Key findings from our new report about climate finance for food systems transformation

In the lead-up to COP27 in Egypt, the Global Alliance for the Future of Food has released a new report to support those in the climate finance and philanthropic communities who want to champion comprehensive, evidence-based climate action.

It’s titled Untapped Opportunities: Climate Financing for Food Systems Transformation. The publication builds on the Global Alliance’s past work that explored how food systems transformation can help countries achieve national climate goals.

With updated analysis and calculations, this report outlines the many strategic opportunities to invest in food systems activities in ways that would benefit the health of people, the planet, and animals.

Currently, public finance directed to food systems sits at 3% — a drop in the bucket of global investment directed to climate change. Food and agriculture may seem like a niche investment until you consider that food systems generate 33% (one-third) of global greenhouse gas emissions. This includes the emissions produced during the growing, harvesting, storing, transporting, selling, and wasting of that food.

Just 3% of public finance to address 33% of the problem doesn’t quite make sense, does it? Here’s an overview of some of the other key findings from our new climate financing report.

• We must define specific actions from across the food systems value chain. It’s easy to say “food systems transformation is an effective tool to fight climate change” and leave it at that. What’s less clear are all the supply and demand-side measures linked to food systems that could contribute significantly to emission reductions. Food systems actions often focus on supply-side measures because they are the ones we can more easily grasp: these measures look at actions taken before and during food production. Curbing land-use change and the conversion of ecosystems (for concentrated livestock production, for instance) and enhancing carbon sinks. While these actions have mitigation potential, demand-side food systems measures are just as important when it comes to tackling large-scale emission reductions. These demand measures including reducing food waste and shifting diets to more plant-based food should also be the focus of public finance. Together, recognizing and investing in supply and demand-side measures along the food systems value chain could reduce global GHG emissions by up to one-fifth of what’s needed by 2050 to meet the Paris Agreement’s 1.5°C target.
• There is a role for investors and philanthropic organizations working in all sectors. Finance is often sorted into buckets. A bucket for health funding, a bucket for climate, a bucket for livelihoods, etc. Investment in food systems transformation cuts across all sectors and silos, offering a unique opportunity for even the most thematically-focused investor to play a part. Our new report shares a finding from a 2019 publication assembled by the Food and Land Use Coalition. It outlines the amount of funding needed in categories like “nature protection and restoration,” “healthy oceans,” “stronger rural livelihoods,” “digitalization of food systems,” and “gender and demography.” Climate change is an existential threat, and we must start investing in systems-thinking approaches that will produce benefits on several fronts.
• It’s not only new finance that is needed — we also need to redirect existing financial flows. We need an estimated USD 300 to 350 billion per year to implement actions needed to transform our food systems. Currently, only USD 9.3 billion annually goes to food systems measures. Closing that gap could come from finance that is currently being used to support food and agriculture measures that undermine climate goals and perpetuate destructive practices. This includes funding that supports the expansion of monocultural landscapes, chemical agriculture, and extractive water practices. If we redirected even a portion of the USD 528 billion in public money spent each year on harmful agricultural practices, we could be off to a strong start. Repurposing or creating new incentive structures to build sustainable food systems will help direct public and private funding to activities that align with climate objectives — rather than hinder them.
• There’s a tremendous opportunity for governments to do more to direct climate funding to food systems transformation. For national governments and public financiers, the most logical step is to better include food systems measures in their Nationally Determined Contributions (NDCs). These national climate action plans are at the heart of the Paris Agreement and will be revisited at COP27 in Egypt in November. Our analysis and review of 167 NDCs found that while over 90% of countries reference food as part of mitigation, adaptation, or other climate measures, just 1 in 4 allocate finance needs for these measures. More public funds must be earmarked for implementing food systems actions — we hope this report is a first step in helping policymakers and other stakeholders understand why and how.

This post is an overview of the complete findings of this exciting new release. Read the full Untapped Opportunities: Climate Financing for Food Systems Transformation report.