A flexible input-output price model for assessment of a nexus perspective to energy, water, food security policymaking

Abstract

Input-Output models and their extensions offer multiple prospects to explore the energy, water, food inter-linkages – Energy, Water, Food nexus (EWF-n). This paper takes India as a case study to examine a nexus-informed approach to policy making for redressing the EWF security (EWF-s) challenges. First, a Leontief demand-driven EWF-extended Input-Output model is developed. The Leontief's production functions (representing endogenous, fixed technical coefficients) of the developed model are then further modified using flexible functions to capture EWF-related technological and policy interventions. The resulting changes in the model (to include divergent input substitution possibilities) allow evaluation of policy scenarios with nexus or non-nexus considerations towards EWF-s. These scenarios assess outcomes across diverse domains (physical, social, economic, environmental) in short, medium, and long-run over the period 2015-2047. The results show that not only does the EWF nexus-oriented scenario produce major co-benefits demonstrated in terms of the most significant long-term improvement in EWF outcomes but that it also achieves considerably superior economic, social, and environmental outcomes. Synergies and trade-offs across various policy scenarios are also discussed. The insights obtained from the application of this approach, especially cross-sectorial (EWF), cross-domain, and temporal can provide promising takeaways for policymakers to adopt a robust and sustainable strategy for tackling the EWF-s challenges.