The research programme was carried out in the context of the framework of the UNESCO-IHP Programme IV 'Water Interactions: Systems at Risk and Social Challenges.
What is virtual water?
Producing goods and services generally requires water. The water used in the production process of an agricultural or industrial product is called the 'virtual water' contained in the product. For producing one kilogram of grain we need for instance one to two cubic metres of water.
Water is a scarce good and thus should be treated economically. There is an urgent need to develop appropriate concepts and tools to do so. A bridge has to be built between water management practice and economic thinking. In allocating and using water in an efficient way, there are different levels of decision-making:
Local water use efficiency. At this level the user of the water plays a key role. Local water use efficiency can be increased by creating awareness, charging prices based on full marginal cost and by stimulating watersaving technology.
Water allocation efficiency. People allocate water to serve certain purposes, which generally implies that other, alternative purposes are not served. Choices on the allocation of water can be more or less 'efficient', depending on the (economic, social and ecological) value of water in its alternative uses.
Global water use efficiency. The places in the world where water demand is high are not not the same places where water availability is high. A water-scarce country can therefore aim at importing products that require a lot of water in their production (water-intensive products) and exporting products or services that require less water (water-extensive products). This is called import of virtual water (as opposed to import of real water, which is generally too expensive) and will relieve the pressure on the nation's own water resources. For water-abundant countries an argumentation can be made for export of virtual water. Import of water-intensive products by some nations and export of these products by others includes what is called 'virtual water trade' between nations.
A first objective of the research programme on Virtual Water Trade was to assess virtual water flows between nations and to draw the virtual water trade balances of all nations of the world by analysing both import and export of water.
In first instance virtual water trade was considered in relation to international trade of crops and livestock products (such as meat, leather, milk, butter and eggs). In the second instance some other products have been considered, such as paper and cotton.
A second objective of the programme was to analyse the virtual water trade balances of nations within the context of required and available domestic water resources, to evaluate the trade balances in terms of economic efficiency, water and food security, and sustainability, and to develop alternatives for improved global water use efficiency.
Activities and Outputs
At the start of the project, an international expert meeting on Virtual Water Trade was organised. The meeting was held 12-13 December 2002 at IHE, Delft, the Netherlands. A special session on 'Virtual Water Trade and Geopolitics' was organised at the Third World Water Forum in Japan, March 2003.
One PhD students and a number of MSc students have carried out different work packages within the research programme. Case studies were carried out for particular countries (e.g. China, Israel).