IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v133y2024ics0140988324002299.html
   My bibliography  Save this article

Food, energy, and water nexus: A study on interconnectedness and trade-offs

Author

Listed:
  • Ghosh, Bikramaditya
  • Gubareva, Mariya
  • Ghosh, Anandita
  • Paparas, Dimitrios
  • Vo, Xuan Vinh

Abstract

This study finds interesting outcomes regarding the interlinkage between the food, energy, and water sectors. The UN's Food and Agriculture Organization data from January 1961 till January 2023 are employed for six variables, namely Total Renewable Water resources per capita (TRW), Total Internal Renewable Water resources per capita (TIRW), Total Water Withdrawal per capita (TWW), Global Food Consumption per capita (GFC), Global Crop Production (GCP), and Global Electricity Consumption (GEC). Employing Quantile Vector Auto-Regression (QVAR) methodology, we observe asymmetry in connectedness across quantiles. Positive shocks produce stronger impacts in the variables than negative ones. Crop production mostly acts as a receiver of shocks. Renewable water is a consistent net emitter in all circumstances, while water withdrawal is crucial during negative shocks regime as well as in neutral time.

Suggested Citation

  • Ghosh, Bikramaditya & Gubareva, Mariya & Ghosh, Anandita & Paparas, Dimitrios & Vo, Xuan Vinh, 2024. "Food, energy, and water nexus: A study on interconnectedness and trade-offs," Energy Economics, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:eneeco:v:133:y:2024:i:c:s0140988324002299
    DOI: 10.1016/j.eneco.2024.107521
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988324002299
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2024.107521?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Diebold, Francis X. & Yılmaz, Kamil, 2014. "On the network topology of variance decompositions: Measuring the connectedness of financial firms," Journal of Econometrics, Elsevier, vol. 182(1), pages 119-134.
    2. Chatziantoniou, Ioannis & Gabauer, David & Stenfors, Alexis, 2021. "Interest rate swaps and the transmission mechanism of monetary policy: A quantile connectedness approach," Economics Letters, Elsevier, vol. 204(C).
    3. Ludger Linnemann & Roland Winkler, 2016. "Estimating nonlinear effects of fiscal policy using quantile regression methods," Oxford Economic Papers, Oxford University Press, vol. 68(4), pages 1120-1145.
    4. Markku Lanne & Henri Nyberg, 2016. "Generalized Forecast Error Variance Decomposition for Linear and Nonlinear Multivariate Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(4), pages 595-603, August.
    5. Ozturk, Ilhan, 2015. "Sustainability in the food-energy-water nexus: Evidence from BRICS (Brazil, the Russian Federation, India, China, and South Africa) countries," Energy, Elsevier, vol. 93(P1), pages 999-1010.
    6. Christopher M. Chini & Lucas A. Djehdian & William N. Lubega & Ashlynn S. Stillwell, 2018. "Virtual water transfers of the US electric grid," Nature Energy, Nature, vol. 3(12), pages 1115-1123, December.
    7. Valeria De Laurentiis & Dexter V.L. Hunt & Christopher D.F. Rogers, 2016. "Overcoming Food Security Challenges within an Energy/Water/Food Nexus (EWFN) Approach," Sustainability, MDPI, vol. 8(1), pages 1-23, January.
    8. Binh Thai Pham & Hector Sala, 2022. "Cross-country connectedness in inflation and unemployment: measurement and macroeconomic consequences," Empirical Economics, Springer, vol. 62(3), pages 1123-1146, March.
    9. J. S. Famiglietti, 2014. "The global groundwater crisis," Nature Climate Change, Nature, vol. 4(11), pages 945-948, November.
    10. Ghosh, Bikramaditya & Pham, Linh & Teplova, Tamara & Umar, Zaghum, 2023. "COVID-19 and the quantile connectedness between energy and metal markets," Energy Economics, Elsevier, vol. 117(C).
    11. Elsoragaby, Suha & Yahya, Azmi & Mahadi, Muhammad Razif & Nawi, Nazmi Mat & Mairghany, Modather, 2019. "Energy utilization in major crop cultivation," Energy, Elsevier, vol. 173(C), pages 1285-1303.
    12. Koop, Gary & Pesaran, M. Hashem & Potter, Simon M., 1996. "Impulse response analysis in nonlinear multivariate models," Journal of Econometrics, Elsevier, vol. 74(1), pages 119-147, September.
    13. Yousaf, Imran & Youssef, Manel & Goodell, John W., 2022. "Quantile connectedness between sentiment and financial markets: Evidence from the S&P 500 twitter sentiment index," International Review of Financial Analysis, Elsevier, vol. 83(C).
    14. Zaghum Umar & Mariya Gubareva & Muhammad Naeem & Ayesha Akhter, 2021. "Return and volatility transmission between oil price shocks and agricultural commodities," PLOS ONE, Public Library of Science, vol. 16(2), pages 1-18, February.
    15. Bouri, Elie & Saeed, Tareq & Vo, Xuan Vinh & Roubaud, David, 2021. "Quantile connectedness in the cryptocurrency market," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 71(C).
    16. Pesaran, H. Hashem & Shin, Yongcheol, 1998. "Generalized impulse response analysis in linear multivariate models," Economics Letters, Elsevier, vol. 58(1), pages 17-29, January.
    17. Hatirli, Selim Adem & Ozkan, Burhan & Fert, Cemal, 2006. "Energy inputs and crop yield relationship in greenhouse tomato production," Renewable Energy, Elsevier, vol. 31(4), pages 427-438.
    18. Steven Chu & Arun Majumdar, 2012. "Opportunities and challenges for a sustainable energy future," Nature, Nature, vol. 488(7411), pages 294-303, August.
    19. Patel, Ritesh & Gubareva, Mariya & Chishti, Muhammad Zubair & Teplova, Tamara, 2024. "Connectedness between healthcare cryptocurrencies and major asset classes: Implications for hedging and investments strategies," International Review of Financial Analysis, Elsevier, vol. 93(C).
    20. Topi, Corrado & Esposto, Edoardo & Marini Govigli, Valentino, 2016. "The economics of green transition strategies for cities: Can low carbon, energy efficient development approaches be adapted to demand side urban water efficiency?," Environmental Science & Policy, Elsevier, vol. 58(C), pages 74-82.
    21. Kang, Wenjin & Tang, Ke & Wang, Ningli, 2023. "Financialization of commodity markets ten years later," Journal of Commodity Markets, Elsevier, vol. 30(C).
    22. Ahmed Bossman & Samuel Kwaku Agyei & Yuxing Li, 2022. "ICEEMDAN-Based Transfer Entropy between Global Commodity Classes and African Equities," Mathematical Problems in Engineering, Hindawi, vol. 2022, pages 1-28, July.
    23. Paolo D’Odorico & Davide Danilo Chiarelli & Lorenzo Rosa & Alfredo Bini & David Zilberman & Maria Cristina Rulli, 2020. "The global value of water in agriculture," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 117(36), pages 21985-21993, September.
    24. Iacopini, Matteo & Poon, Aubrey & Rossini, Luca & Zhu, Dan, 2023. "Bayesian mixed-frequency quantile vector autoregression: Eliciting tail risks of monthly US GDP," Journal of Economic Dynamics and Control, Elsevier, vol. 157(C).
    25. Tom Gleeson & Yoshihide Wada & Marc F. P. Bierkens & Ludovicus P. H. van Beek, 2012. "Water balance of global aquifers revealed by groundwater footprint," Nature, Nature, vol. 488(7410), pages 197-200, August.
    26. Ghosh, Bikramaditya & Pham, Linh & Gubareva, Mariya & Teplova, Tamara, 2023. "Energy transition metals and global sentiment: Evidence from extreme quantiles," Resources Policy, Elsevier, vol. 86(PA).
    27. Farid, Saqib & Naeem, Muhammad Abubakr & Paltrinieri, Andrea & Nepal, Rabindra, 2022. "Impact of COVID-19 on the quantile connectedness between energy, metals and agriculture commodities," Energy Economics, Elsevier, vol. 109(C).
    28. Banaeian, Narges & Zangeneh, Morteza, 2011. "Study on energy efficiency in corn production of Iran," Energy, Elsevier, vol. 36(8), pages 5394-5402.
    29. Bazilian, Morgan & Rogner, Holger & Howells, Mark & Hermann, Sebastian & Arent, Douglas & Gielen, Dolf & Steduto, Pasquale & Mueller, Alexander & Komor, Paul & Tol, Richard S.J. & Yumkella, Kandeh K., 2011. "Considering the energy, water and food nexus: Towards an integrated modelling approach," Energy Policy, Elsevier, vol. 39(12), pages 7896-7906.
    30. Tomohiro Ando & Matthew Greenwood-Nimmo & Yongcheol Shin, 2022. "Quantile Connectedness: Modeling Tail Behavior in the Topology of Financial Networks," Management Science, INFORMS, vol. 68(4), pages 2401-2431, April.
    31. Ruth J. Maddigan & Colleen Gallagher Rizy & Wen S. Chern, 1982. "The Irrigation Demand for Electricity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(4), pages 673-680.
    32. Martin-Gorriz, B. & Soto-García, M. & Martínez-Alvarez, V., 2014. "Energy and greenhouse-gas emissions in irrigated agriculture of SE (southeast) Spain. Effects of alternative water supply scenarios," Energy, Elsevier, vol. 77(C), pages 478-488.
    33. Olivier Blanchard & Roberto Perotti, 2002. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1329-1368.
    34. Claudia Ringler & Dirk Willenbockel & Nicostrato Perez & Mark Rosegrant & Tingju Zhu & Nathanial Matthews, 2016. "Global linkages among energy, food and water: an economic assessment," Journal of Environmental Studies and Sciences, Springer;Association of Environmental Studies and Sciences, vol. 6(1), pages 161-171, March.
    35. Mark W. Rosegrant & Tingju Zhu & Siwa Msangi & Timothy Sulser, 2008. "Global Scenarios for Biofuels: Impacts and Implications ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(3), pages 495-505.
    36. Diebold, Francis X. & Yilmaz, Kamil, 2012. "Better to give than to receive: Predictive directional measurement of volatility spillovers," International Journal of Forecasting, Elsevier, vol. 28(1), pages 57-66.
    37. Chai, Li & Liao, Xiawei & Yang, Liu & Yan, Xianglin, 2018. "Assessing life cycle water use and pollution of coal-fired power generation in China using input-output analysis," Applied Energy, Elsevier, vol. 231(C), pages 951-958.
    38. Scherer, Laura & Pfister, Stephan, 2016. "Global water footprint assessment of hydropower," Renewable Energy, Elsevier, vol. 99(C), pages 711-720.
    39. Steven H. Strogatz, 2001. "Exploring complex networks," Nature, Nature, vol. 410(6825), pages 268-276, March.
    40. Massimo Peri & Daniela Vandone & Lucia Baldi, 2017. "Volatility Spillover between Water, Energy and Food," Sustainability, MDPI, vol. 9(6), pages 1-16, June.
    41. Zhou, Yuanchun & Ma, Mengdie & Gao, Peiqi & Xu, Qiming & Bi, Jun & Naren, Tuya, 2019. "Managing water resources from the energy - water nexus perspective under a changing climate: A case study of Jiangsu province, China," Energy Policy, Elsevier, vol. 126(C), pages 380-390.
    42. M. Rodell & J. S. Famiglietti & D. N. Wiese & J. T. Reager & H. K. Beaudoing & F. W. Landerer & M.-H. Lo, 2018. "Emerging trends in global freshwater availability," Nature, Nature, vol. 557(7707), pages 651-659, May.
    43. Nikolaos Antonakakis & Ioannis Chatziantoniou & David Gabauer, 2020. "Refined Measures of Dynamic Connectedness based on Time-Varying Parameter Vector Autoregressions," JRFM, MDPI, vol. 13(4), pages 1-23, April.
    44. Ringler, C. & Willenbockel, D. & Perez, N. & Rosegrant, M. & Zhu, T. & Matthews, Nathanial, "undated". "Global linkages among energy, food and water: an economic assessment," Papers published in Journals (Open Access) H047781, International Water Management Institute.
    45. Xiaozhi Xiang & Jesper Svensson & Shaofeng Jia, 2017. "Will the energy industry drain the water used for agricultural irrigation in the Yellow River basin?," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 33(1), pages 69-80, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bhattacherjee, Purba & Mishra, Sibanjan & Kang, Sang Hoon, 2024. "Extreme time-frequency connectedness across U.S. sector stock and commodity futures markets," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 1176-1197.
    2. Zhou, Xiaoran & Enilov, Martin & Parhi, Mamata, 2024. "Does oil spin the commodity wheel? Quantile connectedness with a common factor error structure across energy and agricultural markets," Energy Economics, Elsevier, vol. 132(C).
    3. Ghosh, Bikramaditya & Pham, Linh & Gubareva, Mariya & Teplova, Tamara, 2023. "Energy transition metals and global sentiment: Evidence from extreme quantiles," Resources Policy, Elsevier, vol. 86(PA).
    4. Bikramaditya Ghosh & Dimitrios Paparas, 2023. "Is There Any Pattern Regarding the Vulnerability of Smart Contracts in the Food Supply Chain to a Stressed Event? A Quantile Connectedness Investigation," JRFM, MDPI, vol. 16(2), pages 1-12, January.
    5. Asadi, Mehrad & Tiwari, Aviral Kumar & Gholami, Samad & Ghasemi, Hamid Reza & Roubaud, David, 2023. "Understanding interconnections among steel, coal, iron ore, and financial assets in the US and China using an advanced methodology," International Review of Financial Analysis, Elsevier, vol. 89(C).
    6. El Khoury, Rim & Alshater, Muneer M. & Li, Yanshuang & Xiong, Xiong, 2024. "Quantile time-frequency connectedness among G7 stock markets and clean energy markets," The Quarterly Review of Economics and Finance, Elsevier, vol. 93(C), pages 71-90.
    7. Zhang, Jiahao & Zhang, Yifeng & Wei, Yu & Wang, Zhuo, 2024. "Normal and extreme impact and connectedness between fossil energy futures markets and uncertainties: Does El Niño-Southern Oscillation matter?," International Review of Economics & Finance, Elsevier, vol. 89(PB), pages 188-215.
    8. Urom, Christian & Ndubuisi, Gideon, 2023. "Do geopolitical risks and global market factors influence the dynamic dependence among regional sustainable investments and major commodities?," The Quarterly Review of Economics and Finance, Elsevier, vol. 91(C), pages 94-111.
    9. Ghosh, Bikramaditya & Pham, Linh & Teplova, Tamara & Umar, Zaghum, 2023. "COVID-19 and the quantile connectedness between energy and metal markets," Energy Economics, Elsevier, vol. 117(C).
    10. Huang, Shoujun & Bossman, Ahmed & Gubareva, Mariya & Teplova, Tamara, 2024. "International transmission of shocks and African forex markets," Energy Economics, Elsevier, vol. 131(C).
    11. Le, Trung H. & Pham, Linh & Do, Hung X., 2023. "Price risk transmissions in the water-energy-food nexus: Impacts of climate risks and portfolio implications," Energy Economics, Elsevier, vol. 124(C).
    12. Zhao, Wandi & Gao, Yang, 2024. "Dynamic patterns and the latent community structure of sectoral volatility and jump risk contagion," Emerging Markets Review, Elsevier, vol. 59(C).
    13. Zhang, Hongwei & Zhang, Yubo & Gao, Wang & Li, Yingli, 2023. "Extreme quantile spillovers and drivers among clean energy, electricity and energy metals markets," International Review of Financial Analysis, Elsevier, vol. 86(C).
    14. Abricha, Amal & Ben Amar, Amine & Bellalah, Makram, 2024. "Commodity futures markets under stress and stress-free periods: Further insights from a quantile connectedness approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 93(C), pages 229-246.
    15. Chen, Huayi & Shi, Huai-Long & Zhou, Wei-Xing, 2024. "Carbon volatility connectedness and the role of external uncertainties: Evidence from China," Journal of Commodity Markets, Elsevier, vol. 33(C).
    16. Abdullah, Mohammad & Abakah, Emmanuel Joel Aikins & Wali Ullah, G M & Tiwari, Aviral Kumar & Khan, Isma, 2023. "Tail risk contagion across electricity markets in crisis periods," Energy Economics, Elsevier, vol. 127(PB).
    17. Asadi, Mehrad & Roudari, Soheil & Tiwari, Aviral Kumar & Roubaud, David, 2023. "Scrutinizing commodity markets by quantile spillovers: A case study of the Australian economy," Energy Economics, Elsevier, vol. 118(C).
    18. Armah, Mohammed & Amewu, Godfred, 2024. "Quantile dependence and asymmetric connectedness between global financial market stress and REIT returns: Evidence from the COVID-19 pandemic," The Journal of Economic Asymmetries, Elsevier, vol. 29(C).
    19. Shang, Jin & Hamori, Shigeyuki, 2024. "Quantile time-frequency connectedness analysis between crude oil, gold, financial markets, and macroeconomic indicators: Evidence from the US and EU," Energy Economics, Elsevier, vol. 132(C).
    20. Shi, Huai-Long & Zhou, Wei-Xing, 2022. "Factor volatility spillover and its implications on factor premia," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:133:y:2024:i:c:s0140988324002299. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.