16
H. Schlör et al.
Based on this analysis, it is assumed in the following model (Sect. 4.2) that the
time preference rate is equal to the interest rate.
We have outlined the historical background of the current scientific debate about
economic growth and its theoretical principles. In the following, we will integrate
the FEW nexus, the core sectors of the transition path towards a green economy, in
this Solow-based economic growth framework.
3.3 Food–Energy–Water Nexus and Economic Growth
Food, energy and water are crucial resources and key elements of life and of any
human welfare. The nexus among the key elements means that water, energy and
food production are closely connected [3]. This food–energy–water nexus builds an
“intrinsic link [10]” between the global challenges of ensuring food security and the
rising demand for energy and water, as the UN determined in 2014 [82, 84]. These
central resources for any society are under increasing stress:
• The OECD assumes that the global water demand will increase by 55% by 2050,
so that 40% of the global population will be living under water stress conditions
[54].
• The water demand for energy production will increase by about 20% [35].
• 800 million people are currently hungry and by 2050 food production will have
to increase by about 50% due to the rising world population [24].
• And climate change will further set the water resources under additional stress
because of higher temperatures, resulting in “shifts in precipitation patterns and
snow cover, and a likely increase in the frequency of flooding and droughts [23]”,
which will also have an impact on the global food production.
These key sectors and their interrelated systems are under severe stress yet central
for any life on earth. Their governance must consider socio-economic, ecological and
governmental indicators irrespective of the chosen growth scenarios in the decisions.
Figure 6 shows that the FEW nexus is a triple-encircled system. Accordingly, a
well-balanced management of the FEW nexus is dependent (a) on the surrounding
economic system characterized by key economic indicators, (b) on environmental
indicators developed by Raworth [63] and (c) on characteristics of good governance
developed by the UNDP [79, 80]. These indicators define the solution space for the
management of the FEW nexus, as Fig. 6 shows.
The nine Raworth indicators [63] (climate change, land use change, biodiversity
loss, ozone depletion, chemical pollution, nitrogen phosphorus cycles, ocean acidification, atmospheric aerosol loading, freshwater use) describe the environmental
system of the FEW nexus and its constraints. The described environmental system
thus provides the resources for the economic system, building thereby the natural
constraints for the economic system that affect also the FW nexus. On the other hand,
the economic system is restricted by the Raworth indicators and can be characterized by nine indicators of the presented economic growth model of Chap. 4 (capital,
H. Schlör et al.
Based on this analysis, it is assumed in the following model (Sect. 4.2) that the
time preference rate is equal to the interest rate.
We have outlined the historical background of the current scientific debate about
economic growth and its theoretical principles. In the following, we will integrate
the FEW nexus, the core sectors of the transition path towards a green economy, in
this Solow-based economic growth framework.
3.3 Food–Energy–Water Nexus and Economic Growth
Food, energy and water are crucial resources and key elements of life and of any
human welfare. The nexus among the key elements means that water, energy and
food production are closely connected [3]. This food–energy–water nexus builds an
“intrinsic link [10]” between the global challenges of ensuring food security and the
rising demand for energy and water, as the UN determined in 2014 [82, 84]. These
central resources for any society are under increasing stress:
• The OECD assumes that the global water demand will increase by 55% by 2050,
so that 40% of the global population will be living under water stress conditions
[54].
• The water demand for energy production will increase by about 20% [35].
• 800 million people are currently hungry and by 2050 food production will have
to increase by about 50% due to the rising world population [24].
• And climate change will further set the water resources under additional stress
because of higher temperatures, resulting in “shifts in precipitation patterns and
snow cover, and a likely increase in the frequency of flooding and droughts [23]”,
which will also have an impact on the global food production.
These key sectors and their interrelated systems are under severe stress yet central
for any life on earth. Their governance must consider socio-economic, ecological and
governmental indicators irrespective of the chosen growth scenarios in the decisions.
Figure 6 shows that the FEW nexus is a triple-encircled system. Accordingly, a
well-balanced management of the FEW nexus is dependent (a) on the surrounding
economic system characterized by key economic indicators, (b) on environmental
indicators developed by Raworth [63] and (c) on characteristics of good governance
developed by the UNDP [79, 80]. These indicators define the solution space for the
management of the FEW nexus, as Fig. 6 shows.
The nine Raworth indicators [63] (climate change, land use change, biodiversity
loss, ozone depletion, chemical pollution, nitrogen phosphorus cycles, ocean acidification, atmospheric aerosol loading, freshwater use) describe the environmental
system of the FEW nexus and its constraints. The described environmental system
thus provides the resources for the economic system, building thereby the natural
constraints for the economic system that affect also the FW nexus. On the other hand,
the economic system is restricted by the Raworth indicators and can be characterized by nine indicators of the presented economic growth model of Chap. 4 (capital,