Globalisation of water : opportunities and threats of virtual water trade; Dissertation, UNESCO-IHE Institute for Water Education, Delft and Delft University of Technology.

Abstract

Where the river basin is generally seen as the appropriate unit for analyzing freshwater availability and use, it becomes increasingly important to put freshwater issues in a global context. The book analyses the opportunities and threats of international virtual water trade in the context of solving national and regional problems of water shortages. Central questions addressed in the study are: What are the fluxes of virtual water related to the international trade of products? Is the import of virtual water a solution to water-scarce nations or merely a threat of becoming water dependent? Can the international trade of products be a tool to enhance water use efficiency globally, or, is it a way of shifting the environmental burdens to a distant location? To understand the global component of fresh water demand and supply, a set of indicators has been developed. The framework thus developed has been applied to different case studies. An estimated 16% of the global water use is not for producing domestically consumed products but products for export. With increasing globalisation of trade, global water interdependencies and overseas externalities are likely to increase. At the same time liberalisation of trade creates opportunities to increase global water use efficiency and physical water savings. Many nations save domestic water resources by importing water-intensive products and exporting commodities that are less water intensive. As a result of product trades from more productive sites to the less productive sites, there is a saving of 6 per cent of the global water use in agriculture. The study explores the use of virtual water transfers as an alternative to large scale inter-basin real water transfers has been analysed in a case study for China along with some major product studies such as coffee, tea and cotton products. The consumption of a product is connected to a chain of impacts on the water resources in the countries where it is grown and processed. The study has estimated the water footprint of worldwide consumption. Detailed impact study has been carried out for the case of cotton. It identifies both the location and the character of the impacts. The research distinguishes between three types of impact: evaporation of infiltrated rainwater for cotton growth (green water use), withdrawal of ground- or surface water for irrigation or processing (blue water use) and water pollution during growth or processing. Given the general lack of proper water pricing mechanisms or other ways of transmitting production-information, cotton consumers have little incentive to take responsibility for the impacts on remote water systems. It is found that the international trade has indirectly enhanced the global water use efficiency and helped to address the national water scarcity in some water-poor countries by saving national water resources. However, this was possible at the cost of increased water dependencies between nations. The existing indicators of water use are not sufficient to address the effect of consumption on water resources. It is proposed to use the concept of water footprint to understand the real appropriation of water by a nation and also to understand the chain of impacts on global water resources as a result of local consumption. The future trade negotiations should undertake the notion that trade is not only a tool of global economic development; it can also be a means of externalising the water footprint and thus shifting environmental burdens to distant location