Virtual Water as an Economic Tool to Alleviate Water Stress

Importing virtual water can be used as an economic tool to alleviate water stress. When countries import agricultural products, they are importing the water embedded in a product. The water savings between the exporters and the importers generates savings in both water and energy supplies. What transforms water into a global issue is trade in goods and services with a substantial water footprint either in the finished product or in its production (so-called virtual water). Countries with water shortages can import water-intensive food, goods and services, while water-abundant countries can take advantage of their bountiful water supplies through exports. For example, to produce a ton of grain requires 1000 cubic meters of water. If that ton of grain is imported, then that 1000 cubic meters of water per ton of grain can be saved. This spared water can be mobilized towards more productive uses such as higher-value agricultural crops, for supporting ecosystems or other environmental services, or to serve domestic drinking or industrial needs. Virtual water is, therefore, an interesting concept especially when water is chronically in short supply. Energy costs too are equally linked to the production of goods and services. As energy sources become scarce as well, virtual water can serve as a tool in alleviating pressures on a nation’s water and energy supplies. In this way, these countries are able to alter their trade and development policies by recognizing the value of water and using water as a tool to gain a competitive advantage through their trade policies.