World Economic Forum (WEF) 2011 Global Risks Report Identifies ‘Water-Food-Energy’ Nexus in Top 3 Risk Clusters

In its 2011 Global Risks report, the World Economic Forum (WEF) identifies natural resources among the top 3 global risk clusters of concern.

The graphic below demonstrates the interconnections.

Source: WEF 2011

Food production requires water and energy; water extraction and distribution requires energy; and energy production requires water.  Food prices are highly sensitive to the cost of energy inputs through fertilizers, irrigation, transport and processing.

Economic growth; population growth; diminishing resource and production efficiency gains; climate change and governance failures, all act as drivers that exacerbate the problems.  A similar conclusion was drawn in a good recent article at Foreign Policy (‘The Great Food Crisis of 2011’).

To give an idea of the scale of the pressures, the report includes referenced forecasts for a 50% increase in food demand by 2030, a 30% increase in water demand, and a 40% increase in energy demand by 2030.

The WEF warns that:

Shortages could cause social and political instability, geopolitical conflict and irreparable environmental damage

The WEF is solutions-focussed, identifying a series of approaches and options for focus to address the challenges.  Unsurprisingly, some of the tools include trade and pricing measures.

The World Economic Forum is partnering with the Water Resources Group (WRG) to address a number of these issues in a phased approach (PP60-63 of the report).