Almost all economic activities are supported by the use of scarce land, water or energy, either directly or indirectly. Nexus is a useful label to describe how these resources are closely interlinked. To avoid negative side effects and to create synergies through policy, efficient management of the nexus resources needs to account for the direct and indirect effects of changes in various resources within the full biophysical and economic systems.
The report "The Land‑Water‑Energy Nexus: Biophysical and Economic Consequences" published by the OECD addresses the following question: What would be the global and regional biophysical and economic consequences by 2060 because of policy inaction regarding the limited availability of land, water and energy, given their interlinkages?
The most direct linkages in the nexus are at the biophysical level, such as in the production of crops; however, it is vital to look at the consequences of the bottlenecks on different economic activities and on different policy objectives: welfare, environmental quality, food, water and energy security. The report highlights that while the LWE nexus is essentially local, there can be significant large-scale repercussions in vulnerable regions, notably on forest cover and in terms of food and water security.