The "Water-Food-Energy Nexus"

A summary of annual risk forecasts in a Linked-In group led me to a very interesting presentation on global risks from the World Economic Forum, the body that puts on the annual movers-and-shakers shindig at Davos, Switzerland. Among the risks they highlighted are those associated with what they termed the "water-energy-food nexus". The food vs. fuel concerns I explored in Friday's posting make up just one subset of this much larger and more complex set of interactions. These can be further expanded--and complicated--by incorporating the relationships between this triad and climate change. Although the WEF identified a number of steps that could be taken to address this poorly-appreciated challenge, it requires a leap of faith to imagine we could tackle this issue as systematically as it seems to merit, in light of our track record on other big but comparatively simpler challenges such as energy security and the ongoing deficit and debt problems of the developed world.

The extra complexities resulting from adding water to the already thorny food-fuel relationship are nicely illustrated by a systems chart in the WEF's analysis. It shows food security, water security and energy security linked by a series of sometimes reciprocal inputs, and influenced by other factors such as population and energy growth and environmental pressures, along with two overarching risks of global governance failures and economic disparity. All of this leads toward geopolitical conflict. It's a sobering assessment, even without including the missing arrow flowing back from food security to energy security. Biofuel produced from food crops makes up an increasingly important source of global liquid fuel supplies, so the "food intensity of energy production" deserves inclusion with these other factors, too.

This isn't the first time that I've seen a diagram portraying these interactions. I can't help wondering whether the WEF viewpoint was influenced by some scenario work that I encountered through my involvement with Global Business Network in the 1990s and early 2000s. I was fascinated by Gerald Harris's description of the triangle connecting water, food and energy, which has become much more apparent in the years since I first saw it. Although at the time the traditional energy industry understood its relationship with water pretty well, the water intensity of corn ethanol wasn't yet an issue, because US ethanol production was under 2 billion gallons a year, less than a sixth of its current level. And while some oil and gas wells have been hydraulically fractured for decades, the mass application of this technique to unlocking shale gas resources was still in its early days and hadn't percolated into the public's consciousness. Yet while the use of (and impact on) water in energy has become a much higher profile issue, metrics for comparing the water intensity of energy produced from different sources are still evolving. And we've barely begun to think about how for example water, which requires energy to capture and distribute, is used in producing energy, affecting the availability of water for growing food, some of which is then turned into energy. You can start similarly convoluted chains with food or energy, too.

We've typically looked at issues such as those in the examples above in terms of simple, binary decisions, rather than complex tradeoffs calling for integrated resource planning among all affected parties, at both the regional and local level, and markets that account for as many of the real costs and relevant externalities as possible. Yet without taking anything away from the work of the groups that the WEF mentions are looking at these problems in Indochina, Jordan, and elsewhere, we simply don't have the kind of governance in place to do this globally. If the UN can't come to grips with climate change and nuclear proliferation, then the future of the "water-food-energy nexus" seems far likelier to play out either in isolation or as a series of one-off efforts among highly motivated (desperate?) parties. And with last year's favorite governance body, the G20, heading into what some are calling a "G-Zero" world, it's not clear who else could take up this mantle. In the absence of some improbably comprehensive global approach to managing these interdependencies, it's up to those working in the affected industries to ensure that these factors are at least reflected in the planning and analysis of major projects and investments.