How International Water Markets Are Becoming Part of the Green Transition

In her academic article “International Water Markets in the Context of the Green Transition: Regulatory Mechanisms for Managing Water Pollution,” Anastasia Tsybulak, Ph.D. in Economics and professor at the Ukrainian-American University “Concordia,” and founder of the Glossary Eco Foundation, raises one of the key questions of the modern economy: What role will water play in the global resource system in the context of the green transition?

Water as an element of the global economic balance.

In my work, I examined how new international water markets are emerging, markets that are already influencing environmental policy, trade, technology, and geopolitical decisions. In a world where freshwater scarcity is on the rise, its distribution is no longer solely a domestic issue for each country—it is becoming a tool of international influence.

The article proposes a clear typology of modern water markets:

• the market for water conservation and water-saving technologies, including innovative monitoring and reuse systems;
• the market for water-intensive products, which drives 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 water supply sources, including desalination, rainwater harvesting, and wastewater treatment.

Virtual water as an economic tool.

Central to the study is the concept of “virtual water”—the volume of water used in the production of goods that are subsequently exported. Thus, countries effectively “export” or “import” water along with their products—such as agricultural goods.

This phenomenon is already changing approaches to food and water security, as it allows for the redistribution of water resources without the physical transport of water. At the same time, it creates new dependencies, where exporting countries become suppliers of a strategic resource, often without even realizing it.

Water Rights Markets: How New Regulations Are Taking Shape.

I also analyzed international experience in regulating water pollution. In a number of countries, including the United States, Australia, Germany, and Finland, environmental quota markets are already in place, allowing companies to buy and sell rights to use or pollute water. This is shaping a new model of economic responsibility for environmental damage. The legal mechanisms for compensation for damages and the role of the state in shaping the regulatory framework for such markets are examined separately.

Alternative Water Sources: An Industrial and Strategic Necessity.

The publication explores the potential of alternative water sources, such as:

• seawater desalination;
• rainwater harvesting for reuse;
• treatment and recycling of municipal and industrial wastewater.

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

Water and Foreign Policy: How a New Diplomacy Is Taking Shape.

I would like to emphasize that access to water is already becoming a part of diplomatic negotiations and intergovernmental agreements. She defines so-called “water diplomacy” as a new format of international cooperation, where access to water resources is simultaneously a matter of national security, an area for cooperation, and a potential source of conflict. The green transition is impossible without an effective and equitable water management system—both within countries and on a global scale. For Ukraine, this is not only a matter of environmental adaptation but also of its geo-economic position—given its agricultural export potential and access to water resources.