The world needs to reduce emissions and curb global warming before it is too late. Agrifood systems – both a victim and a cause of climate change – must do their part. We spoke to Mohamed Manssouri, Director of the FAO Investment Centre, about the importance of investing in carbon neutrality in agrifood systems.
What’s at stake?
The food, energy and financial crises are pushing more people into extreme poverty and hunger. Even before the pandemic and the war in Ukraine, the world was not on track to end hunger and malnutrition by 2030.
We urgently need to transform our agrifood systems to be more sustainable, resilient and inclusive. These systems need to be able to respond to growing food demand while also becoming greener and contributing to global mitigation efforts.
In terms of climate change, agrifood systems are both a culprit and a victim. Depending on estimates, emissions from agrifood systems account for 21 to 37 percent of total anthropogenic greenhouse gas emissions. At the same time, the effects of climate change – increased drought, flooding, wildfires, unpredictable weather patterns – are extremely disruptive to global agricultural production. They also impact agrifood system actors differently, from small-scale farmers to large manufacturers and consumers.
Carbon neutrality is becoming a key policy theme globally, and many institutions and companies are genuinely concerned about sustainability. Countries are already highlighting the role of food and agriculture in their Nationally Determined Contributions (NDCs), and governments are pushing through legislation needed to achieve ambitious carbon reduction targets.
Is carbon neutrality in agrifood systems a utopian ideal?
We believe that decarbonizing agrifood systems is both necessary and achievable.
When we talk about decarbonizing agrifood systems, we are effectively talking about removing emissions across entire supply chains – from farm to fork. We’re also talking about more efficient farming practices and sustainable agriculture, the use of agricultural lands for carbon sequestration, the avoidance of land clearing, efficient processing and logistics, and reduction of food loss and waste, including at consumer level.
The change is happening, but we’re not seeing a massive new green wave just yet.
All this depends on many factors, including the commodity in question, the complexity of the supply chain, and the relationships among input suppliers, farmers, processors, distributors, retailers and consumers. Above all, it takes strong political and corporate commitment, sound policies, good governance and dedicated investment to see results.
Working towards carbon neutrality is merely a milestone, maybe a minimum of what we should be striving for towards more ambitious emission reduction targets.
How do you define carbon neutrality, and what are some obstacles in achieving carbon-neutral agrifood systems?
Beyond the hype, many questions remain. For one, how do you measure carbon neutrality and achieve it in practice? And how do you ensure a shared governance mechanism?
There are at least a dozen definitions of carbon neutrality, with more cropping up as private and public players decide to tackle their emissions. According to the Intergovernmental Panel on Climate Change (IPPC), carbon neutrality is achieved when anthropogenic emissions are balanced by anthropogenic removals over a specified period (IPCC, 2018). There is limited reliable, up-to-date inventory data on food production processes for accurate carbon footprint assessments. And while farm-level innovations and methodologies to assess neutrality hold promise, they are far from perfect.
We, at the Food and Agriculture Organization of the United Nations (FAO), teamed up with our longstanding partner, the European Bank for Reconstruction and Development (EBRD), to carry out a comprehensive study on carbon neutrality in agrifood systems.
We wanted greater insight into these issues and to provide strategic guidance on the public and private investment and policy needed to move the carbon neutrality agenda forward.
The result was Investing in carbon neutrality: utopia or the new green wave? Challenges and opportunities for agrifood systems.
The private sector has much to gain by decarbonizing agrifood systems – like reducing costs, mitigating risks, protecting brand value, ensuring long-term supply chain viability and gaining competitive advantages.
Some companies have committed to ambitious emissions reduction targets. But efforts have been uneven.
For one, achieving carbon neutrality is still voluntary. And the costs of becoming carbon neutral can be significantly higher for smaller companies than larger ones – and vary from sector to sector.
Most importantly, not all carbon reduction approaches pay off for agrifood system actors. Consumers are often not willing to pay a premium for carbon-neutral products, and regulations affecting carbon emissions (and implicit carbon prices) often do not create enough incentives to decarbonize.
So, what can be done?
Our study identifies five areas where governments, investors and international organizations can take action to shorten the distance towards carbon-neutral agrifood systems.
One, strategically target carbon neutrality. Governments can set the tone through policies, strategies and road maps, including a strong commitment in their NDCs. And they can regulate carbon or provide incentives to adopt low carbon technology.
Two, improve and standardize tools and methods for collecting data and monitoring, reporting and verifying emissions, including carbon footprint calculators. Measuring carbon neutrality can be a major challenge for private companies. Governments can help by defining, simplifying and harmonizing internationally recognized standards for carbon accounting.
Three, promote sound governance mechanisms, which is crucial to guiding low-carbon investment and private sector compliance. Four, directly support companies and farmers through concessional financing and incentives to decarbonize their operations.
Five, educate and communicate. That means developing capacities and sharing knowledge at all levels, from farmers and companies to service providers and consumers. Simple, more transparent and reliable communication on a product’s carbon footprint can raise consumer awareness and influence buying habits.
Drastically reducing the carbon footprint of the world’s agrifood systems can and must be part of the climate solution. It is not some box-ticking exercise, but rather a broad, long-term endeavour involving a complex set of interventions and the engagement of many stakeholders, including organizations like FAO and the EBRD. We all have a responsibility to work towards a greener, more resilient future.
More Information:
Mohamed Manssouri, Director
FAO Investment Centre Food and Agriculture Organization of the United Nations
www.fao.org/investment-centre
See related publication: Investing n Carbon Neutrality: Utopia or the New Green Wave? Rome, FAO.
