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  • May 24, 2022
  • 4 min read

What is Virtual Water?

Most of the time, we tend to believe that our water consumption is limited to the water we use in its physical or ‘visible’ form for drinking, cooking, washing, bathing, etc. How many of us think of water when we look at, say, wheat, onions, a shirt, or cheese? Not many. It would surprise us, however, to know that a large amount of water goes into the production of these things. That, simply, is what we mean when we say ‘virtual water’.


If one is to define ‘Virtual water, it is the water embodied or “hidden” in the products, services, and processes people buy and use every day. Though invisible to the end-user of a product or service, virtual water has been consumed along the manufacturing life cycle of a product, thereby making its creation possible. The virtual water content of a product is the total sum of the water used along the value chain.


The concept of virtual water, a relatively recent one, was introduced by British geographer John Anthony Allan in the early 1990s. Allan formulated it as a helpful tool for water-scarce countries to feed growing populations as well as a possible answer to global conflicts over natural resources. He suggested that countries lacking domestic water resources could simply import food and other commodities containing virtual water, thereby avoid having to deal with water crises directly. [1]


Examples and quantum of virtual water use:


A gallon of orange juice: 272.2 gallons

A 200gm bag of potato chips: 48.9 gallons

A pair of jeans: 2,866 gallons

A pound of butter: 3,602.3 gallons

One pound of rice: 200 gallons



Direct water use, on the other hand, is the visible use of water at a given time and location, for example, direct water is used in the washing of a shirt, while virtual water is the total water used in all stages of the production of that shirt.


Virtual Water Footprint

Water Footprint is an indicator of freshwater use that looks at both direct and indirect (virtual) water consumption [2]. The water footprint includes not only the total volume of fresh water used in the creation process of a product/service but also the category of water used, i.e. blue, green or grey water. This is important because the water footprint can be estimated to determine whether a particular production process is sustainable within the water and ecological conditions of any region. In that much, it has been recognised as a strong tool for sustainable water management and policy planning at the macro (regional or national) as well as micro (product/service) levels. The water footprint depends on agricultural practices, water use efficiency, time, place and local climatic conditions. For an example, virtual water for producing a particular quantity of crop in an arid region would be higher than in a wet or semi-arid region [3].



Contribution of different crops to the total global water footprint of crop production (1996 -2005).

Source: Mekonnen M. M. and Hoekstra A. Y. (2011)


Blue Water footprint: is freshwater on the land surface or within the ground. It can be easily pumped and engineered and can, with difficulty, be valued. Blue water is used for diverse purposes, namely, food production, ‘non-food’ production and other economic activities including energy generation. Blue water is usually prone to over-consumption.


Green Water: is simply rainfall that infiltrates into the soil and is incorporated by plants through transpiration. Green water consumption is limited to sustaining natural vegetation and producing local crops and therefore is used only for food production.


Grey Water footprint: is the amount of fresh water required to imbibe pollutants to meet specific water quality standards.


Virtual Water Content in Major Food Products

Above table shows the virtual water (green, blue and grey) embodied in major food crops and livestock.


Country-wise, China, India and the US have the largest total water footprints within their territory, viz., 1207, 1182 and 1053 cu. m per annum, respectively. About 38% of the global water footprint lies within these three countries. India has the largest blue water footprint within its territory at 243 cu. m. Per annum, which is 24% of the global blue water footprint. Irrigation of wheat is the process that takes the largest share (33%) in India’s blue water footprint, followed by irrigation of rice (24%) and irrigation of sugarcane (16%). China is the country with the largest grey water footprint within its borders: 360 cu.m. per annum, which is 26% of the global grey water footprint.


Why is Virtual Water Important?

Virtual water, though invisible, holds vital importance as far as water management is concerned. The analysis of virtual water can help countries determine not only how they are managing their water but also ‘who’ is consuming it, i.e., how the water resources in one country are supporting consumption in another country. In other words, virtual water helps us understand the interdependence of economies and their resources.


The notion that water can be incorporated in goods and services is very powerful when it is applied to international trade and food security. For instance, consider a country producing and exporting rice; paddy or rice is a water-intensive crop and requires large amounts of water in its cultivation. Since this country exports rice, it implies that it is also exporting the virtual water that has been consumed in cultivating that much paddy.


Combining this with the concept of water footprint enables us to work out the dependencies, and to identify risks in terms of scarcity and pollution. This has implications for food security, economy, and diplomacy.


Food and water security are vital issues for any country’s governance. Policy makers in water scarce countries or regions can use virtual water analysis to develop strategies to save water by increasing imports and restricting exports with high virtual-water content. This ‘Virtual Water Trade (VWT) is gradually changing the hydrological cycle in many ways. Several countries have begun to act early, following the VWT route to address worldwide water distress.


References:



  • May 24, 2022
  • 5 min read

What is Virtual Water Trade (VWT)?


When goods and services are exchanged, or traded, between countries so is virtual water, or the water used in the production of those goods/services - this is the concept of Virtual Water Trade (VWT). If a country is water scarce, it may choose to import water intensive goods (and therefore virtual water) thereby reducing the pressure on the local water resources. To cite an example, if a country uses X cu.m. of local water to produce 1 tonne of wheat and it chooses to import this wheat rather than grow it domestically, it is, in effect, saving X cubic meters of local water per ton of wheat imported.


As such, virtual water trade allows a new and larger perspective on water problems. In fact the concept of virtual or ‘embodied’ water was first developed as a way of understanding how water scarce countries could provide food, clothing and other water intensive goods to their inhabitants. VWT can potentially reduce global water scarcity by transferring water resources ‘virtually’ from the relatively water-surplus regions, to the water-scarce. If virtual water transfers take place from regions with higher water productivity to those with lower, VWT ensures efficient global water use [1].


As food and other products are traded internationally, their water footprint follows them in the form of virtual water. This allows the linkage of the water footprint of production in one country to the water footprint of consumption in another country.


Virtual Water Trade in the Real World


An increase in demand for food and industrial goods and services in the second half of the 20th century necessitated many countries to be net importers of food. In the two and a half decades from the mid-1980s, international trade in agricultural products increased by almost three times, and so did the related virtual water trade. Cereals, meat, fats and oilseeds constitute more than half the virtual water trade across the globe.


Cereal grains have been major carriers of virtual water in countries where water resources are scarce. Therefore, cereal imports can play a crucial role in offsetting local water deficit. This happens, for example, in Mediterranean countries, the Middle East and Mexico.


Globally, the major gross virtual water exporters are USA, China, India, Brazil, Argentina, Canada, Australia, Indonesia, France and Germany and the major gross virtual water importers are the USA, Japan, Germany, China, Italy, Mexico, France, the UK and the Netherlands. Mexico manages to conserve 12 billion cubic meters per year of its national water resources by importing maize. Some of the Middle Eastern countries have to import over 85% of their food because of the water scarcity the region faces. According to Price Waterhouse Coopers (PWC), some Gulf countries import nearly all the rice required by them, about 93% of cereals, 62% of meat and 56% of vegetables.


Share of different Sectors in Virtual Water Trade [2]
Virtual Water Trade through Food and Commodities (1995-2005) [3]

North European countries import more water than they export in virtual form. This, however, is not driven so much by water scarcity as it is for protection of their domestic water resources, land availability, and land uses. In Europe as a whole, 40% of the water footprint lies outside of its borders. [4]


Per capita renewable water resources availability among virtual water exporters (in thousand cubic metres) [5]

VWT in India


A study found that India exported about 26 billion litres of virtual water on an average per annum between 2006-16. Rice was the highest exported food product, followed by buffalo meat and maize. In India, farmers rely heavily on groundwater for rice cultivation, and a kilogram of paddy requires about 15,000 litres of water. Since the country is also one of the top producers and exporters of beef, the virtual water necessary for producing one kilogram of buffalo meat was 5 to 20 times higher than that needed for agricultural production. Cashews, pulses and wheat were the imports with the highest virtual water content but these crops utilise much lesser water than rice [6].


Cumulatively, India exported about 497 trillion litres of virtual water and imported about 238 trillion litres during these 10 years over which the study was conducted.


In 2020-21, India’s agricultural exports registered a growth of over 17%, garnering $41.25 billion in foreign exchange. While good news for the country, especially in view of economic recovery from the COVID pandemic, it does have a negative consequence. The improved agricultural exports for 2020-21 translate into the annual drinking water needs of 1,500 villages with a population of 1,000 each! As Ashok Gulati, an agriculture economist points out, the export of 17.7 million tonnes of rice and 7.5 million tonnes of sugar is the same as the export of 50.4 billion cubic metres (rice 35.4, sugar 15 billion cubic metres) of water. [7]


The increase in net virtual water export has happened mostly after 1990, prior to which it was negligible. Virtual water export, in terms of water required for production, was about 10% in the year 2018. In contrast, the virtual water import of India fell to negligible values from 1990 onwards.


With the water footprint of India having increased by about 1.3 times in 28 years (as per research studies) [8], the question is whether India, which is included among the world’s most water stressed countries, can afford to be a net virtual water exporter? As per historical trends, virtual water export from India is expected to grow, therefore its negative impact on future generations will be wider and deeper if corrective actions are not taken urgently.


India needs to integrate virtual water trade risks into the policy framework by:

  • Prescribing the limits of national VWT

  • Establishing and listing the products/regions that need to be excluded from it

  • Specifying the water types to be used

  • Encouraging wastewater reuse and alternative means of water generation to avoid blue water depletion


Why has Virtual Water Trade become important?


The key characteristic of virtual water ‘trade’ is that while being economically ‘invisible’, i.e., no country is technically paying money to import or buy water, it can effectively meet society’s vital needs of food and water security. It enables water scarce regions to enjoy an affordable version of food and water security. So it is a ‘stress-free’ solution to an otherwise precarious problem [9].


This is the reason why some water scientists attribute the ‘absence of water wars’ in water-stressed regions to Virtual Water Trade. The visible impact of trade in virtual water on a national scale goes largely unnoticed, as less than 5% of the total water gets depleted during a year through agricultural exports [10]. This, however, can be considerable enough to cause an imbalance in the water resources at a regional or local level. According to research on Ecohydrology by the University of California, Berkeley, “unsustainable virtual water trade” constitutes about 15% of the water used in irrigation around the world, having increased by 18% from 2000 to 2015 [11].


It may be argued that exports generate revenue for a country in the short term, however, the value of the virtual water exported may well offset these gains by a wide margin in the long run. Therefore, virtual water footprint and trade need to be studied and evaluated carefully in today’s water scarce world.


References:


[3] Source: Mekonnen and Hoekstra, 2011

[5] Source: World Bank Development Indicators Database

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