Food system policy overhaul could mitigate climate crisis and bring US$10tn benefits annually, study finds

31 Jan 2024 --- A report by Germany-based Food System Economics Commission (FSEC) reveals food systems are currently “destroying more value than they create” and have called for an urgent overhaul of food system policies.

Globally, food systems are undergoing a significant transformation with manufacturers and brands developing sustainable innovations, environmentally-friendly solutions, leveraging AI, sustainable processing technology, along with dietary additives for livestock and enhanced fertilizers.

On the flipside, the industry has also been battling climate change’s impact on crop yields while greenwashing concerns due to misleading environmental claims grow.

“Agriculture and food systems, at the global level, currently create hidden (or external) costs of more than US$ 10 trillion per year. This is more than the value-added that the global food system contributes to the overall economy,” Hermann Lotze-Campen, FSEC commissioner and head of the research department “Climate Resilience” at Potsdam Institute for Climate Impact Research (PIK), which conducted the study with FSEC, tells Food Ingredients First.

Diets rich in fats, sugar, salt and ultra-processed foods will cause a 70% rise in obesity globally by 2050, warns the study.“That means, agriculture and food systems effectively destroy more value than they create. This is due to nutrition-related health costs and productivity losses, greenhouse gas emissions (GHG), biodiversity loss and nitrogen-related environmental damages, and contributions to social inequality. Without changes in agriculture and food policies, these damages will further grow in the future.”

Implications of current approach
Even if countries follow their policy commitments made in their Nationally Determined Contributions, the global adoption of diets high in fats, sugar, salt and ultra-processed foods would still lead to 640 million people being underweight, along with a 70% rise in obesity globally by 2050, warns the study. This could have direct implications on medical systems worldwide.

The team also predicts per capita food waste to increase by 16% compared to present levels, reaching 76 kg of dry matter per capita in 2050.

Further, food systems will continue adding to the soaring temperatures through GHG, leading to a 2.7℃ rise by the end of the century compared to pre-industrial periods.

“Extreme events like heat waves, extended droughts and heavy rainfall will be challenging for agriculture. Agricultural systems around the world need to adapt to these changing conditions, but at the same time GHG emissions from agriculture need to be reduced,” notes Lotze-Campen.

Meanwhile, the impact on consumers is predicted in terms of rising food prices due to climate or other shocks that could heighten poverty and hunger, stretching the budgets of the poor and middle classes. “This leads to social tensions and the imposition of measures to limit trade,” says the study. 

Synergies and trade-offs
Lotze-Campen highlights that the FSEC Global Policy Report shows that a Food System Transformation pathway is possible and that it would create huge economic benefits.

Rising food prices due to climate or other shocks could heighten poverty and hunger, says Lotze-Campen (Image credit: PIK/Karkow).The report highlights five policy priorities to implement such a transformation pathway-

• Diets- Addressing malnutrition, undernourishment, overweight and obesity, including affordable diets for all
• Livelihoods- Higher incomes and better jobs for food system workers
• Biosphere- Protection of intact land and restoration of degraded land to ensure the ecological sustainability of food systems
• Production- Sustainable intensification of production is necessary to spare remaining intact land for its contributions to climate and environmental stability
• Resilience- Enabling food systems to cope with environmental shocks such as climate change that threaten food security.

As an example of the trade-offs and synergies that transforming food systems entails in practice, the study mentions the case of India. Adopting more sustainable agricultural practices will help tackle issues in the region, like undernutrition, depletion of groundwater due to conventional agricultural methods and high GHG emissions. Still, such measures might raise food prices and agricultural production costs.

“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,” underscores Johan Rockström, director of the PIK and FSEC principal.

The way forward
For Lotze-Campen, the most important lever for a sustainable food system transformation is a shift to largely plant-based diets, with less consumption of meat and dairy products.

“This also includes new food products, e.g. plant-based alternatives to meat or new food products based on precision fermentation or other new technologies. Food manufacturers are already offering some of those products. These technologies need to be advanced and need to become competitive in the market.”

“Consumers can start to change their dietary choices toward less meat and dairy, and more plant-based and other alternative products. Stakeholders can change purchasing strategies in canteens, restaurants, hospitals, schools etc., in the same direction.”

A shift toward more plant-based and other alternative products can contribute to the sustainable food system transformation.He further shed light on policymakers' role, suggesting they provide price incentives through measures like taxes on GHG emissions and smart regulation. 

The study also mentions taxes on sugar-sweetened beverages and on nitrogen fertilizers, which have proved effective in reducing the use of both by making them more expensive.

“The FSEC report provides a clear vision for a Food System Transformation pathway and guidance for policymakers on how to implement this pathway. The report also shows that it is technologically possible and economically highly beneficial.”

“Achieving these goals is challenging, but many technologies are already available. The Food System Economics Commission suggests that, given sufficient political will and determination, this ambitious Food System Transformation can be achieved,” he concludes.

The study was conducted by the FSEC, which was formed by the Potsdam Institute, the Food and Land Use Coalition, and EAT. The University of Oxford and the London School of Economics were the academic partners.

By Insha Naureen