Nearly 88% of the water withdrawn worldwide is used to produce goods or services.
This is the hidden link in globalization: when we exchange goods and services, we also transfer fresh water from one country to another. Yet, water management remains local, while consumption has become global. Solutions are emerging.
Fresh water, though essential to all human activity, is often absent from discussions on globalization, as if its availability were a given. Yet, without water, there is no food, no industry, no energy, and no digital technology. Our lives, even in their dematerialized form, rely on the use of water, which cools, cleans, and heats. Water is the invisible input of our economy. One figure sums up its importance: 88% of the water withdrawn worldwide is used to produce goods or services.
Water already flows from one continent to another, not through pipes, but through globalized value chains, in the food and clothing we consume, and in all our infrastructure. This “virtual water” fuels globalization, yet remains largely ignored by economic and political decisions. As a result, water is mobilized as if it were an infinite resource, serving an economy that prioritizes immediate performance at the expense of ecosystems and populations.
The hidden water flows in our plate
The concept of virtual water, invented in the early 1990s by geographer Tony Allan, allows us to measure the water incorporated in the products we consume. For example, it takes 15,000 liters of water to produce one kilogram of beef, 4,000 liters for one kilogram of pistachios, and 1,000 liters for one kilogram of corn.
Every breakfast becomes a journey around the world: the morning coffee comes from Colombia or Brazil, nourished by tropical rains; the square of dark chocolate that accompanies it is made from Ecuadorian cacao; the avocado from Peru comes from an irrigated field. Only the wheat and salt in the baguette, and the hen that laid the egg, come from France. Our food choices connect water basins around the world, often without our even realizing it.
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To measure the volume of water used indirectly, Arjen Hoekstra developed the concept of “water footprint” in 2002. This corresponds to the total volume of water used to produce the goods and services we consume. It can be calculated for a country or for an individual consumer. For example, the water footprint of a French person is over 4,000 liters per day, and 90% of this comes from their food.
Water in globalized value chains
This approach, based on the plate and more generally on the final product, reveals the massive transfers of water between countries, often invisible in trade.
The textile industry perfectly illustrates this reality. From cotton cultivation to dyeing and washing, each garment consumes thousands of liters of water. The Amu Darya and Syr Darya rivers, which originate in Tajikistan and Kyrgyzstan, have been diverted by downstream countries to irrigate cotton fields. This massive irrigation has reduced their flow to the point of drying up the Aral Sea (Central Asia). There, the decrease in water availability leads to health problems and a decline in living conditions. Industrial processes generate polluting waste, which is poorly treated and contaminates rivers, soil, and groundwater. Textile-producing countries pay the environmental price for our low-cost clothing.
This example illustrates a broader problem. The globalization of virtual water flows reveals a major institutional void. The economy is global, but water management remains local . This disconnect fosters water and environmental dumping. The rules of global trade obscure the real impacts on populations and ecosystems. Fragmented production chains allow companies to exploit the resources of fragile countries without compensation or recognition of the social and environmental impacts.
Increased inequalities
The intensive exploitation of water is not only an environmental problem; it is a social and political issue. Populations in producing countries suffer from water scarcity, groundwater pollution, and health risks. Inequalities are widening: the most vulnerable bear the costs, while the wealthiest reap the benefits.
Beyond the North-South divide, the problem lies in the dominance of market forces. Multinational corporations choose their production sites based on water costs and weak regulations, reinforcing a model where water becomes an economic variable rather than a common good. States, often overwhelmed, adopt these standards to remain competitive, leaving little room for local or ecological alternatives.
Towards the recognition of water as a global common resource
Water governance remains largely fragmented globally. Unlike climate change, which benefits from a multilateral framework despite its limitations, water is not recognized as a global common resource with binding rules and standards for economic actors.
This situation limits the capacity to regulate water use and impacts. In the absence of systematic water footprint labeling for products, water consumption related to exchanged goods and services remains largely invisible. Even though a product’s water footprint can vary significantly depending on production systems and inputs used, this invisibility contributes to a lack of accountability among all stakeholders. In a context of exceeding planetary water boundaries , the availability and transparency of information regarding the water footprint of products and services are a central governance issue.
Furthermore, water use reflects significant geographical inequalities: industrialized countries account for a large share of indirect water consumption through imports of agricultural and industrial products, while water pressures are primarily felt in producing countries. In this context, trade policies and international cooperation are potential levers for the indirect regulation of water impacts. The jurisprudence of the World Trade Organization (WTO) has recognized the possibility for a state to restrict access to its market based on production processes and methods. Perhaps in the future, localized environmental impacts, such as water stress, will be taken into account in the regulation of international trade.
Internalize the constraint?
On the corporate side, consideration of water risks is progressing but remains uneven. It largely relies on voluntary initiatives, often integrated into non-binding social responsibility strategies. However, some multinationals are beginning to internalize these issues.
Michelin, for example, implemented a hypothetical internal water price to encourage its factories to invest in water conservation and reuse systems. In Gravanches and Troyes, improvements to cooling processes are expected to reduce water withdrawals by more than 60%.
Nevertheless, these initiatives remain primarily focused on direct production sites, while the majority of water consumption associated with these products occurs upstream, along the value chains, where a significant portion of water-related risks are also concentrated. Analyzing the water footprint across the entire supply chain, therefore, emerges as a crucial tool for identifying and managing the water-related risks associated with these investments.
Water is not merely an environmental issue; it is a structuring factor in economic production, international trade, and sovereignty. The gap between the localized nature of water resources and the globalized organization of value chains constitutes one of the major challenges of contemporary water governance.
This article is part of the dossier “Management put to the test of reality” produced by Dauphine Éclairages ,
the online scientific media of the University Paris Dauphine – PSL .
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