The Potential Economic Benefits of Altering Food Systems Could Reach Trillions of Dollars Annually

The Food System Economics Commission has released a new report indicating that global food systems' transformation could result in socio-economic benefits of between 5 to 10 trillion USD per year, far surpassing transformation costs. The report emphasizes an urgent need for policy renovation in food systems, as current systems create more harm than benefit, but potential exists to save millions of lives and mitigate climate impacts.

The latest international policy report from the Food System Economics Commission (FSEC), authored by renowned economists and scientists, suggests that global changes in our food systems could lead to annual socio-economic gains estimated between 5 to 10 trillion USD.

The most in-depth and comprehensive study to date in food system economics underscores the troubling reality that current food systems create more harm than positive value. An urgent reformation in food system policies is required. However, the transformation cost would be substantially less than the ensuing benefits, potentially improving the lives of hundreds of millions of people.

“The costs of not implementing changes to the flawed food system will probably exceed the estimates in this report, especially as the world consistently travels down an incredibly dangerous path. It looks increasingly likely that we will not only exceed the 1.5°C limit but may also have to endure decades of overshoot,” explains Johan Rockström, the Director of the Potsdam Institute for Climate Impact Research (PIK) and FSEC Principal. “The single solution to revert to 1.5°C is to phase out fossil fuels, preserve nature, and significantly alter the food systems from source to sink of greenhouse gases. In this way, the future of humanity on Earth is effectively tied to the global food system,” he adds.

Through the report, scientists offer the most comprehensive analysis of the effects of two potential futures for the global food system to date: the `Current Trends’ and `Food System Transformation’ pathways. The former outlines the scenario by 2050, even taking into account existing commitments by policymakers: food insecurity would still affect 640 million individuals around the world (including 121 million children). At the same time, global obesity rates would see a 70% rise. Food systems will continue to be responsible for one-third of the global greenhouse gas emissions. These emissions will contribute to an increase in global temperature by 2.7 degrees by the end of the century relative to pre-industrial times. The production of food will become progressively more susceptible to climate change, with an increased likelihood of extreme events.

The FSEC also suggests that the food system transformation could significantly benefit economies. The transformation could provide solutions to health and climate challenges. In the `Food System Transformation` pathway, economists demonstrate that improved policies and practices by 2050 could help eradicate undernutrition and save 174 million lives from premature death due to diet-related chronic ailments. Food systems could transform into net carbon sinks by 2040, which could assist in limiting global warming to less than 1.5 degrees by the end of the century. This would protect an additional 1.4 billion hectares of land, reduce nitrogen surplus from agriculture by nearly half, and reverse biodiversity loss. Moreover, 400 million farmers globally could earn a sufficient income.

“The projected cost of this transformation – estimated at the equivalent of 0.2-0.4 percent of global GDP per year – is minimal compared to the multi-trillion-dollar benefits it could potentially offer. Food systems provide a unique opportunity to simultaneously address global climate, nature, and health crises - while significantly improving the lives of hundreds of millions of people,” states Hermann Lotze-Campen, FSEC Commissioner and Head of Research Department “Climate Resilience” at PIK.

“Instead of jeopardizing our future and accruing rising costs leading to extensive hidden health and environmental costs that we will eventually have to address, policymakers should confront the food system challenge directly. This proactive approach could yield enormous short and long-term global benefits,” suggests Ottmar Edenhofer, PIK Director, and FSEC Co-Chair. “This report should instigate dialogues among key stakeholders about strategies to attain those benefits without leaving anyone behind,” he concludes.