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Virtual water refers to the water required in the production of a good or service. For instance, it takes more or less 1,200 cubic meters of water to produce one metric tonne of wheat (depending on where and how it is grown).

"The water is said to be virtual because once the wheat is grown, the real water used to grow it is no longer actually contained in the wheat. The concept of virtual water helps us realize how much water is needed to produce different goods and services. In semi-arid and arid areas, knowing the virtual water value of a good or service can be useful towards determining how best to use the scarce water available." (Tony Allan, November 2005)

The UNESCO-IHE Institute for Water Education published the following average amounts of virtual water [1]:

• the production of 1 kg wheat costs 1.300 l water
• the production of 1 kg broken rice costs 3.400 l water
• the production of 1 kg eggs costs 3.300 l water
• the production of 1 kg beef costs 15.000 l water
• the production of 1 cotton shirt of 300 gram costs 2.500 l water

Virtual water trade refers to the idea that when goods and services are exchanged, so is virtual water. When a country imports one tonne of wheat instead of producing it domestically, it is saving about 1,200 cubic meters of real indigenous water. If this country is water-scarce, the water that is 'saved' can be used towards other ends. If the exporting country is water-scarce, however, it has exported 1,200 cubic meters of virtual water since the real water used to grow the wheat will no longer be available for other purposes.

Daniel Zimmer, Director of the World Water Council, in his presentation at the session on "virtual water trade and geopolitics" at the 2003 World Water Forum in Kyoto:

"The contrast in water use can be noticed between continents. In Asia, people consume an average of 1,400 litres of virtual water a day, while in Europe and North America, people consume about 4,000 litres. About 70 per cent of all water used by humans goes into food production. [...]

"Among the biggest net exporter countries of virtual water are the U.S., Canada, Thailand, Argentina, India, Vietnam, France and Brazil. Some of the largest net import countries are Sri Lanka, Japan, the Netherlands, South Korea, China, Spain, Egypt, Germany and Italy."

Water-scarce countries like Israel discourage the export of oranges (relatively heavy water guzzlers) precisely to prevent large quantities of water being exported to different parts of the world.

In recent years, the concept of virtual water trade has gained weight both in the scientific as well as in the political debate. The notion of the concept is ambiguous. It changes between an analytical, descriptive concept and a political induced strategy. As an analytical concept, virtual water trade represents an instrument which allows the identification and assessment of policy options not only in the scientific but also in the political discourse. As a politically induced strategy the question is, whether virtual water trade can be implemented in a sustainable way, whether the implentation can be managed in a socially, economically and ecologically fashion, and for what countries the concept offers a meaningful option.

In sum, virtual water trade allows a new, amplified perspective on water problems: In the framework of recent developments from a supply-oriented to a demand-oriented management of water resources it opens up new fields of governance and facilitates a differentiation and balancing of different perspectives, basic conditions and interests. Analytically the concept enables to distinguish between global, regional and local levels and their linkages. This means, that water resource problems have to be solved in problemsheds (Tony Allen) if they cannot be successfully addressed in the local or regional watershed. Virtual water trade can thus overcome the hydro-centricity of a narrow watershed view. According to the proceedings of a 2006 conference in Frankfurt, Germany, it seems reasonable to link the new concept with the approach of Integrated water resources management.

• Hoekstra, A.Y. (2003) (ed) ‘Virtual water trade: Proceedings of the International Expert Meeting on Virtual Water Trade’ Value of Water Research Report Series No.12, UNESCO-IHE, Delft, the Netherlands [2]
• Chapagain, A.K. and Hoekstra, A.Y. (2004) Water footprints of nations, Value of Water Research Report Series No.16, UNESCO-IHE, Delft, the Netherlands [3]
• Diana Hummel, Thomas Kluge, Stefan Liehr, Miriam Hachelaf: Virtual Water Trade. Documentation of an International Expert Workshop. July 3-4, 2006. Frankfurt am Main. ISOE-Materialien Soziale Ökologie No. 24 (2006) [4]
• UNO "International year of fresh water - virtual water"
• UNESCO national/individual water footprint calculator
• Tony Allan: Watersheds and problemsheds