Agri production greenhouse gas emissions must drop 30% to align with Paris pact: Report

Agricultural production and land-use change emissions in company value chains account for nearly half of total food systems emissions (an estimated 10 GtCO2e of a total 21 GtCO2e in 2030). 

The statement said analysis from the Future Fit Food and Agriculture reports series estimates that, to mitigate up to 90 per cent of their annual agricultural and land-use change emissions by 2030, food and agriculture companies should expect sector-wide costs of approximately $205 billion per year (2025-2030). While significant, such investments are manageable for the sector as a whole and they have associated co-benefits. The annual expenses represent less than 2 per cent of the sector’s projected $13 trillion average annual revenues for 2025-2030. 

More potential returns

One-fifth of the investments will be in new and growing markets. “These investments, estimated to be $40 billion per year (average annual from 2025-2030), could lead to potential additional returns of up to $190 billion per year by 2030,” it said. 

Some on-farm solutions provide savings and/or increased yields worth up to $30 billion per year. Other associated co-benefits include increased supply-chain resilience and delivery on other sustainability commitments, such as nature targets, it said.

The burden of implementing mitigation solutions should be shared more equitably across value chains. In general, the more upstream a value chain participant is, the lower its margins tend to be. Farmers in particular tend to have the lowest margins of any value chain participants. 

“It follows that companies across the value chain must work together to determine transition economics and arrive at a transparent, fair and equitable distribution of costs and benefits. They also stand to benefit from making more unified policy requests to the government on what it can do to alleviate the costs for all and enable acceleration,” the statement said.    

Mobilising equitable investments

The second Future Fit Food and Agriculture report says costs for mitigation, as a percentage of revenues, change very significantly depending on where actors sit along the value chain. The report shares three examples to illustrate this point, including the case of a Brazilian beef farmer, for whom mitigating 30 per cent of the agricultural production emissions could cost as much as 17 per cent of their revenues – an unrealistic expectation given farmers typically achieve profit margins of less than 20 per cent, it said.

Overcoming inequity requires food and agriculture companies to reassess how they partner with other actors in the value chain, particularly farmers, and how they engage with policymakers to incentivise and accelerate action.  

“Some companies are already leading the way on this, with several working together through the likes of the World Business Council for Sustainable Development (WBCSD) to identify where they can problem solve collectively, raise ambition levels, drive harmonisation, and accelerate the implementation of critical solutions,” it said. 

“Food system transformation is a central solution to climate change and agrifood companies have a critical role to play. To meet net-zero targets, businesses must take concerted and ambitious action to de-risk the transition for producers and ensure the costs and benefits of mitigation are shared equitably across the value chain,” said Diane Holdorf, Executive Vice President, WBCSD.

“Transitioning to a future fit food system will require companies to mobilise equitable investments and fair partnerships with farmers. This new research highlights that the capital needed to drive that transformation is not only within reach, but will also pay dividends to early movers,” said Luke Pritchard, Deputy Director, Nature Based Solutions, We Mean Business Coalition.