| Sumario: | Africa is one of the continents most vulnerable to climate change. While global temperatures have risen by 0.2°C per decade since 1991, Africa has registered a 0.3°C increase (WMO, 2022). Beyond rising temperatures, Africa faces various related challenges, including rising sea levels, unpredictable rainfall leading to both droughts and severe storms, and increased threats from plant pests and animal diseases. As a result, the continent is expected to see a significant decline in arable land, further compromising its agricultural future. Specifically, southern Africa is highly climate vulnerable. Water scarcity is critical for food security, yet trade can help reallocate cereals from water-rich to water-scarce areas.
Indeed one often-overlooked aspect in the discussion about trade and climate change is how trade can actually help combat climate change. Indeed, when production is shifted from places that have limited environmental resources to those that are rich in them, the ecological footprint of economic activities can be lessened. For instance, international and regional trade have the potential to conserve water on both global and regional scales by exporting water-intensive goods from regions that have high water efficiency or abundant water resources to those with less availability (Fracasso 2014), yielding a much more efficient allocation of water resources around the world. SADC’s own regional water policy recognizes comparative advantage in water as a basis for trade integration (SADC 2005).
This policy note reviews virtual water trade in the SADC region and tests whether trade flows reflect countries’ comparative advantage in water endowment, with a focus on cereals. It first presents an overview of virtual water trade flows in the region and uses an econometric model to test the link between water endowments and the water content of trade flows. We conclude with a discussion and some policy implications.
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