It’s no secret that our world is experiencing shifts in the climate that continue to affect our environment. From extreme weather to serious droughts, our climate is changing, which in turn is creating consequences that affect our way of life.
Water – an element most affected by climate change – is crucial to maintaining life and producing goods from paper and clothing, to agricultural products including dairy, meats, and fruits. Without consistent rain, drought conditions make it difficult for countries to produce all of the food products their population enjoys consuming like fruits, vegetables, and meat. The list really goes on, and without sustainable agricultural environments, countries must turn towards other regions who export what they need.
Because it doesn’t make logistical sense to export water itself for countries to use in the production of their own goods, it becomes embedded in products that are more easily shipped. In New Zealand, virtual water is used to feed and raise livestock for meat, dairy, other edible products and wool products. Meeting the demands of other countries, New Zealand takes advantage of being in top ten countries in the world for water quality and quantity. It uses the water to produce agriculture, forest products and provide travel experiences others are unable to.
This virtual flow of water from New Zealand helps them capitalize on the agriculture and forest market in the region. With exports totaling over $35B in 2015*, New Zealand’s goods sent off to other locations include a wide array of seafood, dairy and meat products, fruits, wine, and foresting products– all made from items that require water to survive and produce.
Thanks to virtual water, investors in New Zealand businesses, specifically those tied to agriculture and tourism should benefit from this. Robert Scharar, the Commonwealth Australia/New Zealand Fund Manager visited virtual water exporters on a recent trip to New Zealand. He is enjoying some of Sanford Limited’s green shell mussels on a boat to view how mussels are harvested during a tour of their processing plant.
*Data sourced from Te Ara – The Encyclopedia of New Zealand.
*Data sourced from the Observatory of Economic Complexity.