Energy-food nexus scarcity risk and the synergic impact of climate policy: A global production network perspective

ABSTRACT

Carbon neutrality has been a global consensus to navigate away from catastrophic climate change. In particular, such climate changes also generate inevitable influences on economic securities, such as energy security and food security, through energy structure transformation etc. Energy and food are essential elements for human beings, and they are naturally linked to sustainable development. Usually, emergency events, such as the COVID-19 pandemic, may threaten energy security or food security in a region, the risk of which would be amplified due to the energy-food nexus effect. This is no doubt also a challenge and an opportunity for countries to achieve carbon neutrality. To realize the stable pathways to carbon neutrality, it is important to analyze the energy scarcity risk and food scarcity risk of each industry and country as well as the nexus effect between energy and food. In this paper, we combine multi-regional input-output (MRIO) analysis with network control analysis (NCA) to investigate the dependence degree of each country and region on energy and food resources as well as the risk transmission network of the energy-food scarcity nexus. Base on this, the impact of climate policy on energy-food nexus scarcity risk is analyzed. We found some interesting conclusions. First, regarding the risk transmission network of the energy-food scarcity nexus, China, Germany and the US are the main generators, and the main receptors are Taiwan, Mexico and the Netherlands. These results imply that international trade transfers energy/food scarcity to geographically distant regions via the international supply chain. Second, as for the scarcity risk per unit of output, small economies that rely heavily on imported energy or food (such as Cyprus and Luxemburg) have the highest scarcity risk and are among the top receptors of transmitted risks. We suggest collaborative conservation and management of energy and food resources. Third, the analyses that assess the emission intensity and scarcity risk find that implementation of emission control policies could significantly decrease initial energy scarcity risk and energy-food nexus scarcity risk. This implies that besides emission reduction achievement, climate policies bring co-benefits of energy-food nexus security. Moreover, the co-benefit of energy and food nexus security for low income economies associated with climate policy is much higher than that for high income economies.