Abstract
Water is an increasingly scarce resource in our globalized economy. At the same time, it is an essential input in the production of most goods and services enmeshed in an interconnected world economy. A rich literature has examined how water is used both directly in production and indirectly through supply chains and international trade (e.g., virtual water trade). There is now an opportunity to build on our understanding of who is using what water and where, with research that aims to understand why and how it is used. Such research should enlighten the mechanisms driving societal relations with water and inform decision-makers on how to increase water’s productivity, improve its allocation, and enable us to do more with less water. In this essay, we lay out our vision for research on the relationship between water and international trade.
Highlights
Their work highlighted the importance of indirect water use in supply chains
This literature started by evaluating water use in agriculture, but soon encompassed water use throughout the economy, sparking water efficiency improvements in practice
Studies that quantify the water embodied in the production, trade, and consumption of goods do not uncover those causal links. This is because accounting procedures are about existing correlations between trade and water resources [3]
Summary
Tony Allan [1] introduced the term “virtual water,” and Arjen Y. Hoekstra and others developed sophisticated accounting methods for measuring the water footprint of products and virtual water trade. Their work highlighted the importance of indirect water use in supply chains. This literature started by evaluating water use in agriculture (the most water-intensive economic sector), but soon encompassed water use throughout the economy, sparking water efficiency improvements in practice (e.g., such as those implemented at PepsiCo, https://www.pepsico.com/sustainability-report/water). Studies that quantify the water embodied in the production, trade, and consumption of goods do not uncover those causal links. This is because accounting procedures are about existing correlations between trade and water resources [3].
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