Generated Summary
This document is a report by the Food System Economics Commission (FSEC) that explores the economics of transforming global food systems to address climate, nature, and health emergencies. The study employs a science-based approach, contrasting two pathways: Current Trends (CT) and the Food System Transformation (FST). The FST pathway aims to achieve five operational goals: consumption of healthy diets by all, strong livelihoods throughout the food system, protection of intact lands and restoration of degraded lands, environmentally sustainable food production, and resilient food systems. The report utilizes rigorous economic modeling, literature reviews, and case studies to assess the economic benefits and costs of the FST, focusing on the reduction of hidden costs and the potential for a more inclusive, health-enhancing, and environmentally sustainable global food system by 2050.
Key Findings & Statistics
- The economic value of human suffering and planetary harm related to food systems is estimated at well above $10 trillion USD per year, with the cost of current food systems estimated at $15 trillion USD a year, equivalent to 12 percent of GDP in 2020.
- Health costs due to food systems are at least $11 trillion USD.
- Environmental costs are estimated at $3 trillion USD a year.
- The Current Trends pathway projects that 640 million people, including 121 million children, will remain underweight in 2050.
- The global adoption of unhealthy diets would increase the number of obese people worldwide by 70 percent to an estimated 1.5 billion in 2050, or 15 percent of the expected global population.
- The net benefits of achieving a food system transformation are worth 5 to 10 trillion USD a year.
- The FST pathway can achieve health targets by eradicating food insecurity, improving diet-related health outcomes, and reducing nutrition-related mortality.
- In the FST pathway, greenhouse gas emission reductions keep global warming below 2°C by 2050, biodiversity loss is reversed, and nitrogen surpluses are reduced by half.
- The FST alone will transform the land sector into a net carbon sink by 2040 and limit peak global mean temperature to just above 2.0°C.
- The FST, when the full effects of a global food system transformation on incomes are factored in, estimates of its benefits rise to 10 trillion USD per year.
- The net benefits of pursuing FST from the bottom-up entails calculating the hidden costs avoided by moving from Current Trends to FST. As discussed, the hidden costs are calculated item by item in each scenario. This involves multiplying physical flows by either market or shadow prices.
- At 200-500 billion USD a year, estimated costs of global food system transformation are low compared to its economic benefits.
- Implementing the FST pathway worldwide will need investments and transfers averaging 500 billion USD each year between now and 2050.
- Under FST, agricultural commodity prices increase by roughly 30 percent by 2050.
Other Important Findings
- The FST pathway enhances processes of structural transformation and reallocation of labor outside of agriculture.
- The transformation is affordable at a global level, but its costs for lower-income countries are beyond their current financing capacity.
- The Current Trends pathway underscores that a food system transformation is urgently needed to avoid systemic failures.
- Five broad priorities can guide national food system transformation strategies: Shifting consumption patterns towards healthy diets, Resetting incentives: Repurposing government support for agriculture, Resetting incentives: Targeting revenue from new taxes to support the food system transformation, Innovating to increase labor productivity and workers’ livelihood opportunities, especially for poorer workers in food systems.
- Transforming food systems would provide economic benefits equivalent to at least 5 trillion USD a year.
- In the FST pathway, the five operational goals are consumption of healthy diets by all, strong livelihoods throughout the food system, protection of intact lands and restoration of degraded lands, environmentally sustainable food production and resilient food systems that maintain food and nutrition security in the short and long run.
- Achieving those global gains depends first and foremost on action to change food systems at the national and local levels.
- FSEC has assessed one specific science-based transformation pathway for food system which brings huge benefits for both people and planet.
- In the FST pathway, over the next thirty years, all countries gradually transition away from diets dominated by empty calories and animal-sourced proteins, and instead increase their consumption of vegetables, fruits, nuts, legumes, and whole grains.
- In the FST pathway, the shift to environmentally sustainable production in agriculture reverses biodiversity loss, reduces demand for irrigation water and almost halves nitrogen surplus from agriculture and natural land.
- The continuation of current trends to 2050, modeled through the Current Trends pathway (CT), has further striking features: Food insecurity and undernutrition continue to plague humanity.
Limitations Noted in the Document
- The report acknowledges that while food system resilience is best measured by its ability to adapt to short-term disruptions, integrated assessment models are designed to analyse long-term dynamics and trends.
- The model is unsuitable for assessing resilience to short-term shocks and extreme events.
- The FSEC estimates the costs of transforming food systems at between 200 and 500 billion USD PPP a year to 2050, this broad range is comparable to the 300 to 400 billion USD a year estimated by the UNFSS finance lever (World Bank 2021).
- This study is based on a science-based approach, so no food system measures in the FST are explicitly linked to achieving the operational goal of resilience.
- The study emphasizes the importance of addressing the distributional impacts of food system transformation.
- The FSEC does not model the underlying policies necessary to incentivize and ensure implementation of the measures.
Conclusion
The core message is that a transformation of the global food system is urgently needed, feasible, and offers enormous economic benefits. The FST pathway, which includes measures like improving diets, livelihoods, and production, yields substantial environmental and health net economic benefits, estimated at a minimum of 5 trillion USD annually, and potentially 10 trillion USD per year when factoring in the full impact of rising incomes. The report emphasizes that this transformation is not only biophysically and technically feasible, but it also offers immense economic benefits. The shift towards healthier diets will contribute to 70 percent of the total economic benefits of pursuing the FST pathway through direct effects on dietary health and indirect impacts on the environment. The report stresses the importance of addressing the challenges head-on by dismantling barriers to change and developing achievable transformation strategies. Evidence shows that embracing equity and inclusion is key to making a transformation politically viable and essential for success. This includes the need to ensure that poor and disadvantaged groups can access new opportunities. In conclusion, while the financial burden of transforming food systems is manageable at a global level, it is crucial to address the specific challenges faced by low-income countries to unlock the global benefits of this transformation. The authors suggest five key elements for the design of food system transformation strategies: building coalitions of stakeholders; establishing new governance arrangements that facilitate balanced stakeholder representation and policy coherence; shaping narratives and providing information; calibrating policies to gain acceptance from key stakeholders; and holding governments and businesses to account for progress. By influencing the nature and distribution of interests, ideas, and information, policymakers and stakeholders can work together to build a food system that is more equitable, sustainable, and resilient. In summary, the document’s findings underscore the urgency of transforming food systems to address global challenges, the economic and social benefits of such a transformation, and the need for strategic action across all levels.