This PowerPoint presentation came from work published by McKay at the Stockholm water symposium Workshop 7 Part II Tradeoffs in water and environmental security in 2001 p 321-323 . This was entitled A Proposal for an international Virtual Water Trading council- humanitarian law in action to relieve the rigours of world trade and to facilitate improvements in real water management in counties in transition.
This was further developed in 2002 in Chapter 6 of the book Water Development and Poverty Reduction, edited by Olcay Unver, Rajiv K Gupta and Avesgul Kibaroglu, published by Kluwer. A Proposal for an international virtual water trading council; Building institutional frameworks at the institutional level to reduce poverty , p 111-125
February 13 2007
Virtual water trading could benefit developing countries
Researchers at the University of South Australia believe that developing countries with increasingly scarce water resources, especially in arid and well-populated areas, could benefit significantly from virtual water trading.
The Director of UniSA’s Centre for Comparative Water Policies and Laws, Professor Jennifer McKay is joining other researchers in proposing that the World Trade Organisation (WTO) set up a virtual water-trading council to help manage both real and virtual water resources for the world’s booming population.
Virtual water is water used in the production of food or electricity. For example, producing one kilogram of wheat requires roughly 1000 litres of water, giving it a virtual water content of 1000 litres, according to figures released by the World Water Council. When international trade of food crops or other commodities takes place, there is a virtual flow of water from producing and exporting countries to countries that consume and import those commodities.
The World Water Council would like to see countries with scarce water resources import products that require a lot of water for production, rather than produce them locally, according to Prof McKay, who will speak on the proposed virtual water-trading council at a meeting of the American Academy for the Advancement of Science in San Francisco on 14 February 2007.
“This would allow real water savings. It would reduce the impact on actual water reserves and make water available for other purposes,” Prof McKay said.
“The management of real and virtual water are both relevant when addressing the issue of poverty alleviation,” Prof McKay said. “The main aim of the virtual water-trading council would be to ensure that the water replaced when food, electricity or industrial goods are imported is used to achieve sanitation outcomes in the importing country. The council would also ensure that the exporting country does not endanger the health of its citizens by exporting.”
Prof McKay believes that the virtual water-trading council could solve regional problems by accessing virtual water from a wide variety of places. It could also help to boost food security.
Currently, some of the biggest net exporters of virtual water are the US, Canada, Thailand, Argentina, India, Vietnam, France and Brazil. Big net importers of virtual water include Sri Lanka, Japan, the Netherlands, South Korea, China, Spain, Egypt, Germany and Italy.
”The virtual water-trading council would work under international treaties and bilateral arrangements,” Prof McKay said. “The importing country would need to have a national water plan to show how the saved water would be applied to health and sanitation measures.”
Prof McKay said that for the proposed virtual-water trading council to work within the World Trade Organisation, the present WTO signatories would need to agree to the proposal, and others wishing to be involved would need to make arrangements with the WTO.
The set-up process for the council would need to be multilateral through the WTO using GATT (General Agreement on Tariffs and Trade) agreements and international law - humanitarian law in particular, according to Prof McKay. She believes the United Nations would also be well placed to help in this process.
“The WTO is operating more effectively now than ever before so the prospects look promising,” Prof McKay added.
“The next steps are to present at the UN and WTO proposals that include an assessment of the negative health effects of exporting food, electricity and goods, and to see if some simple multilateral agreements can be made.”
Have you ever wondered how much water it takes to produce one kilo of beef? Up to ten thousand litres. But because we don’t place a monetary value on water this is not reflected on the price of products that we export.
Today researchers from around the world are meeting in San Francisco to discuss the future of virtual water trading. Its a concept that would separate the ideas of real water and virtual water. UniSA Professor Jennifer McKay is on her way to the meeting and she explained to Rosalie Panetta how the system works.
Prof McKay is indebted to the Bren school University of California especially Robert Wilkinson and Sara Hughes.
One of the AAAS scientific symposia was called Collaborating for water governance and policy; from Local to Global.
This Symposium was organized by Sara. M. Hughes and Robert Wilkinson of the Bren School, University of California. Here is a verbatim transcript of the introduction to the symposium:
Sustainable management, use and conservation of water resources are critical issues for the 21st Century. Collaboration has become widely recognised as an important tool in the effort to achieve lasting and effective governance of common resources. Important new experiments in collaborative governance of water resources are being conducted in the United States and through out the world for solving problems and anticipating conflicts. There is considerable enthusiasm about such efforts, but the costs and benefits of such collaboration are often unclear. A variety of opportunities for joint decision making are considered, from vertical to horizontal, institutional to individual.
For example, advances in international collaboration surrounding virtual water resources may benefit from the successful emergence of water markets and watershed management in Australia; water management institutions in the Netherlands have incorporated community involvement in the water sector to make decisions and to plan for the future; and researchers in the United States are working toward interorganisational. interdisciplinary collaboration based on shared values and expertise to set and meet risk standards in water quality.
This session brings together leading experts to review the state of the science in understanding collaborative approaches to water governance, emphasizing when and how they succeed and fail.
Robert Wilkinson Bren School, University of California,
Waterwise is a UK NGO focused on decreasing water consumption in the UK by 2010 and building the evidence base for large scale water efficiency. Waterwise is an independent, not for profit organisation that receives funding from the UK water industry and from sponsorship and consultancy work.
Abstract: Researchers from UniSA’s Centre for Comparative Water Policies and Laws believe developing countries with scarce water resources could benefit significantly by trading virtual water.
Centre Director, Professor Jennifer McKay is proposing that the World Trade Organisation sets up a virtual water trading council to help manage water resources for the world’s booming population...