The Interdependence of Water, Energy, and Food Resources

in the Asia Pacific Region

Hezri Adnan, Ph.D

Institute of Strategic and International Studies Malaysia Roundtable E: Energy-Water-Food Nexus. Singapore International Energy Week, 30 October 2014

Presentation outline

1. Prominence of the WEF nexus internationally

2. Water, food, energy security in Asia and the Pacific

3. Nexus flashpoints in the Asia Pacific region

4. Interlocking effects of WEF Nexus in Southeast Asia

5. Conclusions and policy recommendations

Acknowledgment: Parts of this presentation is drawn from a discussion paper funded by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) E-Mail: hezriadnan@isis.org.my

INTERNATIONAL PROMINENCE

Section 1: Background: The Water-Energy-Security Nexus

Resources running out? Again?

Today, resources are high priority concerns in all levels of government, corporate boardrooms, and local communities. 3F crisis - fears about resources prices and access are back in vogue. Beyond the physical scarcity of single natural resources Multiple resources, multiple scarcities? Connections? Source: BBC

Resource prices now

considered volatile

Resource Prices

International Dialogue on WEF academic conferences

King Carl XVI Gustaf of Sweden hosted a meeting to explore issues relating to “Climate Action: Tuning in on Energy, Water and Food Security. The conference released The Bonham Declaration. On July 2012, 250 high-level participants gathered at Oxford University to attend ReISource: Food-Energy-Water for All, 2012. The conference brought together financiers, political leaders, captains of industries and top academics. One of the primary goals of the Nexus 2014: Water, Food, Climate and Energy Conference was to provide input to the UN Sustainable Development Goals process through the Nexus Declaration.

International Dialogue on WEF policy conferences

• The World Economic Forum, regularly held in Davos, annually; • Bonn 2011 Conference: The Water, Energy and Food Security

Nexus held in Bonn, Germany in 2011; • World Water Forum’s Ministerial Roundtable on Water, Energy

and Food Security, held in Marseilles, France in 2012; • World Water Week, in Stockholm, Sweden, 2012 (theme: water

and food security); 2014 (water and energy) • Mekong2Rio International Conference on Transboundary River

Basin Management, held in Vientiane, Lao People’s Democratic Republic in 2012;

• South African Water, Energy and Food Forum: “Managing the Mega-nexus”, held in Sandton, South Africa in 2012;

• The Water Summit 2013: Bringing WEF Nexus to Life, held in Abu Dhabi, United Arab Emirates in 2013:

• Managing Water, Energy, & Food in an Uncertain World (UCWR) held in Santa Fe, United States of America in 2012;

• Corporate Sustainability in Africa 2012: “Living in the Water, Food and Energy Nexus”, held in Johannesburg, South Africa, in 2012

Nexus conceptual surge? ‘Nexus Industry’ emerging?

Source: Adapted from Bazilian et al 2011

…unsustainable pressures on these 3 strategic resources

Why water, energy and food resources?

Recognize the consequences of one sector on another to achieve efficiency using systems thinking

2-at-a-time or two sector nexus thinking is not new

Linking energy, water and food resources

- Water for energy currently amounts to about 8% of global water withdrawals (45% in industrialized countries, e.g. in Europe).

- Food production and supply chain is responsible for around 30% of total global energy demand - Food production is the largest user of water at the global level, responsible for 80–90% of consumptive blue water use

Energy, water and food are inextricably linked

What happens if we don’t integrate WEF concerns simultaneously? Trade-offs?

Source: Hoff et al 2011

WATER, FOOD, ENERGY SECURITY IN ASIA PACIFIC

Section 2:

Resource challenge in Asia and the Pacific

The increase in resource use in Asia and the Pacific – Domestic materials consumption (DMC) by the region grew more than fourfold from 7.6 billion tonnes in 1970 to 31.9 billion tonnes in 2005.

Source: Ringler et al, 2013.

Water security?

Energy security?

Food security?

SERI

Material consumption by region

Water security in Asia and the Pacific

China, India, Indonesia, South Korea and Vietnam, are all in or close to being in conditions of water stress. The exceptions are few: Bhutan, Brunei, Burma, Cambodia, Laos, Malaysia and Papua New Guinea.

635 million people lack access to safe water and 1.9 billion lack access to effective sanitation. Require over US$ 130b investments

Energy security in Asia and the Pacific

Growth of energy use in the Asia-Pacific region, particularly in Chindia, will have major consequences for geopolitics, financial and energy markets and pollution both regionally and globally

Primary energy demand in Asia and the Pacific is projected to increase from 4,025.2 MTOE in 2005 to 7,285.6 MTOE in 2030, growing at an annual rate of 2.4%.

Food security in Asia and the Pacific

578 million Asians are undernourished. The global economic crisis and the food crisis in 2006-08, have deprived an additional 100 million people of access to adequate food. • Productivity of agriculture – By 2050

South Asia will need to divert up to 57 per cent more water to agriculture

• Environmental stress –Salinization induced by irrigation reduces productivity, . Saline soils affecting almost 50 per cent in Turkmenistan

• Land-grab – Investments in agricultural and forest lands in many parts of the world have increased significantly

Source: UNESCAP

NEXUS FLASHPOINTS IN ASIA AND THE PACIFIC

Section 3:

WEF Nexus plays out differently in different parts of Asia and the Pacific

Central Asia

Overexploitation of the Syr Darya and Amu Darya rivers over the past half-century has led to the drying out of the Aral

Conflicts between hydropower and downstream uses, including irrigation (cotton, rice, wheat), ecosystems protection and sustainable fishing

Kyrgyz Republic releases water in the winter time to generate electricity

Uzbekistan, Turkmenistan and South Kazakhstan need water in the summer for their irrigation schemes.

Water resources, irrigation and hydropower

The Hindu-Kush Himalayan Region

Nexus Flashpoints - Irrigation-Energy

India’s Gujarat groundwater overdraft impacting on energy generation India’s irrigation sector is

dependent on groundwater Much of this groundwater is

pumped using electricity Groundwater use is more than

sustainable recharge leading to groundwater over-exploitation

Energy subsidies caused groundwater overdraft for irrigation , causing a nexus

bankrupted GCB electricity utility and depleted aquifers especially since the late 1980s

Districts depicted in red and yellow are the districts with over-exploitation problems

Source: Mukherji

Nexus Flashpoints – Energy-Water-Food

Upstream projects to dam Brahmaputra river and channel it North

Likely to dry up several streams in NE India and Bangladesh

Likely to affect rice paddy cultivation on the Assam floodplain

May worsen Bangladesh’s food insecurity problem

Increase salinity in the delta will impact the Forest of Sundari Trees (UNESCO Heritage)

China aims for ~ 568GW by 2030. Plans to construct at the Great Bend a dam twice the size of the Three Gorges Dam

China

Source: China Water Risk, 2012

Thermo-electric production and water

Declining water availability stresses energy sector in China

Australia

Droughts in the past decade have left big players bankrupt and selling up. 45 million ha of Australian land ceased production.

INTERLOCKING EFFECTS OF NEXUS IN SOUTHEAST ASIA

Section 4:

WEF Nexus plays out differently in different parts of Southeast Asia

USA

Malaysia

Thailand

Myanmar

Brunei

Metabolism of Resources grows

with Income

Metabolic rate ton/capita/year

Resource use and economic growth

Philippines

Indonesia

Cambodia

Southeast Asia Energy and food security in Mekong

Cambodia, China, Laos, Myanmar, Thailand and Vietnam aim to enhance sub- regional energy-economic cooperation

11 hydropower dams on the

free flowing main stem of the lower Mekong River and 77 other dams in the Mekong Basin as a whole

will reduce fish catch and place

heightened demands on the resources necessary to replace lost protein and calories

Southeast Asia Energy and food security in the GMS

Presents a cross-sectoral, multi-scale assessment of development-directed investments in the wider Mekong Region.

Three critical dynamics identified that generate a high level of connectivity between these countries: • human migration, • natural resource flows • increasing levels of private and State financial

investments.

Indonesia’s Papua food and energy

Myanmar’s transnational

energy projects

PNG’s Purari hydropower

Sarawak hydropower

Cameron Highlands vegetable farming

Cambodia’s land and

food security

Biofuel development in Indonesia

Singapore’s water

production

Thailand’s virtual water

export

Irrigation, food insecurity and extreme weather

events in the Philippines

Potential Nexus Flashpoints in Southeast Asia

UNESCAP 2013

Broadening the WEF framework?

Food

Wa

ter

Energy

Land

Wa

ter

Energy

Food

Water

En

erg

y

Land

Min

erals

FoodWater

Ener

gy

Clim

ate Change

Bonn 2011

RelSource

IISD

CSIRO

ODI-ECDPM-

DIE

World

Economic

Forum (WEF)

Transatlantic

Academy

Land Security? For agriculture, mining, biodiversity and human settlements?

POLICY RECOMMENDATIONS AND CONCLUSIONS

Section 5:

Macroeconomic imbalances nexus

Water-food-energy nexus Illegal economy nexus

WEF 2011

Conclusion # 1 – WEF Nexus as cross-cutting global risks

Nexus redefining geopolitics?

New resource geopolitics caused

by governance failures not

distribution?

Inter-state and intra-state tension

Conclusion #2 - Gaps in the Nexus debate

1. Despite close-relationship of WEF resources, their funding, policy-making and oversight are managed as separate issues across the spectrum of policy, planning, design and operation

2. New security convergence - scarcity-conflict thesis is gaining currency, but this time at systemic level (supply-chain; polycentric governance). Need to consider the risks of security narratives on society. Community rights?

3. Insufficient analysis for some region – the Pacific lags behind, and so is the archipelagic parts of Southeast Asia

4. WEF frameworks need to consider the environmental dimension more coherently

The Nexus Approach recognizes interconnectedness of water, energy, and food across space and time. Its objectives are: • Improve energy, water, and food security • Address externality across sectors, and decision-making at the nexus • Support transition to sustainability

Conclusion # 3 - Situating the nexus approach

Conclusion #4 - Suggested framework for rapidly developing Asia

ECOSYSTEM SERVICES

FOOD

ENERGYWATER

Supporting

services

Cultural

services

Re

gu

latin

g

se

rvic

es

Pro

vis

ion

ing

se

rvic

es

Investments

Resource Efficiency

Social Justice Human Well-Being

Green Growth

W-E-F NEXUS ASSESSMENT SUSTAINABILITY TRANSITIONPOLICY LEVERS

Policy recommendations

1. Nexus accounting – deepen WEF analysis in A-P – Current approach focuses on input-output analysis; solutions?

– Three scarcity metrics – physical (resource intensity); monetary (price & cost dynamics) and distributive (implications of social allocations

– Policy salience – country-level studies & co-production of nexus knowledge

2. Adopt green economy/growth model – Resource productivity and efficiency

– Investments in natural capital

– Social justice

Policy recommendations

3. Re-orientate government policy framework – Policy cycle - ‘Socialization’ of Nexus ideas

– Strengthen price signal to ensure productive & efficient use of resources – subsidy and pricing

– Re-design property rights

– Address supply-and-demand chain – focus on weakest links

4. Disruptive innovation

5. Empower policy process – institutional thinking – Address silo with policy integration

– Long-term policy – foresight, future studies

– Apply systems thinking (influence diagram etc)

THANK YOU

“The Perfect Storm”…we are nowhere near realizing the full impact of this yet. We have seen the first indications – rising food prices, pressure on water supplies, a land grab by some countries for mining rights and fertile agricultural land, and rising prices for energy and for key resources such as metals.”

Sir David King U.K. Former Chief Scientific Adviser