How international water markets are becoming part of the green transformation

In scientific article “International Water Markets in the Green Transition: Regulatory Mechanisms for Managing Water Resources Pollution,” Dr. of Economics, Professor at the Ukrainian-American University “Concordia” and founder of the Glossary Eco Foundation Anastasia Tsybuliak raises one of the key questions of modern economics: what will be the role of water in the global resource system in the green transition?

In my work, I examined how new international water markets are being formed, which already today affect environmental policy, trade, technology and geopolitical decisions. In a world where freshwater shortages are growing, its distribution ceases to be an exclusively internal issue of each state – and turns into an instrument of international influence.
The article proposes a clear typology of modern water markets:

• the market for water protection and water-saving technologies, including innovative monitoring and reuse systems;
• the market for water-based products, which forms the global circulation of so-called “virtual water”;
• the market for rights to use and pollute water resources, which operates on the principles of environmental responsibility;
• the market for alternative sources of water supply, including desalination, rainwater harvesting and wastewater treatment.

The central place in the study is occupied by the concept of “virtual water” — the volume of water used in the production of goods that are then exported. Thus, countries actually “export” or “import” water along with products — for example, agricultural. This phenomenon is already changing approaches to food and water security, as it allows for the redistribution of water resources without the physical transportation of water. At the same time, it creates new dependencies, where exporting countries become suppliers of a strategic resource, even without always realizing it.

Water rights markets: how new regulation is formed. I also analyzed the international experience of regulating water pollution. In a number of countries, including the USA, Australia, Germany and Finland, there are already markets for environmental quotas that allow enterprises to buy and sell the rights to use or pollute water. This forms a new model of economic responsibility for environmental damage. Legal mechanisms for compensation for damages and the role of the state in shaping the regulatory framework for such markets are separately considered.

Alternative water sources: industrial and strategic necessity. The publication reveals the potential of alternative water sources, such as:

• desalination of sea water;
• rainwater harvesting for reuse;
• treatment and recycling of urban and industrial wastewater.

These solutions are already being actively implemented in Singapore, Israel, the UAE, and South Korea – and, in the author’s opinion, should be part of the national strategies of countries facing the consequences of climate change and water scarcity.