Abstract
FEW Nexus decision-making assumes that there are gains to be made by coordinating the interrelationships among Nexus elements. Economics is fundamental in such an endeavor as many actions can be pursued, but they must be beneficial to the parties involved and not harm external matters if they are ever to be implemented. This chapter provides background on the total economics of Nexus decisions. In doing this, we first treat fundamental issues that are relevant in a cost-benefit analysis like including supply and demand responses to Nexus decisions, valuing non-market goods, understanding welfare economics of who gains and losses, and consideration of incentives along with some unintended consequences that may arise. We then turn to broader economic concerns on externalities, income distribution, effects that arise over time, consideration of uncertainties, public and private roles in implementing actions, and. Finally, we present a discussion of an ongoing study showing how economics is woven into a Nexus analysis project.
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McCarl, B.A., Yang, Y. (2020). Economics. In: Saundry, P., Ruddell, B. (eds) The Food-Energy-Water Nexus. AESS Interdisciplinary Environmental Studies and Sciences Series. Springer, Cham. https://doi.org/10.1007/978-3-030-29914-9_5
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