Carbon Neutrality: Utopia or The New Green Wave?

PROJECT SUMMARY

The EBRD and FAO have embarked on a comprehensive study to assess trends, challenges and opportunities for decarbonizing agrifood systems and help countries achieve multiple Sustainable Development Goals.

CONTEXT

The clock is ticking to reduce emissions and curb global warming before it is too late. The world’s agrifood systems – both a cause and a victim of climate change – must do their part.

Agrifood system emissions account for 21 to 37 percent of total anthropogenic greenhouse gas emissions. At the same time, climate change adversely affects agrifood system actors differently, from smallholder farmers to large food manufacturers.

Rising temperatures, changing rainfall patterns and supply chain disruptions already impact food production, undermining global efforts to achieve Sustainable Development Goals, including ending hunger and malnutrition. Agrifood systems need to become greener while also sustainably nourishing a growing global population and contributing to global mitigation efforts.

Carbon neutrality is becoming a key policy theme globally. Many companies are genuinely concerned about sustainability, and governments are pushing through legislation needed to achieve ambitious carbon reduction targets. But beyond the hype, complex issues remain. For one, how do you ensure a shared governance mechanism?

The EBRD and FAO, longstanding partners committed to more sustainable agrifood systems, seek insight into these questions.

In 2020, the EBRD adopted its Green Economy Transition approach. As of 2021, it has financed over 2 000 projects expected to reduce 100 million tonnes of carbon emissions annually. FAO, under its Strategic Framework (2022-2031), is helping countries realize the promise of the four betters – better production, better nutrition, a better environment and a better life for all.

ACTIVITIES

In 2020, the EBRD and FAO embarked on a comprehensive study to assess trends, challenges and opportunities for decarbonizing agrifood systems. Their goal was to provide a detailed analysis of carbon neutrality in agrifood systems and strategic insights on the investment and public policy needed to move the carbon neutrality agenda forward. The study’s recommendations are expected to benefit a wide range of agrifood actors, including representatives from governments, agrifood businesses, international organizations and civil society, as well as sustainability-minded investors.

The multidisciplinary team reviewed original research, informant interviews and analysis to:

Describe the concept of carbon neutrality and present existing methodologies for measuring and certifying carbon neutrality;

Evaluate challenges in achieving carbon neutrality in different parts of the agricultural supply chain;

Simulate strategies and related costs; and

Offer recommendations for public intervention and private investment.

They looked at key technical aspects related to existing methods and standards for measuring and tracking carbon neutrality in agrifood systems with a critical eye to identifying blind spots and challenges.

ACHIEVEMENTS

The study’s main findings, synthesized in an investment brief titled The shortest path: accelerating investment towards carbon-neutral agrifood systems, were presented at the 2021 United Nations Climate Change Conference (COP26) in Glasgow.

The flagship report Investing in carbon neutrality: utopia or the new green wave? Challenges and opportunities for agrifood systems, launched in 2022, identified five areas for action to show what different stakeholders – governments, international organizations, civil society, agribusinesses, and sustainability-minded investors – can do to accelerate the transition to greener agrifood systems.

Takeaways
  • Decarbonizing agrifood systems is both necessary and achievable.
  • Decarbonizing agrifood systems takes strong political and corporate commitment, sound policies, good governance and dedicated investment to see results.
  • Policy and optimization of production processes are among the main drivers for companies to decarbonize.
  • Carbon neutrality in agrifood systems effectively means lowering emissions across entire supply chains – from production and processing to transportation.
  • The economic mitigation potential of agricultural activities could reach an estimated 7 percent of current total anthropogenic emissions by 2030, according to the IPCC Fifth Assessment Report, potentially translating into hundreds of billions of dollars in economic benefits.
  • The private sector has much to gain – like reducing costs, mitigating risks, protecting brand value, ensuring long-term supply chain viability and gaining competitive advantages.
  • Five areas for action for governments, investors and international organizations

    1. Set clear targets and align incentives towards decarbonization.
    2. Improve and standardize data collection methods and carbon assessment tools.
    3. Promote sound governance mechanisms.
    4. Directly support companies and farmers to decarbonize.
    5. Educate and communicate on carbon neutrality.

    Read the Report

    Investing in carbon neutrality: Utopia or the new green wave?
    Challenges and opportunities for agrifood systems

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