Food system transformation could create ‘multi-trillion dollars’ of economic benefits every year

The study of food system economics​ concluded that food systems are currently destroying more value than they create and that an overhaul of food system policies is urgently needed.

The incidence of poverty tends to be higher in agriculture than in the other segments of food systems, the report noted. Nitrogen surplus from agriculture and natural land is increasing from 245 Mt to about 300 Mt a year, polluting water, destroying biodiversity and undermining public health.

A shift to environmentally sustainable production in agriculture potentially reverses biodiversity loss, reduces demand for irrigation water and almost halves nitrogen surplus from agriculture and natural land (i.e. land that has not been altered or developed for human purposes).

“The costs of inaction to transform the broken food system will probably exceed the estimates in this assessment, given that the world continues to rapidly move along an extremely dangerous path. It is likely that we will not only breach the 1.5°C limit, but also face decades of overshoot”, said Johan Rockström, Director of the Potsdam Institute for Climate Impact Research (PIK) and FSEC Principal.

“The only way to return back to 1.5°C is to phase out fossil-fuels, keep nature intact and transform food systems from source to sink of greenhouse gases. The global food system thereby holds the future of humanity on Earth in its hand”, he added.

The FSEC is an independent academic commission, set up to equip political and economic decision-makers with tools and evidence to shift food and land-use systems.  It brings together experts across the economics of climate change, health, nutrition, agriculture and natural resources, representing organisations including the Potsdam Institute for Climate Impact Research, the World Health Organisation, World Bank, London School of Economics and World Resources Institute Africa.

Two possible futures for the global food system

In the report, the scientists provide modelling of the impacts of two possible futures for the global food system to date: our `Current Trends’ pathway, and the `Food System Transformation’ pathway. In its `Current Trends´ pathway the report outlines what will happen by 2050, even if policymakers make good on all current commitments: food insecurity will still leave 640 million people (including 121 million children) underweight in some parts of the world, while obesity will increase by 70% globally.

Food systems will continue to drive a third of global greenhouse gas emissions, which will contribute to 2.7 degrees of warming by the end of the century compared to pre-industrial periods. Food production will become increasingly vulnerable to climate change, with the likelihood of extreme events dramatically increasing.

FSEC also finds that the food system can instead be a significant contributor to economies, and drive solutions to health and climate challenges. In the `Food System Transformation` pathway, economists show that by 2050 better policies and practices could lead to undernutrition being eradicated, and cumulatively 174 million lives saved from premature death due to diet-related chronic disease. Food systems could become net carbon sinks by 2040, helping to limit global warming to below 1.5 degrees by the end of the century, protecting an additional 1.4 billion hectares of land, almost halving nitrogen surplus from agriculture, and reversing biodiversity loss. Furthermore, 400 million farm workers across the globe could enjoy a sufficient income.

“The cost of achieving this transformation - estimated at the equivalent of 0.2-0.4 percent of global GDP per year - is small relative to the multi-trillion dollar benefits it could bring. Food systems are a uniquely powerful means of addressing global climate, nature and health emergencies at the same time - while offering a better life to hundreds of millions of people,” said Hermann Lotze-Campen, FSEC Commissioner and Head of Research Department "Climate Resilience" at PIK.

“Rather than mortgaging our future and building up mounting costs leading to high hidden health and environmental costs that we will have to pay down the line, policymakers need to face the food system challenge head-on and make the changes which will reap huge short- and long-term benefits globally,” says Ottmar Edenhofer, PIK Director and FSEC Co-Chair. “This report should open up a much-needed conversation among key stakeholders about how we can access those benefits whilst leaving no one behind,” he concluded.