Green Economy and the Water-Energy-Food Nexus
The traditional economic model of employing various types of capital, including human, technological, and natural, to produce goods and services has brought about many benefits including higher living standards and improved human well-being. At the same time, economic growth has resulted in environmental degradation. In addition, the global economic model is confronted by a wide array of trends including rapid population growth, urbanisation, increasing poverty, and inequality as well as climate change resulting in resource scarcity and social challenges. In response, many multilateral organisations have called for the development of a green economy that improves human well-being and social equity and reduces environmental degradation.
Managing the water-energy-food nexus
With rising demand for water, energy, and food, managing the water-energy-food nexus is a key aspect of developing the green economy as the nexus approach recognises the need to use resources more efficiently while seeking policy coherence across the nexus sectors in support of green growth. Nonetheless, the governance of water-energy-food sectors has generally remained separate with limited attention placed on the interactions that exist between them. The result has been narrowly focused actions that have failed to reduce nexus-wide pressures.
The transition towards the green economy will require policy instruments that reduce water-energy-food nexus pressures. In particular, policies will be required to promote social and technological innovations that increase resource efficiency and conservation in order to reduce nexus pressures. Policies that reduce nexus pressures in the green economy can be implemented by fiscal and non-fiscal tools, where fiscal tools include market-based instruments and pricing to encourage resource conservation as well as financial incentives to encourage the uptake of new technologies that reduce nexus pressures. Non-fiscal tools include education and awareness on the need to increase water and energy efficiency across the whole economy as well as reduce food wastage.
Fiscal tool: Water Quality Trading in the Ohio River Basin
The Ohio River Basin Water Quality Trading Pilot Project is a first-of-its-kind interstate programme that spans Ohio, Indiana, and Kentucky to evaluate the use of trading by industries, utilities, farmers, and others to meet water quality goals while minimising costs. The water quality trading programme, a market-based approach to achieving water quality goals, allows permitted dischargers to generate or purchase pollution reduction credits from another source. The premise of the water quality trading programme is that:
- Facility A, for example, a wastewater treatment plant, needs to meet nutrient limits for its water quality permit and therefore water quality trading is one option.
- To reduce nutrients in the watershed, Facility A pays Farmer B to do a variety of things, for instance, reduce fertiliser use, plant stream side buffers with trees, or keep livestock manure from getting into the waterways, with each conservation practice verified.
- Nutrient reductions are quantified as credits, for example, equal to one pound of nutrient reduction. Credits are then reviewed and approved by a regulatory agency.
- Facility A can then use those credits to meet permit requirements
Non-fiscal tool: Germany’s Blue Angel Label
In Germany, around 12,000 environmentally friendly products and services from around 1500 companies have been awarded the Blue Angel. The Blue Angel guarantees that a product or service meets high standards with regard to its environmental, health, and performance characteristics. In the process, these products and services are evaluated across their entire lifecycle. Criteria has been developed for each individual product group that must be fulfilled by those products and services awarded with the Blue Label. To reflect technological advances, the Federal Environmental Agency reviews these criteria every three to four years. This ensures that companies constantly improve the environmental performance of their products over time.
Communities
Click here to join the Our Future Water Network. Be part of the community.
Join the conversation on the following LinkedIn groups: Urban Water Security, Our Future Water, Circular Water Economy, Blue-Green Infrastructure, Nature-Based Solutions, and Urban and Regional Futures
Our Future Water has collaborated with Denmark’s State of Green to publish the new white paper ‘Urban Water Management: Creating Climate-Resilient Cities’. Download here for first-hand insights into how some of Denmark’s leading companies, cities, utilities, and universities are working to deliver state-of-the-art water solutions for a sustainable future.
