Can Virtual Water Trade Solve the World’s Water Crisis?

Content Provider	Semantic Scholar
Author	Froshani, Naser Shahnoushi Abolhassani, Leili Radmehr, Riza
Copyright Year	2017
Abstract	In the present century, the water shortage is one of the greatest challenges, especially for arid and semi-arid countries such as Iran. Many researchers in these countries have always examined the methods that can solve the water crisis. In the conventional policies related to management of water resources, the term of “virtual water” has been introduced to reduce physical water scarcity in arid and semi-arid countries by importing water-intensive commodities. In this study, we have reviewed the countries' evidences on the virtual water trade and determined the effective factors on virtual water trade. A review of the published documents and references, confirmed that there is no evidence showing that the framework of virtual water is used to define a policy. Among the 18 countries reviewed in this study, Mexico was the only country which employed the virtual water concept for achieving the water security. In addition, the results of the second part of this study indicate that a country’s abundant of arable land is the most effective factor in describing trade patterns. To sum up, the best trade strategies and agreements are determined by assessing the opportunity costs of production such as virtual water and opportunity cost of land use, evaluating comparative advantages, and other social and economic circumstances. Keyword: Water Shortage, Ordered Logit Model, Best Trade Strategies, Iran. Introduction Water is the fundamental element for life and is considered as the main basis for life permanence on the earth (Gómez-Limón and Martinez, 2006; Viala, 2008; Pimentel et al., 1997; Economics, 2008). The future of water and food production is not clearly predictable Page 2 of 18 because of some uncertainties (Rosegrant et al., 2002). Some of this uncertainty can be due to uncontrollable factors such as weather (Peterson and Ding, 2005). In addition, there are other critical incidents that are caused by choices made by the world’s people. These human-made factors include population growth. (Rosegrant et al., 2002; Vörösmarty et al., 2000; Gleick, 1996), income uses (Dalhuisen et al., 2003; Agthe and Billings, 1987), investment in water infrastructure, small and large-scale reforms in water management (Li et al., 2002) and technological changes in agriculture (Rosegrant et al., 2002). According to a recent study (Rockström et al., 2005), in order to cope with the need of the growing population, water demand for food production will be doubled. According to the other study conducted by Hightower and Pierce (2008), the water demand for energy production will be raised up to 57 % by the year 2030. Industrialization, mismanagement of water, population growth on one hand and climate change, and extended drought on the other hand are the major limiting factors on water resources availability threatening food security in developing countries, in particular arid and semi-arid regions such as Iran (Faramarzi et al., 2010a). In Iran, The water scarcity is a major constraint to the expansion of cropland and food production (Faramarzi et al., 2009). Despite of the water crisis, in developing countries, the water productivity is very low (Faramarzi et al., 2010b) , and agriculture accounts for by far the greatest consumption of water , composing more than 70 % of all withdrawals (figure1; FAO,2007). Fig 1. The share of various economic sectors of water use in some developed and developing countries. Reproduced from FAO (2007) cited by (Cominelli et al., 2009)
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Language	English
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Content Type	Text
Resource Type	Article