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By Root 774 0

national water use. “Going local” to produce bread for Cairo would require more water to be extracted from the Nile and pumped to farmland reclaimed from the desert, where high evaporation would mean heavy losses and salination of the land. Saudi Arabia has sensibly decided to phase out growing wheat domestically using fossil water pumped unsustainably from underground and rely on imports beginning in 2012.37 Nearby United Arab Emirates is likewise mulling over abandoning most domestic agriculture, even fodder for its beloved camels.

Studies of the amount of water saved globally per year through the virtual water trade in food amount to some 455 cubic kilometers,38 a substantial saving given that only 2,000 cubic kilometers remain to be used before we find ourselves on the wrong side of the proposed water planetary boundary. Producing food where the maximum water efficiency can be achieved, and where water is most plentiful, is a natural extension of the idea of comparative advantage, a basic concept in economics that was first proposed by David Ricardo in the early nineteenth century. The idea does have relevance domestically as well as internationally: Instead of trying to divert enormous quantities of water from the wetter south to the arid north, China could instead explicitly formulate a policy to focus on transferring virtual rather than real water, saving money and promoting environmental efficiency in the process. Real water is bulky, heavy, and leaky, so transferring it large distances is both costly and inefficient, as well as damaging to the hydrology of source regions.

Unfortunately, global water savings through trade are currently largely accidental, and few governments make efforts to promote international trade in food on this basis. Some countries are also highly anomalous: Well-watered Switzerland, for instance, imports a huge amount of virtual water in food, while arid Pakistan and Australia both export vast quantities.39 Given that financial and economic arguments invariably carry more weight with policymakers and governments than environmental ones, probably the only viable long-term solution will be for agriculture to be forced to pay properly for the water it uses. Currently farmers around the world are either given water for free or allocated highly subsidized reserved amounts, giving them little incentive for conservation or efficiency, and meaning that the final price of food crops does not reflect the value or scarcity of the water used in producing them.

There is a simple solution to this: privatization. The provision of water must be deregulated and privatized; taken out of the inefficient and often corrupt hands of the state, and handed instead to the private sector. I would also suggest that the World Trade Organization focus more on eliminating water subsidies to farmers to free up trade barriers and make the international trade in virtual water more efficient. I am aware that this proposal will be controversial and that water privatization is typically opposed by NGOs and social movements on the grounds that it will disadvantage the poor. In some cases outright civil conflict has resulted from privatization proposals: In Cochabamba, Bolivia, in 2000 demonstrators were fired on by police during marches against water privatization, resulting in a state of emergency and several deaths.

But opposition to privatization makes the implicit assumption that the public sector is doing a good job—a notion that fails to stand up to empirical analysis. In fact, most state provision of water is rather inefficient, and the public companies providing the service are frequently starved of investment due to pressure on government budgets. Many international studies now show that privatization tends to increase the number of piped household connections, benefiting the poor, who no longer have to buy bottled water at a premium or rely on dirty wells or rivers.40 Privatization of water in Argentina has even been linked with a decrease in child mortality, confounding the expectations of leftist social campaigners.41