Virtual water

The starting point

Despite the success of the past 15 years in providing more people with safe access to clean water, today around 10 per cent of the world's population still do not have this access to clean water. According to the United Nations, today about 800 million people in more than 80 countries still suffer from absolute or chronic water scarcity or are exposed to ongoing stress in acquiring daily water supplies. United Nations studies, published regularly in the World Water Development Reports, forecast however that there will be an increase in water scarcity in many regions of the world, caused by among other things the quick pace of climate change and sustained population growth. Even in central and southern Europe, this shortage of water resources is supposed to become very noticeable by the year 2070.

For this reason, international and national efforts are focusing above all on the sustainable protection as well as the sustainable management of water resources, to make water available in sufficient quantities and quality not only for the population of the world today but also for future generations.

The problem with this is primarily not the absolute quantity of freshwater resources. From a global point of view, these resources are more than sufficient to supply the world population. Instead, the problem is one of unequal occurrence and distribution of the available water resources.

Virtual water—virtual water trade

In dry regions, in particular, valuable freshwater is used for the artificial irrigation of agricultural areas. Thus, for example, the extraction of a gigantic ice-age body of groundwater in north-east Saudi Arabia has led to the metamorphosis of a desert into a blooming agricultural landscape. As a result of this, Saudi Arabia quickly developed into one of the most important exporters of wheat in the world in the 1990s. As groundwater does not recharge in this area due to the low level of precipitation, the use of valuable fossil freshwater resources for foodstuff exports is economically and ecologically questionable at the very least. Against this background, one may ask how much sense it makes for particularly arid regions to export water-intensive products rather than saving and conserving the resource.

Yet in water-rich Germany, at first glance, it seems that a water shortage does not exist—the climatic conditions in temperate zones ensure sufficient freshwater. Added to that, the average water consumption in most industrial countries, as in Germany, has declined. While in 1990, 147 litres per capita were still being consumed per day in Germany, in 2014 this was only 121 litres. This development that appears, initially, to be positive, however, hides the actual water consumption, which often exceeds the direct freshwater consumption many times over.

In this respect, the concept of virtual water has attracted international attention. This concept was developed in the early 1990s by the British geographer, Tony Allen, who, in 2008, was awarded the Stockholm Water Prize for this. Virtual water is defined as the amount of freshwater used in the entire production process of a foodstuff or industrial product.

By analyzing the individual production steps for a product precisely, the amount of virtual water can be determined. Hence, to enjoy one cup of coffee, it should be considered that 140 litres of virtual water are involved. In 1kg of potatoes, there are about 255 litres, in 1kg of wheat 1,300 litres and 1kg of rice even 3,400 litres of virtual water. Besides fruit and vegetable production, animal products are of particular consequence in this respect. According to calculations, a daily breakfast egg contains 200 litres of virtual water and a slice of cheese 100 litres. First place, however, goes to beef: Assuming a three-year intensive farming system for cattle in which a single animal consumes tonnes of feed and water, the quantity of virtual water for 1kg of beef is about 15,455 litres.

If we transfer this concept to industrial products, the water-intensive textile industry stands out. In one cotton t-shirt alone, there are 1,400 litres of virtual water, a pair of shoes has around 8,000. The production of a modern car even has around 40,000 litres, although this number can differ significantly depending on the size and type of production.

With all of these figures, it should be kept in mind that we are talking about global averages. While precipitation (green water) is sufficient for watering purposes in some regions of the earth, in many other regions, artificial irrigation is unavoidable. Consequently 1kg of grain, for example, can be grown using far less virtual water in the Netherlands than in Australia. What is more, as well as climatic factors, the use of technology plays an important role. This can be explained using the example of wheat production in Slovakia and Somalia. While in Slovakia only 465 litres of water per kg need to be used, in Somalia this is estimated to be 18,000 litres per kg.

Following on from these observations, the Dutch researcher Arjen Hoekstra added the term “water footprint” to the debate on global water consumption in the early 2000s. The water footprint describes the total water consumption of a country, but for illustration purposes, it is often given per person and per day. A distinction is made between the direct and indirect water footprint. The latter includes the quantity of water consumed abroad for products that are used in Germany.

Strengths and weaknesses of virtual water trade

Proponents of the concept suggest that virtual water trade at a national level can lead to savings effects, as available water could be more effectively used both ecologically and economically. They further refer to the positive effects of potential structural changes, which could be implemented little by little in arid countries in the course of a departure from agricultural production. Virtual water trade is also supposed to have the potential to prevent or mitigate conflicts about water, which could lead to local tensions, in advance.

Tony Allen’s concept aims in particular to shift water-intensive agricultural production, which is responsible for about four-fifths of the global virtual water trade, to water-rich areas of the earth. According to the logic of the concept, dry, arid countries should import virtual water to conserve their resources.

Originally, the concept of virtual water trade was developed for the MENA region, in which, for reasons of climate, the topic of food security plays an important role. Even if it makes neither ecological nor economic sense in these areas to carry on agricultural activities at highly technical and monetary costs, the political goal of becoming self-sufficient in food to not be dependent on imports prevails in some instances.

A few other challenges and obstacles to a successful global trade in virtual water are also under discussion. On the one hand, it is the highly volatile prices for foodstuffs on the global market. One could only implement the concept if it were free of political interference and prices were to remain stable and predictable. On the other hand, the necessary taxation of water presents a big challenge. Water for irrigation purposes is subsidized for political reasons in many countries or even provided free of charge. With a potential tax on irrigation water, such as there is in Australia, for example, where it has been applied in the form of water certificates since the mid-1990s, above all poor, small farmers will have to be kept in mind.

Following on from the criticism of the growing economic dependency between arid countries and countries rich in water resources, the global transport of foodstuffs is also viewed critically. Against the backdrop of current global warming, an expansion of or even a continued level of the global transport of goods should be reduced and avoided, because of high greenhouse gas emissions. While the concept of virtual water could indeed reduce a country’s domestic water footprint, it would, at the same time increase its CO2 footprint. In scientific circles, this effect is known as a trade-off and could lead to the concept of a virtual water trade having unwanted, negative ecological consequences.

Summary

The first effect of the concept of a virtual water trade is an increased awareness of our actual daily water consumption. More studies and projects followed the concept that stimulated an inclusive scientific discourse on the inequalities of global water consumption. For consumers and politicians, the term water footprint, in particular, serves as action orientation and aims at achieving a more environmentally aware consumer behaviour.

Yet, the concept cannot be implemented as a top-down political approach. Besides a multitude of possible barriers and adverse side-effects, there is also no international authority that could dictate such a global water trade. Admittedly, the concept can certainly make sense for arid states that have enough foreign currency from non-agricultural trade if they were to enter into a regional virtual trade with water-rich neighbouring states. Similarly, countries that are spread over several climate zones could profit from the concept.

Sources and further information:

BICC 12/2015

Environmental safety

The starting point

Virtual water—virtual water trade

Strengths and weaknesses of virtual water trade

Summary

Sources and further information:

Data tables

Country portraits

Navigation and operation