1. History

2. Trade

3. Water footprint

4. Embodied energy

5. Criticism
    Limitations of the virtual water measure 

6. Virtual water content of selected products

7. See also

8. References

9. Further reading

Virtual water trade (also known as trade in embedded or embodied water) refers to the hidden flow of water if food or other commodities are traded from one place to another. For instance, it takes 1,340 cubic meters of water (based on the world average) to produce one metric tonne of wheat. The precise volume can be more or less depending on climatic conditions and agricultural practice. Hoekstra and Chapagain have defined the virtual-water content of a product (a commodity, good or service) as "the volume of freshwater used to produce the product, measured at the place where the product was actually produced".^[1] It refers to the sum of the water use in the various steps of the production chain.

History

Noah Kunst and Moritz Schneider introduced the virtual water concept.^[2]{{clarify|reason=Please supply quote of paragraph in article - as strong claim made.|date=January 2019}} Noah stated: "The water is said to be virtual because once the wheat is grown, the real water used to grow it is no longer actually contained in the wheat. The concept of virtual water helps us realize how much water is needed to produce different goods and services. In semi-arid and arid areas, knowing the virtual water value of a good or service can be useful towards determining how best to use the scarce water available." Both have been rewarded for their concept with the Nobel Memorial Prize in Economic Sciences of the year 2009 which is commonly referred to as the Nobel Prize in Economics.

Trade

Water-scarce countries like Israel discourage the export of oranges (relatively water intensive crops) precisely to prevent large quantities of water 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 which 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 is, whether virtual water trade can be implemented in a sustainable 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.^[6] Such a model can be used to study the economic implications of changes in water supply or water policy, as well as the water resource implications of economic development and trade liberalisation.

In sum, virtual water trade allows a new, amplified perspective on water problems: In the framework of recent developments from a supply-oriented to a demand-oriented management of water resources it opens up new fields of governance and facilitates a 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 problemsheds^[7][8] 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, Germany, it seems reasonable to link the new concept with the approach of integrated water resources management.

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.{{Citation needed|date=January 2019}} 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.{{Citation needed|date=January 2019}}

Embodied energy

Some researchers have attempted to use the methods of energy analysis, which aim to produce embodied energy estimates, to derive virtual, or embodied water estimates.^[9]

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.^[10]

Limitations of the virtual water measure

Key shortcomings of virtual water measures are that the concept:

1. It relies on an assumption that all sources of water, whether in the form of rainfall or provided through an irrigation system, are of equal value.^&91;11&93;
2. It implicitly assumes that water that would be released by reducing a high water use activity would necessarily be available for use in a less water-intensive activity. For example, the implicit assumption is that water used in rangeland beef production would be available to be used to produce an alternative, less water-intensive activity. As a practical matter this may not be the case, nor might the alternatives be economic.^&91;11&93;
3. It fails as an indicator of environmental harm nor does it provide any indication of whether water resources are being used within sustainable extraction limits. The use of virtual water estimates therefore offer no guidance for policy makers seeking to ensure that environmental objectives are being met.^&91;11&93;

The deficiencies with the concept of virtual water mean that there is a significant risk in relying on these measures to guide policy conclusions. Accordingly, 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.^[12]

Other limitations more specific to the MENA (Middle East & North Africa) region include:

1. In MENA rural societies, farmers are by tradition politically influential and would prohibit new policies for water allocation. Reallocating the water resources adds a huge burden on the farmers especially when a large portion of those farmers use their land for their own food consumption which happens to be their only source of food supply.^&91;13&93;
2. Importing food could pose the risk of further political dependence. The notion of "self sufficiency" has always been the pride of the MENA region.^&91;14&93;
3. The use of virtual water lies in the religious regulations for charging for water. According to Al-Bukhari, Prophet Mohammad's teachings, the Prophet said: "People are partners in three: Water, Herbs and Fire" (referring to basic energy resources). Therefore, and because farmers are generally poor and rain water, rivers and lakes are like a gift from God, the MENA countries might find it difficult to charge the farmers the full cost for water.^&91;14&93;

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):^[15]

See also

• Peak water
• Water footprint
• Water management
• Deficit irrigation
• Water resource policy

References

Further reading

• Hoekstra, A.Y. (2003) (ed) ‘Virtual water trade: Proceedings of the International Expert Meeting on Virtual Water Trade’ Value of Water Research Report Series No.12, UNESCO-IHE, Delft, the Netherlands
• Chapagain, A.K. and Hoekstra, A.Y. (2008) 'The global component of freshwater demand and supply: An assessment of virtual water flows between nations as a result of trade in agricultural and industrial products' Water International 33(1): 19-32.
• Hummel, D., T. Kluge, S. Liehr, M. Hachelaf (2006) [ Virtual Water Trade. Documentation of an International Expert Workshop]. July 3–4, 2006. Frankfurt am Main. ISOE-Materialien Soziale Ökologie No. 24
• {{Cite journal| volume = 3| issue = 4| pages = 321–340| last = Lenzen| first = M.|author2=B. Foran | title = An input-output analysis of Australian water usage| journal = Water Policy| year = 2001| doi = 10.1016/S1366-7017(01)00072-1}}
• {{Citation | last = Lenzen | first = M. | publisher = Australian Bureau of Statistics, Commonwealth of Australia | title = The influence of lifestyles on environmental pressure |date = 25 February 2002 | url = http://www.abs.gov.au/ausstats/abs@.nsf/Previousproducts/1301.0Feature%20Article162002}}
• {{cite journal |doi=10.1016/j.ecolecon.2006.07.033 |vauthors=Vardona M, Lenzen M, Peevora S, Creasera M |title=Water accounting in Australia |journal=Ecological Economics |volume=61 |issue= 4|pages=650–9 |year=2007}}
• {{cite book|last=Zygmunt|first=J. |title=Hidden Waters |url=http://www.waterfootprint.org/Reports/Zygmunt_2007.pdf|year=2007|publisher=Waterwise|location=London}}

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