Moving Agriculture to a Low Carbon Future: A Call to Action

2° Celsius and the Stranded Assets

Global temperatures shall not rise more than 2° celsius (3.6° fahrenheit). That’s the number that 167 countries agreed to as the target in the Copenhagen Accord in 2009. 167 countries that together account for 87% of global carbon emissions.

Climate scientists took that target and calculated how much wiggle room we have left to remove carbon from the ground (in the form of fossil fuels) and burn it into the air. Their answer: 565 gigatons.

Some smart hedge fund managers in London took that number, looked at the fuel reserves held by publicly traded oil and gas companies like Chevron, Exxon, BP, Total, and others, and published CarbonTracker. Their answer: 2,795 gigatons.

In other words, oil and gas companies hold more than 5 times the amount of fuel in reserve than the world can afford to burn by 2050!

The problem with fossil fuels isn’t scarcity. It’s stranded assets.

Fuel reserves, usually held as assets on the balance sheet, suddenly look like stranded assets that are overvalued. Thus, a new investment hypothesis triggered the global movement of capital away from fossil fuels and toward the low carbon economy.

The Shift to a Low Carbon Economy

The accelerating shift to renewable energy sources is occurring faster than experts optimistically expected. It is driven by governments efforts to curb climate change and the rapid cost reductions and innovations in renewable technologies. The energy sector is being transformed.

This shift to low carbon is also hitting the automotive sector. While only 1% of autos sold in the world are electric, every automaker has electric models as the future of their product lines.

With structural shifts in energy and automotive industries gaining critical mass, agriculture faces an inflection point:

Agriculture can not afford to be late to the low carbon economy.

We All Need to Eat

Our current agriculture system is not ready for this shift. As an industry, Agriculture is the most reliant on fossil fuels and the most sensitive to energy price changes. This study from the US Department of Agriculture demonstrates that “food industries are more sensitive to energy price changes than are nonfood industries.” Higher food prices for main food crops threaten food security. Agriculture is vulnerable.

We will threaten global food security.

There are four critical dependencies on fossil fuels in agriculture:

• Synthetic fertilizer. Natural gas is the starter from which agricultural inputs like fertilizer, pesticides, etc. are created. Our current farming practices depend on these chemicals. Without them, we can not grow food and are thrust back to hunter-gatherer.
• Farm equipment. Tractors and other farm equipment run on gasoline, diesel, propane, and other fossil fuels. While the automotive industry is urgently taking up electrification, farm equipment manufacturers are largely ignoring it.
• Transportation. Agricultural outputs pass through the global supply chain via trucks, planes, trains, and boats. While some of these are being tackled by their corresponding industries (automotive, as discussed, but airline, maritime, and logistics) it has far reaching consequences for how agriculture will bring goods to market.
• Refrigeration. The proliferation of refrigerants to properly store and manage “cold chains” for food put huge volumes of hydrofluorocarbons (HFCs) into the atmosphere when they are not properly disposed of — 90% of HFCs that go into the atmosphere occur at the end of life of products.

A Call to Action

In the several years that I’ve researched and written about food and agriculture, I have met a lot of entrepreneurs, corporate leaders, and government bureaucrats who are working to incrementally improve agriculture. Incrementalization is not what’s needed. We need a true transformation. Looking at the food system through the lens of our energy future opens up truly innovative opportunities. While the shift to a low carbon economy is creating uncertainty keenly felt in all industries (talk to any automotive or energy executive), the organizations that work to shape this future are best positioned.

• How do we reward farmers for changing to farming techniques that sequester carbon and regenerate landscape?
• Can we create agricultural inputs in ways that mimic nature rather than trying to control it?
• How do we rethink farm machinery?
• How must we reengineer supply chains?
• Are there new crops we should grow?
• How do we create different packaging for food?
• How can we properly manage refrigerants to reuse or recycle into non warming chemicals?

Have more questions? Add them in the comments. Have answers? Let’s talk.