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PROFESSOR V. DUKHOVNY: “VIRTUAL WATER” – DO WE NEED THIS CONCEPT OR NOT?

The appearance of VW concept in last 5-8 years attracted big and perhaps – exaggerated attention in water world. New publication of a group of outstanding water professionals led by Holder Hoff and Tony Allan summarized many aspects of this concept and permitted to give some analytical view on it.

1. Taking in account that all goods and products, which are existing and will be introduced in the globe, consist among many other components of water, real transfer of water in such latent form as part of "import – export" took place much more before VW concept came in brains of our colleagues. Moreover, such "underground" transfer of water can be more impressive if we take in account export of such final products and big water demand goods as paper, clothes (both natural and artificial), steel and so. Why do we orient only to the food products that typically grow in irrigated lands? If we want to be frank to ourselves, we need to analyze all water composite goods but it means almost full "export – import" flow in the world.

2. VW concept caused many interesting questions:

  • what is the goal of this concept?
  • what are the norms and rate of the assessment of volumetric VW trade?
  • how can we differentiate "green water" in VW from "blue water"?
  • who are interested in this concept?

Authors of the article try to answer to the first question in conclusion as:

  • necessity to include fluxes VW in IWRM;
  • underlying role of VW in water saving on the global scale;
  • potential for VW to compensate water scarcity in individual regions;
  • help to raise awareness of an effect of lifestyles and diets on water resources.

3. The connection of VW with IWRM means absence of correct understanding of IWRM itself. IWRM consists of proper system of management, which is based on the national governance. The governance – not IWRM – defines public relation to rational use, including water; state priorities; society involvement in management; administrative or democratic approach legal and whole scope of different institutional, financial tools, mechanism that creates political climate and environment of state. One of the government principles is relation to food security – how can it be guaranteed by the self-sufficiency or import of proper commodities. The developing world oriented mostly to the proper degree of self sufficiency – not full, but such that can create independence from deviations in the world trade and world prizes.

Governance in those states, from one side, can introduce (and manage in future) proper tax and other conditions for promotion of export the goods that state are interested in and that may require big quantity of water.

Governance, from other side, connects with one of the main regulator in agricultural trade – subsidies. How much western world are talking now about limitations of subsidies, which were, are and should be principal tool for promotion of national import of produced commodities.

We can find connection of VW with not IWRM itself, but with target of IWRM. If VW flow can introduce proper price of agricultural product on the basis of more efficient condition of exporter, IWRM can define goal – to achieve (with strong assistance of governance) such level of water productivity which can complete local commodity with import product on the base of rational water use and maximizing of productivity of irrigated water by using IWRM approach.

4. Last three aspects take place in water world, but principal regulator of VW is not our understanding of flow of papers and awareness, but rules of market economy and personal aspirations of society. It is well known that those principles orient not to the humanity and care of environment, but to maximizing profit and satisfaction of own interests and advantages. Really American society doesn't known about preference of health diet? Why this most rich, developed and smart nation in the world has largest quantity of unhealthy fat men? If they don't think about their health, what are their interests in global water scarcity and most efficient use of VW? Similar example – the rejection of Kyoto protocol under conditions of their largest influence on climate change.

The socio-economic specialties of developing countries are very different from the developed states with high level of wellbeing. Large quantity of rural population depends on huge role of agricultural production in developing states not only in food sufficiency, but also in employment of people and their wellbeing. Agriculture is connected with large quantity of basic production such as infrastructure, transport, repair, supply of machines, equipment, fertilizers and so, same with accompanied secondary production – stock, saving and processing of raw materials in the final product. Specific place in agriculture has water system and their development. In result – according to our research in soviet time – each 1 USD of agricultural production creates + 1,5 USD of accompanied secondary production. Add to this market, where thousand persons, municipal and local service are occupied – but all those people depend on initial production, which has had grown on the fields! In result – agricultural sector is the source of introduction own part of income to state budget plus, some time, more from interactions with other economic sectors.

The comparison of Israel with developing states is impossible by this reason – Israel with its 16 thousand USD of national income per capita annually can import food and they don't need to care about employment so their rural population that transformed in industrial population 30 years ago. But developing states with 50 – 60 % of rural population and 1000 USD (and less) of national income per capita can't do it!!!

5. Most indefinite part of VW concept relates to methodic for identifying water amount used for production of each crop, good and commodity, taking into account that as stated correctly in the article specific quantity of water per unit of product deviates in 10 time!!! If we accept VW concept, we need orient in quantity of water to so called "potential productivity of water", which follow of level most advance by present time advanced technology of production. Second part of this methodic is dividing water on their sources into "green" and "blue", "fresh and brackish", "direct and return". Each of these water types has different cost and it can be taken in account in definition of monetary aspect of VW.

I fully agree beside this with recommendations of the authors to addressing of scientific investigations to directions, mentioned in their conclusions.

Finally – what we have?

  • VW concept can't manage future development of states and region in some different ways from used routinely order of macroeconomic long-term planning and forecasting with account of their social, economic, cultural and environment specialties. Ability to competitive with proper option of VW trade can be assessed by taking into account that each trade in market conditions has proper instability, deviation, which can reflect the sustainability of national economic and society wellbeing;
  • direct use of VW concept for assessment of privilege of one or other options of development and food security can cause on the proper moment efficiency of export, against, for example, development or improvement of irrigation. But who can guarantee that 5 – 10 years later market prices will not jump such dramatically that it could by followed by the failure of nations' wellbeing and economy?
  • Use of VW concept by traders has also proper dangerous ability – transform water (same as oil now) in subject of global speculation, when expected product with account of so called "world prices on water" will get on the market water portion based, for example on the prices regulated water delivery with pumping instead of rainfed agriculture?

Colleagues!

Let be careful, so that our professional negotiations don't transform into a tool of globe deviation!

So, VW concept should have limited dissemination as proper one from much aspects of future development, forecasting and comparison, but not "idea fix", which can be used not only in right way, but transform in one of the forms of "hydroegoizm"!!!

I fully support opinion of Tony Allen, introduced in last published WWC (March 2004) that: "I decided to avoid putting a lot of effort to developing a gratuities version of the concept … I left concept as metaphor".

Professor Viktor A. Dukhovny,
Director of SIC ICWC,
Vice President of ICID,
Member of Board WWC

Source: Scientific-Information Center, 22.12.2004