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Virtual Water and Trade: A Critical Economic Review

  • Erik Gawel
Chapter
Part of the Springer Water book series (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.

Keywords

Carbon Footprint Trade Flow Water Saving Water Footprint Virtual Water 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgments

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

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Copyright information

© Springer International Publishing Switzerland 2014

Authors and Affiliations

  1. 1.Department of EconomicsHelmholtz Centre for Environmental Research – UFZLeipzigGermany

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