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Study Examines Environmental and Socioeconomic Interactions Within and Across Borders to Understand the Trading of Natural Resources

Researchers at Michigan State University (MSU) have penned two papers that have begun to challenge a more basic, input/output view of natural resources in support of a method that better reflected the way the world actually works.

Beijing, like megacities across the globe, depends on a steady supply of natural resources, like water, to maintain growth. (Image credit: Sue Nichols, MSU-CSIS)

According to the papers, these natural resources do not simply gush or flow down pipelines and that, at times, energy moves across the globe stored in the materials it creates. At times, water also moves which is stored in crops to make them grow. And, beyond a balance ledger, people do not see the effects of their decisions at certain times.

Moreover, those places that are poor in energy or water will still take money to supply that very resource which they lack, usually to a place that does not have a requirement for that same resource, but would be happy to preserve it.

In this month’s Science of the Total Environment, MSU Center for Systems Integration and Sustainability (CSIS) PhD student Zhenci Xu and his contemporaries analyzed the virtual trade of both water and energy together. As a case in point, the researchers used China because of its epic growth and considerable consumption of natural resources. The team presented this as a new method that could be applied to other corners of the globe.

This latest nexus method was not only able to factor trade into this exchange but was also able to tease out hidden effects.

For example:

  • The outcomes unpredictably demonstrated that over 40% of provinces benefited from one kind of internal resource—either energy or water—through trade at the cost of losing the other kind of internal resource (water or energy).
  • A double loss of both energy and water was experienced by 20% of provinces.
  • Unexpectedly, about 40% of the energy or water that was transferred came from provinces that relatively lacked the very resources they were supplying. And those valuable resources were going to provinces, where natural resources were abundantly available. This further deepened the gap in resource inequality.

The ways natural resources are used across the globe have profound environmental and socioeconomic implications. Trading crucial resources involves many interactions, and all must be revealed and considered if we are to make important decisions that advance sustainability.

Jianguo “Jack” Liu, Rachel Carson Chair in Sustainability and CSIS Director, Michigan State University

The team used the built-in framework of metacoupling, which holistically looks into socioeconomic and environmental interactions, both within and across borders, to completely gain an insight into the trading of natural resources.

The approach was used in the March journal, Applied Energy. The research team at MSU, again headed by Liu and Xu, investigated the flow of virtual energy in China. This energy is used for producing products and goods in one place that are transported. The study discovered that virtual energy from energy-scarce, less-populated regions in China’s western regions flowed to booming cities located in the east that have abundant amounts of energy.

As a matter of fact, the transfer of virtual energy from west to east was considerably greater when compared to the physical energy moving through the vast infrastructure of China.

Our work is showing that the virtual water/energy trade may be motivated more by the demand side than by the supply side. And revealing that more demand-side policies should be developed to reduce resource consumption and environmental burden. It is important to seek environmental balance as well as economic gain.

Zhenci Xu, PhD Student¸ Center for Systems Integration and Sustainability, Michigan State University

Interactive national virtual water-energy nexus networks—the latest paper—was penned by Yingjie Li, Anna Herzberger, Xiuzhi Chen, Mimi Gong, Kelly Kapsar, Ciara Hovis, Ying Tang, and Yunkai Li, apart from Liu and Xu.

The National Science Foundation, MSU, MSU AgBioResearch, and China Scholarship Council funded the latest research.

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