The concept of virtual water was originally promoted by Professor Tony Allan to shed light on how Middle Eastern countries’ water requirements have exceeded available resources since 1970. Trying to explain why there has been no war over water when many economies in the Middle East region have only half the water they need, Allan argued that economic systems solved the water supply problem for the region, supplying water via trade. In other words, water scarcity in these countries was being managed by importing virtual water in the form of agricultural products from the international market. While virtual water is a theoretical indicator, the “water footprint” emerged as a methodological attempt to estimate virtual water, although some authors point out the confusion surrounding these two indicators (see General Overviews). As the water footprint and virtual water provided useful means for estimating flows of water through international trade in products and services, many works have been published around these concepts since the first great meeting celebrated on the topic, the Congress of Virtual Water in 2003 (see General Overviews). This review introduces the foundational pieces in this literature, then includes different sections on the associated concepts (see Colors of Virtual Water Flows), the main methodologies used to quantify virtual water flows (see Methodologies for Quantifying Virtual Water Flows), studies on virtual water flows at different geographical scales and across diverse economic sectors and products (see Applications of Accounting Methods), the most important papers dealing with the role of virtual water and water footprint as a policy tool (see From Virtual Water and Water Footprint to Policy), and finally the main criticisms of these concepts (see Critics of Virtual Water and Water Footprint).
Virtual water was defined by Allan 1997 as the water “contained” in a product, understood not only as the physical amount actually within the product but also as the amount of water required to generate it. It is a revolutionary concept because it describes something never conceptualized before: the water “embedded” in trade products. Thus, virtual water also helps us understand how virtual water flows between countries or regions. This idea was developed in detail by Allan 2003 and Chapagain, et al. 2005, among others reports published in the Value of Water Research Report Series supported by the Institute for Water Education UNESCO-IHE. This served as a springboard for the first publications in the newly developing study of virtual water flows between nations (see Water Footprint Network). Building upon the idea of virtual water trade, Hoekstra and Hung 2002 sought to quantify virtual water flows related to international food trade and thus defined the concept of the water footprint, defined as the volume of water needed for the production of goods and services consumed by the inhabitants of the country. Oki and Kanae 2014 pointed out that this definition of water footprint modified the original understanding of virtual water savings through virtual water trade, thus giving raise to confusion. They argued that following the original definition by Professor Allan, the saved water requirements by virtual water trade should be counted as the potentially necessary amount of water to produce the products in the importing (consuming) country but not, as Hoekstra´s definition of the water footprint suggested, in the exporting/producing country. Velázquez, et al. 2011 reopened this discussion, pointing out that virtual water was defined as a production perspective indicator while water footprint was defined as a consumption perspective indicator. The study also pointed out that this difference between virtual water and water footprint is interesting since it allows us to profit from two indicators defined from different perspectives and capable of identifying the subjects who are responsible for water consumption, whether producers or consumers. However, they showed that there is a growing confusion surrounding both concepts in the literature focused on these two indicators. They have often been used as synonyms and have thus partly lost the potential that is associated with the difference between them. Many of pioneering works on the analysis of virtual water and the water footprint were published in the World Water Council 2004, the e-conference synthesis of the Third World Water Forum held in 2003. The session devoted to virtual water was followed by an online Congress of Virtual Water, considered the first important meeting on this topic. Readers interested in the idea of virtual water trade from a broader perspective should review Allan 2010, while Hoekstra and Chapagain 2008 is a key reading for readers interested in links between international trade and sustainable water management.
Allan, John A. 1997. Virtual water’: A long term solution for water short Middle Eastern economies? British Association Festival of Science Water and Development Session: TUE.51, 14.45. Univ. of Leeds, 9 September.
This is one of the first papers in which Tony Allan introduced the idea of virtual water. It provides the context and origin of the concept, which was defined to show that water scarcity in the Middle East region was being managed by virtual water from the international market.
Allan, John A. 2003. Virtual water eliminates water wars? A case study from the Middle East virtual water trade. In Proceedings of the international expert meeting on virtual water trade. Values of Water Research Report Series n◦ 12. Delft, The Netherlands: IHE.
This academic article develops the idea that virtual water trade can be an instrument in solving geopolitical problems and even prevent wars over water. Part of the report that resulted from the International Expert Meeting on Virtual Water Trade that was held in 2002 at IHE in the Netherlands, one of the first important meetings on this topic.
Allan, John A. 2010. Virtual water: Tackling the threat to our planet’s most precious resource. London: I. B. Tauris.
Uses the concepts of virtual water and water footprint to explore the food supply chain and trade relations, relating global commodity production and trade with local water security.
Chapagain, Ashok K., Arjen Y. Hoekstra, and Huber Savenije. 2005. Saving water through global trade. Values of Water Research Report Series n. 17. Delft, The Netherlands: IHE.
This report quantifies the global and national water savings for the period 1997–2001, covering the international trade of all major crop and livestock products.
Hoekstra, Arjen Y., and Ashok K. Chapagain. 2008. Globalization of water: Sharing the planet’s freshwater resources. Oxford: Blackwell.
Explores the critical relationship between water management and international trade. Focusing on the water footprint and virtual water trade flows analysis of countries worldwide, the book sheds light on how local water depletion and pollution are often closely tied to the structure of the global economy.
Hoekstra, Arjen Y., and P. Q. Hung. 2002. Virtual water trade: A quantification of virtual water flows between nations in relation to crop trade. Value of Water Research Report Series 11. Delft, The Netherlands: IHE.
This is the first methodological approach to the quantification of virtual water flows. This study laid the groundwork for the water footprint concept.
Oki, Taikan, and Shinjiro Kanae. 2014. Virtual water trade and world water resources. Water Science and Technology 49.7: 203–209.
Offers an estimation and evaluation of global virtual water trade for major agricultural and stock products. It is considered the first article showing the water saving through virtual water trade. However, although the article shows that the estimations of virtual water can help in assessing a more realistic water scarcity index in each country, it also points out that the idea of virtual water trade should not be used for any decision making because limiting factors other than water are not considered.
Velázquez, Esther, Cristina Madrid, and Maria J. Beltrán. 2011. Rethinking concepts of virtual water and water footprint in relation to the production-consumption binomial and the water-energy nexus. Water Resources Management 25.2: 743–761.
Reviews the virtual water and water footprint concepts to show the existing conceptual confusion between them and the richness of the qualitative information that is lost due to it. Their objective was to reveal that confusion and to make a conceptual and methodological contribution capable of integrating the conceptual difference between the two indicators studied.
This website provides a state-of-the-art review of many of the publications on virtual water and water footprint.
World Water Council. 2004 March. E-Conference synthesis: Virtual water trade- conscious choices. World Water Council Publication no. 2.
This is the synthesis of one of the first important meetings on the topic of virtual water trade. It contains seminal works published with the aim to stimulating debate and research on the implications of using virtual water trade as a strategic instrument in water policy.
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