The Potsdam Institute for Climate Impact Research (PIK) recently released a new study that offers two different and probably controversial results. At first the researches say that everything is going to be extremely expensive the longer we wait until political leaders get active. „Global economic growth would be cut back by up to 7 percent within the first decade after climate policy implementation if the current international stalemate is continued until 2030“, the paper says. That‘s an awful lot compared to the 2 percent that are expected if there‘s a climate agreement reached by 2015.

The researchers conclude that it is most relevant to not further postpone mitigation to keep climate targets (the 2 degrees above pre-industrial levels-target e.g.) in reach. “Economists tend to look at how things balance out in the long-term, but decision-makers understandably worry about additional burdens for the people and businesses they are responsible for right now. So increased short-term costs due to delaying climate policy might deter decision-makers from starting the transformation. The initial costs of climate policies thus can be more relevant than the total costs”, lead-author Gunnar Luderer says.

On the other hand Ottmar Edenhofer, he’s the co-author of the study and chief-economist of PIK, formulates a goal that could make it possible to keep the earth’s rising temperatures below the 2 degrees-target mentioned above. But his demands seem to be quite optimistic. At first, he said, a wordwide carbon trading system must reach prices for CO2 emission rights of 20 to 50 Euro (27 to 67 Dollar) per ton. That would be the only way to increase the price of fossil energy sources at a level that could force the industries to switch over to green energy alternatives. Here we should keep in mind that a ton of CO2 is currently traded at just about 3 Euro (4 Dollar) in Europe.

According to Edenhofer especially technologies for carbon dioxide removal from the atmosphere might be required in the future to reach the climate targets. This implies the use of bio-energy alongside wind or solar power, with plants consuming CO2, combined with carbon capture storage (CCS), storing underground the emissions from biomass combustion. The longer it takes to start climate policies the higher is the world’s reliance on these technologies will be, the study adds.

For the study the scientists produced 285 alternative climate change mitigation scenarios, with varying assumptions on the course of international climate negotiations on the one hand and on the other hand the availability of low carbon technologies from solar and wind power to bio-energy, CCS and energy efficiency. For the economic evaluation, they considered indicators like mitigation costs, energy prices or potential financial transfers induced by an international carbon market.

In 2010, UN Resolution 64/292 explicitly recognized the human right to clean water and sanitation, acknowledging that they are essential to the realization of all human rights. The numbers are staggering. The UN claims that 783 million people had no access to clean water in 2012.

But according to Asit Biswas, a former member of the World Commission on Water, the real figures are probably much higher.  “Look at South Asia alone. Some 1.7 billion people live in this region. I challenge anyone to show me a single city or village where people have access to clean water. My guess is that some 2.3 billion people are now without access to clean water”,  Biswas told The European.

So is the world fast running out of clean water, or is it all a question of better water management? And if so what could it look like? This three-part blog series by Julian Claudi will focus on several proposed and partly tried and tested methods and techniques for improving the situation.

We start off by taking a closer look at virtual water trading and real water trading. What’s the deal with these concepts? They’re not really new terms and a lot has been said and done about them for several years. But could they become tools for a solution?

The Virtual Water conceptreveals how much water it takes to produce any product. It refers to the “hidden” water use embedded in products and helps us realize how much water is needed to produce the goods we use and the food we eat. For instance, for one cup of coffee about 140 liters of water is needed. That includes the water used in growing, producing, packaging and shipping the beans that went into that cup of coffee. Read more: http://bit.ly/12RrrcT

Virtual water trade refers to the flow of water if food or other commodities are traded from one place to another. That means there is a virtual flow of water from producing and exporting countries to countries that consume and import those commodities.

A new study by the EU commission has shown that agricultural products are by far the largest drain on water resources.  It says that the consumption water footprint of the average EU citizen is 4,815 litres per day, 40 percent of which is the result of imports from other countries, mainly cocoa, coffee and cotton. Comparing imports and exports showed that the EU28 is a net importer of ‘virtual’ water.

John Anthony Allen, a British geographer is widely credited with creating and popularizing the idea of “virtual water” with his book, Virtual Water: Tackling the Threat to our Planet’s Most Precious Resources.  “Our ignorance is immense,”  Allen has said. “Most of us don’t have the slightest idea about the sheer volumes of water involved in our daily lives.” He was awarded the the Stockholm Water Prize in 2008 for his contributions.

So would it make sense to use virtual water calculations for a global trading system? Opinions are divided. Much like the criticism surrounding carbon emission trading between industrialized nations and developing ones,  critics of the virtual water trade concept argue that several aspects carry negative consequences for the poorest countries like rising dependency on external water resources or the possibility given by trade to “exploit” water resources in other parts of the world.

A paper written for Germany’s Helmholtz Center for Environment Research  says global interlinkages of water resources induced by trade can worsen gaps between nations.

“Feelings of unfairness arise due to the fact that those countries which are endowed with the most abundant water resources and thus are able to supply virtual water to the arid countries of the South (the Big Five), belong to the group of wealthy industrial countries, which are able to influence agricultural trade in many ways. On the one hand, high levels of protection in the form of tariffs and quotas, especially of the European Union, the USA and Japan, are criticised for being a major constraint for ‘the development of the virtual water market’”.

In contrast, hydrologist Ignacio Rodriguez-Iturbe, professor of civil and environmental engineering at Princeton University, sees the virtual water system as a water saving solution, concluding “that in most scenarios the total amount of virtual water trade will decrease by 2030, but the amount of water saved as a result of the trade will increase.“

The whole virtual water phenomenon has also led to a debate on water trading markets, which some say have the potential to revolutionize the way water is managed.

Yet, the US-based Institute for Agriculture and Trade Policy (IATP) says in the study “Water Governance in the 21st Century: Lessons from Water Trading in the U.S. and Australia” that allocation of water should not be based on commodification and economic efficiency alone.

“The national water sector reforms underway in many countries should consider the hidden costs of existing market based approaches, and should be premised on the notion of water as a commons, available first and foremost for public purposes (including the realization of right to water and right to food).”

Finally, one thing most experts seem to agree on is that the virtual water concept does raise awareness about the daily water consumption in the western world. 

But at the same time it appears that as long as the concept of virtual water is inextricably linked with the current prevalent global economic trade system, there is always the risk of an ineffectiveness of the system causing unjust financial advantages and a distraction from the search for other solutions.

Some experts such as Maude Barlow, co-founder of the Blue Planet Project, which works internationally for the human right to water, warn of water’s close links to the international trading system.

“We’ve got to stop thinking that the water wars of the future will be on a battlefield somewhere, they’re going to be on the grain markets, the stock markets and grain trading as part of the international trading system. It is about the water that has been pulled into this profit-making mostly food production and it’s very dangerous,” Barlow said.