Mediterranean Economies 2023
DOI: 10.1401/9788815411167/c9
Almost a year after
Russia invade Ukraine, global market prices for key food items
have returned to pre-war levels. Nevertheless, it is too early
to declare the crisis over: food prices were on the rise before
the war began, and they remain high compared to mid-2021 levels;
global food stock levels also remain tight, and with no
immediate prospect for peace in Ukraine and extreme weather
events affecting many parts of the world, prices are likely to
remain volatile [Caprile and Pichon 2022].
Global increase and
volatility in food, energy and fertilizer prices entail
heterogeneous consequences for countries depending on their
underlying conditions and vulnerabilities.
¶{p. 310}
To understand the
impacts of the Ukraine crisis on the Mediterranean region, it is
important to identify the nature and degree of countries’
vulnerability regarding both the WEF nexus and components. A
first step towards this direction is introducing the WEF nexus
concept to describe the causal linkages and trade-off
relationships between WEF resources, focusing on the MENA
region.
2. The Water-Energy-Food (WEF) nexus in the Mediterranean region
According to the
Food and Agriculture Organisation of the United Nations (FAO),
the WEF nexus indicates that water, energy and food security are
very much linked, meaning that the actions in one sector can
often affect one other sector or both [FAO 2014]
[8]
. The interactions among WEF are numerous and
significant: energy depends on water for power generation, the
extraction, transport and processing of fossil fuels, and the
irrigation of biofuel crops [IRENA 2015]; water provision
depends on energy for its abstraction, purification and
distribution; and food production needs water and energy to
produce, process and transport food [FAO 2014]. It then follows
as a corollary that impacts on one resource, whether from the
demand or supply side, affect all other WEF resources and
thereby the entire production or consumption chain. Recognising
this, the policies that govern these resources are also
interrelated. Nevertheless, the management of these interlinked
resources is usually handled by separate institutions to
facilitate decision-making in addressing sector-specific
challenges and demands. This approach overlooks the
interdependences between resources, triggering
¶{p. 311}inefficiencies and trade-offs
throughout the nexus [Giordano and Quagliarotti 2020].
The term nexus is
bi-dimensional, contemporarily describing a conceptual and a
governance framework [Harwood 2018]. As a conceptual framework,
it provides a systemic understanding of the interconnections of
WEF resources; as a governance framework, it draws attention to
the interdependencies between the management of different
resources and raises questions on the limits of single-resource
governance models.
The WEF nexus is
particular evident in the Mediterranean region, especially in
the MENA countries, where it is driven by many natural,
demographic, socio-economic and political factors that intensify
the nexus interlinkages.
Several nexus
studies point out that in the MENA region, the need to meet the
growing demand for water, energy and food in a climate change
and increasingly resource-constrained scenario, associated with
resources inefficiency and WEF sectoral policy, has fuelled a
vicious circle that has ended up favouring trade-offs rather
than amplifying synergies between sectors, with significant
implications at the domestic, international and global scale
[FAO 2014; Borgomeo et al. 2018].
At the domestic
level, in the last three decades, the MENA region has
experienced rapid population growth and accelerated
socio-economic development, which have contributed to increased
water, energy, and food demands. However, raising demands are
not only associated with demographic and socio-economic trends,
but also to low efficiency throughout the WEF nexus. The prices
of energy, water and food are strongly affected by subsidies,
which do not reflect changes in resources scarcity, the cost of
the service, and the true economic relationship between
resources.
These market
distortions encourage higher consumption, inefficiencies, loss
and waste, and prevent cost recovery from infrastructure
investments and operation. To make essential energy services
available to low-income users, fuels and electricity are
subsidized at rates averaging in excess of 50 per cent of the
supply cost, with energy subsidies representing more than 9 per
cent of GDP in many countries [IRENA 2015]. However, energy
subsidies tend to promote unsustainable consumer behaviour, send
the wrong signals to consumers and suppliers, affect the
economic viability of sustainable energy sources, contribute to
¶{p. 312}environmental pollution and greenhouse
gases (GHG) emissions, and worsen governments’ finances. In
addition, due to perceived cultural and religious
considerations, the average price charged for water in the MENA
region is about 35 per cent of the cost of production. In the
case of desalinated water, it is only 10 per cent [IRENA 2015].
The availability of
inexpensive and heavily subsidized water has led to overuse and
waste in the agricultural and municipal sectors. Yet water
remains a scarce resource in almost every country.
Moreover, Arab
governments maintain their obligations to the social contract by
providing low-priced food to the population, creating a
dangerous bidirectional link between internal stability and the
price of primary commodities. When subsidies within each WEF
system are connected across the nexus, negative externalities
and distortions can be multiplied, triggering inefficiencies and
trade-offs throughout the nexus.
Inefficiencies,
market distortions and high negative externalities are
particular evident in fossil fuel-producing countries, where the
WEF nexus is heavily oil-dominated. Here, the relative abundance
of energy sources helps to support many of the basic resources,
in terms of both availability and affordability, obscuring any
shortages in the other components of the nexus. The ability to
increase water supply as well as support domestic agricultural
production is strongly dependent on the rent from oil, which
allows countries to finance the production of non-conventional
water (i.e., seawater and brackish groundwater desalination, and
treated wastewater) and agricultural goods (i.e., using highly
controlled environmental conditions in closed agricultural
systems) overcoming the internal geoclimatic constraints.
At the
international level, the trade dimension of the WEF nexus
appears an effective solution to tackle domestic nexus
challenges. The MENA countries are faced with serious challenges
in their objective to achieve food security locally due to
several constraining factors, including high aridity, limited
cultivable land, scarce water resources and serious implications
of climate change. As domestic production of water-intensive
food is not an efficient way of using scarce natural resources,
governments have generally adopted a trade-oriented food
security strategy based on the neoclassical theory of
international comparative advantage. In
¶{p. 313}this way, they have «externalised» the
pressure on their nations’ own water resources by importing
water in virtual form (fig. 4)
[9]
.
Country/Sub-Region |
Food self-sufficiency
ratio (%) |
Cereal
self-sufficiency ratio (%) |
||||
2005 |
2011 |
2014 |
2005 |
2011 |
2014 |
|
Jordan |
56.26 |
53.09 |
66.6 |
5.05 |
3.66 |
3.7 |
Lebanon |
73.23 |
61.03 |
74.7 |
18.05 |
10.96 |
13.8 |
Syria |
85.23 |
80.62 |
84.3 |
74 |
57.98 |
47.86 |
Palestine |
81.55 |
72.26 |
79.3 |
19.69 |
10 |
9.48 |
West
Asia |
74.0675 |
66.75 |
76.225 |
29.1975 |
20.65 |
18.71 |
Algeria |
53.48 |
70.04 |
75.2 |
29.88 |
31.96 |
21.65 |
Egypt |
83.68 |
78.96 |
88 |
69.63 |
56.3 |
66.04 |
Libya |
44.95 |
43.09 |
38.3 |
10.79 |
7.06 |
9.49 |
Morocco |
89.6 |
80.4 |
100 |
46.09 |
58.96 |
68 |
Tunisia |
71.78 |
68.49 |
89.5 |
47.82 |
46.79 |
42.42 |
North
Africa |
68.698 |
68.196 |
78.2 |
40.842 |
40.214 |
41.52 |
Total |
71.38275 |
67.473 |
77.2125 |
35.01975 |
30.432 |
30.115 |
Source:
Saab [2017]. |
As a result,
international trade plays a key role in achieving macro-level
water and food security but, at the same time, it increases the
vulnerability of the MENA countries to the increase and
volatility of international food prices (tab. 4).
The international
dimension of the WEF nexus is particularly evident in
oil-producing countries, where revenues from oil exports allow
them to quickly offset low food production and scarce water
availability through virtual water imports. However, this
dependency is dynamic over time, increasing when oil prices are
low and/or food prices are high
[10]
. {p. 315}
The challenges of
meeting the growing demand for WEF resources are expected to be
further compounded by the impacts of climate change, which links
the domestic WEF nexus to the global scale. As the demand for
WEF resources increases in the context of climate change
impacts, not only do the nexus interlinkages intensify, but also
direct competition or trade-offs between sectors increase,
limiting countries’ ability to meet the growing demand
sustainably [Markantonis et al. 2019].
Notably, climate change is a global challenge that both affects
and is affected by the WEF nexus through multiple bidirectional
interactions that intertwine within the web of WEF
interconnections. Climate change drives a series of phenomena
that have negative effects on water, energy and food security,
exacerbating nexus conflicts within the region: rising
temperatures, changes in precipitation patterns, extreme weather
events and sea-level rise may gradually alter the balance
between the nexus resources, and even the nature of their
interactions [Cramer et al. 2018]. At the
same time, water, energy and food production may increase GHG
emissions, thereby contributing to global warming. Furthermore,
current sectoral approaches to climate change mitigation and
adaptation may amplify rather than reduce negative externalities
and trade-offs within the nexus. While some sector-oriented
mitigation and adaptation measures may have the potential to
trigger synergistic «win-win» opportunities across one or more
of the nexus sectors, other measures, such as hydropower, first
generation biofuels, the shift to non-conventional water
resources and agricultural intensification, are not always
nexus-smart. In addition, attempts to reduce GHG emissions in
order to achieve ambitions to combat climate change as expressed
in the Paris Agreement or to account for the social cost of
carbon may influence demand for oil and/or its price, reducing
the oil and gas revenues available to import food and desalinate
water in oil-exporting countries.
What emerges is a
rather dramatic picture, which outlines a WEF nexus fuelled by a
vicious cycle and particularly vulnerable to the impact of
climate change. As we seek to explain in the next section, the
war in Ukraine, due to its repercussions in the main global
commodity markets, is further jeopardizing all components of the
nexus, both directly and indirectly.{p. 316}
3. The impact of the Ukraine war on WEF resources in the Mediterranean region
Russia’s
unjustified and unprovoked war against Ukraine has greatly
impacted markets for both global energy and food, entailing
disparate consequences for countries according to their
underlying conditions and vulnerabilities.
Focusing on the
European level, before the outbreak of war, the EU was heavily
dependent on Russia: 40 per cent of its gas and nearly a third
of its oil supplies were of Russian origin [European Union
2023]. In March 2022, in light of the Russian invasion of
Ukraine, EU leaders agreed to phase out European dependency on
Russian fossil fuels, with important implications in terms of
access to energy sources in the member states. The energy crisis
has posed several key challenges, especially as it is strongly
intertwined with wider climate, economic and societal
considerations. It entails trade-offs between short-term energy
security goals versus long-term climate-mitigation targets, or
security of supply versus energy costs.
The transition
towards a climate-neutral economy is high on the agenda at both
the EU and member state levels. The EU aims to become a global
leader in the fight against climate change by establishing a new
model of energy security, stable over the long term and in line
with its ambitious climate goals, as pointed out in the European
Green Deal and the Fit for 55 package.
Simultaneously, the
oil crisis triggered by the Ukraine war has revealed the
fragility of the EU countries with respect to their energy
security, demonstrating the important role still played by
fossil fuels in the current energy mix and highlighting the
limits of the slow pace of the energy transition towards
renewables. In particular, the Ukrainian war and the resulting
increases in energy prices have significantly affected the three
pillars of the energy trilemma (energy reliability,
affordability and sustainability), underscoring that the energy
transition is neither easy nor immediate as naively thought
[11]
. {p. 317}
From the climate
change standpoint, the war is contributing to two countervailing
dynamics [Mecklin 2023]. Firstly, many European countries are
rushing to find alternative sources of fossil fuels, re-opening
coal-burning plants and investing in oil and gas abroad. Thus,
in the short run, one of the dimensions of the energy trilemma,
sustainability, seems destined to be shelved in favour of energy
security. At the same time, the shock waves in global energy
markets have strengthened the urgency of the energy transition
and the need to reduce dependency on fossil fuel supplies.
Consequently,
sufficient hydrocarbon resources and investments will still have
to be made available to satisfy energy needs while countries
progress toward transitioning to carbon-neutral power
generation. So, the EU should find a way to achieve a balance
between mitigating short-term critical impacts and a
significantly accelerated energy transition.
As regards food
security, food availability has not been at stake. The EU is
self-sufficient mainly in essential agricultural products.
However, the EU is a considerable net importer of specific
products that may be difficult to substitute in the short term,
such as sunflower oil and seafood [European Union 2023]. If
roughly the availability of food necessary for the European
countries is not at risk thanks to the good stability of the
Single Market, the surge in energy and fertilizer prices has
caused an increase in agricultural production costs, with
negative consequences on farm incomes and the purchasing power
of consumers. In particular, the EU’s vulnerability to market
distortions in the fertilizer trade may be especially acute,
since fertilizers represents 18 per cent of input costs for
arable crops. The EU relies on Belarus and Russia for 59 per
cent of its potassium fertilizer imports, while 31 per cent of
its nitrogen fertilizer imports comes from Russia [European
Union 2023]. As a result, food affordability for low-income
households, already affected by the pandemic, may be further
jeopardised.
In the MENA region
as a whole, the impact of the Ukraine crisis in terms of WEF
resources is strictly related to its socio-economic and
agro-ecological profile. However, when the analysis moves from a
regional to a national level, it emerges that the global
increases in food, energy and fertilizer prices triggered by the
war entail heterogeneous consequences for countries
{p. 318}depending on their underlying specific
conditions, which imply varying degrees of vulnerability.
The MENA region is
generally described as energy-intensive, water-scarce,
food-deficient and highly vulnerable to the impacts of climate
change [Al-Zubari 2016]. It is one of the wealthiest regions of
energy resources such as oil and gas, holding about 57 per cent
of world’s oil reserves and 41 per cent of natural gas resources
[IRENA 2015]. Consequently, the region is bound to take
advantage of higher oil and gas prices. In addition, raising oil
production in line with OPEC+ announced quotas ensures that MENA
oil exporters also benefit from a positive quantity effect
[12]
.
Gas demand is also
expected to remain high given the willingness of European
economies to reduce dependence on Russian gas imports in the
next years. Rising energy prices and output translates into
higher petrodollar inflows for MENA, to the point that the
International Monetary Fund (IMF) has had to revise its forecast
for growth in the region as a whole by 0.9 percentage points to
5 per cent [IMF 2022]. However, this positive outcome masks
several negative effects within the region. Higher oil and gas
prices might push governments in oil-exporting countries to
delay the introduction of the necessary structural fiscal
reforms aimed at diversifying the revenue base and reducing
heavy subsidies, neglecting the opportunity to take advantage of
higher energy prices to implement long-awaited reforms towards
economic diversification and energy transition in line with the
Paris Agreement’s goals. In addition, while MENA oil and gas
exporters, most notably Saudi Arabia, the United Arab Emirates,
Qatar, Kuwait, Bahrain, Oman, Iraq, Iran, Algeria and Libya,
benefit from rising oil export revenues, which translates into
ameliorating external accounts, MENA non-oil-importing economies
suffer from rising energy import bills, which, in contrast,
contributes to inflation and loss of purchasing power.
The fallout from
the war in Ukraine also affects other components of the WEF
nexus as the MENA is one of the world’s most water-scarce
regions. While its population represents about 6 per cent of the
world population, its share of freshwater is limited to only 2
per cent [IRENA 2015]. {p. 319}
Water scarcity,
associated with constraints on agriculture land and
productivity, makes the region one of the most food
import-dependent areas in the world. Indeed, MENA countries have
acutely felt the impact of disruption from the Ukraine conflict
to global food production and exports. However, fiscal
disparities between oil exporting and importing countries are
equally marked also in terms of food security, with oil-rich
states enjoying far greater purchasing power than their regional
peers. Although oil-rich countries, such as the Gulf States,
import between 80-90 per cent of all the calories they consume,
and in some food categories, like cereals, they import 100 per
cent of their needs, higher energy prices have largely cushioned
them from food price spikes, allowing them to buy agricultural
commodities at any cost, without placing an excessive burden on
public finances. In contrast, in the energy importers, dramatic
inflation in both their food and fuel import bills has penalized
them significantly in terms of food accessibility and
affordability [Saab 2017]. Not only do they have to pay for more
expensive food imports, but their heavy dependence on wheat
imports from Russia and Ukraine makes them especially vulnerable
to the collapse of food exports from the Black Sea region.
Before the war, Egypt, Lebanon and Tunisia imported respectively
80, 70 and 50 per cent of their wheat needs from Russia and
Ukraine [Laborde and Mamun 2022]. Other MENA countries that are
reliant on imports of key food products from Russia and Ukraine
include Turkey, Syria and Libya.
Although the MENA
countries are looking for alternative markets for their cereal
supply, particularly India, the USA, Canada, Argentina and
Uruguay, the shift is not immediate and free of costs due to
longer shipping distances and the rise in fuel prices.
Soaring costs for
food staples have threatened household-level food security in
several import-dependent MENA countries, putting people’s
resilience at «breaking point», as the UN’s World Food Programme
has pointed out [WFP 2022]. In Egypt, the world’s largest
importer of wheat, this is especially true. The country consumes
around 21 million tons of wheat every year, 13 million of which
are imported. Egypt heavily relies on wheat to provide
subsidized bread to more than 60 million people, and higher food
and energy prices undermine the government’s ability to pay for
the $5.5 bn in food subsidies that keep the price of bread
within the reach of Egypt’s poor [WFP 2022].
{p. 320}
Guaranteeing food
affordability is a matter of food security and political
stability since food subsidies have historically helped
governments strengthen the legitimacy of their rule in the
absence of meaningful political participation. Today, many
analysts fear current food inflation and the consequential
impact on the State’s budget risk destabilising the country, as
a considerable share of the population would be affected
directly or indirectly by higher prices.
With the global
food crisis set to worsen in 2023 and, above all, in a scenario
of increasing climate variability, which portends the spectre of
multiple breadbasket failures, MENA governments perceive the
dangers of the region’s dependence on food imports and the
urgency of adopting effective measures to address food
insecurity at its roots. In the first instance, this will
require diversifying away from a concentration of grain imports
from any single region, notably the Black Sea. Furthermore, in
response to food security concerns, several countries may be
driven to abandon a trade-based food security strategy by
increasing their share in food self-sufficiency, neglecting the
principles of environmental sustainability and amplifying the
trade-off within the WEF nexus.
4. WEF policy options to minimize repercussions in the Mediterranean region
As shown above, the
Ukraine war, associated with climate change impacts, is
significantly affecting energy and food security with direct and
indirect consequences also for water resources.
Several policy
responses to tackle the Ukraine crisis have contributed to
severe market distortions, exacerbating global price increase
and instability. Indeed, as countries take action to respond to
high prices and other fallout from the war, they should take
care to avoid exacerbating the impacts for others. As previous
food price spikes have taught us, the best way to deal with
market shocks is to allow markets to work by removing
distortions and support the most vulnerable countries and
households via social safety nets and, where most needed,
through humanitarian assistance.
Furthermore, since
water, energy and food security are inextricably linked and the
WEF nexus includes the sectors mostly affected by the Ukraine
war, policy response in «silo» to ensure
{p. 321}the supply of one nexus resource
without considering the interdependence of water, energy and
food security may amplify rather than reduce negative
externalities, risking fuelling a vicious circle that ends up
favouring trade-offs rather than amplifying synergies between
sectors. Consequently, effective solutions able to guarantee the
supply of such resources, minimizing repercussions throughout
the nexus, should be envisaged.
The MENA countries
have responded differently to the food security challenges posed
by the Russian-Ukraine war depending on existing environmental,
socio-economic and institutional contexts. In addition to some
of the instruments that have already been implemented, there are
additional short, mid, and long-term measures that countries
should consider both on the supply and demand sides.
In the very short
run, protecting vulnerable households against food price hikes
is crucial. Social safety nets can be practical tools to support
low-income people against this crisis and several countries are
expanding existing social protection programmes to cover more
households [WFP 2022]. In particular, a cash transfer system to
poor households, which is proven to be effective and more
cost-efficient than food subsidies and in-kind food distribution
as successful Egypt’s Takaful and Karama programmes have shown,
should be reintroduced [Breisinger et al.
2018].
In the short term,
countries should diversify their wheat supply, carefully
weighing the costs and benefits of such an «insurance» mechanism
since wheat supply from the Black Sea usually comes at lower
costs compared to other regions such as Europe or the USA. In
Egypt, for example, the General Authority for Supply Commodities
(GASC) is actively exploring the diversification of import sources
[13]
. {p. 322}
In the longer term,
countries need to explore food security strategies to balance
the benefits of trade openness with the potential costs of
vulnerability to trade shocks. In a scenario of increasing food
market instabilities, MENA governments may start to consider
greater levels of domestic food production as part of their
national aggregate food security policies. Although from a
political and strategic point of view such an approach may be
justified in that it can help stabilise domestic food prices and
reduce vulnerability to international markets and reliance on
other countries, it comes at an economic cost. This is because
the resource endowments of most MENA countries are not well
suited to food production, particularly cereal production, and
their comparative advantages lie in other economic activities.
To overcome such barriers, countries should focus on what could
be called «macro food sovereignty» by combining self-sufficiency
and trade-based food security strategies incentivizing the
cultivation of local species of crops more suited to their
geoclimatic condition [Quagliarotti 2023]. Countries could thus
help build more sustainable and diverse food systems, enhancing
levels of agrobiodiversity and improving nutritional outcomes
while helping diminish MENA region’s over-dependence on food
imports. However, boosting domestic crop production may be
challenging even in countries with opportunities to expand
arable areas because agricultural systems must adapt to address
water shortages and climate change. This suggests the need for
additional research and efforts to increase the production of
alternatives to wheat, including drought-tolerant sorghum,
millet and high value export crops, and to support
climate-resilient farming systems such as drip irrigation and
solar-powered irrigation systems [Abay et
al. 2023].
On the demand side,
there are important differences among countries in terms of
their potential to reduce reliance on wheat. Reducing the high
consumption of wheat has significant potential in Egypt where
the average annual consumption is about 145 kg per capita,
double the global average. Shifting consumption from wheat to a
more diverse set of food products can serve a dual purpose:
improving Egypt’s wheat self-sufficiency and addressing
malnutrition [FAO 2022]
[14]
. Another threat to food
{p. 323}security for the MENA region is food
loss and waste. Reducing food loss and waste across the entire
value chain, from the early stages (production, handling,
processing and distribution) to the consumer and retail levels,
would help reduce expensive food imports, freeing up fiscal
resources to fund social safety nets for the most vulnerable
households.
Since energy
represents both a critical input along different stages of the
water and food supply chain and the largest source of GHG
emissions, the energy transition should be considered the first
step towards sustainable integrated solutions able to enhance
security and sustainability across WEF sectors, while supporting
global climate ambitions. The joint development of
non-conventional water and energy sources, i.e., desalinated
water and renewable energy, could address water and energy
security challenges by combining economic efficiency and social
equity under the constraint of environmental protection
[Giordano and Quagliarotti 2020].
In the MENA
countries, renewable energy may provide access to a
cost-effective, secure and environmentally sustainable supply of
energy, simultaneously triggering spill-over effects throughout
the WEF nexus. The MENA region has a high potential in renewable
energy development, especially solar, due to the presence of
vast desert lands with a solar radiation density ranging between
1,300 and 2,500 kWh/m2 per year
[IRENA 2015]. Generally, renewable energy technologies are less
water-intensive than conventional options: water needs for solar
photovoltaics (PV) is negligible compared to conventional
thermoelectric generation, withdrawing up to 200 times less
water to produce the same amount of electricity [IRENA 2016]. In
addition to contributing to significant water savings, clean
energy can be used to increase non-conventional water supply
more sustainably, especially desalinated water, whose production
is still affected by high economic and environmental costs due
to the considerable amount of fossil energy required to feed the
reverse osmosis. Therefore, the use of renewables may not only
satisfy the energy demand of countries that do not have
sufficient oil reserves, but also improve the resilience and
adaptive capacity of those countries that, due to environmental
constraints and the scarcity of two strategic resources for
human well-being – water and food, are more vulnerable to the
impact of climate change. {p. 324}
To enhance the
transition towards a mix of renewable energy and desalinated
water, several measures and actions should be undertaken, such
as reforming the subsidy and tax system to «internalise»
environmental and social costs [Burnett and Wada 2018];
encourage the development of renewable energy technologies with
the help of international financing, develop innovative means of
financing, and remove institutional, technical, regulatory and
economic barriers [Halalsheh et al. 2018];
strengthen the nexus between non-conventional energy (renewable)
and water sources (treated wastewater and desalinated water) to
address both climate change mitigation and adaptation; promote
cross-sectoral projects; and incorporate the key principles of
green and circular economy into the WEF nexus.
In addition, given
the variability in the unequal distribution of the WEF resources
throughout the Mediterranean region as well as the
ever-increasing pressures on them, it is necessary that the
Mediterranean countries strengthen their cooperation to face WEF
challenges in a complementary manner. However, there is
traditionally a low level of cooperation between countries,
which often express different goals, agendas and priorities in
addressing the complex nexus between WEF sectors. Nevertheless,
in the last decade, key regional and sub-regional institutions
have expressed an interest in exploring the nexus approach,
including the EU, the Regional Cooperation Council (RCC), the
League of Arab States (LAS), the Union for the Mediterranean
(UfM) and the Barcelona Convention (MAP/UNEP).
At the EU policy
level, the WEF nexus is included in the Renewable
Energy Directive, the Green
Infrastructure Communication, and it is
in line with the vision and the objectives of the EU
Green Deal, which is a cross-sector
reform project aiming to make the EU’s economy sustainable by
turning climate and environmental challenges into opportunities
across all policy areas [Medinilla 2021].
In the MENA region,
the WEF nexus has gained increased attention in the
Arab Strategy for Water Security in the
Arab Region 2010-2030, the Arab
Sustainable Agricultural Development Strategy 2005
to 2025, and the Pan-Arab
Strategy for the Development of Renewable Energy
Applications 2010-2030, which suggest the
need for integrated WEF and climate change solutions,
identifying non-conventional water and renewable energy as key
elements {p. 325}for increasing nexus
sustainability and efficiency [IEA-ETSAP and IRENA 2012].
Furthermore,
strengthening countries’ WEF nexus cooperation on different
bilateral and multilateral levels is crucial to face the
scarcity of, guarantee access to and affordability of food,
water and energy. From this point of view, the principle of
comparative advantage applied to the WEF nexus can act as an
effective tool to amplify synergies and complementarities
between countries. Taking into consideration countries’
different factor endowments, each country should specialize in
the production and exchange of that good for which it has a
lower opportunity cost than other countries. All countries may
gain from this WEF exchange model because the potential WEF
nexus net benefits may increase when complementarities and
synergies among sectors cross national borders.
This approach
should be adopted at both sub-regional and regional level. At
the sub-regional level, MENA countries may gain from the mutual
dependencies triggered by this model of sub-regionally
integrated water and energy sectors, enforcing interdependencies
among countries and addressing water, energy and food security
in an economically efficient and environmentally sound manner
[IUCN and ROWA 2019]. The Pre-Feasibility Study for
Mid-East Water-Renewable Energy Exchanges
carried out jointly by EcoPeace Middle East and the
Konrad Adenauer Foundation demonstrates the potential benefits
when the nexus approach crosses national borders, allowing
countries to cooperate to achieve greater economic efficiency in
resources management [Katz and Shafran 2017]. To achieve this
objective, the study considers three countries – Israel, Jordan,
and Palestine – in a cooperation model for the concrete
application of the international trade theory of comparative
advantages by increasing interdependencies among states. Given
the constraints in terms of energy and water security and the
disparities between countries in terms of factor endowments, the
project takes as a reference states’ relative resources
abundance to build a non-conventional water-energy exchange
model among the three countries. All countries will gain from
this regionally integrated water and energy sector model,
enhancing common social, economic, and environmental goals.
At the regional
level, great opportunities may arise from a Euro-Mediterranean
partnership in the field of renewables, which
{p. 326}goes beyond conventional trade
relations in the energy sector to realize concrete «win-win»
projects of common interest. Taking into consideration the
geo-climatic advantages of the MENA region in solar energy, the
increased production of renewable energy may be used to feed a
virtuous and integrated EU/MENA WEF system able to maximise
positive externalities through the creation of a sustainable
circuit powered by a North-South flow of technology, know-how,
capital and agricultural products (virtual water), and a reverse
flow of clean energy. As a co-product of solar power plant
expansion in MENA countries, a large amount of seawater could be
desalinated to overcome the projected water shortages in the
region [Kennou et al. 2018].
Such an innovative
Euro-Mediterranean cooperation model could represent a first
step to facing the challenges triggered by the Ukraine and
climate change crises, addressing both the growing energy demand
of the European countries hungry for non-fossil energy sources
and the growing water demand of the Arab countries thirsty for
virtual and non-conventional water resources.
Conclusions
The Ukraine war is
representative of the modern risks the world is facing,
generated by global change (i.e., climate change or biodiversity
loss) and increased integration between economies (i.e.,
globalization and market concentration) in a novel geological
epoch shaped by a significant human pressure on natural systems
(the Anthropocene).
The conflict has
caused a massive shock to the global economy, especially to
energy and food markets, decreasing supply and pushing up prices
to unprecedented levels. Compared with other economic regions,
the Mediterranean area has been particularly affected by the
economic consequences of Russia’s invasion of Ukraine. In
particular, the Ukraine crisis has highlighted the extreme
vulnerability of the Mediterranean countries in terms of water,
energy and food security, which are inextricably linked in the
region. Indeed, the WEF nexus represents a growing challenge,
mainly driven by a vicious circle that amplifies trade-offs
rather than synergies between sectors [Zhang et
al. 2018].{p. 327}
In the European
countries, the ongoing energy crisis has sent mixed signals. On
the one hand, securing short-term energy needs has prompted an
urgent search for readily available, conventional energy
supplies, such as oil and gas; on the other, the unfolding
energy security crisis has been a reminder for member states
about the importance of adopting energy self-sufficiency
supplies, such as renewables.
The MENA region has
been affected by the conflict in Eastern Europe in several ways,
primarily through the substantial surge in food and energy
prices and disruptions of the global supply chains.
However, the impact
of the war on these countries has been different, with oil and
food importers primarily hit by the conflict’s economic
shockwaves. Even though food prices have receded to pre-war
levels, exposure to trade disruptions remains a constant concern
in this import-dependent region.
Consequently, today
the main challenges are how to provide Europe with clean energy
supplies and the MENA region with increasing food and water
supplies.
Applying a WEF
nexus approach in the Mediterranean region based on the
principle of comparative advantage may create a unique
opportunity to mitigate the trade-offs and address pressing
water, energy and food challenges both at national and regional
level.
Currently, there is
no sector like that of energy where Euro-Mediterranean
cooperation should be strengthened to favour WEF synergies and
complementarities among countries. Building long-term WEF
partnerships to feed the nexus with the exchange of renewable
energy, virtual and non-conventional water means placing the
Mediterranean region within a virtuous WEF nexus of trade,
growth and peace. The WEF nexus approach is not a «silver
bullet» aimed at solving development and environmental
challenges in the Mediterranean, but it could provide an
opportunity to minimize security risks and maximize
opportunities, enhancing resource efficiency and equity between
countries and helping the region move towards achieving the
Sustainable Development Goals (SDGs) and meeting the commitments
under the Paris Agreement. {p. 328}
Note
[8] Water security has been defined as «the reliable availability of an acceptable quantity and quality of water for health, livelihoods and production, coupled with an acceptable level of water-related risks»; energy security has been defined as «access to clean, reliable and affordable energy services for cooking and heating, lighting, communications and productive uses», and as «uninterrupted physical availability [of energy] at a price which is affordable, while respecting environment concerns»; food security is defined as «availability and access to sufficient, safe and nutritious food to meet the dietary needs and food preferences for an active and healthy life». Adequate food has also been defined as a human right [FAO 2014].
[9] The virtual water concept was coined by Tony Allan in 1993 to describe the hidden flow of water in food or other commodities that are traded from one place to another. For example, cereal grains have been major carriers of virtual water in countries where water resources are scarce. Therefore, cereal imports can play a crucial role in offsetting local water deficit [Allan 1998].
[10] Keulertz and Woertz [2016] explicitly underline the importance that energy exports have for steering the Gulf States towards food imports as an alternative to improving their WEF resource management, but they also highlight how reducing domestic trade-offs can lead to higher exposure internationally.
[11] In Italy, the effects of the significant reduction in Russian supply have been particularly pronounced due to the high percentage of gas in Italy’s energy supply (45 per cent), combined with its dependence on imports in the energy sector (75 per cent in 2021), due to the country’s scarcity of gas fields and the environmental concerns and legal constraints that have hindered gas extraction in the past [Caprile and Pichon 2022].
[12] OPEC+ is a group of 23 oil-exporting countries which meets regularly to decide how much crude oil to sell on the world market.
[13] GASC is an Egyptian economic body affiliated to the Ministry of Supply and Home Trade established by Republican Decree No 1189/1968 to overcome the crises arising in the Egyptian market during 1967 and in subsequent years. It aims to activate the local and international market mechanism in order to procure the strategic commodities needed by the state so as to achieve the following targets: improve productivity and raise agricultural production efficiency; develop marketing and promotional services; establish strategic governmental food stocks; achieve structural suitability within the state marketing system; create competitiveness, prohibit monopoly and make the local market balanced (http://www.gasc.gov.eg).
[14] Egypt has high rates of overweight and obesity, which are linked to food subsidies and associated consumption of energy-dense foods.