The virtual water trade is the hidden flow of water in food or other

commodities In economics, a commodity is an economic good, usually a resource, that specifically has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. Th ...

that are

trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. Traders generally negotiate through a medium of cr ...

d from one place to another. Other terms for it are embedded or embodied water. The virtual water trade is the idea that virtual water is exchanged along with goods and services. This idea provides a new, amplified perspective on water problems. It balances different perspectives, basic conditions, and interests. This concept makes it possible to distinguish between global, regional, and local levels and their linkages. However, the use of virtual water estimates may offer no guidance for policymakers seeking to ensure they are meeting environmental objectives. For example, cereal grains have been major carriers of virtual water in countries where water resources are scarce. So cereal imports can compensate for local water deficits. However,

low-income countries A developing country is a sovereign state with a less-developed industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. There is also no clear agreemen ...

may not be able to afford such imports in the future. This could lead to food insecurity and

starvation Starvation is a severe deficiency in caloric energy intake, below the level needed to maintain an organism's life. It is the most extreme form of malnutrition. In humans, prolonged starvation can cause permanent organ damage and eventually, de ...

Concept

The virtual water concept, also known as embodied water, was coined by John Anthony Allan (Tony Allan) in 1993. He received the Stockholm Water Prize for the concept in 2008. The virtual water trade is the idea that when goods and services are exchanged, so is virtual water. When a country imports one tonne of wheat instead of producing it domestically, it is saving about 1,300 cubic meters of real indigenous water. If this country is water-scarce, the water that is 'saved' can be used towards other ends. If the exporting country is water-scarce, however, it has exported 1,300 cubic meters of virtual water since the real water used to grow the wheat will no longer be available for other purposes. This has obvious strategic implications for countries that are water-constrained such as those found in the

Southern African Development Community The Southern African Development Community (SADC) is an inter-governmental organization headquartered in Gaborone, Botswana. Goals The SADC's goal is to further regional socio-economic cooperation and integration as well as political and se ...

(SADC) area. Water-scarce countries like

Israel Israel, officially the State of Israel, is a country in West Asia. It Borders of Israel, shares borders with Lebanon to the north, Syria to the north-east, Jordan to the east, Egypt to the south-west, and the Mediterranean Sea to the west. Isr ...

discourage the export of oranges (relatively water intensive crops) precisely to prevent large quantities of water from being exported to different parts of the world. In recent years, the concept of virtual water trade has gained weight both in the scientific as well as in the political debate. The notion of the concept is ambiguous. It changes between an analytical, descriptive concept and a political induced strategy. As an analytical concept, virtual water trade represents an instrument that allows the identification and assessment of policy options not only in the scientific but also in the political discourse. As a politically induced strategy, the question if virtual water trade can be implemented in a

sustainable Sustainability is a social goal for people to co-exist on Earth over a long period of time. Definitions of this term are disputed and have varied with literature, context, and time. Sustainability usually has three dimensions (or pillars): env ...

way, whether the implementation can be managed in a social, economical, and ecological fashion, and for which countries the concept offers a meaningful option. The data that underlie the concept of virtual water can readily be used to construct water satellite accounts, and brought into economic models of international trade such as the GTAP Computable General Equilibrium Model. Such a model can be used to study the economic implications of changes in the water supply or water policy, as well as the water resource implications of economic development and trade liberalization. In sum, virtual water trade allows a new, amplified perspective on water problems: In the framework of recent developments from a supply-oriented to demand-oriented management of water resources, it opens up new fields of

governance Governance is the overall complex system or framework of Process, processes, functions, structures, Social norm, rules, Law, laws and Norms (sociology), norms born out of the Interpersonal relationship, relationships, Social interaction, intera ...

and facilitates differentiation and balancing of different perspectives, basic conditions, and interests. Analytically, the concept enables one to distinguish between global, regional, and local levels and their linkages. This means, that water resource problems have to be solved in ''problems'' if they cannot be successfully addressed in the local or regional watershed. Virtual water trade can thus overcome the hydro-centricity of a narrow watershed view. According to the proceedings of a 2006 conference in

Frankfurt Frankfurt am Main () is the most populous city in the States of Germany, German state of Hesse. Its 773,068 inhabitants as of 2022 make it the List of cities in Germany by population, fifth-most populous city in Germany. Located in the forela ...

, Germany, it seems reasonable to link the new concept with the approach of integrated water resources management.

Related terms

Water footprint

The concept of virtual water trade was introduced to refer to the idea that countries can save domestic water by importing food. Imported food, however, comes from somewhere. In 2002, Arjen Y. Hoekstra, while working for UNESCO-IHE, introduced the concept of water footprint. The water footprint shows the link between consumer goods or a consumption pattern and water use and pollution. Virtual water trade and water footprint can be seen as part of a bigger story: the globalization of water. For instance, it takes 1,340 cubic meters of water (based on the world average) to

produce In American English, produce generally refers to wikt:fresh, fresh List of culinary fruits, fruits and Vegetable, vegetables intended to be Eating, eaten by humans, although other food products such as Dairy product, dairy products or Nut (foo ...

one

tonne The tonne ( or ; symbol: t) is a unit of mass equal to 1,000 kilograms. It is a non-SI unit accepted for use with SI. It is also referred to as a metric ton in the United States to distinguish it from the non-metric units of the s ...

wheat Wheat is a group of wild and crop domestication, domesticated Poaceae, grasses of the genus ''Triticum'' (). They are Agriculture, cultivated for their cereal grains, which are staple foods around the world. Well-known Taxonomy of wheat, whe ...

. The precise volume can be more or less depending on climatic conditions and

agricultural Agriculture encompasses crop and livestock production, aquaculture, and forestry for food and non-food products. Agriculture was a key factor in the rise of sedentary human civilization, whereby farming of domesticated species created f ...

practice. Hoekstra has defined the virtual-water content of a product (a commodity, good or service) as "the volume of

freshwater Fresh water or freshwater is any naturally occurring liquid or frozen water containing low concentrations of dissolved salts and other total dissolved solids. The term excludes seawater and brackish water, but it does include non-salty mi ...

used to produce the product, measured at the place where the product was actually produced". It refers to the sum of the water use in the various steps of the production chain.

Embodied energy

Some researchers have attempted to use the methods of energy analysis, which aim to produce

embodied energy Embodied energy is the sum of all the energy required to produce any goods or services, considered as if that energy were incorporated or 'embodied' in the product itself. The concept can help determine the effectiveness of energy-producing or ...

estimates, to derive virtual, or embodied water estimates.

Virtual water content of selected products

The following table shows the average virtual water content of some selected products for a number of selected countries (m³/ton):

Limitations

The virtual water or the water footprint concepts have faced some criticism. Australia's National Water Commission considers that the measurement of virtual water has little practical value in decision making regarding the best allocation of scarce water resources.WA WATER (2014
Western Australia Branch Newsletter
June 2014, p. 1 Other limitations more specific to the

MENA The Middle East and North Africa (MENA), also referred to as West Asia and North Africa (WANA) or South West Asia and North Africa (SWANA), is a geographic region which comprises the Middle East (also called West Asia) and North Africa together ...

(the Middle East & North Africa) region include the fact that importing food could pose the risk of further political dependence. The notion of "

self-sufficiency Self-sustainability and self-sufficiency are overlapping states of being in which a person, being, or system needs little or no help from, or interaction with others. Self-sufficiency entails the self being enough (to fulfill needs), and a sel ...

" has always been the pride of the MENA region.Expert Statement on Virtual Water by Dr. Hazim El-Naser and Mohammad Abbadi (2005).

References

{{Reflist, 30em