With rising population, an expanding middle class, changing lifestyles and climate change putting a strain on resource availability, achieving food, energy and water security is becoming a prime concern.

By 2050, India is expected to be the world’s most populous country with 1.7 billion people, and the world’s second largest economy with a GDP of $42 trillion (in PPP terms). It is estimated that India would require to increase its annual food production by 30 per cent, to 333 million tonnes. In addition, more than 880 GW of new power generation capacity would be required by 2040.

Thus, a new paradigm is needed to manage these resources better.

In many ways, food, energy and water (FEW) are interlinked with complex and dynamic interactions, and vulnerability in one could directly translate to vulnerabilities in the others.

For example, agriculture and food production is the largest consumer (about 80 per cent) of freshwater resources in India and irrigation is primarily dependent on groundwater extraction, which requires electricity. Similarly, poor agricultural practices lead to inefficient use of energy and water.

Complex connections

Given that 60 per cent of India’s total power production capacity is thermal power, energy production is water-intensive. In fact, 50 per cent of industrial water used in India is for energy production. There are other major issues as well, such as the increasing water pollution due to industrial effluents or fertiliser run-offs, and erratic weather patterns.

Making decisions without considering the impact of one on the other has limited positive impact. For example, using power subsidies for agriculture as a tool to achieve food security has promoted the overuse of groundwater. Rising water stress is now raising serious questions about agricultural sustainability. Depletion of the groundwater table has resulted in regulations such as the guidelines issued by the Central Ground Water Authority in November 2015, which negatively impact industrial activity, including power production.

It is apparent that the traditional approach of managing each FEW component independently is no longer an option. A holistic approach would reduce negative externalities and trade-offs, build synergies and increase overall resource-use efficiency, and improve productivity.

Success stories

A holistic approach has resulted in success stories, though sporadic. ‘Climate smart agriculture’ in several States has demonstrated the possibility of saving water and energy while raising yields in a cost-effective manner. For example, a technique of rice cultivation without flooding the fields, has benefited farmers in Andhra Pradesh, Tripura, West Bengal, among several others, with a higher yield while requiring 30 to 50 per cent less water. The Integrated Watershed Development Programme launched by the Government in 2008 and led by Nabard, played an important role in recharging groundwater as well as achieving crop yield improvement in several States, including Karnataka and Andhra Pradesh. Such examples further bolster the case for a nationwide adoption of the nexus approach.

The role of the industrial and financial sectors towards nexus-friendly infrastructure augmentation is vital as well in the face of the growing competition to access limited resources. Adopting energy and resource-efficient technologies and processes in manufacturing and agriculture could be the lowest hanging fruit to begin with, and efforts towards this are already visible across sectors.

Sector-wide adoption of risk assessment tools and reporting structures linked to resource use, such as natural capital accounting, would be essential, and there is need for enterprises, investors and lenders to push for greater adoption of such frameworks. Project financiers, including investors and financial institutions, can play a catalytic role in promoting the FEW nexus approach for project design and development, and mainstreaming it across the economy.

In conclusion, the effective management of food, energy and water, three crucial elements in the economy, is necessary for India to achieve its developmental objectives. The synergistic approach towards managing FEW as an inter-dependent ecosystem provides this opportunity and would support India’s shift towards a low-carbon economic growth trajectory.

The writer is the MD & CEO of YES Bank and chairman of YES Institute

Published on March 14, 2017