Pollution exacerbates interregional flows of virtual scarce water driven by energy demand in China.

Existing studies on the virtual scarce water flows within the water-energy context focus on water quantity while largely ignoring water quality. This study improves the quantification method of scarce water uses by considering both blue water (representing water quantity) and grey water (indicating water quality). Based on a scarce-water extended multi-regional input-output model, we investigate the virtual scarce water flows driven by energy demand across 31 Chinese regions in 2012 and 2017. The results show that considering water quality provides new insights into the patterns of interregional flows of virtual scarce water driven by energy demand. The virtual integrated scarce water (VISW) flows, which consider both water quantity and quality, are 5 times the volume of virtual quantity-based scarce water (VQSW) flows. Moreover, certain regions (e.g., Hebei) are recognized as net VISW exporters, but are net importers in terms of VQSW. There are significant differences in the critical interregional pairs identified based on net VISW flows (e.g., Shandong-Zhejiang, and Shandong-Guangdong) and net VQSW flows (e.g., Heilongjiang-Guangdong, and Liaoning-Shaanxi). To reduce water scarcity based on the combined effect of both quantity and quality, the critical VISW interregional pairs should enhance cooperation through compensation payments and interregional technology transfer. This study highlights the importance of water quality in the assessment of virtual scarce water uses. Employing virtual scarce water as a policy tool to mitigate water scarcity might fail without the consideration of water quality.