August 4, 2016 Environmental Issues Written by Greentumble
What is virtual water trade?
A cup of coffee is about 150ml but there is

more hidden water in your morning cup of coffee. In fact, one cup of coffee requires about 140 litres of water[sc:1]. This amount represents the amount of water required for growing and processing the coffee beans until the product reaches the consumer. This “hidden” water is what experts have called “virtual water”. Virtual water is the amount of water needed for the production of food, other products or services and which is subsequently considered as embedded in that product or service.
More specifically, researchers Hoekstra and Chapagain have defined the virtual-water content of a product as

 “the volume of freshwater used to produce the product, measured at the place where the product was actually produced”.

The concept of virtual water was first introduced by Professor John Anthony Allan from King’s College London and the School of Oriental and African Studies as a way of understanding how water scarce countries could provide food, clothing and other water intensive goods to their inhabitants. For his contributions Professor John Anthony Allan was awarded the 2008 Stockholm Water Prize.

Virtual water trade therefore reflects the virtual water traded between countries when they trade commodities, goods and services. In principle, the virtual water flows should help establish how the water resources in one country are used to support consumption in another country[sc:4]. Virtual water flows combined with information about our water footprint also helps map out the dependencies of different countries and to identify where any risks may lie, in terms of scarcity, pollution or climate change. Given that water is a critical input to our global economy, mapping this out is an important exercise and can have important implications for food security, economy and diplomacy[sc:2].

Looking at virtual water provides some staggering statistics. For example, 1 litre of milk includes 1000 litres of embedded water, 1kg of wheat needs 1350 litres of water and 1 kg of rice contains 3000 litres of “hidden” water[sc:1]. A coffee cup’s 140 litres used to grow, produce, package and ship the beans is roughly the same amount of water used by an average person daily in England for drinking and household needs[sc:1]. Showing people the ‘virtual water’ content of various goods will also hopefully increase awareness about water consumption and drive sustainable consumption behaviour.

At country or regional level, looking at the virtual trade flows provides interesting insights into the approaches of different countries. Specifically, water-scarce countries such as Mediterranean countries, the Middle East and Mexico, often find it attractive to import virtual water relieving pressure on domestic water resources. Northern European countries also import a lot of virtual water but this policy aims at protecting domestic water resources, land availability and land uses. In Europe, 40% of the water footprint lies outside its borders[sc:2].

While the concept of virtual water and virtual water trade is very enlightening and can shed light on how water is used in ways that we don’t often fully appreciate, some academics have expressed reservations regarding its use and relevance.

First of all, it relies on the assumption that all sources of water, regardless of their source, for example rainfall or provided through an irrigation system, are of equal value. Secondly, it implies that by taking into account virtual water, domestic water resources would then be used for less water-intensive activities. However, that is not always the case nor would the alternative option make more economic sense. In addition, the concept of virtual water does not provide any information on whether the water resources are being used sustainably or not. As such, it is of limited value for supporting policy decisions and helping to ensure that environmental objectives are being met[sc:3].