This paper summarizes the findings of an extensive review of literature that was conducted to understand the historical state of the food, energy, and water nexus in the Lake Atitlan basin and to recommend incentive-based, long-term sustainable policies to become a significant driver to Guatemala’s tourism industry and GDP growth. The SWAT (Soil and Water Assessment Tool) was implemented in the basin to work towards the goal of simulating nutrient loading. A key conclusion of this review study is for the local population to have advocacy for the “zero wastewater discharge to Lake Atitlan” initiative to bring long-term benefits to lake water quality. One of the recommended policy decisions is to seek external financing from international agencies like the World Bank at low-cost interest (IDA Loans) to implement waste management systems and pay this external debt by putting a small but affordable tax on tourists visiting the lake. Once a culture of zero municipal effluent discharge to Lake Atitlan is adopted by the local population, the livelihood of residents will become sustainable and the standard of living will increase because of improved water and air quality, making Lake Atitlan a haven of tourism for Guatemala and lifting its economy.