The ratio of plant carbon gain to water use, known as water use efficiency (WUE), has long been recognized as a key constraint on crop production and an important target for crop improvement. WUE is a physiologically and genetically complex trait that can be defined at a range of scales. Many component traits directly influence WUE, including photosynthesis, stomatal and mesophyll conductances, and canopy structure. Interactions of carbon and water relations with diverse aspects of the environment and crop development also modulate WUE. As a consequence, enhancing WUE by breeding or biotechnology has proven challenging but not impossible. This review aims to synthesize new knowledge of WUE arising from advances in phenotyping, modeling, physiology, genetics, and molecular biology in the context of classical theoretical principles. In addition, we discuss how rising atmospheric CO2 concentration has created and will continue to create opportunities for enhancing WUE by modifying the trade-off between photosynthesis and transpiration.

Reconciling higher freshwater demands with finite freshwater resources remains one of the great policy dilemmas. Given that crop irrigation constitutes 70% of global water extractions, which contributes up to 40% of globally available calories (1), governments often support increases in irrigation efficiency (IE), promoting advanced technologies to improve the “crop per drop.” This provides private benefits to irrigators and is justified, in part, on the premise that increases in IE “save” water for reallocation to other sectors, including cities and the environment. Yet substantial scientific evidence (2) has long shown that increased IE rarely delivers the presumed public-good benefits of increased water availability. Decision-makers typically have not known or understood the importance of basin-scale water accounting or of the behavioral responses of irrigators to subsidies to increase IE. We show that to mitigate global water scarcity, increases in IE must be accompanied by robust water accounting and measurements, a cap on extractions, an assessment of uncertainties, the valuation of trade-offs, and a better understanding of the incentives and behavior of irrigators.

Abstract: Using field survey data collected by the authors, this chapter first describes groundwater markets in northern China that have been developing rapidly in the past two decades. Groundwater markets in the area are informal, localized and mostly unregulated. There is little price discrimination, and institutional characteristics tend to be similar in both high- and low-income villages. The privatization of tubewells is one of the most important driving forces encouraging the development of groundwater markets. Increasing water and land scarcity are also major determinants. The chapter also explores the impacts of the emergence of the groundwater markets on agricultural production – including crop water use and crop yields – and farmer income in northern China. Results indicate farmers that buy water from groundwater markets use less water than those that have their own tubewells. However yields of water buyers are not negatively affected. This is probably because water buyers exert more efforts to improve water use efficiency. Results also show that other things held constant, the crop incomes of water buyers are not statistically different from those of well owners. The chapter also finds that groundwater markets in northern China are not monopolistic, supporting the notion that they offer poor rural households affordable access to irrigation water.