A critical review on the accounting of energy in virtual water trade

Virtual water trade analysis investigates the embedded volume of water associated with the movement of a good from production to consumption. Energy-derived virtual water trade includes electricity, fossil fuels, and other energy resources and their water footprints. This growing field aids in understanding competition for scarce resources and the burden shift from energy consumption to production. This review investigates recent trends in energy virtual water trade from 2007-2021. Through the review, we find several limitations of the current practice, including lack of inclusion of hydroelectric footprints, inconsistent definitions of water footprint, and varying methods of assessment. A majority of studies assessed virtual water trade at the annual scale, neglecting inter-annual variability, and were primarily focused on a few locations, such as China and the United States. We recommend that future studies improve understanding of sub-annual variability in virtual water trade, prioritize local empirical data to avoid data misappropriation, and characterize uncertainty to promote policy. Through this review of virtual water of energy research, we identify existing themes and propose future directions to facilitate enhanced utility of the methods.