Feast or famine: Are we underestimating climate risks to food systems?

A new analysis has spelled out the high likelihood of losses exceeding $5trn from extreme weather impacting food and water systems over the next five years. Will this be enough to boost policymakers' focus on sustainable food?

Feast or famine: Are we underestimating climate risks to food systems?

Pictured: A farmer in Germany during drought in summer 2022

September 2023 was officially the hottest on record per the World Meteorological Organization’s data. It followed on from unseasonably intense and early heatwaves in Europe and Asia this year which and record-breaking heat in southern parts of the US.

Add flooding in places as diverse as China, Greece and Scotland to the mix and you have a recipe for reduced food production in a great many places.

New analysis this week from insurance and reinsurance giant Lloyds of London and the Cambridge Centre for Risk Studies confirmed that the damage is likely to get worse in the coming years.

Lloyds is predicting that extreme weather events – made more likely, frequent and intense due to the climate crisis – will lead to at least $3trn in total economic losses through food and water systems in the next five years.

This is its most optimistic outlook. Its worst-case scenario would be some $17.6trn of total economic losses. Lloyds believes that a scenario involving around $5trn of losses would be the most likely and has noted that its modelling is based on a “hypothetical but plausible” increase in extreme weather events.

In any case, the damage will not be felt evenly across the globe. Lloyds believes that the Caribbean and Asia-Pacific regions would feel the steepest losses. This could be catastrophic given that rice is a staple source of food for more than half of the global population, with more than 90% of global production concentrated in Asia.

Nations in these geographies could also struggle with longer recovery times due to the structure of their economies and the likelihood of multiple extreme weather events hitting in succession.

A potential underestimate

While the numbers may seem staggering, they may well be too low. Lloyds, which has long been the subject of anger from green groups for its support of fossil fuels, believes that the crystallization of systemic risk in food and water has a “low likelihood”.

It has stated that the likely probability of a “major”, “severe” or “extreme” food and water shock is less than 4% in any given year over the next five years.

But shocks are already happening, even if they do not quite meet these definitions of severity from Lloyds.

Lloyds’ modelling has been published in the same week that a piece of scientific research in the Nature Communications journal calculated that costs relating to extreme weather events had averaged $143bn per year between 2000 and 2019. This is equivalent to $16m per hour.

One of the authors of that research, Professor Ilan Noy, told the Guardian that the figure was far higher to those produced using “standard quantification” measures for climate risk. Noy said it seems that most climate risk calculations had underestimated risk before and are likely to keep doing so.

Elsewhere, the World Economic Forum’s annual global risks report for 2023, based on the views of more than 1,200 experts, ranked extreme weather events as the second-biggest near-term (2023-2025) risk, behind only the cost-of-living crisis. Failure to mitigate climate change and failure to adapt to climate change also came in the top seven. This ranking accounts for both likelihood and severity of risks.

Asked to look at a ten-year period, the WEF’s panel of risk experts upgraded failed climate mitigation to the top spot and failed climate adaptation to the second spot. The top four is rounded off by extreme weather events and ecosystem collapse. Resulting from these megatrends, natural resource crises is ranked sixth.

Distribution and production

There are, of course, other major risks which are impacting food production and distribution more acutely and potentially sooner than risk forecasters had predicted. These range from the pandemic, to conflict and restrictions resulting from international trade deals.

A paper published in the journal Sustainability this week, based on a survey of academic experts, revealed that most believe food distribution challenges will be a greater risk than there simply not being enough food to go around over the next decade.

WWF UK’s director of food strategy David Edwards tells edie that food production is technically sufficient to supply every person on earth with 3,000 calories a day – around 800-1,000 more than is recommended for adults by the UK Government.

The issue lies in how many these calories are used inefficiently. Between 30 and 40% of all food produced globally each year goes to waste. Around 40% of the grain produced globally, and up to 80% of the soy, is fed to animals rather than people.

Edwards says: “The UN Food and Agriculture Organisation has been somewhat culpable over the past 20 or 30 years of propogating a narrative that we need to double food production.

“Quite a lot of the problems we are now facing in the 21st century result from the unintended consequences of the ‘green revolution’ which tried to solve the problems of the late 20th century. It’s to do with the overproduction and overconsumption of commodity monocultures.

“The green revolution afforded the world huge amounts of calories through massively improving yields for crops like wheat and maize through the use of artificial fertilisers, pesticides and irrigation.”

In a bid to solve hunger, unintended consequences have cropped up for human and planetary health. WWF estimates that the externality costs of the current food system are $19trn per year – more than double the $9trn it costs to run. This figure includes things like healthcare costs for obesity and malnutrition; remedying pollution and soil degradation.

This is before additional risk in terms of extreme weather events or other system shocks is factored in.

Edwards argues that those stating that food will not be affordable if production systems are shifted in line with climate targets and planetary boundaries do not recognise that the systems are already being run in an “unaffordable” manner.

Holistic approach

Edwards believes that it is technically possible to shift to sustainable food systems, addressing both climate mitigation and adaptation, while also building in environmental protection and worker justice.

This could be achieved through the more holistic embedding of food to policy packages relating to climate and the environment, which are, in many countries, disjointed. The vast majority of nations make no mention of food in their Paris Agreement delivery plans and the COP28 Presidency is campaigning for a sea-change here.

Holistic embedding, in Edwards’ view, would start with Governments strategically overseeing a transition in production. Asking for changes on the demand-side in the first instance can lead to manufactured culture wars that pit farming, food security, nature and the general public against each other – as has been seen in the Netherlands and to a lesser extent, the UK.

“Policies and narratives need to be equitable,” he summarises.

Edwards says that repurposing subsidies is “possibly the biggest thing Governments can do” to foster systems change in food to a system which comes with less intrinsic risk.

Nations have pledged through the UN Biodiversity Treaty to phase out or reform all subsidies that harm nature this decade. This should total $500bn per year by 2030. The commitment was ratified in December 2022 by some 190 nations.

But, as always, commitments are easier to make than true progress. The UN’s international biodiversity targets for the past decade all went unmet.

Edwards concludes: “If we just focused on sustainable production, this issue would take care of itself. It’s not an impossible challenge; the biggest barriers are around the political economy.

“We should recognise how concentrated the power is in the global food system. It’s not so different from the power sector.”

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