Project // Implementing the Water-Energy-Food Nexus: Incentive Structures and Policy Instruments

These intersectoral interdependencies occur when for example, agro-fuel development compete for land or water with food crops. Another example is when upstream food cultivation generate impacts (i.e. water pollution and soil erosion) on water resources used downstream. Moreover, another example is when energy costs for irrigation pumps are subsidised, yet this may occur at the expense of depleting ground water resources. These situations are characterised by sectoral trade-offs where one actor’s action impact the activity of another actor. In economics, such situations are conceptualise as negative externalities. However, next to these trade-offs, there are also opportunities for creating synergies among different actors or sectors. Such synergies may include increasing resource use efficiency or improving resource allocation. Even if international discourse recognizes the existence and importance of this nexus, the understanding of possible approaches taking into account the inter-sectoral negative externalities and the exploration of synergies between the use of resource and sectors is limited. The Nexus-Project addressed a number of nexus cases studies in developed and developing countries. Furthermore, the project examined which incentive structures, governance mechanisms and policy instruments could be applied to increase inter-sectoral coordination and regulation. Moreover, the project considered the potential and the limitations of single coordination mechanisms or policy instruments.

Results

The results of the project have been summarised in six research briefs.

Project Implementation

Implementing Institution

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute

Project Lead

• Ines Dombrowsky
• Waltina Scheumann

Team

• Babette Never
• Carmen Richerzhagen
• Jean Carlo Rodriguez de Francisco
• Katharina Stepping

Financing

Federal Ministry for Economic Cooperation and Development (BMZ)

Time Frame

2015 - 2016 / completed