The virtual water trade refers to the hidden movement of water in food and other goods that are traded between places. Other names for this are embedded or embodied water. This concept shows that water is transferred along with goods and services. It offers a new way to understand water challenges by considering different viewpoints, basic needs, and interests. It also helps compare global, regional, and local levels and how they are connected. However, using virtual water estimates may not help leaders make decisions to protect the environment.
For example, grains like wheat and corn are major sources of virtual water in areas with limited water supplies. Importing these grains can help address local water shortages. However, countries with low incomes may struggle to afford these imports in the future. This could lead to not having enough food to eat and even starvation.
Concept
The virtual water concept, also called embodied water, was introduced by John Anthony Allan (Tony Allan) in 1993. In 2008, he was awarded the Stockholm Water Prize for creating this idea.
The virtual water trade describes how water is linked to the exchange of goods and services. For example, if a country imports one tonne of wheat instead of growing it locally, it saves about 1,300 cubic meters of water that would have been used domestically. If the importing country has limited water, this saved water can be used for other needs. However, if the exporting country has limited water, it loses 1,300 cubic meters of water because the water used to grow the wheat is no longer available for other uses. This idea has important effects for countries with limited water, such as those in the Southern African Development Community (SADC).
Countries that lack enough water, like Israel, avoid exporting water-intensive crops such as oranges. This helps prevent large amounts of water from being sent overseas.
In recent years, the virtual water trade idea has become more important in scientific and political discussions. The concept is sometimes unclear, as it can be used both to analyze water use and as a strategy for managing water resources. As an analytical tool, it helps identify and evaluate water-related policies in science and politics. As a strategy, it raises questions about whether virtual water trade can be done in a way that is fair, environmentally safe, and economically sound.
The data used in virtual water studies can be used to create water satellite accounts and included in models that study international trade, such as the GTAP Computable General Equilibrium Model. These models help analyze how changes in water supply or policies affect economies and how economic growth and trade affect water resources.
In summary, virtual water trade provides a new way to understand water challenges. It helps shift from managing water based only on supply to managing it based on demand. This approach allows for better governance by considering different levels—global, regional, and local—and how they connect. If water problems cannot be solved locally or regionally, they must be addressed at higher levels. Virtual water trade helps move beyond focusing only on small areas like watersheds. According to a 2006 conference in Frankfurt, Germany, it is reasonable to connect virtual water trade with integrated water resources management.
Related terms
The idea of virtual water trade was created to show how countries can save water at home by importing food. However, imported food comes from other places. In 2002, Arjen Y. Hoekstra, while working for UNESCO-IHE, introduced the idea of a water footprint. A water footprint shows how consumer goods or habits are connected to water use and pollution. Virtual water trade and water footprint are parts of a larger topic: the worldwide movement of water.
For example, producing one tonne of wheat uses about 1,340 cubic meters of water on average worldwide. The exact amount may be more or less depending on weather conditions and farming methods. Hoekstra defined the virtual-water content of a product as "the amount of fresh water used to make the product, measured where it was actually made." This includes all the water used during each step of the production process.
Some researchers have tried using methods from energy analysis, which calculate how much energy is used in production, to estimate how much water is used in the same way.
Virtual water content of selected products
The table below shows the average virtual water content for some products in several countries (m /ton):
Limitations
The ideas of virtual water and water footprint have been criticized. Australia's National Water Commission believes that measuring virtual water is not helpful for making decisions about how to best use limited water supplies.
In the MENA region (Middle East and North Africa), another challenge is that importing food might increase reliance on other countries for political matters. The idea of "self-sufficiency," or being able to produce enough food on their own, has always been an important goal for the MENA region.