What is wrong with virtual water trading?
So-called virtual water, the water embedded in internationally traded goods, has come under discussion. The amount of quantitative studies which attempt to estimate volumes and flows of virtual water in relation to agricultural trade is rising rapidly, while the concept has been recognized by large firms and international institutions. From the viewpoint of economic trade theory, the endowment with abundant water resources gives countries a comparative advantage in the export of waterintensive goods, while water scarce countries gain the option to alleviate stress on domestic water resources by substituting the production of water-intensive goods by imports. However, fairness implications are seen to arise in the reallocation of water resources through the means of mostly agricultural trade. In this perspective, moral problems can be attached to both imports and exports, and even to a country's own consumption of virtual water. Global institutional arrangements are therefore suggested, to regulate virtual water flows in a "fair" and "efficient" manner. This paper will give a short overview of the concept's history and findings, and subsequently analyse it from the perspective of economic trade and resource theory. The contribution of this paper will be to examine the concept of virtual water in terms of the problems it evokes, its informative value and the policy suggestions which are made in this context. It must be concluded that the concept is unspecific and inconsistent, implying governance schemes which will neither improve efficiency nor sustainability in today's trade patterns.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: ++49 - 0341 - 235-2771
Fax: ++49 - 0341 - 235-2825
Web page: http://www.ufz.de/index.php?en=1445
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Esther Velázquez & Cristina Madrid & María Beltrán, 2011. "Rethinking the Concepts of Virtual Water and Water Footprint in Relation to the Production–Consumption Binomial and the Water–Energy Nexus," Water Resources Management, Springer, vol. 25(2), pages 743-761, January.
- van den Bergh, Jeroen C. J. M. & Verbruggen, Harmen, 1999. "Spatial sustainability, trade and indicators: an evaluation of the 'ecological footprint'," Ecological Economics, Elsevier, vol. 29(1), pages 61-72, April.
- 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.
- Dik Roth & Jeroen Warner, 2008. "Virtual water: Virtuous impact? The unsteady state of virtual water," Agriculture and Human Values, Springer, vol. 25(2), pages 257-270, June.
- Kumar, M. Dinesh & Singh, Om Prakash, . "Virtual water in global food and water policy making: is there a need for rethinking?," Papers published in Journals (Open Access) h036595, International Water Management Institute.
- Brian R. Copeland & M. Scott Taylor, 2004.
"Trade, Tragedy, and the Commons,"
NBER Working Papers
10836, National Bureau of Economic Research, Inc.
- Anderson, Kym, 2004.
"The Challenge of Reducing Subsidies and Trade Barriers,"
CEPR Discussion Papers
4592, C.E.P.R. Discussion Papers.
- Kym Anderson, 2004. "The challenge of Reducing Subsidies and Trade Barriers," Centre for International Economic Studies Working Papers 2004-12, University of Adelaide, Centre for International Economic Studies.
- Anderson, Kym, 2004. "The challenge of reducing subsidies and trade barriers," Policy Research Working Paper Series 3415, The World Bank.
- Siebert, Horst, 1996. "Trade policy and environmental protection," Kiel Working Papers 730, Kiel Institute for the World Economy.
- Carl-Erik Schulz, 1996. "Trade policy and ecology," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 8(1), pages 15-38, July.
- Ansink, Erik, 2010. "Refuting two claims about virtual water trade," Ecological Economics, Elsevier, vol. 69(10), pages 2027-2032, August.
- de Fraiture, Charlotte & Cai, X & Amarasinghe, Upali & Rosegrant, M. & Molden, David, 2004. "Does international cereal trade save water?: the impact of virtual water trade on global water use," IWMI Research Reports H035342, International Water Management Institute.
- A. Hoekstra & A. Chapagain, 2007. "Water footprints of nations: Water use by people as a function of their consumption pattern," Water Resources Management, Springer, vol. 21(1), pages 35-48, January.
When requesting a correction, please mention this item's handle: RePEc:zbw:ufzdps:12011. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.