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1. technology development on FEW components through research, for example,
developing ways to generate energy with less water, grow food with less irrigation and energy and utilize less energy and water for municipal use;
2. building a more efficient public utility generation and distribution system or
reducing leaks in water distribution;
3. providing extension information on FEW situations, improving practices like
water conserving agricultural practices;
4. financing insurance coverage for cases where for example water is limited and
operations are curtailed; and
5. creating public goods that benefit many without excluding those who have not
financed implementation, for example, capital investment in reservoirs or canals.
In public cases, an individual does not capture all of the benefits and is likely to
choose not to pay for the investment. Thus, in cases where the Nexus action creates
a public good then broader involvement is needed to achieve implementation as
private actions will underinvest in such actions.
5.3.6 Cost–Benefit: Not Just Economics
Finally, let us deal with the broad issue of benefit–cost analysis inclusiveness. One
quite frequently hears people say that for a project to be justified it must have a ratio
greater than one of the benefits divided by costs. In fact, it is often a requirement that
a benefit–cost ratio is constructed for almost any considered project.
However, it is also important to note that the benefit–cost ratio will generally not
be all-inclusive relative to the items considered in making a decision. In particular,
there may well be many nonmarket impacts which cannot be quantified in dollars
and cents. Nexus project induced items such as reductions in the amount of erosion
getting into the water, or a reduced amount of air pollution emissions, or an alteration in biodiversity in the region are difficult to represent in general and certainly in
monetary terms. In such cases, one may do both a benefit–cost and a simultaneous
environmental analysis and emphasize that both should be considered, not just the
cost–benefit ratio as could be implemented within the systems approach discussed
in Chap. 2.
5.4 FEW Nexus Metrics, Data, and Modeling
In this section, we use an ongoing Texas FEW Nexus case study to illustrate the
complexity and challenges regarding the economic considerations related to FEX
Nexus metrics, data, and modeling but also see the detailed discussion in
Chaps. 13–16.
5 Economics
1. technology development on FEW components through research, for example,
developing ways to generate energy with less water, grow food with less irrigation and energy and utilize less energy and water for municipal use;
2. building a more efficient public utility generation and distribution system or
reducing leaks in water distribution;
3. providing extension information on FEW situations, improving practices like
water conserving agricultural practices;
4. financing insurance coverage for cases where for example water is limited and
operations are curtailed; and
5. creating public goods that benefit many without excluding those who have not
financed implementation, for example, capital investment in reservoirs or canals.
In public cases, an individual does not capture all of the benefits and is likely to
choose not to pay for the investment. Thus, in cases where the Nexus action creates
a public good then broader involvement is needed to achieve implementation as
private actions will underinvest in such actions.
5.3.6 Cost–Benefit: Not Just Economics
Finally, let us deal with the broad issue of benefit–cost analysis inclusiveness. One
quite frequently hears people say that for a project to be justified it must have a ratio
greater than one of the benefits divided by costs. In fact, it is often a requirement that
a benefit–cost ratio is constructed for almost any considered project.
However, it is also important to note that the benefit–cost ratio will generally not
be all-inclusive relative to the items considered in making a decision. In particular,
there may well be many nonmarket impacts which cannot be quantified in dollars
and cents. Nexus project induced items such as reductions in the amount of erosion
getting into the water, or a reduced amount of air pollution emissions, or an alteration in biodiversity in the region are difficult to represent in general and certainly in
monetary terms. In such cases, one may do both a benefit–cost and a simultaneous
environmental analysis and emphasize that both should be considered, not just the
cost–benefit ratio as could be implemented within the systems approach discussed
in Chap. 2.
5.4 FEW Nexus Metrics, Data, and Modeling
In this section, we use an ongoing Texas FEW Nexus case study to illustrate the
complexity and challenges regarding the economic considerations related to FEX
Nexus metrics, data, and modeling but also see the detailed discussion in
Chaps. 13–16.
5 Economics