Generated Summary
This report, commissioned by Climate Focus for the Global Alliance for the Future of Food, investigates the critical need to increase climate finance and align public financial flows to food systems to meet the Paris Agreement targets. The study emphasizes that while food systems are a significant driver of climate change, they receive only a small fraction of public climate finance. The methodology involves an analysis of existing finance flows, a review of Nationally Determined Contributions (NDCs), and recommendations for policymakers and donors. The report highlights that transitioning to more sustainable food systems requires increased support from the global finance community and that significant economic and environmental benefits can be achieved by redirecting financial resources toward climate-aligned actions in food systems.
Key Findings & Statistics
- Food systems are responsible for one-third of global greenhouse gas emissions.
- Only 3% of public finance is directed to food systems.
- USD 528 billion of public money is spent on agricultural practices that can have harmful impacts on the environment and climate, while USD 300-350 billion is needed annually to transform food systems.
- The study states that emissions from global food systems alone would likely exceed the emissions limit required to keep global warming below 1.5°C (2.7°F) in the next 40 years.
- An estimated USD 300 to 350 billion is needed every year through 2030 to support the transition to sustainable and climate-resilient food systems.
- In the past 5 years, only USD 9.3 billion per year in public climate finance was directed to food systems.
- 70% of current Nationally Determined Contributions (NDCs) lack adequate detail on the funding needs for climate action in food systems.
- A startling 86.4% of the USD 611 billion spent annually has potential destructive impacts on climate, biodiversity, health, and food systems resilience.
- Developing countries declare funding needs of USD 14 billion per year to implement food systems actions; by contrast, they estimate finance needs of USD 64 billion for energy and transport measures.
- Public climate finance provided to food systems has quadrupled in the past 5 years, increasing from USD 1.7 billion per year by 2016 to USD 9.3 billion per year by 2020.
- The economic gains of such a transition are estimated at USD 5.7 trillion a year by 2030, and USD 10.5 trillion a year by 2050.
- Social returns include creating new jobs and markets in the fields of sustainable food production, transport, and consumption, estimated to be worth USD 4.5 trillion by 2030.
- In the period 2000–2015, food systems received USD 1.7 billion per year. This amount grew to USD 9 billion per year during 2016-2020.
- Philanthropic finance flowing from foundations to climate change mitigation has grown steadily in recent years, from nearly USD 900 million in 2015 to over 1.9 billion in 2020.
- Food systems and agriculture totalled an estimated USD 105 million between the years 2015–2020, accounting for 5.5% of total philanthropic giving to climate change mitigation.
- In the period 2019-2020, USD 509 billion was channelled to mitigation activities in the energy and transport sectors, while only 14 billion went to land-use activities.
- Finance needs for implementing the country’s Nationally Determined Contribution (NDC) measures up until 2030 are estimated at a minimum USD 0.6 billion.
- Between 2018–2020, the EU provided EUR 60 million (USD 60.1 million) for marketing campaigns that promoted the consumption of pork, beef, poultry, and lamb.
- Between EUR 28.5 to 32.6 billion (USD 28.56 to 32.67 billion) goes toward livestock farms or producing fodder for livestock every year.
- The current aggregate value of the global food system is an estimated USD 9 to 11 trillion dollars.
- Between 2015-2020, global meat and dairy companies received USD 478 billion from 2,500 investment firms, banks, and pension funds around the globe.
- Investors channelled USD 70 billion between 2010-2015 to subsidiaries of 23 firms who had been linked to land grabbing and illegal deforestation in their production and trading of agricultural products.
Other Important Findings
- Investing in food systems transformation is a cost-effective way to achieve huge emissions reductions.
- Beyond NDCs, countries must ensure that their domestic food and agricultural policies are coherent with climate goals.
- Developing countries should include more detailed food systems priorities and funding needs in their NDCs to mobilize climate finance.
- Governments use an array of instruments to channel finance into food systems that influence what is produced, where, and how much.
- Public finance supporting agriculture and food production has significantly shaped our current food systems.
- The study emphasizes that the adoption of monocultural landscapes for food production has significantly eroded global soils and hindered nature’s capacity to regenerate.
- Solutions to reduce the climate impacts of food systems already exist and require increased support by the global finance community.
- Financial, regulatory, and fiscal policies such as subsidies, tariffs, and taxes are some of the tools available to policymakers to direct how public and private finance is used in food systems.
- Transitioning to more sustainable food systems using supply- and demand-side measures could reduce global GHG emissions by at least 10.3 Gt CO2eq a year by 2050.
- Public climate finance provided to food systems has quadrupled in the past 5 years, increasing from USD 1.7 billion per year by 2016 to USD 9.3 billion per year by 2020.
- The impact of this financial support on the climate is particularly relevant for high- and upper-middle-income countries, where dairy and meat consumption per capita is higher.
- In poorer countries and regions, the production of staple foods such as cereals receives more support, leaving farmers with fewer incentives to diversify production toward more nutritious foods.
- The first recipients of climate finance include national or subnational governments, development finance institutions, research institutions, and non-governmental organizations.
- Good examples of integrating food systems measures into NDCs can be found in Kenya’s and Colombia’s NDC.
- Kenya’s NDC specifies several mitigation measures that have potential to contribute to food systems transformation, including scaling up nature-based solutions and climate-smart agriculture.
Limitations Noted in the Document
- The study notes that the framework allowed reviewers to interpret the scope of measures in the NDCs in order to categorize the finance needs relevant for food systems and other sectors.
- The NDC documents varied in length and level of detail, with some not compiling sectoral-based finance information but instead detailing project-specific finances.
- The filter may have excluded some forestry-related projects that fall in the Agriculture, Forestry and Other Land Use (AFOLU) sector but did not have clear food-relevant objectives.
- In the absence of regulation to make private finance coherent with climate goals, increasing investments in the food and agriculture sector have led to negative environmental and social impacts through the production of key agricultural commodities.
Conclusion
The report’s central argument is that the global food system must undergo a radical transformation to address climate change effectively. It emphasizes that despite the food system’s substantial contribution to greenhouse gas emissions, it receives a disproportionately small amount of public climate finance. The authors stress the urgency of increasing financial support for food systems transformation, highlighting that failure to do so will jeopardize the achievement of the Paris Agreement goals. The study underscores the importance of redirecting financial flows, ensuring that climate finance aligns with sustainable food system policies and actions. The recommendations call for policymakers and donors to prioritize food systems in NDCs, include detailed funding needs, and consider multiple benefits when measuring climate investments. The report also calls for minimizing negative externalities and maximizing social, economic, health, and environmental returns over time. In the end, to deliver on all Sustainable Development Goals, the authors conclude that the mitigation potential of our food systems must be capitalized on and that existing financial flows must be redirected towards climate-aligned actions in food systems. The report suggests that a shift towards sustainable food systems, supported by strategic financial investments and policy changes, is essential for both climate mitigation and building resilience in the face of climate change impacts. It advocates for a holistic approach to food systems that considers health, equity, and interconnectedness, ensuring that the benefits of transformation are widely shared. The key message is that by recognizing and investing in climate-resilient food systems, the global community can address the climate crisis and achieve multiple sustainable development goals. This demands not only new climate finance but also redirecting existing financial flows towards climate-aligned actions in food systems.