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date: 23 August 2019

Abstract and Keywords

Given that food production requires a lot of water, more than any other economic sector, one would expect that the world’s food production concentrates in places where water is relatively abundant. This chapter, however, highlights the paradox that various water-poor countries produce food for export to water-rich countries. Food commodity prices do not reflect the cost of water inputs or of damaged water ecosystems, so that the global food market lacks economic incentives to source from places with less harmful impacts on local water systems. The costs of ‘traded’ embedded water thus remain invisible. The chapter proposes an international water label for water-intensive products and argues that international trade rules should include regulations on sustainable water use.

Keywords: Virtual water ‘trade’, water pricing, the water scarcity-export paradox, water footprint, sustainable water consumption.

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