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Virtual Water and Trade: A Critical Economic Review

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The Global Water System in the Anthropocene

Part of the book series: Springer Water ((SPWA))

Abstract

In recent years many scholars have dealt with aspects of a “globalisation of water resources” implicating the need for a global approach to governing scarce water resources. Especially the concepts of virtual water and water footprints have garnered increasing attention due to their pledge to disclose the linkages of local water consumption and global agricultural trade. In response, trade-restricting policy instruments have been promoted by some authors in response to seemingly inefficient, unfair or unsustainable “virtual water”-trade patterns. To shed some light on the link between food trade, water and sustainability this paper discusses the informative value of the virtual water and water footprint concepts from an economic point of view, including various refinements of these indicators which have been suggested in the literature. Additionally, the performance of trade-related global water governance arrangements based on virtual water will be considered, bringing up again the debate about the environmental benefits of free trade. It must be concluded that the virtual water concept is limited in terms of its usefulness in providing policy advice or guiding economic decision-making. Specific sustainability problems (distorted pricing, bad governance, trade performance) should be solved in the respective arenas and not by virtual water-related global governance schemes or even trade barriers.

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Notes

  1. 1.

    While usually VW and WF are just seen as different ways of looking at the same thing (Gawel and Bernsen 2013), Velazquez et al. 2009 try to elaborate some relevant differences.

  2. 2.

    An early statistical and modelling analysis on the water-food trade relations has been conducted by Yang et al. (2003).

  3. 3.

    Population growth and changing consumption patterns will differ among regions, and this will affect the associated impact of water scarcity, which is why “water is far from having the properties of a global public good” (Mehta 2003, p. 556). By comparison, the global climate system can be characterized as a global public good, because no person on earth can be excluded from its benefits or from the negative consequences of climate change.

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Acknowledgments

The author would like to thank two anonymous referees for helpful comments.

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  1. Department of Economics, Helmholtz Centre for Environmental Research – UFZ, Permoserstr. 15, 04318, Leipzig, Germany

    Erik Gawel

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  1. Erik Gawel
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Correspondence to Erik Gawel .

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  1. Global Water System Project, Bonn, Germany

    Anik Bhaduri

  2. Global Water System Project, Bonn, Germany

    Janos Bogardi

  3. UNESCO-IHE, Delft, The Netherlands

    Jan Leentvaar

  4. Global Water System Project, Bonn, Germany

    Sina Marx

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Gawel, E. (2014). Virtual Water and Trade: A Critical Economic Review. In: Bhaduri, A., Bogardi, J., Leentvaar, J., Marx, S. (eds) The Global Water System in the Anthropocene. Springer Water. Springer, Cham. https://doi.org/10.1007/978-3-319-07548-8_3

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