Virtual water – what are the implications for governance?

The idea of virtual water has gained quite a bit of traction lately. Virtual water is defined by our colleagues at the virtual water site as part of the products and commodities that are being traded. It thus refers to  The virtual-water content of a product (a commodity, good or service) [which] is the volume of freshwater used to produce the product, measured at the place where the product was actually produced (production-site definition). […] The adjective ‘virtual’ refers to the fact that most of the water used to produce a product is not contained in the product. The real-water content of products is generally negligible if compared to the virtual-water content.

 It is an interesting concept, known to be advocated by professor Tony Allan, who calls for attention to the ‘invisible’ water claims embedded in the things we purchase. Obviously purchasing power is inequally distributed across countries, and therefore calling attention to virtual water is also calling for attention to inequities and economic scarcity of water. But what to make of this and what to do about it, if anything? Probably, to the mainstream economist, as long as markets function well – meaning that water ends up with the highest bidder- the virtual trade in water is not creating many problems that require government intervention. But one would have to be nearly blind not to see the relation between asymetric power relations and the access to water, and here we end up asking questions about the posisbility for intervention in such relations. Is the concept of virtual water ripe enough to start plotting interventions for the redistribution of water? How do we take account – price wise- of diverging water quality levels? How do we determine who owns the water? Who would be tasked with such interventions? How would we assure enough water for nature if we start viewing water as a (virtual) commodity?


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