Publication // A hydro-economic methodology for the food-energy-water nexus
By Justin S. Baker, George Van Houtven, Yongxia Cai, Fekadu Moreda, Chris Wade, Candise Henry, Jennifer Hoponick Redmon, A. J. Kondash. Growing global water stress caused by the combined effects of growing populations, increasing economic development, and climate change elevates the importance of managing and allocating water resources in ways that are economically efficient and that account for interdependencies between food production, energy generation, and water networks—often referred to as the “food-energy-water (FEW) nexus.” To support these objectives, this report outlines a replicable hydro-economic methodology for assessing the value of water resources in alternative uses across the FEW nexus–including for agriculture, energy production, and human consumption—and maximizing the benefits of these resources through optimization analysis.
The report’s goal is to define the core elements of an integrated systems-based modeling approach that is generalizable, flexible, and geographically portable for a range of FEW nexus applications. It includes a detailed conceptual framework for assessing the economic value of water across the FEW nexus and a modeling framework that explicitly represents the connections and feedbacks between hydrologic systems (e.g., river and stream networks) and economic systems (e.g., food and energy production). The modeling components are described with examples from existing studies and applications. The report concludes with a discussion of current limitations and potential extensions of the hydro-economic methodology.
About the Authors
- Justin S. Baker, PhD, is an associate professor of Forest Resource Economics in the Department of Forestry and Environmental Resources, North Carolina State University.
- George Van Houtven, PhD, is a senior economist in the Center for Water Resources at RTI International.
- Yongxia Cai, PhD, is a senior economist in the Center for Applied Economics and Strategy at RTI International.
- Fekadu Moreda, PhD, is a senior water resources engineer in the Center for Water Resources at RTI International.
- Chris Wade, MS, is a research economist in the Center for Applied Economics and Strategy at RTI International.
- Candise Henry, PhD, is a senior energy researcher in the Center for Applied Economics and Strategy at RTI International.
- Jennifer Hoponick Redmon, MSES, MPA, is a senior environmental health scientist in the Center for Environmental Health, Risk, and Sustainability at RTI International.
- A. J. Kondash, PhD, is a research environmental scientist in the Center for Environmental Health, Risk, and Sustainability at RTI International.
Baker, J. S., Van Houtven, G., Cai, Y., Moreda, F., Wade, C., Henry, C., Redmon, J. H., & Kondash, A. J. (2021). A hydro-economic methodology for the food-energy-water nexus: Valuation and optimization of water resources. RTI Press. RTI Press Publication No. MR-0044-2105 https://doi.org/10.3768/rtipress.2021.mr.0044.2105
A Hydro-Economic Methodology for the Food-Energy-Water Nexus: Valuation and Optimization of Water Resources
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