How does the water-energy-food nexus work in developing countries? An empirical study of China.

Abstract

As three resources that are necessary for human survival and production, water, energy and food are increasingly closely linked. In recent years, the water-energy-food nexus has attracted special attention from international organizations and academic circles. However, due to the lack of research on its internal mechanisms, there is still controversy on whether the water-energy-food nexus can be used as a new policy basis. The internal mechanisms of the water-energy-food nexus were analysed from the perspective of industrial linkages in this paper and empirically verified by constructing an SVAR (structuralvectorautoregression) model using China's data. The results showed that there were two forms of conduction in China's water-energy-food nexus: the water-energy-food nexus with nuclear power participation and that with natural gas participation. The characteristics of China's water-energy-food nexus were derived. For the interactions of the water-energy segment in China's water-energy-food nexus, the conduction from energy to water was consistent for different types of energy, while that from water to energy varied depending on the type of energy. Food production always had a negative impact on energy production, while the conduction from energy to food varied for different types of energy. The conduction between food and the water supply was not as significant as was generally considered. Especially, the impact of the water supply on food production was weak. The order of strength intensity and the duration were also available for reference. Accordingly, a new policy basis was presented under the framework of China's water-energy-food nexus. Both our research design and research findings are significant in contributing to understanding the internal mechanisms of the water-energy-food nexus, and the policy implications are also helpful for achieving better policy effects.