12 - Regulation of the nexus

Summary

Introduction

The climate-energy-water nexus is a relatively new focus of interdisciplinary research and policy attention (Proust et al 2007; WBCSD 2010; PMSEIC 2010; Water in the West 2013). Research and practice regarding regulation of the nexus is at an even more nascent stage. Nevertheless, regulation – establishing rules, laws, and institutional and decision-making frameworks – is emerging as a critical dimension of managing the trade-offs that arise at the intersection of climate, energy and water policies. On the one hand, well-designed regulation that takes account of all elements of the nexus can facilitate more integrated decision making and management, in some cases leading to outcomes that optimise benefits for all three sectors (Pittock et al. 2013). On the other hand, regulatory systems in different sectors that operate independently of one another – a situation described as “regulatory fragmentation” (Craig 2008) – may present barriers to management of the nexus and to the implementation of innovative technological options.

This chapter examines regulation of the climate-energy-water nexus. It focusses on the barriers to integrated climate-energy-water decision making posed by regulatory fragmentation, as well as case examples of ways that existing regulatory frameworks for climate, energy and water might be adapted to better manage the nexus. Case studies are drawn from specific jurisdictional contexts – Australia, the United States and the European Union – but are analysed as examples of regulatory practice that might offer useful lessons for regulation of the nexus in other regions and countries. The final section of the chapter considers some of the new challenges facing regulatory efforts at the nexus. These include current or imminent developments: for example, the climate change and water impacts of efforts to harvest ‘unconventional’ energy resources, including through the use of techniques of hydraulic fracturing (fracking) (Wiseman 2009; NWC 2010). Other challenges lie on the horizon: for example, the water and energy implications of proposed technologies to deal with carbon pollution and climate change, such as carbon capture and storage (Pittock et al 2013), or geoengineering (Royal Society 2009).