Transition to sustainable food systems could yield $10 trillion annually, study reveals

An economic study akin to the influential Stern Review of 2006 on climate change has unveiled that a shift towards a sustainable global food system could deliver staggering annual benefits of up to $10 trillion. This comprehensive analysis highlights the significant environmental and medical costs incurred by existing food production systems, asserting that they extract more value than they generate, effectively borrowing from the future to reap short-term profits. 

Global food systems are identified as a key driver of greenhouse gas emissions, responsible for a third of global emissions, thus exacerbating the climate crisis and pushing the world toward a perilous 2.7°C of warming by the end of the century. This dire trajectory sets in motion a vicious cycle, as rising temperatures lead to extreme weather events and increased crop damage.  

Food systems also impose a heavy burden on healthcare systems. The study forecasts that a business-as-usual approach would result in 640 million people being underweight by 2050, alongside a 70% increase in obesity cases. The international team of researchers behind this study emphasized that reorienting the food system would be politically challenging, yet the potential economic and welfare benefits are immense.  

Johan Rockström, a co-author of the study and a researcher at the Potsdam Institute for Climate Impact Research, underscored the significance of the global food system, asserting that it “holds the future of humanity on Earth in its hand.” 

The study’s recommendations entail a reallocation of subsidies and tax incentives away from harmful large-scale monocultures dependent on fertilizers, pesticides, and deforestation. Instead, financial incentives should be directed towards smallholder farmers who can transform their farms into carbon sinks, promoting biodiversity. 

A shift in dietary choices also plays a pivotal role, alongside investments in technologies to enhance efficiency and reduce emissions. The report predicts that with reduced food insecurity, undernutrition could be eradicated by 2050, leading to 174 million fewer premature deaths and enabling 400 million farm workers to earn sufficient incomes. Such a transition would contribute to limiting global warming to 1.5°C above pre-industrial levels and halving nitrogen run-offs from agriculture. The estimated costs of implementing these transformative measures range from 0.2% to 0.4% of global GDP per year. 

 Previous research by Johan Rockström and his colleagues highlighted the food sector as the largest economic sector surpassing planetary boundaries. In addition to its climate impact, it significantly drives land-use changes, biodiversity loss, and accounts for 70% of freshwater consumption. 

The report is the result of collaboration between the Food System Economics Commission, which includes the Potsdam Institute, the Food and Land Use Coalition, and EAT, a holistic food-system coalition comprising the Stockholm Resilience Centre, the Wellcome Trust, and the Strawberry Foundation. Academic partners such as the University of Oxford and the London School of Economics also contributed to the study. 

The hidden costs associated with food, encompassing climate change, human health, nutrition, and natural resources, are estimated at a staggering $15 trillion. The study introduces a new model projecting how these hidden costs could evolve over time, depending on humanity’s ability to institute change. This aligns with a United Nations Food and Agriculture Organization report from the previous year, estimating off-the-books agrifood costs exceeding $10 trillion globally in 2020. 

Dr. Steven Lord from the University of Oxford’s Environmental Change Institute highlighted the study’s contribution in quantifying the economic opportunities associated with transforming food systems, emphasizing that the transformation is affordable on a global scale, while the cumulative costs of inaction pose substantial economic risks. 

Numerous other studies have already underscored the health and climate benefits of shifting towards plant-based diets. For instance, a report last year revealed that Brazil’s beef industry and the associated deforestation have a larger carbon footprint than all of Japan’s emissions from cars, factories, air conditioners, electric devices, and other sources combined. 

The study does not prescribe vegetarianism but suggests that demand for beef and most other meats would decline if the hidden health and environmental costs were factored into their prices. 

Nicholas Stern, the chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, welcomed the study, noting that the economics of the current food system are fundamentally flawed and detrimental to both human health and the environment. He emphasized the urgent need for radical change. 

One of the main challenges posed by the proposed food system transition is the potential increase in food costs. Managing this aspect with political skill and ensuring support for vulnerable populations is crucial to avoid social unrest, like the “yellow vests” protests in France triggered by petrol price hikes. 

Christiana Figueres, former executive secretary of the UN Framework Convention on Climate Change, stressed the forward-looking nature of the report, indicating that it demonstrates the possibility of a different reality and offers a roadmap to transform the food system into a net carbon sink by 2040. She emphasized that this opportunity should capture the attention of policymakers committed to securing a healthier future for both the planet and its people.