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On the economics of virtual water trade

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  • Reimer, Jeffrey J.

Abstract

Virtual water trade is increasingly recognized as a useful metaphor for thinking about freshwater resources in an international context. Its legitimacy in terms of economic theory has been questioned by a number of authors, however. In this article I develop new theoretical results that place the virtual water concept on a firm economic foundation, and which correct several misconceptions within the existing literature on virtual water economics.

Suggested Citation

  • Reimer, Jeffrey J., 2012. "On the economics of virtual water trade," Ecological Economics, Elsevier, vol. 75(C), pages 135-139.
    • Handle: RePEc:eee:ecolec:v:75:y:2012:i:c:p:135-139
    DOI: 10.1016/j.ecolecon.2012.01.011
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    References listed on IDEAS

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    1. Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-874, September.
    2. Wichelns, Dennis, 2004. "The policy relevance of virtual water can be enhanced by considering comparative advantages," Agricultural Water Management, Elsevier, vol. 66(1), pages 49-63, April.
    3. Jeffrey J. Reimer & Man Li, 2010. "Trade Costs and the Gains from Trade in Crop Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(4), pages 1024-1039.
    4. Hoekstra, Arjen, 2010. "The relation between international trade and freshwater scarcity," WTO Staff Working Papers ERSD-2010-05, World Trade Organization (WTO), Economic Research and Statistics Division.
    5. Choi, E. Kwan & Harrigan, James, 2003. "Handbook of International Trade," Staff General Research Papers Archive 11375, Iowa State University, Department of Economics.
    6. Ansink, Erik, 2010. "Refuting two claims about virtual water trade," Ecological Economics, Elsevier, vol. 69(10), pages 2027-2032, August.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Guangyao Deng & Liujuan Wang & Yanan Song, 2015. "Effect of Variation of Water-Use Efficiency on Structure of Virtual Water Trade - Analysis Based on Input–Output Model," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 29(8), pages 2947-2965, June.
    2. Kazuki Kagohashi & Tetsuya Tsurumi & Shunsuke Managi, 2015. "The Effects of International Trade on Water Use," PLOS ONE, Public Library of Science, vol. 10(7), pages 1-16, July.
    3. Marta Antonelli & Martina Sartori, 2014. "Unfolding the Potential of the Virtual Water Concept. What is still under debate?," IEFE Working Papers 74, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    4. A. Hassan & M. Y. Saari & T. H. Tengku Ismail, 2017. "Virtual water trade in industrial products: evidence from Malaysia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 19(3), pages 877-894, June.
    5. Roberto Roson & Richard Damania, 2017. "Beyond Water Stress: Structural Adjustment and Macroeconomic Consequences of the Emerging Water Scarcity," EcoMod2017 10259, EcoMod.
    6. Mohamad Afkhami & Thomas Bassetti & Hamed Ghoddusi & Filippo Pavesi, 2018. "Virtual Water Trade: The Implications of Capital Scarcity," Working Papers 03/2018, University of Verona, Department of Economics.
    7. Richard R. Rushforth & Benjamin L. Ruddell, 2015. "The Hydro-Economic Interdependency of Cities: Virtual Water Connections of the Phoenix, Arizona Metropolitan Area," Sustainability, MDPI, vol. 7(7), pages 1-26, June.
    8. Fracasso, Andrea, 2014. "A gravity model of virtual water trade," Ecological Economics, Elsevier, vol. 108(C), pages 215-228.
    9. Hachaichi, Mohamed, 2023. "Unpacking the urban virtual water of the Global South: Lessons from 181 cities," Ecological Economics, Elsevier, vol. 210(C).
    10. Tian, Qingsong & Yu, Yan & Xu, Yueyan & Li, Chongguang & Liu, Nianjie, 2023. "Patterns and driving factors of agricultural virtual water imports in China," Agricultural Water Management, Elsevier, vol. 281(C).
    11. Soheila Zareie & Omid Bozorg-Haddad & Hugo A. Loáiciga, 2021. "A state-of-the-art review of water diplomacy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(2), pages 2337-2357, February.
    12. Rodolfo Metulini & Stefania Tamea & Francesco Laio & Massimo Riccaboni, 2016. "The Water Suitcase of Migrants: Assessing Virtual Water Fluxes Associated to Human Migration," PLOS ONE, Public Library of Science, vol. 11(4), pages 1-13, April.
    13. M. Antonelli & R. Roson & M. Sartori, 2012. "Systemic Input-Output Computation of Green and Blue Virtual Water ‘Flows’ with an Illustration for the Mediterranean Region," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(14), pages 4133-4146, November.
    14. Roberto Roson & Martina Sartori, 2013. "Trade-offs in water policy: System-wide implications of changing water availability and agricultural productivity in the Mediterranean economies by 2050," Working Papers 2013:21, Department of Economics, University of Venice "Ca' Foscari".
    15. Alina Petronela Alexoaei & Valentin Cojanu & Cristiana-Ioana Coman, 2021. "On Sustainable Consumption: The Implications of Trade in Virtual Water for the EU’s Food Security," Sustainability, MDPI, vol. 13(21), pages 1-19, October.
    16. Chen, Rui & Wilson, Norbert L.W., 2017. "Virtual Water Trade: Do Bilateral Tariffs Matter?," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258279, Agricultural and Applied Economics Association.
    17. Ayanda M. Ngxumeshe & Motshekwe Ratsaka & Bohani Mtileni & Khathutshelo Nephawe, 2020. "Sustainable Application of Livestock Water Footprints in Different Beef Production Systems of South Africa," Sustainability, MDPI, vol. 12(23), pages 1-13, November.
    18. Delbourg, Esther & Dinar, Shlomi, 2020. "The globalization of virtual water flows: Explaining trade patterns of a scarce resource," World Development, Elsevier, vol. 131(C).

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    More about this item

    Keywords

    International trade; Water;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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