Virtual Water

Virtual Water
Balance and flows of virtual water related to trade of agricultural and industrial products during 1996–2005. Net exporters (sending systems) are in green and net importers (receiving systems) are in red. The arrows indicate the relative sizes of large gross virtual water flows between sending and receiving systems (> 15 Gm3/year). Countries without arrows are potential spillover systems of the large virtual water flows.
Source: Hoekstra, A. and Mekonnen, M., 2012.

Virtual Water

The world is facing serious problems of water scarcity. Currently, two-thirds of the global population (over 4.0 billion people) suffer from severe water scarcity at least one month of the year. This is due to inadequate supplies, poor sanitation and pollution, mismanagement, overuse and waste. In addition, climate change is altering precipitation patterns around the world, causing shortages in some areas and flooding in others. It is clear that humans are changing the water system of the globe in significant ways – thereby jeopardising the very environmental systems upon which humankind relies for freshwater – without adequate knowledge of the system and how it will respond to change. To understand the impacts humans are having on water, every component of the water cycle must be carefully scrutinised, including virtual water.
Virtual water is the total amount of water required to produce a commodity (e.g. food and clothing). Hence, the trade of commodities, whether regional, national or international, represents the transport of virtual water from one area to another. The study of virtual water is important in terms of water scarcity and its impact on global food security and the role of food trade in compensating for water deficits. The number of trade connections and the total volume of virtual water trade has more than doubled over the past two decades. Understanding flows of virtual water was one of the first steps towards understanding “telecoupling” or the increasingly dispersed geographic nature of the multiple components of a global economy that creates impacts on the environment far from the consumption areas. Consumers remain largely unaware of the distant impacts, including land degradation, of their consumption.
At the global scale, understanding virtual water is essential to understanding the largely “hidden” movement and considerable economic value of water in international trade. Because of limited water resources, the world’s drylands are increasingly dependent on the trade of virtual water. In a very practical sense, if food is imported, so is the water that it took to produce6. Globalisation has contributed to the ease by which developed countries are increasingly importing water that is embodied in goods from the rest of the world, which effectively alleviates pressure on domestic water resources. For example, consumers in the United States routinely purchase clothing made from cotton grown in Pakistan, a country with severe water shortages. But this is not restricted only to developed countries.
China, which faces severe water shortages, especially in the north and north-western regions, has attempted to incorporate a virtualwater strategy to deal with regional-water management and food-trade policies4. However, while China’s virtual water exports account for 2.1 % of its renewable water resources and 8.6 % of its total water use, it is the world’s largest importer of virtual water, accounting for 31 % of the total virtual water transported. Globally, the volume of virtual water trade is vast: roughly 27 trillion m3 of virtual water was traded worldwide in 2010. In 1986, 68 % of the world’s population lived in water-exporting countries; by 2010, 60 % of the global population lived in water-importing countries. Globally, there is a net transfer of virtual water from areas with a water surplus to areas with a water deficit. This is dynamic due to land-use changes, e.g. the recent development of new croplands concentrated in the waterrich tropics, particularly in South America, while croplands in some of the semi-arid/subhumid lands of central Asia have been abandoned.
The magnitude and role of virtual water in the future will be shaped by many factors, including population growth, economics and availability. Increasingly, it will be influenced by the changing climate, especially in drylands and changing land-use. Without the discovery or development of new water resources, a contraction in the trade of virtual water will put water-importing nations in an increasingly perilous position. As the market for virtual water becomes more constrained, some nations and communities will be favoured over others due to inequalities in political and economic influence. Moreover, because virtual water is embedded in global trade, there are private interests that could have outsized influence on trading patterns and partners.
The importance of virtual water in global trade suggests the need for a close examination of its role in the functioning and health of the planet and the global economy. Along with ensuring that the world’s population has access to food via trade of virtual water will come the challenge of balancing a number of trade-offs associated with other issues, such as “virtual greenhouse gasses” that are similarly embedded in food and other products that are traded internationally.

% of global population in water- exporting/importing countries for 1986 and 2010.
Source: WAD3-JRC, based on FAOSTAT.

The increase in virtual water trade and the percentage of the total virtual water flux in the network corresponding to plants, animals, luxury and other commodities.
Source: Carr, 2013.

Irrigation alongside an overseas shipping container in Angola.
Source: Roeder, A.