) shows that future energy plans could conflict with the industrial water policy, but the amount of water used in the energy sector is highly dependant on technology choices, especially for power plant cooling. They predict high electricity demand in the future is expected to be met mainly by coal and nuclear power, and planned inland development of nuclear power presents a new source of freshwater demand. In the study of Wu and Chen (2017) all the input items are inclusively inventoried as products of the economy. The previous analysis
shows that the industrial water use induced by the solar power plant infrastructure is revealed to be over one order of magnitude higher than that in previous scoping. However, there is still lack uniform way to investigate the process of the integrated framework in scientific analysis, especially few studies focus on the supply chains of these three resources in China. We thus introduce the supply chains analysis based on the IOA method to present the details of impact among food, energy and water. In this study, we apply Taylor’s series expansion to show the supply chains impact. Particular, stage 0 represents direct impacts and stage 1–10 represent indirect impacts. 2. Methodology and data 2.1. Framework for water, energy and food nexus In this study, China is considered as a system. While considering the physical exchange of the whole system with outside, there are two approaches for the resources flow into the whole system from outside. By one approach, the resources flow from the environment boundary into the system. For example, water flows from the natural environment into agriculture, forestry sector, animal husbandry sector, fishery sector and the sector of production and distribution of water. Similarly, energy flows from the environment into the economic system by the sector of mining, washing of coal and the sector of extraction of crude petroleum and natural gas. By the other approach, the resources flow into or out of the system through international trade. While considering the monetary and physical flows in the system, it is both an economic system, and an ecological system. As an economic system, values flow throughout a network among interdependent economic sectors via the input-output relations. As an ecological system, water and energy flows from the original components to other sectors via the input-output links which are revealed in the monetary input-output tables. Specially, for each sector, the consumed resources can be identified as for direct use or indirect use. By investigation the supply chains, this analysis provides more information on the interactions among food, water and energy. 2.2. Accounting resources flow In a typical IO analysis, the Leontief equation can be expressed as follows:
X = ( I− A)−1y = Ly
(1)
where X is a n× 1 vector representing output of each sector; L = ( I− A)−1 is Leontief Inverse, and I is the n× n unity matrix, A stands for the technology coefficient matrix (n× n ); y is the n× 1 vector of sectoral final demand.
f = eXˆ
(2)
where f is a 1 × n vector which represents resources flows from the environment to the whole system by n sectors, e is the resources use coefficient vector, referring to resources directly explored from the environment per unit of output, the symbol “ˆ” indicates a diagonal matrix. Using Eqs. (1) and (2), the total resources consumption can be rewritten as:
P = eLyˆ
(3)
Where P is a 1 × n vector shows the embodied resources consumption by each sector. 2.3. Supply chains analysis Following Owen et al. (2018), the Leontief Inverse L can be expanded by Taylor’s series:
L = I + A + A2 + A3 + ⋯+An 32
(4)
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Applying Eq. (4) to Eq. (3), P can be expanded as:
ˆ + eA ˆ 2 y + eA ˆ 3 y + ⋯+eA ˆ ny P = eIyˆ + eAy
Table 2 Embodied water consumption by each agriculture and food manufacture sector.
(5)
ˆ k y calculates the impact from the k th stage in production. The where eA stages in production are defined to recognize the direct and indirect relations in the supply chains. As eˆIy is the original resources consumption which directly from the environment driven by final demand ˆ is the direct resources consumption which is from y of each sector; eAy the input-output structure, in particular Ay is the inputs from other industries and eˆAy represents the resources supplied to each sectors through the materials inflow from the original component. In the next ˆ 2 y of water or stage, these sectors require inputs of A (Ay ) , along with eA energy is supplied. Furthermore, the supply chains can be expanded ˆ t y (t≥ 2 ) shows the indirect reinfinitely. Similar with the stage 2, eA sources consumption. To evaluate the interlinkages of food and natural resources, we apply Eq. (5) to identify the supply chains of food production by using Matlab.
No.
Sector name
Total embodied water consumption (billion m3)
A3 A1 F5 A4 F11 F7
Animal husbandry Agriculture Slaughtering and Processing of Meat Fishery Other food Processing of fruit, vegetables, nuts and other agriculture food Manufacture of grain mill products Processing of Aquaculture Manufacture of vegetable oils Manufacture of dairy products Manufacture of dairy products Agriculture, forestry, animal husbandry and fishery related service Manufacture of condiments and Fermentation Products Manufacture of feeds Manufacture of sugar and sugar confectionery Forestry
782.91 416.14 266.46 228.71 178.16 139.42
F1 F6 F3 F9 F8 A5 F10 F2 F4
2.4. Data sources We used the monetary input-output tables for 2012 obtained from NBSC (National Bureau of Statistics of the People’s Republic of China). The original input-output database includes 139 sectors. The water withdrawal data were collected from the China Statistical Yearbook on Environment 2013. The energy production data is from the China Energy Statistical Yearbook and is measured in standard coal equivalent. As Table 1 listed, there are 16 sectors related with agriculture or food manufacture.
A2
124.44 70.57 67.33 58.66 45.83 35.70 31.60 12.95 2.64 −53.43
961.53 billion m3 of embodied water, followed by animal husbandry sector, agriculture, construction of buildings and slaughtering and processing of meat. Fig. 1 shows the top 10 embodied water consumers, and the green bars represent agriculture and food manufacturing sectors. Furthermore, we divided the total embodied water consumption into direct or indirect water consumption at different stages by Taylor’s expansion in Eq. (5). Fig. 2 shows the different water use in supply chains from stage 0 to stage 10 of the top 10 water use agriculture and food manufacture sectors. For agriculture, animal husbandry sector and fishery, the highest water use in stage 0 of the supply chains, because water directly flows into these three sectors from the environmental boundary. These four sectors are the original component for water resources where is the beginning of water flows in the whole system. For most of other agriculture and food manufacture sector, stage 1 contains the largest water use. This is because majority of immediate productions for food manufacture are from agriculture, forestry and fishing sectors, and these immediate products contain a large amount of water use. Specially, other food sector is an exception. In stage 2, other food sector still has large indirect water consumption. It reveals that besides immediate productions made by the original component of water, other food sector uses a large amount of other input. These inputs are not made in the original component sectors but using a lot of products from original component. After stage 2, the indirect water consumption decreases sharply.
3. Results and discussion 3.1. Food-water linkages All of the agriculture and food manufacture sectors jointly consumed 2408.10 billion m3 embodied water, accounted to 39.98% of total embodied water consumption by the whole system in 2012. It is clear that water is the essential fundamental for food. Table 2 shows the embodied water consumption driven by final demand of agriculture and food manufacture sectors in China at 2012. In terms of total embodied water consumption, animal husbandry sector, agriculture, slaughtering and processing of meat, fishery, other food sector, processing of fruit sector, vegetables, nuts and other agriculture food sector and manufacture of grain mill products were the leading embodied water consumer. All of them consumed more than 100 billion m3 embodied water. Compared with other sectors, these are still remarkable. Among all of the 139 sectors, the largest water consumer is the production and distribution of water with the amount of Table 1 List of agriculture and food manufacture sectors. Sector name
No.
Agriculture Forestry Animal husbandry Fishery Agriculture, forestry, animal husbandry and fishery related service Manufacture of grain mill products Manufacture of feeds Manufacture of vegetable oils Manufacture of sugar and sugar confectionery Slaughtering and Processing of Meat Processing of Aquaculture Processing of fruit, vegetables, nuts and other agriculture food Manufacture of prepared meals and dishes Manufacture of dairy products Manufacture of condiments and Fermentation Products Other food
A1 A2 A3 A4 A5 F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11
3.2. Food-energy linkages All of the 16 agriculture and food manufacture sectors jointly use 404.75 million ton embodied minerals use for energy production measured by equivalent of coal, accounting for 13.60% of total minerals use for energy production use in the whole system. Among these 16 sectors, agriculture uses the largest amount of embodied minerals use for energy production with 78.15 million ton minerals use for energy production measured by equivalent of coal, followed by other food sector and animal husbandry, which use 59.29 and 58.58 million ton equivalent coal measured embodied minerals use for energy production respectively. To understand the interaction relations between food and energy, we use Taylor’s series in Eq. (5) to show the minerals use for energy production flow in the supply chains of agriculture and food manufacture. As Fig. 3 shows, minerals use for energy production the 33
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Fig. 1. Top 10 embodied water consumers in China, 2012.
rate. In most sectors, the embodied minerals use for energy production keep a high amount even in stage 8. Also, the decrease varies among sectors, for example in agriculture the impacts are significant during the whole period. 3.3. Water-energy linkages Besides agriculture, forestry, animal husbandry and fishery sectors, the sector of production and distribution of water is another original component for water. As a node, water flows into the system from the environment boundary in the sector of production and distribution of water and flows into other sectors by the supply chains. This sector consumes 0.12 million ton minerals use for energy production measured by equivalent coal. As Fig. 4 shows, in the first two stages, the embodied minerals use for energy production equals zero. The results show the sector of production and distribution of water does not consume primary energy. Furthermore, from stage 2 to stage 6, the impact of embodied minerals use for energy production is significant and variable. While investigating water consumption for energy production, the water uses for various purposes. The sector of mining and washing of coal and the sector of extraction of crude petroleum and natural gas are for the energy flow from the natural environment to the human’s social and economic activities. The production and distribution of electricity and heats sector is to convert and transport energy. The embodied water consumption of the sector of production and distribution of electricity and heats is 13.91 billion m3. As Fig. 5 shows, in stage 2, the energy production sector consumes largest embodied water, and the impacts of its use decline through supply chains. The sector of mining and washing of coal and the sector of extraction of crude petroleum and natural gas use little embodied water. Instead of consumed resources, sector i “generate” resources for the national system by trade. More exactly, these sectors save water from net flows in the international trade.
Fig. 2. The decomposition of embodied water use by supply chains, in China, 2012.
embodied minerals use for energy production in the agriculture and food manufacture specifics has some typical features. First, the embodied minerals use for energy production flow impact at stage 0 is zero. Since the minerals use for energy production only flows into the economic system through the sector of mining and washing of coal and the sector of extraction of crude petroleum and natural gas. In the 16 sectors, it doesn’t exit a channel for minerals flow from the nature to agriculture or food manufacture. Second, in the stage 1, the impact of embodied energy consumption conducted in supply chains is also zero in all sectors. This result indicates that the input-output analysis shows these 16 sectors rarely use primary energy. Third, in stage 3, the indirect uses of minerals for energy production in the 16 sectors are significant. This impact composed two sources of energy. One is the use of electricity which is product by primary energy, and the other is from the immediate products in which use primary energy as immediate inputs. Compared with the decomposition of embodied water in Section 3.1, the impact of embodied minerals use for energy production during stage 0 to stage 10 is more flexible. The impacts declined in a slower
3.4. Discussion In this article, we investigate the national economy of China as a 34
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Fig. 3. The decomposition of embodied minerals use for energy production by supply chains, in China, 2012.
energy significantly, however, the immediate products for its inputs consumes a large amount of energy. Like the tracing of embodied energy, the investigation on supply chains help us to understand the virtual flows of the resources and reveal both the direct and indirect relations among them. Globalization increases the products and resources flows all over the world. To make policies in global view and nexus thinking, it is skeptical to realize the impact of international trade on resources. The nexus analysis based on IOA method provides an efficient way to reveal and manage tradeoffs between monetary flows and physical flows of resources. The analysis on supply chains shows not only goods flows in international trade, but also resources flow in or out a country by trade. If the net import of sector i is large, and its international trade impact exceeds impact generated in production proceeds, the embodied
whole system. It is crucial to identify the entry points in the national level system. Instead of distribution resources from the environment and trade to all sectors, in this framework, resources (e.g. water and miners used for energy production) enter the system only through agriculture and energy production sectors. This way help to trace the resources flows more exactly. What is more, it shows the resources flow through intermediate inputs before final demand. The results show that agriculture and animal husbandry contribute largest use of resource in supply chains. There is no doubt, studies by applying different methods all admit the fact that agriculture is the largest consumer of resources. However, besides the nexus thinking, the contribution of energy consumption in animal husbandry is not always revealed, as its embodied use of primary energy is low in stage 0–2. It shows that not only this sector does not consume energy directly, but its inputs do not consume
Fig. 4. The embodied energy consumption in water production sector by supply chains, in China, 2012. 35
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Fig. 5. The embodied water consumption in energy production sector by supply chains.
sector is not significant. Meanwhile, by importing or exporting resources, international trade impacts on the resources flow through input-output structures. As a result, when making polices, the interactions of various resources and international trade are need to be considered by applying food energy water nexus (FEWN) approach.
resources impact of sector i will be negative. That is to say, instead of consuming resources, sector i “generate” resources for the national system by trade. The results show that the forestry sector contributes both water and energy to the whole system. The sector of mining and washing of coal and the sector of extraction of crude petroleum and natural gas contributes water to the system. In traditional trade theory, exports can bring monetary flow to a country, and the development of export industries have benefited from the trade. However, driving by the nexus thinking, the exporters bore the burden of scarce resources with the production of exports for the benefit of importers. On the contrary, the international trade brings benefits to importers, especially in the sectors which rely on a large amount of inputs in resources (e.g. agriculture and manufacturing of food), since people enjoy the final use but not burden the scarcity natural resources. The investigations of supply chains evaluate the ripples through the international trade, and provide practical ways to decrease the trade deflect with other countries.
Acknowledgement This study is supported by the Fundamental Research Funds for the Central Universities (Grant No. 106112017CDJXY020009). References Al-Ansari, T., Korre, A., Nie, Z., Shah, N., 2015. Development of a life cycle assessment tool for the assessment of food production systems within the energy, water and food nexus. Sustain. Prod. Consum. 2, 52–66. Al-Saidi, M., Elagib, N.A., 2017. Towards understanding the integrative approach of the water, energy and food nexus. Sci. Total Environ. 574, 1131–1139. Balkema, A.J., Preisig, H.A., Otterpohl, R., Lambert, F.J.D., 2002. Indicators for the sustainability assessment of wastewater treatment systems. Urban Water 4, 153–161. Chang, Y., Huang, R., Ries, R.J., Masanet, E., 2015. Life-cycle comparison of greenhouse gas emissions and water consumption for coal and shale gas fired power generation in China. Energy 86, 335–343. Chen, S., Chen, B., 2015. Urban energy consumption: different insights from energy flow analysis, input–output analysis and ecological network analysis. Appl. Energy 138, 99–107. Chen, S., Chen, B., 2017. Coupling of carbon and energy flows in cities: a meta-analysis and nexus modelling. Appl. Energy 194, 774–783. Chen, B., Han, M.Y., Peng, K., Zhou, S.L., Shao, L., Wu, X.F., Wei, W.D., Liu, S.Y., Li, Z., Li, J.S., Chen, G.Q., 2018a. Global land-water nexus: agricultural land and freshwater use embodied in worldwide supply chains. Sci. Total Environ. 613–614, 931–943. Chen, P.-C., Alvarado, V., Hsu, S.-C., 2018b. Water energy nexus in city and hinterlands: multi-regional physical input-output analysis for Hong Kong and South China. Appl. Energy 225, 986–997. Duan, C., Chen, B., 2017. Energy–water nexus of international energy trade of China. Appl. Energy 194, 725–734. Fang, D., Chen, B., 2017. Linkage analysis for the water–energy nexus of city. Appl. Energy 189, 770–779. Feng, K., Hubacek, K., Siu, Y.L., Li, X., 2014. The energy and water nexus in Chinese electricity production: a hybrid life cycle analysis. Renew. Sustain. Energy Rev. 39, 342–355. Guan, D., Hubacek, K., 2008. A new and integrated hydro-economic accounting and analytical framework for water resources: a case study for North China. J. Environ. Manage. 88, 1300–1313. Hamiche, A.M., Stambouli, A.B., Flazi, S., 2016. A review of the water-energy nexus. Renew. Sustain. Energy Rev. 65, 319–331. Holland, R.A., Scott, K.A., Flörke, M., Brown, G., Ewers, R.M., Farmer, E., Kapos, V., Muggeridge, A., Scharlemann, J.P.W., Taylor, G., Barrett, J., Eigenbrod, F., 2015.
4. Conclusion In this paper, China’s economic activities are taken into consider as a whole system. In this system, we apply supply chains analysis based on input-output structures, to identify the different type of resource use. We focus on several linkages, including the linkages between social and economic activities and the natural environment, the food-water linkage, the food-energy linkage, and the energy-water linkages. The energy and water sectors provide immediate inputs for each other. The impact at stage 0 represents the resources directly extracted from nature. Only the original component sectors directly consume resources by this way. The impact at stage 1 represents primary energy consumption or water consumption from agriculture or the sector of production and distribution of water. At most cases, this is the largest impact. The impacts after stage 2 combine effects from both the secondary energy (virtual water) and the other immediate productions. The results show that agriculture and animal husbandry contribute most use of resource in supply chains. Animal husbandry sector, agriculture, slaughtering and processing of meat jointly contribute large amount of embodied water consumption. While agriculture, other food sector and animal husbandry sector consumes most embodied primary energy, although the direct primary energy use by animal husbandry 36
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Ecological Modelling journal homepage: www.elsevier.com/locate/ecolmodel
Identifying critical supply chains: An input-output analysis for Food-EnergyWater Nexus in China Zhengyan Xiaoa, Meiqin Yaob, Xiaotong Tangc, Luxi Sund,
T
⁎
a
School of Statistics, Renmin University of China, Beijing, 100872, China School of Information Engineering, Hangzhou Dianzi University, Hangzhou, 310018, China c The Department of Accounting, Tianjin University of Finance and Economics, Tianjin, 300222, China d School of Economics and Business Administration, Chongqing University, Chongqing, 400030, China b
A R T I C LE I N FO
A B S T R A C T
Keywords: Food-Energy-Water Nexus Structural chains Input-output analysis
As the most populous country over the world, China has great pressure on food and resources security. In this study, we set the national economy of China as a whole system, and apply supply chains analysis based on the input-output structures, to identify the food-water linkage, food-energy linkage, and the energy-water linkage in the system. The results show that agriculture and animal husbandry contribute most use of resource in supply chains. Animal husbandry sector, agriculture, slaughtering and processing of meat contribute large amount of embodied water consumption. While agriculture, other food sector and animal husbandry sector consumes most embodied primary energy, although the direct primary energy use by animal husbandry sector is not significant. Meanwhile, by importing or exporting resources, international trade impacts on the resources flow through input-output structures. When making polices, the interactions of various resources and international trade should be considered by applying food energy water nexus (FEWN) approach.
1. Introduction According to the UN World Urbanization Prospects 2018, at the mid-year of 2018, the world’s population has reached 7.63 billion people, and it is expected to reach around 9.77 billion people by 2050. In particular, more people live in urban areas rather than in rural areas, with 55% of the world’s population residing in urban areas until 2018. In 1950, only 30% of the world’s population lived in cities, however, by 2050, 68% of the world’s population will live in cities. Since the increase in demands of food, energy and water driven by population growth, urbanization, and economic development, the supplies of these three resources face significant challenges. Traditional thinking treats energy, water and food in completion (Owen et al., 2018). In fact, these three factors are relevant. It is clear that water and energy are the crucial inputs along the whole food supply chain (e.g., from production of rice and wheat, to harvesting, processing, storage and transportation). Energy production process consumes a large amount of water, while a lot of energy consumption is embodied during the production and distribution of water. It is essential to focus on the interrelationships and dependencies between them. Nexus thinking represents a sustained effort to recognize the interconnections among the three resources, and uses an integrated perspective on the management of them
⁎
(Al-Saidi and Elagib, 2017; Sharmina et al., 2016). Actually, policies need to look at the interlinks that one policy target on one resource inevitably has effects on another one (Wang et al., 2017). The Food-Energy-Water Nexus (FEWN) analyses integrate these three factors into an interconnected system, investigating the relationships among them, while considering the impacts from human activities. The FEWN is widely used in analyses of ecological processes and for the resources management. Studies approach the nexus by using a variety of methods, tools and frameworks (Al-Ansari et al., 2015; Balkema et al., 2002; Chang et al., 2015; Feng et al., 2014; Hamiche et al., 2016; Li et al., 2018; Mannan et al., 2018; Nair et al., 2014). A difficulty in nexus issue is the lack of a unified base for energy and water flow analysis, which hinders sustainable energy and water resource utilization (Wang et al., 2017). Given that, Input-Output Analysis (IOA) serves as a foundation for defining the relations among the three resources. As one of the main methodologies for evaluating the interactions between economic factors and natural resources, it provides effective tools to investigate both the physical flows and monetary flows through economic trade networks, and detects the driving force of resources consumption from an economic structure perspective (Fang and Chen, 2017; Su et al., 2013). The IOA method is useful to examine the interactions and trade-offs between multiple entities. For example,
Corresponding author. E-mail address: [email protected] (L. Sun).
https://doi.org/10.1016/j.ecolmodel.2018.11.006 Received 1 June 2018; Received in revised form 13 November 2018; Accepted 13 November 2018 0304-3800/ © 2018 Elsevier B.V. All rights reserved.
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applying IOA method, both direct and indirect flows embodied in interactive chains of production and consumption, both direct and indirect flows can be investigated (Chen and Chen, 2015). This framework can be used in a wide range, such as different metabolic flows in urban metabolism (Chen and Chen, 2017), global trade of energy (Duan and Chen, 2017), virtual water tracking (Yang et al., 2012). From the perspective of nexus, IOA approach also applies an effective way to assessing the supply and demand relations between the food, energy and water resources. On the global level, Yang et al. (2012) apply ecological network analysis to shed insight into the complicated system interactions, and find that control and utility relations can well depict the mutual relation in trade system, and direct observable relations differ from integral ones with indirect interactions considered. Holland et al. (2015) reveal that energy-driven pressures on freshwater resources and the consequences of energy production should be considered when designing policy. Chen et al. (2018a) follow nexus thinking to expound global land-water nexus by tracking agricultural land and freshwater use flows along the global supply chains, and reveal that developed countries (e.g., USA and Japan), and major large developing economies (e.g., mainland China and India) are the overriding drivers of agricultural freshwater comsumption globally. On the national level, White et al. (2018) demonstrate the hidden virtual flows of water, energy, and food embodied in intra-regional and transnational inter-regional trade. They claim that China’s prioritization of economic growth and trade in low value added and pollution intensive sectors consumes a great amount of nexus resources within its territory to satisfy consumers’ demands in Japan and South Korea. Owen et al. (2018) take UK as a case, use input-output analysis techniques to investigate the interaction between the energy, water and food impacts of products, and recognize that strategies that aim to reduce environmental impacts should not harm the socioeconomic well-being of the UK. On the regional level, Chen et al. (2018b) present a demonstration of the waterenergy mixed-unit input-output approach by analyzing Hong Kong and its associated hinterland in mainland China. Their study shows that the current water infrastructures will meet the demand for water treatment in 2050, and suggests that all types of water for energy and energy for water will increase by 7.8–9%. By using Beijing as an example Chen and Chen (2015), find that the impact of nexus on energy networks is larger than water networks and the most urban sectors rely on manufacturing in the energy-water nexus. Similarly, Wang et al. (2017) propose a modified input-output analysis which provides a unified framework to balance urban energy and water comsumption, by using the case of Beijing. The results show that manufacture provides the largest outflow of hybrid energy, and agriculture is the largest receiver. Compared with Beijing, Yang et al. (2018) find that Shanghai is facing greater environmental challenges in the process of urban sustainability. As the world’s most populous country and fastest growing economy, China has a population of 1.42 billion people and keeps fast economic growth rate during the last three decades. With the development in society and economy, China has great challenges in food, energy and water. In particular, China is poor of water resources with 2300 m3 of per capita availability, which is less than one third of the world's average (Guan and Hubacek, 2008). China's per capita water availability is low and unevenly distributed, both spatially and temporally, which is inconsistent with the rising socio-economic need for water (Jiang, 2015). Therefore, to investigate the relations among food, energy and water in China from the perspective of nexus thinking is valuable to the global food and resources security. The study by Qin et al. (2015) shows that future energy plans could conflict with the industrial water policy, but the amount of water used in the energy sector is highly dependant on technology choices, especially for power plant cooling. They predict high electricity demand in the future is expected to be met mainly by coal and nuclear power, and planned inland development of nuclear power presents a new source of freshwater demand. In the study of Wu and Chen (2017) all the input items are inclusively inventoried as products of the economy. The previous analysis
shows that the industrial water use induced by the solar power plant infrastructure is revealed to be over one order of magnitude higher than that in previous scoping. However, there is still lack uniform way to investigate the process of the integrated framework in scientific analysis, especially few studies focus on the supply chains of these three resources in China. We thus introduce the supply chains analysis based on the IOA method to present the details of impact among food, energy and water. In this study, we apply Taylor’s series expansion to show the supply chains impact. Particular, stage 0 represents direct impacts and stage 1–10 represent indirect impacts. 2. Methodology and data 2.1. Framework for water, energy and food nexus In this study, China is considered as a system. While considering the physical exchange of the whole system with outside, there are two approaches for the resources flow into the whole system from outside. By one approach, the resources flow from the environment boundary into the system. For example, water flows from the natural environment into agriculture, forestry sector, animal husbandry sector, fishery sector and the sector of production and distribution of water. Similarly, energy flows from the environment into the economic system by the sector of mining, washing of coal and the sector of extraction of crude petroleum and natural gas. By the other approach, the resources flow into or out of the system through international trade. While considering the monetary and physical flows in the system, it is both an economic system, and an ecological system. As an economic system, values flow throughout a network among interdependent economic sectors via the input-output relations. As an ecological system, water and energy flows from the original components to other sectors via the input-output links which are revealed in the monetary input-output tables. Specially, for each sector, the consumed resources can be identified as for direct use or indirect use. By investigation the supply chains, this analysis provides more information on the interactions among food, water and energy. 2.2. Accounting resources flow In a typical IO analysis, the Leontief equation can be expressed as follows:
X = ( I− A)−1y = Ly
(1)
where X is a n× 1 vector representing output of each sector; L = ( I− A)−1 is Leontief Inverse, and I is the n× n unity matrix, A stands for the technology coefficient matrix (n× n ); y is the n× 1 vector of sectoral final demand.
f = eXˆ
(2)
where f is a 1 × n vector which represents resources flows from the environment to the whole system by n sectors, e is the resources use coefficient vector, referring to resources directly explored from the environment per unit of output, the symbol “ˆ” indicates a diagonal matrix. Using Eqs. (1) and (2), the total resources consumption can be rewritten as:
P = eLyˆ
(3)
Where P is a 1 × n vector shows the embodied resources consumption by each sector. 2.3. Supply chains analysis Following Owen et al. (2018), the Leontief Inverse L can be expanded by Taylor’s series:
L = I + A + A2 + A3 + ⋯+An 32
(4)
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Applying Eq. (4) to Eq. (3), P can be expanded as:
ˆ + eA ˆ 2 y + eA ˆ 3 y + ⋯+eA ˆ ny P = eIyˆ + eAy
Table 2 Embodied water consumption by each agriculture and food manufacture sector.
(5)
ˆ k y calculates the impact from the k th stage in production. The where eA stages in production are defined to recognize the direct and indirect relations in the supply chains. As eˆIy is the original resources consumption which directly from the environment driven by final demand ˆ is the direct resources consumption which is from y of each sector; eAy the input-output structure, in particular Ay is the inputs from other industries and eˆAy represents the resources supplied to each sectors through the materials inflow from the original component. In the next ˆ 2 y of water or stage, these sectors require inputs of A (Ay ) , along with eA energy is supplied. Furthermore, the supply chains can be expanded ˆ t y (t≥ 2 ) shows the indirect reinfinitely. Similar with the stage 2, eA sources consumption. To evaluate the interlinkages of food and natural resources, we apply Eq. (5) to identify the supply chains of food production by using Matlab.
No.
Sector name
Total embodied water consumption (billion m3)
A3 A1 F5 A4 F11 F7
Animal husbandry Agriculture Slaughtering and Processing of Meat Fishery Other food Processing of fruit, vegetables, nuts and other agriculture food Manufacture of grain mill products Processing of Aquaculture Manufacture of vegetable oils Manufacture of dairy products Manufacture of dairy products Agriculture, forestry, animal husbandry and fishery related service Manufacture of condiments and Fermentation Products Manufacture of feeds Manufacture of sugar and sugar confectionery Forestry
782.91 416.14 266.46 228.71 178.16 139.42
F1 F6 F3 F9 F8 A5 F10 F2 F4
2.4. Data sources We used the monetary input-output tables for 2012 obtained from NBSC (National Bureau of Statistics of the People’s Republic of China). The original input-output database includes 139 sectors. The water withdrawal data were collected from the China Statistical Yearbook on Environment 2013. The energy production data is from the China Energy Statistical Yearbook and is measured in standard coal equivalent. As Table 1 listed, there are 16 sectors related with agriculture or food manufacture.
A2
124.44 70.57 67.33 58.66 45.83 35.70 31.60 12.95 2.64 −53.43
961.53 billion m3 of embodied water, followed by animal husbandry sector, agriculture, construction of buildings and slaughtering and processing of meat. Fig. 1 shows the top 10 embodied water consumers, and the green bars represent agriculture and food manufacturing sectors. Furthermore, we divided the total embodied water consumption into direct or indirect water consumption at different stages by Taylor’s expansion in Eq. (5). Fig. 2 shows the different water use in supply chains from stage 0 to stage 10 of the top 10 water use agriculture and food manufacture sectors. For agriculture, animal husbandry sector and fishery, the highest water use in stage 0 of the supply chains, because water directly flows into these three sectors from the environmental boundary. These four sectors are the original component for water resources where is the beginning of water flows in the whole system. For most of other agriculture and food manufacture sector, stage 1 contains the largest water use. This is because majority of immediate productions for food manufacture are from agriculture, forestry and fishing sectors, and these immediate products contain a large amount of water use. Specially, other food sector is an exception. In stage 2, other food sector still has large indirect water consumption. It reveals that besides immediate productions made by the original component of water, other food sector uses a large amount of other input. These inputs are not made in the original component sectors but using a lot of products from original component. After stage 2, the indirect water consumption decreases sharply.
3. Results and discussion 3.1. Food-water linkages All of the agriculture and food manufacture sectors jointly consumed 2408.10 billion m3 embodied water, accounted to 39.98% of total embodied water consumption by the whole system in 2012. It is clear that water is the essential fundamental for food. Table 2 shows the embodied water consumption driven by final demand of agriculture and food manufacture sectors in China at 2012. In terms of total embodied water consumption, animal husbandry sector, agriculture, slaughtering and processing of meat, fishery, other food sector, processing of fruit sector, vegetables, nuts and other agriculture food sector and manufacture of grain mill products were the leading embodied water consumer. All of them consumed more than 100 billion m3 embodied water. Compared with other sectors, these are still remarkable. Among all of the 139 sectors, the largest water consumer is the production and distribution of water with the amount of Table 1 List of agriculture and food manufacture sectors. Sector name
No.
Agriculture Forestry Animal husbandry Fishery Agriculture, forestry, animal husbandry and fishery related service Manufacture of grain mill products Manufacture of feeds Manufacture of vegetable oils Manufacture of sugar and sugar confectionery Slaughtering and Processing of Meat Processing of Aquaculture Processing of fruit, vegetables, nuts and other agriculture food Manufacture of prepared meals and dishes Manufacture of dairy products Manufacture of condiments and Fermentation Products Other food
A1 A2 A3 A4 A5 F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11
3.2. Food-energy linkages All of the 16 agriculture and food manufacture sectors jointly use 404.75 million ton embodied minerals use for energy production measured by equivalent of coal, accounting for 13.60% of total minerals use for energy production use in the whole system. Among these 16 sectors, agriculture uses the largest amount of embodied minerals use for energy production with 78.15 million ton minerals use for energy production measured by equivalent of coal, followed by other food sector and animal husbandry, which use 59.29 and 58.58 million ton equivalent coal measured embodied minerals use for energy production respectively. To understand the interaction relations between food and energy, we use Taylor’s series in Eq. (5) to show the minerals use for energy production flow in the supply chains of agriculture and food manufacture. As Fig. 3 shows, minerals use for energy production the 33
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Fig. 1. Top 10 embodied water consumers in China, 2012.
rate. In most sectors, the embodied minerals use for energy production keep a high amount even in stage 8. Also, the decrease varies among sectors, for example in agriculture the impacts are significant during the whole period. 3.3. Water-energy linkages Besides agriculture, forestry, animal husbandry and fishery sectors, the sector of production and distribution of water is another original component for water. As a node, water flows into the system from the environment boundary in the sector of production and distribution of water and flows into other sectors by the supply chains. This sector consumes 0.12 million ton minerals use for energy production measured by equivalent coal. As Fig. 4 shows, in the first two stages, the embodied minerals use for energy production equals zero. The results show the sector of production and distribution of water does not consume primary energy. Furthermore, from stage 2 to stage 6, the impact of embodied minerals use for energy production is significant and variable. While investigating water consumption for energy production, the water uses for various purposes. The sector of mining and washing of coal and the sector of extraction of crude petroleum and natural gas are for the energy flow from the natural environment to the human’s social and economic activities. The production and distribution of electricity and heats sector is to convert and transport energy. The embodied water consumption of the sector of production and distribution of electricity and heats is 13.91 billion m3. As Fig. 5 shows, in stage 2, the energy production sector consumes largest embodied water, and the impacts of its use decline through supply chains. The sector of mining and washing of coal and the sector of extraction of crude petroleum and natural gas use little embodied water. Instead of consumed resources, sector i “generate” resources for the national system by trade. More exactly, these sectors save water from net flows in the international trade.
Fig. 2. The decomposition of embodied water use by supply chains, in China, 2012.
embodied minerals use for energy production in the agriculture and food manufacture specifics has some typical features. First, the embodied minerals use for energy production flow impact at stage 0 is zero. Since the minerals use for energy production only flows into the economic system through the sector of mining and washing of coal and the sector of extraction of crude petroleum and natural gas. In the 16 sectors, it doesn’t exit a channel for minerals flow from the nature to agriculture or food manufacture. Second, in the stage 1, the impact of embodied energy consumption conducted in supply chains is also zero in all sectors. This result indicates that the input-output analysis shows these 16 sectors rarely use primary energy. Third, in stage 3, the indirect uses of minerals for energy production in the 16 sectors are significant. This impact composed two sources of energy. One is the use of electricity which is product by primary energy, and the other is from the immediate products in which use primary energy as immediate inputs. Compared with the decomposition of embodied water in Section 3.1, the impact of embodied minerals use for energy production during stage 0 to stage 10 is more flexible. The impacts declined in a slower
3.4. Discussion In this article, we investigate the national economy of China as a 34
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Fig. 3. The decomposition of embodied minerals use for energy production by supply chains, in China, 2012.
energy significantly, however, the immediate products for its inputs consumes a large amount of energy. Like the tracing of embodied energy, the investigation on supply chains help us to understand the virtual flows of the resources and reveal both the direct and indirect relations among them. Globalization increases the products and resources flows all over the world. To make policies in global view and nexus thinking, it is skeptical to realize the impact of international trade on resources. The nexus analysis based on IOA method provides an efficient way to reveal and manage tradeoffs between monetary flows and physical flows of resources. The analysis on supply chains shows not only goods flows in international trade, but also resources flow in or out a country by trade. If the net import of sector i is large, and its international trade impact exceeds impact generated in production proceeds, the embodied
whole system. It is crucial to identify the entry points in the national level system. Instead of distribution resources from the environment and trade to all sectors, in this framework, resources (e.g. water and miners used for energy production) enter the system only through agriculture and energy production sectors. This way help to trace the resources flows more exactly. What is more, it shows the resources flow through intermediate inputs before final demand. The results show that agriculture and animal husbandry contribute largest use of resource in supply chains. There is no doubt, studies by applying different methods all admit the fact that agriculture is the largest consumer of resources. However, besides the nexus thinking, the contribution of energy consumption in animal husbandry is not always revealed, as its embodied use of primary energy is low in stage 0–2. It shows that not only this sector does not consume energy directly, but its inputs do not consume
Fig. 4. The embodied energy consumption in water production sector by supply chains, in China, 2012. 35
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Fig. 5. The embodied water consumption in energy production sector by supply chains.
sector is not significant. Meanwhile, by importing or exporting resources, international trade impacts on the resources flow through input-output structures. As a result, when making polices, the interactions of various resources and international trade are need to be considered by applying food energy water nexus (FEWN) approach.
resources impact of sector i will be negative. That is to say, instead of consuming resources, sector i “generate” resources for the national system by trade. The results show that the forestry sector contributes both water and energy to the whole system. The sector of mining and washing of coal and the sector of extraction of crude petroleum and natural gas contributes water to the system. In traditional trade theory, exports can bring monetary flow to a country, and the development of export industries have benefited from the trade. However, driving by the nexus thinking, the exporters bore the burden of scarce resources with the production of exports for the benefit of importers. On the contrary, the international trade brings benefits to importers, especially in the sectors which rely on a large amount of inputs in resources (e.g. agriculture and manufacturing of food), since people enjoy the final use but not burden the scarcity natural resources. The investigations of supply chains evaluate the ripples through the international trade, and provide practical ways to decrease the trade deflect with other countries.
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4. Conclusion In this paper, China’s economic activities are taken into consider as a whole system. In this system, we apply supply chains analysis based on input-output structures, to identify the different type of resource use. We focus on several linkages, including the linkages between social and economic activities and the natural environment, the food-water linkage, the food-energy linkage, and the energy-water linkages. The energy and water sectors provide immediate inputs for each other. The impact at stage 0 represents the resources directly extracted from nature. Only the original component sectors directly consume resources by this way. The impact at stage 1 represents primary energy consumption or water consumption from agriculture or the sector of production and distribution of water. At most cases, this is the largest impact. The impacts after stage 2 combine effects from both the secondary energy (virtual water) and the other immediate productions. The results show that agriculture and animal husbandry contribute most use of resource in supply chains. Animal husbandry sector, agriculture, slaughtering and processing of meat jointly contribute large amount of embodied water consumption. While agriculture, other food sector and animal husbandry sector consumes most embodied primary energy, although the direct primary energy use by animal husbandry 36
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