142
As discussed in Chap. 3, water security involves access to, water for human and
ecosystem uses; energy security involves access to clean, reliable and affordable
energy services for daily uses; food security involves physical and economic access
to sufficient, safe and nutritious food to meet dietary needs and food preferences for
an active and healthy life. The Bonn2011 conference specifically aimed to explore
“how a nexus approach can enhance water, energy, food security by increasing
efficiency, reducing trade-offs, building synergies and improving governance across
sectors” (Hoff 2011). Nexus decisions can alter food/water/energy availability and
prices, in turn, altering the welfare of groups outside the FEW production region or
domain under study including disadvantaged ones. Such potential effects increase
the importance of making informed and balanced choices not only on our natural
resources but also in working toward the achievement of Sustainable Development
Goals as discussed in Chap. 3.
Section 4.2 noted the importance of considering distributional effects, such as
whether and how the policy change may be felt by high- versus low-income populations, or how people in urban centers and rural areas may be differentially impacted.
Section 18.4 includes four case studies that illustrate distributional (distributive)
effects in FEW policies at the city-scale.
5.3.3 Incorporating Dynamic Concerns
Nexus interrelationships and demands for Nexus commodities are changing over
time. Therefore, decision-making processes need to be proactive and consider the
dynamic evolution of the FEW arenas. (See Sect. 4.3.1 for a discussion of FEW
system dynamics and human behavior.) For example:
1. Growing populations alter FEW demands.
2. Climate change alters water supplies plus regional FEW demands.
3. Aquifer and fossil fuel reservoir depletion is ongoing.
4. Evolving technology influences FEW supplies and demands.
5. Regional FEW infrastructures and resource stocks/availabilities may be depreciating or being depleted.
The incidence of growing populations and climate change forces economists to
consider how to balance current versus future resource allocation properly so as to
maximize society’s welfare over a long time horizon.
Economic effects at different points in time are not usually valued the same. The
promise of payment of a dollar today is more valuable than payment 10 years from
now since one could buy an interest-bearing bond returning say a dollar plus 25
cents interest by 10 years from now. Economists use the concept of a discount rate
to place economic effects across different times on an equal footing. This reduces
the future value by an accounting of the compound interest one would achieve by
that period from investing the same amount of money currently.
B. A. McCarl and Y. Yang
As discussed in Chap. 3, water security involves access to, water for human and
ecosystem uses; energy security involves access to clean, reliable and affordable
energy services for daily uses; food security involves physical and economic access
to sufficient, safe and nutritious food to meet dietary needs and food preferences for
an active and healthy life. The Bonn2011 conference specifically aimed to explore
“how a nexus approach can enhance water, energy, food security by increasing
efficiency, reducing trade-offs, building synergies and improving governance across
sectors” (Hoff 2011). Nexus decisions can alter food/water/energy availability and
prices, in turn, altering the welfare of groups outside the FEW production region or
domain under study including disadvantaged ones. Such potential effects increase
the importance of making informed and balanced choices not only on our natural
resources but also in working toward the achievement of Sustainable Development
Goals as discussed in Chap. 3.
Section 4.2 noted the importance of considering distributional effects, such as
whether and how the policy change may be felt by high- versus low-income populations, or how people in urban centers and rural areas may be differentially impacted.
Section 18.4 includes four case studies that illustrate distributional (distributive)
effects in FEW policies at the city-scale.
5.3.3 Incorporating Dynamic Concerns
Nexus interrelationships and demands for Nexus commodities are changing over
time. Therefore, decision-making processes need to be proactive and consider the
dynamic evolution of the FEW arenas. (See Sect. 4.3.1 for a discussion of FEW
system dynamics and human behavior.) For example:
1. Growing populations alter FEW demands.
2. Climate change alters water supplies plus regional FEW demands.
3. Aquifer and fossil fuel reservoir depletion is ongoing.
4. Evolving technology influences FEW supplies and demands.
5. Regional FEW infrastructures and resource stocks/availabilities may be depreciating or being depleted.
The incidence of growing populations and climate change forces economists to
consider how to balance current versus future resource allocation properly so as to
maximize society’s welfare over a long time horizon.
Economic effects at different points in time are not usually valued the same. The
promise of payment of a dollar today is more valuable than payment 10 years from
now since one could buy an interest-bearing bond returning say a dollar plus 25
cents interest by 10 years from now. Economists use the concept of a discount rate
to place economic effects across different times on an equal footing. This reduces
the future value by an accounting of the compound interest one would achieve by
that period from investing the same amount of money currently.
B. A. McCarl and Y. Yang