INTRODUCTION
Food, water, and energy are essential resources for human existence and development, as they form the basis for all human life and the evolution of all societies Nowadays, water, food, and energy shape complex inter-connections in different ways Water is essential for agricultural cultivation and food production, and is a fundamental input for energy (electricity) generation Meanwhile, energy is critical for water processing and transportation Similarly, energy is fundamental for food production and all operations across the entire food supply chain, from cultivation to production and transportation The inter-linkages between these resources have become increasingly complicated with the increasing scarcity of such natural resources as water, land, and primary energy resources, including coal and oil
“Agriculture is both an energy user and energy supplier through biofuels” (IHE Delft, 2018) Agriculture, especially food production and energy (electricity) generation from hydropower are highly land- and water-intensive, both agriculture and energy are getting to over-consume the available land and water of the country Other types of energy generation sources—for example, coal, oil, gas, and nuclear—would also impact water quality and reservoir FAO (2014) reported that food production consumes up to 70% of global water use, and 30% of global energy use Looking forward to 2030, global energy, food, and water demands are estimated to increase by 30% (IEA, 2017), 50% (FAO, 2017), and 55% (OECD, 2012), respectively Major contribution to this growth will come from rapid population and economic growth, and urbanisation (Hoff, 2011) By 2025, water supply is estimated to decrease globally, to below 1,700 cubic meters per person annually, and two-thirds of the world population might live under water-stressed conditions—less than 500 cubic meters per person annually—while developing countries will be impacted the most (UN Water, 2012)
The existing institutions and policy settings for energy, food and water sectors emphasize maximizing sectoral outputs and efficiency to support economic growth However, policies deployed in a particular sector do impact other sectors These institution and policy setting typically do not consider cross-sectoral impacts For example, energy policy would influence the water usage for food, energy, and other economic sectors, which would eventually impact on water intensity, availability, and water stress of the country, energy consumption, affordability, intensity, and efficiency as well
The discussion about food, water, and energy interconnection or nexus is particularly relevant for Vietnam, as the country currently faces significant economic-growth pressures The critical question is that how a natural resource-centric and external-factor- reliant economy like Vietnam will achieve and sustain the aspirational economic growth rates of between 7% and 8% per annum over the period 2015-2030 (Vietnam National Assembly, 2016; World Bank & MPI Vietnam, 2016) – in the backdrop of limited availability of indigenous energy, water and land resources; uncertainty of commodity prices and foreign investment Additionally, the environmental impacts associated with resource use are likely to come into conflict with the country’s Green Growth Strategy 1 that aims to significantly reduce carbon emissions over the next 15 years
“Shaking off the legacy of colonization and long-brutalizing conflicts” is tough, and embracing an uninterrupted pathway to prosperity and modernity, perhaps even tougher for Vietnam (Vu-Thanh, Tu-Anh, 2014), which spent millenniums fighting against foreign invasion by China, France and United State of America - to achieve independence from France in 1945, and reunification in 1975 Since the introduction of “Đổi Mới”
(Economic Reform) 2 in 1986, Vietnam has successfully transformed from among the
“world’s poorest, war-ravaged, closed and centrally planned economy”, to a middle- income economy with open markets and deeply integrated into global economy (World Bank, 2016; MPI Vietnam, 2016) During the period 1986-2013, for example, despite serious economic fluctuations and downturns caused by the collapse of Soviet Union in early 1991, Asian financial crisis in 1997, and recent Global Financial Crisis in 2007, economic growth of Vietnam has been stable and inclusive with average annual GDP growth rate ranging between 5.3% to 8.5% (MGI, 2012; World Bank, 2017)
1 Vietnam’s National Green Growth Strategy was issued by Prime Minister under Decision No 1393/QĐ- TTg, dated 25 Sept, 2012, aims to reduce the intensity of greenhouse gas emissions by 8%-10% during 2012-2020, 1.5%-2% towards 2030
2 Further details about “Đổi Mới” (Economic Reform) can be found in Porter, Gareth (1993) and Le Binh
Even after more than three decades since the introduction of “Đổi Mới” (Reform) in 1986, Vietnam’s economy is still highly dependent on natural resources and commodities, making the country heavily vulnerable to resources availability and commodity prices It is well recognized that a healthy economy should not be over-reliant on external factors including resource imports and volatile commodity prices – in the long run The economic development of Vietnam over the last three decades has therefore been only partially successful (Vu-Thanh, Tu-Anh, 2014) Some of the major impediments facing the country are the relationship between party-state and the private sectors; the inequality and unfairness in access to basic resources for economic growth by these two economic sectors; insufficient and undiversified architecture of production and economic structure, lack of long-term balanced strategies informed by technological advances; and the absence of holistic approaches and institutions that are capable of considering linkages between economy, energy, food and water
Vietnam is currently facing crucial challenges to achieve economic growth targets of 7% to 8% in the coming decades Some of the key impediments to achieve this target include unstable macroeconomic environment, poor labour productivity, weak financial sector, insecurity of key natural resources (energy, food and water) (MGI, 2012; UNDP, 2015)
Rapidly increasing demand of energy, food, and water, of 75%, 51% and 20%, respectively by 2030 in the backdrop of depleting resources is a critical hurdle for achieving targeted economic growth (MOIT and DEA, 2017; 2030 WRG, 2017) The country therefore requires prompt action to transform historical policy trends into innovative policies Availability of adequate, affordable and sustainable energy, food and water, and design of policies and institutions that are capable of considering diverse issues arising from interlinkages between these three resources are therefore critical
The linkages between food, water and energy are inherently complex, and becoming increasingly uncertain, which makes it difficult to predict their impacts on socio- economic development This research therefore analyses the impacts of alternative developmental pathways (scenarios) underscored by a range of energy, food, and water considerations on socio-economic development, and identifies policy trade-offs for the country for the period 2014-2030 To achieve this objective, the research applies a multi- disciplinary research approach, which enables the integration of various methods, such an historical analysis, input-output modelling, scenario analysis, and policy assessment to develop alternative pathways for future socio-economic growth of Vietnam In this context, the key challenges for Vietnam’s economic development in the backdrop of complex linkages between energy, food and water can be addressed as follows
Water scarcity and implications for agricultural irrigation and energy generation
Vietnam is an agricultural nation, with more than 12 million hectares (ha) of land dedicated for agricultural purposes; of which, 4 million ha is for rice cultivation alone (Tran, 2014) Water is the most important factor for rice cultivation in Vietnam Until recently, Vietnam was considered to be water-abundant nation, with water availability of 9,560 cubic meters per capita per year, obtained from over 2,360 rivers and lakes (DWRM, 2012; Nguyen T P Loan, 2012) However, rapid economic and population growth, fast urbanisation, and water-intensive industrial policies have raised concerns about water security in the long term Vietnam’s population is estimated to increase to
104 million by 2030 (GSO and UNFPA Vietnam, 2016), thus reducing water per person per year by approximately 900 m3 (2030 WRG, 2017) Further, the downstream location of Vietnam in Mekong delta river basin, with upstream water shared between China, Myanmar, Thailand, Laos and Cambodia, makes Vietnam extremely vulnerable It should be noted that agriculture currently accounts for nearly 80% of total water usage in Vietnam (ADB, 2009) Sustainable usage and management of water is therefore critical for food production and socio-economic security
Besides, water is central for energy generation; hence, water directly impacts energy security of the country Water is needed for energy generation from production, to distribution, and to usage (2030 WRG, 2017) This is particularly critical for Vietnam, as the nation promotes hydropower, which is expected to account for 15.5% of total electricity production, equivalent to 27,800 MW by 2030 (T Minh, 2016) In 2015, the total installed hydropower capacity increased to 15,211 MW, accounting for nearly 41% of the total national electricity generation (IHA, 2016; GIZ, 2015) However, these hydropower plants fail to operate at adequate capacity due to a high dependency on the weather changes and water flows, that typically occur during drought seasons For example, shortfalls of hundreds of MWs, and millions of kWh occurs every year during peak hours in the dry season due to the lack of water inflows to hydropower plants (Dao,
2010) Moreover, hydroelectric plants as well as other onsite power generators, such as oil, coal and gas, consume substantial amounts of water in their activities, which include the drilling, extraction and processing of fuels Therefore, future water scarcity poses fundamental long-term challenges for food and energy sectors and, by implication, the country’s socio-economic development
Energy security to support rapid economic growth and fast urbanisation
Vietnam’s economy has been transformed in recent decades due to market-oriented reforms, which have occurred since 1986, and rapid economic development The average annual economic growth rate for the period 1990 - 2010 was 7.4%, with total GDP increasing from US$ 60 billion in 1990 to US$ 171 billion in 2013 (MGI, 2012; World Bank, 2017) The rapid economic growth in the future will require huge increase in energy demand, estimated to be 3.6% p.a until 2030, equivalent to 130 million tonnes of oil equivalent (APEC, 2013) Historical trends of energy supply, as illustrated in Figure 1-1, indicate that energy generation has heavily relied on fossil fuels (coal, oil and gas) and hydro, which collectively accounted for more than 70% of the total primary energy supply These trends should establish the criticality of energy-economy-environmental linkages, and would challenge the country’s development, both economically and environmentally
Figure 1-1: Vietnam’s Total Primary Energy Supply: 2006–2015
HISTORICAL EVOLUTION OF ENERGY-FOOD-WATER NEXUS IN VIETNAM
HISTORICAL EVOLUTION OF ENERGY-FOOD-WATER NEXUS
The long history of being dominant by Chinese and Western (France and United States of America) civilizations has made Vietnam affected by their concept, philosophy, technology and legal legislation in ruling the countries during decades since the country’s independence (Le, 2016) For example, the mind-set in developing agriculture, especially rice cultivation was deeply influenced by China in terms of expanding the dykes, irrigations systems and methods for water stream, cultivating by metal tools; or developing new types of pottery, mining, and weapon After combatting Western colonialism to become an independent communist country-led by Vietnam Communist Party (VCP), Vietnam applied the western economic growth model - i.e economic liberalization - to restore its economy and integrate into the global economy (Neil L Jamieson, Gerald C Hickey, Milton Edgeworth Osborne, et al 2018) These historical features and changes have impacted the culture and habits of using energy, food, and water and set the foundations for forming their linkages in Vietnam
Further, energy, food, and water are the most crucial factors for the socio-economic development of Vietnam In 2016, for example, the energy sector contributed approximately 18% of the total GDP and generated 50% of all new jobs (MOIT and DEA, 2017) At the same time, agriculture is fading as the most important economic sector in Vietnam, despite its still large contribution to GDP at 17%, equivalent to US$ 3.1 billion; and despite providing jobs for 41% of the population as of 2017 (World Bank, 2017); and still being the main source of raw farm products (coffee, pepper, corn, fruits, etc.) for food processing industries and a major contributor to exports Rice is the most important crop and is grown principally in the Red and Mekong river deltas Water is the primary input for all production activities in agriculture, energy, and thus the entire economy; agriculture and energy account for 80% and 10% of total water use, respectively In terms of water flow management, the country is divided into 16 major river basins, four of which account for approximately 80% of the country’s total GDP: Dong Nai (28%), Red–Thai Binh (25%), Mekong delta (17%), and South-East River Cluster (SERC) (10%) (2030 WRG, 2017) From a geo-economic perspective, the country’s three historic lowland regions are bounded and bound together by extensive uplands, linked by interrelated landscapes, economies, and culture Across these plains, water is fundamental to the economy and transportation The North and Northwest plains are bounded by the Red–Thai Binh river basin, which empties into the Gulf of Tonkin, while the South and Southeast are surrounded by the Dong Nai, SERC, and Mekong basins, which empty into the South China Sea Central Vietnam, situated between the two major river basins, is a combination of a narrow coastal plain and central highlands to its west, in which 80% of the country’s coffee output is grown and 70% of reservoir capacity for hydroelectric plants is installed (2030 WRG, 2017)
A deeper historic analysis of the significance of these sectors (energy, food and water) is therefore critical for the development of an insightful perspective of the energy–food– water security nexus and the assessment of its impact on socio-economic development and environment—the focus of this research This chapter is organized into six main sections: section 2.1 presents a historical view of the early emergence of energy–food– water linkages in Vietnam during the country’s formation and early period (until 179 BCE), section 2.2 describes the evolvement of an energy–food–water nexus during the period of Chinese Dominance (179 BCE–938 CE), section 2.3 represents the evolution of this nexus during the Feudalist period (938 CE–1800s CE), section 2.4 describes the extension of the energy–food–water nexus during the period of Western Dominance (1887–1973), section 2.5 describes this linkage in Sovereign Vietnam since 1973 until now, and finally section 2.6 projects future trends for the energy–food–water nexus
2.1 E-F-W linkages: Formative years (until 179 BCE)
Emerging links between Food and Water
Before 179 BCE, the water-food linkages were initially formed during the formation of the country when the wet-rice cultivation was introduced within the Viet commune Vietnam was formerly called as Văn Lang 3 since the mid-to-late 3rd century BCE, a then renamed Âu Lạc 4 after a dynastic change, holding that name until the Chinese conquest
3 Văn Lang (2547-258 BCE) was the 1st nation of Vietnam, ruled by Hung Kings
4 Âu Lạc (257-207 BCE) was the 2nd nation of Vietnam after defeating and seizing throne from Hung Kings to rule the kingdom, then renaming the country as Âu Lạc
Source: Tran (1991) in 179 BCE During this time, the food sector—mainly focusing on wet-rice cultivation— was started by pre-historic tribes, who domesticated riverine wild rice plants into viand rice, switching from hunting-gathering to farming, which also marked the Viet people as among the first commune in East Asian region to practice the wet-rice based agriculture (Pham, 2006) The country was geographically narrow with approximately 15,000 km 2 , covering the Red River delta and the adjoining mountains to the north and west In which, a civilization based on wet-rice-centric agriculture was formed and mainly self-sufficient, the plain land was stably fertile, and wet-rice was the main food resource
The food production – mainly wet-rice – was dependent on the availability of indigenous inputs, such as rich soil, hot and humid weather, geographic diversity, and especially diverse systems of ponds and rivers The easiness in water accessibility and huge river systems enabled the construction of dikes to avoid floods, and canals to retain water for wet-rice cultivation As a result, thousands of kilometres of dikes were built along the Red River to protect this vast fertile delta and its population
Many rivers that run through the countryside provided water and sediment for rice production, and also catered for other food sources such as aquatic species, seafood Further, initial irrigation was mostly dependent on the ebb and flow of the river tide, it was convenient for ancient farmers to maintain crops in various seasons On the other hand, since the cultivation areas lay along the river banks, crops were frequently lost in case of and canals to unusually high tides, storms, or floods
During this stage of the country’s history, the social organization was structured in form of connected communes-notably as the smallest unit, sharing common land, water and other resources for practicing rice-cultivation and protecting themselves against external attacks The relationship between the organization of centre state and rural communes was well-established The communes were self- ruling whilst entirely complied with the state The communes must pay tribute and provide human resources for the state in case the country was in needs of more resources for harder works, or fighting against external attack, and natural disasters
During this time, rice fields were mostly small and cultivated by individual families in communes As time went by, wet rice civilization grew and settlements become larger and more complex, rice fields expanded as well; irrigation systems therefore needed to be improved and enlarged The centre state gradually took control of the fields and took responsibility for ensuring water flow
The amount of water used in the wet-rice production accounted for the largest proportion of contemporary water use, and it was proved throught the ancient farmer’s mindset -
“First water, second fertilizers, third hard work, fourth seeds”- which emphasized the importance and impacts of water on the agriculture of ancient farmers The expansion of rice fields was associated with the increase of population in this period The control of central state over rice fields and water flow resulted in the initial legal system of controlling water resources for rice cultivation, which institutionally set the foundation for water-food linkage In summary, water was the most important primary input for rice cultivation in Vietnam during the very early years of the formation of the agriculture, including food production
The emerging linkages between energy and agriculture
During this period, the role of energy in food production and water management was not significant, which was primarily in form of heat supply, or fire Thermal energy originating from charcoal, wood, and straw came to be used in fire pottery and making copper and iron products (Neil L Jamieson, Gerald C Hickey, Milton Edgeworth Osborne, et al 2018) The adoption of these minerals was a big step in the creation of new metal tools for practicing agriculture in the Viet commune, such as axes, hoes, and ploughs made from copper or heavy iron to improve farming techniques During this stage, diverse natural resources, especially energy resources, were found in North Vietnam, including large deposits of “anthracite coal, lime, phosphates, iron ore, barite, chromium ore, tin, zinc, lead, and gold” (Wu, 2007) Meanwhile, agricultural wastes from rice production were the major primary input of energy in term of heat of fire for entire society
Further, energy, food, and water linkages existed not only in production activities but also in culture, religion, and folk beliefs Vietnamese people worshipped Gods connected to natural elements In agriculture, they praised the God of Water, the God of Rivers, the God of the Land, the God of Rain, the God of Thunder, and the God of Fire, etc For example, the Goddess of Agriculture is honoured every year with festivals to pray for booming crops, prosperity and happy lives (Le, 2014) Water and rice were also deeply salient in the culture, as implied in many legends of the ancient Vietnamese, such as ‘Son
Tinh, Thuy Tinh’ 5 , a parable of the will against natural disasters, or ‘Banh Chung, Banh Day’ 6 , a story of traditional foods made from rice to commemorate ancestors Till present, at festivals or holidays, there are always products from rice, to honour Vietnam family ancestry Therefore, despite such large reserves of highly productive land, water, and energy, no over-exploitation of these resources for economic or industrial purposes occurred until after the advent of Chinese dominance since 179 BCE
2.2 Evolution of E-F-W nexus: The Chinese era (179 BCE – 938)
As soon as Văn Lang civilization ended in 179 BCE, Vietnam became dominated by the Chinese Feudal Dynasty for the first time after the King An Duong Vuong 7 failed to fight against Trieu Da (Chinese commander) During this period 179 BCE-938 , the country was renamed as An Nam 8 , and there became higher demand for producing more food, consuming more water to serve China - which was seen as the mother land This was a turning point for the adverse changes of the society among the ancient Vietnamese in all aspects regarding culture, socio-economic and state governance, institutions including the usage of water, land and food-stuffs The transportation infrastructure such as constructed roads, harbors, waterways were prioritized to develop so that China could assure their administration over the social, political and military over An Nam (Le, 2014; Neil L Jamieson, Gerald C Hickey, Milton Edgeworth Osborne, et al 2018) Agricultural products were the key sources for Chinese to take over and send back to China mainland to serve for its growing population and also because agricultural products were the only harvest in An Nam Hence, the food production – mainly in agriculture – was improved by the Chinese introduction of more effective means in irrigation and cultivation, by using metal tools for farming To further strengthen the agriculture development, irrigation systems were developed, local granary were expanded, hydro projects such as canals and drains were built to carry water to the fields, store and irrigate Regarding the natural resources and energy such as coal, ores, minerals - exploitation, there was the adoption
5 Son Tinh, Thuy Tinh’ is a well-known Vietnamese legend about the power of water in human life throughout the history to fight agaist natual disasters (storms, floods)
6 Banh Chung, Banh Day’ is the eminent legend of square and roll rice cakes that honour rice as the most important for religion, culture and human life of the Viet people
7 King An Duong Vuong was the solely King to rule Âu Lạc before being defeated by Chinese invasion (Trieu Da)
LITERATURE REVIEW
Energy, food, and water are inextricably and increasingly linked First, water is an essential input for energy generation as well as food production, especially as it pertains to agricultural irrigation Similarly, electricity is a fundamental requirement for water treatment and transportation, food production, and the food supply chain Agricultural products and wastes can then be a major source for bio energy in promoting renewable energy development This fact notwithstanding, Vietnam has been less motivated to investigate the linkages among these sectors, primarily due to the nation’s historical assumption about the unlimited availability of natural resources as water, primary energy, and land Therefore, institutional and policy settings have traditionally focused on individual sectors, to maximise each sector’s economic gains, without thoroughly considering the broad impacts on other sectors
Chapter 2 provides insights regarding the multifaceted connections between the energy, food, and water sectors, as well as a historical evolution of this linkage in Vietnam, from its formation and development to its future pathways These linkages are likely to substantially impact the country’s future socio-economic development, as environmental impacts will inevitably be a trade-off without a disciplined political framework to confront this scenario Further, underestimating the significance and impacts of the energy–food–water connections can even escalate the security challenges from the vastly increasing demand among these sectors
Therefore, this chapter aims to review existing studies on the energy–food–water security nexus with a relevance to or an implication for Vietnam This will provide a solid background to develop an appropriate research perspective on the energy–food–water security nexus relative to Vietnam’s socio-economic development This chapter is organised as follows: Section 3.1 summarises existing studies on the energy–food–water nexus; Section 3.2 analyses major limitations of these studies; Section 3.3 discusses the appropriateness of the selected method in this research; and Section 3.4 concludes
3.1 A review of existing studies on energy-food-water security nexus
As previously discussed in the conclusion of Chapter 2, a major shortcoming of Vietnam’s current energy–food–water policymaking is its focus on individual sectors, which fails to consider the connections among these sectors and their impacts on society’s development in terms of its economy, employment, and environment This limitation primarily occurs due to Vietnam’s lack of an appropriate policymaking framework and strategic planning practices; hence, it is significant to review existing studies on energy– food–water security on both of global and national scale The strength and shortcomings of these could be developing a research framework for the current research Therefore, this section reviews existing energy–food–water studies in terms of their objectives, scope, underlying research methods, and key findings regarding the analysis of linkages among energy, food and water, assessment of socio-economic-environmental impacts and discussion on policy discourse Table 3.1 summarises the key features in these studies The findings from this review will provide a foundation to identify major shortcomings of existing research, and will also be useful for developing a more appropriate integrated research framework for this research, as also noted in Sections 3.3 and 3.4
Linkages among energy, food and water
Following studies focus on analysis of linkages among energy, food and water in either quantitative or qualitative approach
FAO (2000) examines the energy and agriculture nexus in the context of sustainable development Over the last two decades, per capita energy consumption has increased, with a global average annual consumption of approximately 1.6 tonnes of oil equivalent (TOE) per capita As modern agriculture requires energy inputs at all stages of agricultural production, FAO (2000) aims to support the use of sustainable, sensible energy in agriculture A key finding of this report is that energy and agriculture should be considered as part of integrated management policies, as improved energy services will support rural development, and agriculture provides biomass energy The results also indicate that using biofuels will decrease both fossil fuel consumption and the environmental impacts of energy use in agriculture: theoretically, bioenergy can meet 25% of the world’s fossil fuel demands This research applies a life cycle assessment method, the results of which can raise awareness among policymakers about energy’s role in agriculture as well as the need for change in developing countries’ rural energy scenarios Incorporating and integrating international actions is essential to ensure global energy sustainability As an important factor in the nexus, changing water resources will affect food production as well as energy efficiency, but FAO (2000) does not address this element
Mukherji (2007) studies the effects of the energy–irrigation nexus—particularly regarding two energy types: electricity and diesel—on groundwater markets in West Bengal, India This region’s poorer farmers have limited irrigation, with only 1.1 million of its 6.1 million farmers owning electric pumps In this context, this study aims to find a policy solution that could stimulate the groundwater market by adjusting energy prices The main finding reveals that an electric Water-Extraction Mechanism (WEM) allows owners to actively sell water when faced with high tariffs; powerful pumps with longer operating hours can serve more buyers and irrigate larger areas Further, electric WEM owners sell 1,263 times more water than diesel WEM owners, and the former pump 879,972 more hours than diesel WEM owners Similarly, electric submersibles cultivate 4.2 acres more than diesel submersibles Electric centrifuges also cultivate 4.5 acres more than diesel centrifuges when diesel prices increase and farmers change to low-intensity cultivation to ensure profitability, resulting in reduced groundwater markets The methods applied in this research include a scenario analysis, linear regression, and policy analysis, the results of which comprehensively illustrate the links between the energy (diesel and electricity) and groundwater sectors for policymakers to address sites’ groundwater scarcity However, this study does not thoroughly analyse the environmental and food security problems caused by rural electrification and increased groundwater extraction
Harto et al (2010) studies the life cycle of water consumption in various low-carbon energy sources for transportation This particular study is primarily motivated by the rapid rise of CO2 emissions from transport vehicles, especially when fossil fuels have been a main energy sources for transportation over decades The study identifies that alternative energy sources would include not only the biofuels used in internal combustion engines, but also the means of generating low-carbon electricity used in electric vehicles Further, this study primarily examines such biofuels as cellulosic ethanol from switch- grass, soybean biodiesel, corn-based ethanol and microbial biodiesel Meanwhile, low- carbon electricity is sourced from photovoltaic cells, solar concentrators, and coal with carbon sequestration Against this backdrop, this study aims to determine how to use alternative low-carbon fuels to replace both gasoline and diesel fuels in transportation: it intends to discover how to decrease carbon and ensure water reserves while generating energy for transportation The key findings of this study indicate that using a wide range of electrical vehicles and configurations of algae and switch-grass systems are likely to contribute to decreasing CO2 emissions in transportation However, this study also highlighted the risk of increasing overall water consumption when the large-scale production of irrigated biofuel crops occurs The study uses the hybrid life cycle analysis (LCA) method in combination with a materials-based process, and an input–output (IO) analysis The outcomes from this study provide critical perspectives for policymakers and researchers in adopting a holistic approach to analyse the comprehensive benefits and trade-offs from any new technology, and particularly in considering their long-term impacts on such finite, scarce resources as water Despite this study’s important contribution, it does not consider the socio-economic impacts of deploying technological changes in energy sources for transportation—such as the price or economic output in food sectors—as biofuel sources require significant amounts of cultivated land Hence, this narrows the study in assessing the long-term impacts from technological changes in the energy supply mix
Hoff (2011) studies the water–energy–food nexus in the context of global challenges; specifically, the author examines simultaneous population growth, economic development, and changing lifestyles, which sometimes amplify each other This study posits that unless significant changes occur in production and consumption methods, the demand for agricultural products as well as primary energy will have to increase by 70% and 50% by 2050 and 2035, respectively Such a soaring demand would have substantial implications for water and land resources, and especially in terms of declining reservoir levels Hence, this study aims to address unsustainable development patterns and resource constraints in the energy, food and, water sectors The study’s major findings indicate that energy, food, and water policies should cover key issues, such as productivity; utilising wastes as a resource in multi-use systems to stimulate development through economic incentives; coherence among governance, institutions and policy; benefiting from productive ecosystems; capacity-building and the raising of awareness This research applies life cycle assessment and scenario analysis methods; the study results fundamentally increase the awareness of policymakers, researchers, and entrepreneurs regarding the significance of interlinkages between these sectors in making policies or decisions in production or consumption schemes However, this study fails to consider the potential trade-offs in continuing current policy trends, and hence, it is difficult to more insightfully assess the impacts for future development pathways derived from this study
Bazillian et al (2011) investigate the connections among the energy, food, and water sectors with a global application perspective This study describes the urgent need for a powerful analytical tool, conceptual modelling, and algorithmic, robust data sets to quantitatively analyse the future global demands for energy, water, and food This study aims to address the need for an integrated research model to quantify the linkages among energy, food, and water, thus optimising each sector’s productivity without affecting other sectors’ development A key finding from this study is the Omega, Land, Energy, and Water (CLEW) modelling integrated analysis tool, which can assist decision makers in decision making, analysing policy, integrating and supporting such policies, and assessing technology This research applies the life cycle assessment method and CLEW model This study and work by Hoff (2011) collectively establish a critical foundation for future research on energy–food–water nexus Additionally, the CLEW model enables the development of various scenarios with a perspective of identifying future development opportunities as well as understanding impacts of different policies Despite this significant contribution, this study did not analyse socio-economic and environmental impacts Therefore, it would be less applicable for policy analysis and assessment of the connections among energy–food–water and socio-economic development
Siddiqi and Anadon (2011) quantify the water intensity in energy production, and energy intensity in the water value chain, in the Middle East and North Africa (MENA) This region is rich in crude oil, which constitutes 66% of the world’s crude oil reservoir, although it accounts for only 1.4% of the world’s freshwater supply Despite this fact, a majority of water and energy systems have been separately managed in the MENA, and hence, the region lacks cross-sectoral inputs for proper policymaking This situation becomes increasingly challenging under the contexts of population growth, increasing water and energy demands, and climate changes in coming years Therefore, this study aims to investigate the interactions between water and energy by emphasizing the importance of integrating water systems with energy infrastructure Its findings indicate that water is used in extraction and refining of fossil fuels, while energy is used in water exploitation, usage, and treatment This study applied life cycle analysis method to examine the water-energy linkages regarding intensity and production aspects The study outcomes also reflect the urgency for policymakers to integrate water-energy infrastructure in the MENA However, this study’s model did not more deeply analyse the socio-economic impacts and trade-offs of the energy and water sectors’ existing policies; hence, the results are less insightful for developing a more multi-dimensional policy framework
Xin Li et al (2012) analyse the energy, water, and CO2 emissions nexus in China, with a view toward 2020 As a country with the world’s highest rate of greenhouse gas emissions (25.1% in 2010), China has deployed wind energy as an alternative for conventional fossil energy Therefore, this study aims to assess the amount of water consumed and the resulting CO2 emissions in the mass deployment of wind power, thereby analysing the wind energy sector’s economic and environmental performance This study’s key findings indicate that wind energy would double the socio-economic benefits for China The life-cycle and IO analyses are applied in this study, the outcomes of which provide meaningful analysis of the economic and environmental benefits of wind energy for policymakers However, this research presents a narrow view for policy analysis and assessment, as the analysis does not observe wind energy’s impacts on other critical factors, such as food, employment or climate change
ESCAP (2013) comprehensively studies the energy-food-water nexus in the Asia-Pacific region from 1970s to 2005, with a specific focus on Central Asia and the Mekong Basin The global economy’s continuous growth has led humanity to approach the limits of global resource availability While the planet must handle large amounts of waste, resulting in a loss of biodiversity and climate change, commodity prices are constantly escalating Thus, ESCAP aims to improve the understanding of the energy–food–water nexus, thereby applying appropriate policy systems that reduce resource scarcity and ensure sustainable future development The study primarily provides a comprehensive picture of the energy–food–water relationship, especially in Eastern Asia and the Mekong Basin: the region’s resource scarcity (1970–2005) is higher than the global average, and its dependence on fossil fuels led the Asia-Pacific region to account for approximately half of the world total CO2 emissions in 2008 Additionally, the study provides green economy models and low-carbon, resource efficiency, and multi-objective approaches for the region Finally, three important government actions are proposed: i) reinforcing price signals to ensure the efficient use of resources, ii) eliminating unrelated market failures, and iii) addressing supply and demand challenges by creating closer links between resources and the global marketplace This study incorporates a policy analysis method, the results of which provide policy options and initiatives in the resource management field, increase the public’s awareness of resources’ potential future scarcity, and provide a foundation for researchers of this nexus However, this report summarises the research results and provides some general policy directions for the region and cannot be generalised to multiple countries, as each country will have its own unique resource characteristics and challenges Further, this study does not include future predictions regarding food security and its connections with the water and energy sectors, or the food- water-energy nexus
Byers et al (2014) investigate the electricity and water demands for system cooling in the United Kingdom, with projections toward the year 2050 Specifically, the electricity sector in England and Wales is responsible for approximately 50% of all water extractions and 40% of non-tidal surface water abstractions, while 90% of the electricity in the United Kingdom comes from thermal power plants In this context, this study aims to comprehensively profile the United Kingdom’s projected water consumption by 2050 Its key findings reveal that the electricity sector currently demands substantial amounts of water, which is primarily due to increasing industrial services, climate change, and a heavy reliance on coal Key findings of this study also suggest that i) regarding cost optimisation, water consumption will increase by 69% compared to the present; ii) applying a larger-scale cooling system would potentially decrease fresh water consumption, as this primarily depends on the ability to capture and store carbon, then gas or coal The trade-offs from this solution, which must be thoroughly considered when contemplating its implementation, includes an increase in both costs and CO2 emissions This research deploys the quantification model and scenario analysis methods, which can assess the changes in water demand from various technological scenarios for energy generation This study’s results provide policymakers with an understanding about the connections between electricity and water, as well as the energy–water connections’ economic and environmental impacts This significant contribution notwithstanding, the research method was not integrated with a policy analysis as a fundamental framework for proposing policy choices, hence narrowing its utility in providing a long-term analysis for assessing the policy implications and trade-offs for particular pathways
Table 3-1: Summary of energy-food-water nexus research
No Study Tittle Author(s) Objectives Methods Key research findings Focus Region
Using sustainable and sensible energy in agriculture
Energy development helps to develop sustainable agriculture
Bioenergy can replace 25% of fossil fuels used worldwide
Nexus and its Impact on
Finding a policy solution to stimulate the groundwater market
Scenario analysis Linear regression Policy analysis
Under high energy prices, electric pump owners will sell more water than diesel pump owners, or 1,263 times:
+ Electric pump owners sell water at lower prices than diesel pump owners to increase competition
+ The higher the diesel price, the greater the price difference; farmers switch to low-intensity cultivation, leading to a reduced groundwater market
A Comprehensive Analysis in the Context of New
A comprehensive analysis of the water-energy nexus
History and integration policies are inseparable from the study of the water- energy nexus
Table 3-1: Summary of energy-food-water nexus research (Cont.)
Life Cycle Water Use of
Discover low-carbon fuel solutions to replace gasoline and diesel fuels in transportation operations
Algae and switch-grass systems are likely to contribute to the removal of carbon in transportation
Addressing unsustainable development models and resource constraints
Life cycle assessment Scenario analysis
Promote policies that increase resource productivity, link policies, build energy, and improve policy
Develop tools to assist decision makers
Life cycle assessment Design CLEW modelling Water-
The Water-Energy Nexus in the Middle East and North
Emphasizes the importance of developing an integrated water and energy infrastructure
An analysis of the importance of considering actual policy processes for water and energy infrastructure in the MENA region
Middle East and North Africa
Evaluation and planning to integrate the energy and water sectors
Life cycle assessment Policy analysis Scenario analysis
Evaluate and demonstrate the need to incorporate energy and water policy decisions
Table 3-1: Summary of energy-food-water nexus research (Cont.)
To identify an energy pathway that would sustainably meet the country’s energy needs
Policy analysis Scenario analysis Optimisation model
Need to save energy and encourage renewable energy and CO 2 reduction to reduce import dependence and environmental impacts
Productivity of Winter Rice in the Mekong
Finding a solution to save water but not decrease rice yields in the context of climate change
Scenario analysis AquaCrop model ECHAM4 model
Halving the birth rate reduces the yield by half and evaporation by 40%
A 5-day irrigation schedule saves 100m 3 /ha compared to the 10-day schedule
An increase in carbon concentrations increases the productivity of evapotranspiration and yield
Wind Power in China: The
Analysis of the wind power industry’s economic and environmental efficiency
Need to increase the proportion of wind energy to increase energy benefits Water-Energy China
Table 3-1: Summary of energy-food-water nexus research (Cont.)
The relationship between agricultural technology and energy demand in Pakistan
Changing agricultural technology to increase agricultural productivity
As demand for energy increases by 1%, cereal production increases by 3,072%, and livestock production increases by 0.581%
Agricultural added value increases 1.915% in GDP
Primary energy consumption increases by 1%, while the industrial share of value added decreases by 0.843%
Nexus in Asia and the
Improving the understanding of the energy-food-water nexus
From 2000 to 2005, the average annual growth rate of material consumption in the Asia-Pacific region is 6%/year, compared to the global average of 3.7%/year; Asia and the Pacific accounted for almost half of the world’s
To orient green, low-carbon economic models, improve resource efficiency, and provide a multi-objective approach in the region
Table 3-1: Summary of energy-food-water nexus research (Cont.)
Develop long-term power generation options that can reduce both CO 2 emissions and water consumption
Scenario analysis Cost-benefit analysis
The electricity sector can be reshaped at the expense of carbon emissions, but not at the cost of water, depending on both renewable and nuclear energy
Provide an overview of the water-energy nexus
Have to change agricultural practices to increase water use efficiency Water-Energy United
Review of Rice Policies in
Review major rice policy reforms in China, Thailand, and Vietnam
Policy analysis Help the governments clearly understand and learn about other nations’ policies
Support of Food Security and Sustainable Agriculture
Toward a coordinated use and management of resources in terms of cost, planning, decision making, implementation, monitoring, and evaluation
Need to provide sustainable goals for the water–energy–food nexus
Table 3-1: Summary of energy-food-water nexus research (Cont.)
Cooling Water Use: UK pathways to 2050
Provide a detailed and continuous picture of water use by 2050
Help policymakers clearly identify the importance of the electricity–water nexus, as well as its impacts on the economy and environment
Interdisciplinary Analysis of Water-Energy-Food
Selecting the most comprehensive policy for all three resources
Questionnaire Build agent-based model
Expert panel – Delphi Policy analysis
Discover the future of the Mekong region using six development initiatives with significant potential at the regional level
Three key systems play an important role in energy demand: fish stocks, land use change, and irrigation
Qin et al (2015) Detailed analysis of water use in the energy sector
Life cycle assessment Scenario analysis Cost-benefit analysis
Clarify the conflict between the potential policies Water-Energy China
Reduce future water consumption without adversely affecting the energy and food sectors
Increased food supplies and biofuels will increase the demand for water
Table 3-1: Summary of energy-food-water nexus research (Cont.)
The Future Nexus of the
Reduce the conflict in the basin’s water-energy-food nexus
Optimisation model Scenario analysis Policy analysis
Changes in rainfall and temperature will affect the basin’s water–energy–food nexus
The Dynamic Relationship between Agricultural
Reducing poverty and global issues
Promoting agricultural value-added policies
Increasing cereal yield by 0.433% and increasing agricultural productivity by 0.193 will reduce 1 unit of food poverty
0.22%, area of forest 0.631% of total land area, and agricultural productivity by 0.266% to 0.354% will reduce 1 unit of the energy poverty index
Water, Food and Energy Bijl et al (2018)
Explore the differences and the role of spatial scales between water- food-energy
Life cycle assessment Quantitative model
Each of the resources in this nexus substantially differs regarding the absolute magnitude of production, as well as within the scope of its transactions
Table 3-1: Summary of energy-food-water nexus research (Cont.)
Employment and Incomes among Rural Households in
Study the relationship between energy-food and social factors
Scenario analysis Agricultural household-dynamic programming model
Household heterogeneity plays an important role in the nexus analysis Energy-Food India
Provides a detailed view of sustainable development in the energy-water-food sectors under economic and environmental contexts
Scenario analysis Policy analysis Quantitative model
Tariffs and investments in agricultural intensification will result in more efficient renewable energy and decreased carbon emissions
The FAO (2014) incorporates the water sector into the energy–agriculture nexus, which continues the FAO’s (2000) previous study on the energy–agriculture connection When demand increases, the competition for resources will have an unforeseen impact on livelihoods and the environment Therefore, this study aims to systematically analyse the interactions between the natural environment and human activities, ultimately to coordinate the usage and management of resources Specifically, this involves costs, strategic planning, deployment, controlling, and assessment Key findings of this study indicate that core content balances the purposes, benefits, and different needs of people and the environment The research deploys a life cycle assessment method, the outcomes of which provide a better understanding of the complex, dynamic connections between energy, food and water This offers a critical foundation for future research in properly managing these resources while pursuing more sustainable pathways However, this research model solely uses the life-cycle assessment method, which does not contribute to a policy analysis to develop alternative pathways towards food security and agricultural development This will be critical under the existing pressure of scarce water reserves and increasing energy demands over the coming decades
METHODOLOGICAL FRAMEWORK
Chapter 3 reviewed various methodologies deployed for either non-nexus or nexus approaches among energy, food and water sectors It is concluded that the existing deployment of “singular” methods seems to be narrow and limited, which focuses on solving particular question of a sectoral issue from a short-term perspective Meanwhile, nexus approach, focuses on addressing multi-dimensional issues under cross-sectoral linkages and from a long-term perspective, hence requiring a proper research methodological framework with broader viewpoint and cross-disciplines underpinned This research would therefore propose an integrated methodological framework, in which, the integration among selected methods namely Historical analysis, Scenarios Analysis, Input-Output Modelling and Assessment of Policy implications are fundamental bases The goal of this research framework is to deliver insightful and well- structured analysis and debate for policy arenas in various scenarios in developing socio- economic pathway The objective of this chapter is therefore to describe a comprehensive overview of the methodological framework deployed in this research This chapter is organized with six sections, in which section 4.1 provides a brief introduction about the overall methodological framework Sections 4.2, 4.3 4.4 and 4.5 respectively describe all core components of this research framework namely Historical Analysis, Scenario development, Input-Output Modelling Framework and Data preparation and resources for the analysis; and section 4.6 is to provide conclusion of this chapter
This section provides an overview of the overall methodological framework deployed in this research for analyzing the impacts of various scenarios of energy, food, and water security nexus on the socio-economic progress and environment in the future development of Viet Nam The proposed research framework is developed based on the integration of multi disciplines of historical analysis, input-output modeling, scenario analysis and assessment of policy implications, as shown in Figure 4.1
Historical analysis is focused on the historical development of the country overtime Along with this history, the historical contours of energy, food and water linkages are also analyzed Key features in analysis are: supply, demand, and institutions – for each phase of historical analysis External impacts such as politics, culture, socio and economic factors would also be discussed to provide a holistic viewpoint of the evolution if the nexus
Figure 4-1: Overall Methodological Research Framework
Input-output analysis is deployed for the quantitative assessment of linkages between energy, food and water, and socio-economic impacts of alternative development pathways for Vietnam The technological changes and corresponding price elasticity are considered across various scenarios (except SC1-BAU) - to reflect changes in energy, food and water demand
Assessment of scenario impacts composes of scenarios development and modelling scenarios input-output modelling, which is to further assess impacts of energy-food-water linkages for various scenarios on future social, economic and environmental outcomes Each scenario reflects specific assumptions regarding technological changes and economic growth to identify various pathway for the country development Key attributes for assessing scenario impacts, include energy-food-water security, socio-economic growth, and environmental issues (described in detail in Chapter 5)
Assessment of policy implications and trade-offs determines all quantitative outcomes from input-output modelling results and identifies potential trade-offs
Historical analysis of Energy-Food-
Input-Output analysis Assessment of scenario impacts
Assessment of policy implications and trade-offs among energy-food-water security and socio-economic growth, and environment (CO2 emissions) This assessment would therefore provide useful inputs to policy makers to design informed policies, institutions and governance mechanisms
Historical analysis focuses on analyzing of factors and influences that have shaped the evolution of energy, water and food nexus throughout the country’s history This is a useful method to review, interpret sources, evidence and data to reflect the evolution of the security nexus between energy, food and water over time This method is also used to envision the future trends for energy, water and food security
Chapter 2 of this thesis, develops a historical contour of energy-food-water security nexus in Vietnam over time The key elements of this contour include supply, demand and policies for energy, food and water Furthermore, this contour also includes a discussion on political, social, economic and technological dimensions that significantly impacted the evolution of energy, food and water sectors
Further, the historical contour is developed for the following time periods that represent major phases in this history of Vietnam formation and development:
The origins: Country’s formation until 179 BCE
The Chinese dominance (179 BCE – 938 AD)
Scenarios analysis focusses on analyzing the impacts of alternative scenarios on E-F-W security and underlying trade-offs The scenarios differ from each other in terms of energy, food, water technologies, rates of growth and other constraints
The following six scenarios are considered in this research:
Business as Usual – BAU (SC1)
Energy-Food-Water Nexus Scenario (SC5)
Low-carbon Energy-Food-Water Nexus Scenario (SC6)
Further details about these scenarios are provide in Chapter 5
This research’s core methodology involves applying input-output modelling to quantify the I-O and price models Figure 2 illustrates a five-step modelling process with a focus on the model’s mathematical formulation,which is briefly described below
Figure 4-2: Input-Output Modelling Approach
Implementation of I-O coefficients to reflect technological changes
Assessment of price impacts due to technological changes
Determination of price elasticity due to input factor substitution (multi-tier calibration of nested production functions) Assessment of technological changes’ social, economic and environmental impacts and E-F-W security
The baseline scenario, or the ‘Business as Usual’ (BAU) scenario labelled ‘SC1’, introduces no new technologies in the food-water-energy supply side; hence, technological changes will have no impact on any future socio-economic development This scenario therefore acts as a comparison benchmark in this research It is developed on the basic of data sourced from national accounts, adopted from the GSO (2007) The base model is extended by incorporating food, water and energy data from the World Bank (2017), International Energy Association (IEA, 2017), the United Nations’ Food Agricultural Organisation (FAO, 2011a, 2017), and the Asia Development Bank (ADB, 2015) - to capture economic sectors’ disaggregated representation of food, water and energy production and consumption Based on this extension, this research’s base year is set as 2014, after updating the 2007 I-O table, which incorporates the most updated data from the above-mentioned international agencies A Leontief fixed-production function with a linear regression is applied from the standard I-O model from years 2014 to 2030 to quantify the BAU I-O model
The implementation of various scenarios with technological changes is based on the development of assumptions with different choices in applying new technologies for Vietnam’s energy, food, and water supply from 2014 to 2030 These assumptions are determined based on the Vietnamese government’s socio-economic outlook and strategy Five scenarios represent various future pathways for Vietnam’s development, ranging from the food, water and energy sectoral-policy approaches to a cross-sectoral nexus approach The key assumptions in these scenarios include their impacts, deduced from the price elasticity that occurs due to technological changes; and therefore, the research will apply energy, food and water security as well as future socio-economic outcomes
Changes in food, water and energy prices are approximately defined to determine the new price range after the introduction of new technology The input-output model’s pricing is applied to estimate this price change, with all mathematical formulations and descriptions noted in Section 4.4.3
Technological changes will induce sectoral price elasticity, and hence, initiate substitutions among the factor input The substitution in the input price factor assessment is impacted by technological changes
This research deploys the constant elasticity substitution (CES) approach to reflect cross-price elasticity, which are used to adjust the input-output technical coefficients to describe a new economic structure underpinned by new technology in food, water and energy generation The sectoral substitution with all mathematical specifications and estimated parameters will be discussed later in this section
The final section will assess the new scenarios’ impacts in detail Each scenario will present a new trend in Vietnam’s socio-economic progress and environmental impacts while adopting respective energy, food and water policy pathways
4.4.1 Introduction to Input-Output Modelling
POLICY IMPLICATIONS & TRADE-OFFS IN VARIOUS SCENARIOS
DEVELOPMENT OF ENERGY-FOOD-WATER SECURITY
‘The real voyage of discovery consists not in seeking new landscapes but in having new eyes’ (Marcel Proust)
Scenarios are alternative descriptions of prospective stories, images, or environments, which describe pathways from the present to the future A good scenario must be well rooted both in the past and present, well perceiving the future, and being highly consistent in the logic of hypotheses The purpose of scenario analysis is to anticipate possible events and uncertainties that may affect a country or an organisation in achieving its goals in the long run The development of scenarios envisions the future by developing a set of assumptions based on several factors, such as policies, institutions, economic status, historical development, availability of natural resources, and technology, among the others A careful identification of the key scenario variables is required to determine the factors that may have significant impacts on future challenges
This study develops energy-food-water security scenarios for Vietnam for the period 2014-2030 through a four-step process First, broad categories of indicators that may affect long-term pathways of food-water-energy resources and the related policies for Vietnam’s future socio-economic development are described Second, various scenarios are built based on logical and consistent assumptions regarding these indicators The third step is the quantification of scenario indicators in the modelling process The final step is the evaluation of the implications of alternative scenarios and the assessment of their impact on policy choices Vietnam’s socio-economic strategy is examined, and the country’s performance in various food-water-energy security scenarios is assessed Furthermore, scenario development supports policy-making by confronting various cognitive premises and considering potential uncertainties, consequences, and trade-offs of the proposed policies (Thomas, T Chermack, 2004) In doing so, scenario development will enable the Vietnamese policy makers to re-examine the assumptions that underlie their views of the world, thus increasing their ability to accomplish different and multi-target policies
5.1.1 Identification of the key scenario attributes
To develop institutions that can aptly address food-water-energy security challenges and ensure the security of food-water-energy supply in Vietnam, the key scenario attributes need to be determined
Energy-food-water security is a multifaceted concept, and critically captures key attributes these resources, namely efficiency, availability and affordability associated with (UNEP 2008, Chester 2010, FAO 2013b)
Regarding water security, the main elements are i) water accessibility; ii) water safety; and iii) water affordability so that every person can lead a clean, healthy and productive life, while ensuring that the natural environment is protected and enhanced (Global Water Partnership, 2000) Therefore, three attributes of water security are defined in this research, namely, water availability, water stress and water intensity
In terms of food security, key elements of food security are identified as i) food availability, which is influenced by production, distribution and exchange of food; ii) access to food - including affordability, allocation and preference; and iii) food stability over time (Ericksen, 2008; Schumidhuber & Tubiello, 2007) Within this research’s scope, food security is defined in terms of three attributes, namely, food accessibility, food-import dependency and food affordability
Scenario attributes are divided in this research into broad categories of indicators, namely socio-economic, food-water-energy security, and environmental, as described in Figure 5-1, and later discussed in following sections of this chapter
Figure 5-1: Key attributes for the Impact Assessment of different scenarios
GDP Investment Trade-Balance Employment
Energy Import-Dependency Energy Diversity
Energy Efficiency Energy Affordability Energy Intensity
Water Efficiency Water Accessibility Water Affordability
Food Import-Dependency Food Affordability Food Accessibility
CO 2 Emissions Water Intensity Water Stress
5.1.2 Socio-economic attributes of scenarios
The socio-economic attributes employed in this study are employment, economic (GDP) growth, investment in critical infrastructure (electricity, water, and transport), and trade balance These attributes represent the impacts of changes in energy, food, and water policies and strategies Vietnam’s socio-economic outcomes Government polices aim at securing demand-supply balance in each sector Policy choices that induce technological changes have the potential to produce negative impacts, in the short or long run, due to the momentum of historic imbalances in energy, food and water in Vietnam – which suffered a long-term impact from thousands of years of wars, and associated losses, and damages Government policies aim to accelerate economic growth, improve the national prosperity, and generate more jobs, thus increasing welfare Therefore, all these attributes play a significant role in developing future pathways for energy, food, and water policy options for Vietnam in the long run
Food-water-energy security is a multifaceted issue, and actions in one area often impact outcomes in other areas The population boom, climate change, economic development, and urbanisation in Vietnam have significantly increased the demand for water, energy, and food While agriculture accounts for the most extensive use of freshwater in the country, water is also used for transportation, forestry and fishery, and energy production
At the same time, a large amount of energy is required for residential uses, industrial sectors, and rapid urbanization Cities, industries, and other users are characterised by increasing demand for water, energy, and land Against this backdrop, Vietnam faces problems of environmental degradation and negative impacts from climate change The impacts of such elements are quantitatively measured by the attributes illustrated below
Food security is measured in this research in terms of three attributes: food-import dependency, food affordability, and food accessibility Water security is defined in terms of water availability, water intensity, and water stress Energy security is measured by six indicators: energy diversity, energy intensity, energy efficiency, energy import- dependency, energy affordability, and CO2 emission
Food import-dependency is defined in this research as the value of total food imports as a percentage of total exports It indicates the dependency of Vietnam’s balance of payments on food imports A low value means low dependency
Food affordability is defined as the share of household income spent on food It describes the uncertainty faced by households due to increasing food prices
Food accessibility describes the physical access to food supply in the market It is defined as the ratio of food supplied per one dollar of transport service This implies that physical access to food increases with improvements in transport service
Water availability is estimated by the supply both surface and groundwater This indicator assesses the abundance of water supply for agriculture, human consumption, industry, and energy generation
Water intensity is measured by the amount of demanded water for each dollar of GDP
This indicator describes the dependency of the economy on water resources
Water stress is defined as the percentage of total available freshwater that can satisfy total water demand It describes the pressure on Vietnam’s water supply for meeting water demand
Energy import-dependency is measured by the value of total energy imports as a percentage of total commodity exports It expresses the reliance of Vietnam’s trade- balance on energy imports A low value indicates a low reliance
Energy diversity reflects the diversification of primary energy sources This indicator is defined by the Herfindahl index, and a low value indicates significant diversity
Energy efficiency is the percentage between final energy and primary energy This attribute reflects the efficiency of the transmission from primary energy sources to final energy supply
Energy affordability is the percentage of household income spent on energy It describes the uncertainty faced by households due to increasing energy prices
Energy intensity is defined as the amount of energy required for each dollar of GDP
This indicator expresses the reliance of the Vietnamese economy on energy
This attribute reflects the quality of Vietnam’s economic growth model In this research, the environmental indicator is defined as the CO2 emissions Over the past two decades, Vietnam has witnessed an increasing dependency on fossil fuel, intensive energy consumption, and over-employment of water and land resources, and the country’s economic growth has placed a burden on its environment Vietnam started from a low base and, only a decade ago, was among the lowest per capita emitters of CO2 Now, the country has tripled its emissions, with the fastest growth rate in the region, much higher than countries such as Cambodia, Thailand, Malaysia, the Philippines, and Indonesia It is, therefore, imperative for Vietnam to address the impact of food-water-energy consumption on the environment, especially in the context of global warming and climate change, in which CO2 emissions play a central role Alternative forms of energy generation and consumption need to be implemented for improving the country’s energy efficiency and reducing CO2 emissions
Vietnam’s CO2 emissions per capita, which amounted to 1.07 tons in 2007, approximately 25% of the world average (World Bank, 2016b), had tripled in 2016 CO2 intensity has shown a fast increase in Vietnam during the last decade, for example, the carbon intensity over total GDP of the country increased by 48% in the same period and has become the region’s second highest, after China
CONCLUSIONS AND RECOMMENDATIONS FOR FUTURE RESEARCH
ASSESSMENT OF THE IMPACTS OF ALTERNATIVE SCENARIOS
The main objective of this chapter is to present the impacts of alternative scenarios on energy–food–water security and social, economic, and environmental outcomes for Vietnam These key findings are derived from input–output modelling (as detailed in chapter 4) This chapter is organized into six sections, as follows Sections 6.1, 6.2, and 6.3 present the assessment of impacts on energy security, food security, and water security, respectively Sections 6.4 and 6.5 describe the assessment of economic impacts and social–environmental impacts Finally, Section 6.6 concludes by summarizing the key findings
This section assesses the impacts on energy security of various scenarios for Vietnam The key attributes of energy security, as discussed in Chapter 5, are energy demand, energy intensity, energy conversion efficiency, energy diversity, energy import dependency, and energy affordability
The energy demand for various scenarios is shown in Figures 6-1 and 6-2 and Tables 6-
1 and 6-2 below The analysis projects primary energy demand over the period 2014–
2030 to grow at a rate of between 8% – 12% annually This represents between three and six times the requirements in the base year 2014 A similar increase is projected for final energy demand Major contributors to this increase are population growth, economic growth, industrialization, and modernization of Vietnam Low-cost energy sources, like coal and oil, will continue to dominate the energy demand of the country, accounting for more than 60% of the total primary energy demand This reliance on coal and crude oil would considerably increase if nuclear energy were removed from the Energy Master Plan for Vietnam 2030 Against a backdrop of limited availability of existing hydro, gas, and renewable energy resources, the country’s heavy reliance on fossil energy is likely to increase, which would cause significant environmental problems in the long run
In the SC1 BAU scenario, the socio-economic expansion of Vietnam throughout the period 2014–2030 is likely to result in considerably increasing demand for energy For example, the total primary energy demand is expected to increase by 8.1% per year over the next 16 years, from 177.1 million tons of oil equivalent (Mtoe) in 2014 to 547.7 Mtoe in 2030 (Figure 6-1) This growth, in the absence of alternative renewable energy sources and technologies for power generation, is likely to result in increased dependence on indigenous energy resources, such as coal, oil, and hydro For example, final energy demand for coal is expected to increase between threefold and fourfold over the period, reaching approximately 179.7 Mtoe in 2030 (Table 6-1) Likewise, final demand for oil is projected to more than triple, from 47.5 Mtoe in 2014 to 140.6 Mtoe in 2030 – representing an annual growth rate of 7% Similarly, final demand for hydro-power electricity would increase threefold, from 13.2 Mtoe in 2014 to 46.2 Mtoe in 2030, representing an annual growth rate of 8.1% Overall, these three relatively scarce resources would account for 70.1% of the total increase in final energy demand over 2014–2030 (Table 6-1)
Figure 6-1: Energy demand in SC1-BAU
Source: Estimates are based on modelling developed in this research
In the SC2 Energy scenario, the total final energy demand will increase substantially by the largest amount of all scenarios over 2014–2030, reaching 923.1 Mtoe in 2030 As a result of energy-oriented policy that maximizes energy capacity and supply, there would be a significant improvement in energy affordability and energy accessibility in the SC2 scenario This improvement would eventually accelerate energy consumption in all sectors Furthermore, with the objective of maximizing energy security in SC2, the energy generation capacity and supply is highly prioritized, which would finally spur the primary energy demand for production As shown in Tables 6-1 and 6-2, during 2014–2030, the total primary energy demand is projected to rise by 10.9% per year, reaching 748.5 Mtoe in 2030, compared with 8% per year in the SC1 scenario, reaching 416.9 Mtoe The introduction and emphasis on developing renewable energy in SC2 is targeted in order to lessen the heavy reliance on indigenous resources over the next decades, and to plug the energy shortage due to the halting of nuclear power in 2016 In the final energy demand, the share of solar electricity and other renewables would increase by 4.2% and 6.6% Therefore, the total share of fossil fuels, including coal, oil, and gas, would reduce from 70.1% to 59.4% in the final energy demand Coal contributes the most to this decrease; its share is projected to decline 7 %, from 33.9% in 2014 to 26.9% in 2030, as shown in Figure 6-3 Notwithstanding the decline in the share of fossil fuel, the substantial increase in the final energy demand from all socio-economic sectors would keep the demand for coal, oil, and gas high; they would account for the dominant shares at 26.9%, 24%, and 8.5%, respectively This would result in a high annual growth rate of fossil fuel demand for coal of 11% and for oil of 11.2% (Table 6-2) This fact would inevitably present a challenge for the environment, especially as it would increase CO2 emissions, which is discussed further in section 6.5
Figure 6-2: Total primary energy demand, various scenarios
Source: Estimates are based on modelling developed in this research
In the SC3 Food scenario, there would be a similar increase in energy demand to SC1 BAU over 2014–2030, reaching 417.6 Mtoe and 545.1 Mtoe in terms of primary energy demand and final energy demand, respectively (Figure 6-3) This increase is equivalent to an annual growth rate of 8.1% for primary demand and 7.3% for final demand (as shown in Table 6-2) The main contribution to the increase is the expansion of food processing from 2% of total food production in 2014 to 9% in 2030, which is in accordance with the scenario assumption, as discussed in Chapter 5
Table 6-1: Energy demand in various scenarios during 2014–2030
Primary Energy Demand (Million Toes)
Final Energy Demand (Million Toes)
Source: Estimates are based on modelling developed in this research
The concentration on expanding food processing implies that the increase in electricity’s consumption for the whole food production chain, such as drying and storage, cooking, preparing, canning, freezing, and packaging, would eventually encourage growth of energy demand for SC3 The absence of new sources for the energy supply mix, such as renewables or nuclear, would lead to an energy sector more dependent on heavier fossil fuels, which would increase the share of fossil fuel more than 80% in both primary and final energy demand by 2030 (Figures 6-4 and Figure 6-5, respectively).The food- oriented policy in SC3 is approached under the context of no significant technology changes for the energy supply mix, amid high and increasing demand for electricity in other commercial, residential, and energy production sectors, indicating significant worsening for energy security as a whole in the SC3 Food scenario
Figure 6-3: Energy demand in various scenarios during 2014–2030 (MToe)
Source: Estimates are based on modelling developed in this research
In the SC4 Water scenario, similar to the SC1 BAU and SC3 Food scenarios, the total energy demand of Vietnam over 2014–2030 would increase at 7.5%, reaching 561.3 Mtoe by 2030 (Table 6-2 and Figure 6-3) The current drivers of energy demand growth include industrialization, urbanization, level of transport mechanization, and population growth Another primary contribution to the increase of energy consumption in SC4 is the huge energy demand for sewage water treatment and new technology in water drop irrigation, which is the main policy focus of this scenario In particular, the primary energy demand in SC4 would increase by 8.1% annually, which is close to the increases in SC1 and SC3, and 4 % lower than the rise in the SC2 scenario The absence of new technology and resources for energy generation in SC4 would worsen dependency on energy fossil fuels, whereas the demand for coal, oil, and gas would be 30.6%, 26.3%, and 13.1% of primary energy demand, respectively (Figure 6-4) Therefore, total demand for fossil fuel energy would amount to 386.2 MToe, equivalent to increased 2.2 times compared to base year
Figure 6-4: Share of fuel type in primary energy demand, various scenarios (%)
Source: Estimates are based on modelling developed in this research
Figure 6-5: Share of fuel type in final energy demand in various scenarios (%)
Source: Estimates are based on modelling developed in this research
In the SC5 Energy Food Water Nexus scenario, there would be significant rise in primary energy demand, from 120 Mtoe in 2014 to 716.8 Mtoe in 2030, which is equivalent to an annual growth rate of 11.8% and 10.6% in terms of primary energy demand and final energy demand, respectively (Tables 6-1 and 6-2, respectively) In this scenario, a cross-sectoral approach among the energy, food, and water sectors is underpinned in the food, water, and energy policy, whereas the goal was set to partially bring about positive impacts on energy security with less pressure on energy demand while maximizing economic growth As a result, the final energy demand would reach 881.6 Mtoe in 2030, an increase of 61%, 4.5%, 61.7%, and 57.1% compared with SC1, SC2, SC3, and SC4, respectively Among the various fuel types, electricity would have the highest annual growth of 11.6%, while oil, gas, and coal would grow at 9.0%, 10.6%, and 8.1%, respectively, over 2014–2030 The share of oil, gas, and coal would also remain high, accounting for 62% of the total final energy demand, despite the increasing share of non-hydro renewable power (solar, wind, and biomass) up to 10%
The appreciable rise in GDP, to reach 426.7 billion US dollars by 2030, is the main driver for considerably increased energy demand to satisfy socio-economic development, rapid urbanization, and maximizing the production output of the energy, food, and water sectors Furthermore, major contribution to the high growth in energy demand of SC5 is derived from the energy demand for maximizing energy production capacity, expansion of the food-processing sector, and sewage water treatment, which are in line with the key assumptions of this scenario, as discussed in Chapter 5 In SC5, the increasing energy demand at a similar pace to the SC2 Energy scenario would require similar investment in the energy sector but would generate much higher positive impacts through higher GDP growth (the largest GDP among all scenarios) The cross-sectoral approach policy considers energy–food–water linkages when deploying new technology in all three sectors with regard to their interaction and mutual impacts, which would contribute the most to the GDP growth
Notwithstanding the positive impacts on economic output and energy security in general, major challenges for the environment regarding the increasing CO2 emissions of SC5 need attention from a policy viewpoint
Table 6-2: Growth rate of energy demand in various scenarios during 2014–2030 (%/year)
2030 SC6 Low Carbon Primary Energy Demand
Source: Estimates based on modelling developed in this research
Figure 6-6: Changes in primary energy demand, various scenarios
Source: Estimates are based on modelling developed in this research
In the SC6 Low Carbon scenario, compared to SC5, there would be a marginally lower increase in primary energy demand from 120 Mtoe in 2014 to 699.4 Mtoe in 2030, which is equivalent to an annual growth rate of 11.6% and 10.2% in term of primary energy demand and final energy demand, respectively, throughout 2014–2030 (Tables 6-1 and 6-2, respectively) In this scenario, the goal is to lower CO2 emissions while pursuing the cross-sectoral approach among energy, food, and water policy Therefore, this scenario is forecast to partially bring about positive impacts on energy security, with less pressure on energy demand and a negative impact on the environment as economic growth is maximized As a result, the final energy demand of SC6 would reach 842.2 Mtoe in 2030, which is equivalent to larger shares of 53.7%, 54.4%, and 50% than those of SC1, SC3, and SC4, respectively; but smaller shares of 8.8% and 4.5% than those of SC2 and SC5, respectively Electricity would have the highest annual growth at 10.5%, while oil, gas, and coal would grow at 9.8%, 9.7%, and 8.5% per year, respectively, over 2014–2030 Despite the increasing share of non-hydro renewable power (solar, wind, and biomass) up to 10% and the reduction of total fossil fuels by 3% compared to SC5, oil, gas, and coal would dominate the share of total energy demand during 2014–2030
Vietnam’s energy intensity, expressed in this research as energy (electricity) consumed per unit of GDP, is forecasted to increase significantly over the next 16 years, at an annual growth rate per annum in the range of 1.7% to 6.39% among the various scenarios, as shown in Table 6-3 This increase reflects the increasing consumption of energy (electricity) per output of GDP
In the SC1 BAU scenario, the average energy intensity of Vietnam would increase at
3.6% per year throughout 2014–2030, from 273.6 Toe per million dollars in 2014, to 480.3 Toe per million dollars in 2030 (Table 6-3) This is due to the rapid reduction and scarcity of Vietnam’s oil, coal, and gas reserves amid rapidly increasing energy consumption over the next 16 years This context would obviously lead to more expensive energy in generating economic output and hence, would result in significantly increased primary energy intensity of SC1, as shown in Figure 6-7
Figure 6-7: Energy intensity trends in Vietnam
Source: Estimates are based on modelling developed in this research
In the SC2 Energy scenario, the assumptions are underlined by the higher priority of shifting the investment focus to increasing energy production capacity in both conventional thermal and renewable energy Therefore, Vietnam is expected to achieve the lowest energy intensity over 2014–2030 in this scenario The energy intensity is forecast to decrease from 273.6 Toe per million dollars of GDP in 2014 to 234.8 Toe per million dollars of GDP in 2030, an average annual decrease of 0.95% (Table 6-3) The energy intensity in SC2 of a 51.1% decrease from 480 Toe per dollar of GDP to 234.8 Toe per million dollars of GDP is a significant improvement over the BAU scenario The major contribution to the improvement of energy intensity in SC2 primarily resulted from the application of the technological change in fossil-based energy production, promotion of renewable energy, and energy efficiency programs in economic sectors For example, renewable energy would account for 10% of the installed energy production capacity, enabling less energy-intensive fossil electricity; energy intensity is expected to decline from 51 Toe per dollar in SC1 to 33 Toe per million dollars in SC2 Furthermore, in SC2, the increased GDP share of relatively less energy-intensive in the service sector is 55 Toe per million dollars and in the industrial sector is 39 Toe per million dollars The energy intensity improvement of SC2 is equivalent to 31% for the industrial sector and 62% for the service sector in SC2, which would eventually lower the energy intensity by 29% and 63% compared to the base year of 2014 and SC1 BAU, respectively
Table 6-3: Primary energy intensity (toe/million dollars)
Other perennial plants and raw rubber 0.06 0.01 0.01 0.03 0.01 0.01 0.01
Water supply — Surface and groundwater 0.76 1.05 0.47 1.06 0.11 0.58 0.61
Growth of energy intensity during 2014–2030 (%) 75.5 -14.2 78.0 68.7 -7.4 -10.4
Annual growth of energy intensity during 2014–2030 (%) 3.6 -0.95 3.7 3.3 -0.5 -0.9
Source: Estimates are developed from this research
In the SC3 Food scenario, the energy intensity of Vietnam is expected to rise by 79% during 2014–2030, from 277 Toe per million dollars in 2014 to 487.1 Toe per million dollars in 2030 (Table 6-3), the highest growth of all the scenarios This rate is equivalent to an average annual growth of 3.7%, which is marginally (0.1 %) higher than the increase rate of SC1 but significantly higher than SC2 (4.7 %) This enormous worsening of energy intensity in SC3 is mainly due to the absence of investment in energy amid vastly increasing food processing and food production capacity, according to the assumptions of SC3 Therefore, this would increase energy consumption for water cycling, pumping, and distribution to meet the rising water demand of the whole food supply chain The high-energy-intensity areas would occur in both the food and water sectors, which would be 4.29 Toe per million dollars and 0.14 Toe per million dollars, respectively In the food sector, the average annual increase of energy intensity is forecast to be 7 % and 12 % higher than SC1 and SC2, respectively Meanwhile, the energy intensity of the water sector is expected to increase annually by 33% and 42% more than SC1 and SC2 on average