North America’s Role in Future Proofing Tomorrow’s Food Supply
With the global population forecast to grow to more than nine billion by 2050, it came as little surprise that food security was a key theme at the Biodiversity COP15 in Montreal and had a full day dedicated to it at the COP27 Climate Conference in Egypt last month.
The Adaptation and Agriculture Day at COP27 saw the introduction of the Initiative on Climate Action and Nutrition (I-CAN), which seeks to accelerate the role of national climate policies in shifting our entire food systems to achieve net-zero emissions and improved health outcomes.
It also saw the introduction of the Food and Agriculture Sustainable Transformation (FAST) Initiative, launched by the COP27 Presidency and UN Food and Agriculture Organization, which aims to scale climate finance flows to transform food and agriculture systems.
Be it the war in Ukraine, some of the worst droughts in recent memory and numerous other global extreme weather events, or rising protests from farmers who say climate policy will strangle their ability to produce affordable food, 2022 underscored the challenges of feeding a growing world population while reducing greenhouse gas (GHG) emissions.
Those challenges mean the countries that will lead global food production tomorrow will need to find ways to produce more food while reducing emissions and keeping their farmers in business.
Canadian and U.S. governments are broadly opting for strategies that help farmers shift toward sustainable agriculture rather than mandating GHG reductions and putting the costs onto producers. Instead of specific emission reduction targets, policy makers have signalled billions in expanded support—through the Inflation Reduction Act and Emission Reduction Plan, in the United States and Canada respectively—to advance farmers’ continued effort to reduce emissions. On top of existing grants and incentives, governments are committing incremental funds to scale adoption of precision agriculture and low- or zero-emission farming technologies, to deploy on-farm renewable energy production, to grow an R&D system that will provide the next generation of low carbon solutions, and to increase the ability of farmlands to store carbon.
Against this backdrop, to meet the increasing expectation for continued abatement in the sector, governments are also testing the waters with targets to reduce emission from key sources. Canada, for example, recently completed consultation on a proposed voluntary target to reduce nitrogen emissions from fertilizer by 30 per cent below 2020 levels.
Emissions from the agriculture sector have remained stable in both Canada and the United States as efficiencies have balanced increased output, but as global food demand grows, governments in both counties are expecting emissions in the agriculture sector to increase. Methane and nitrogen use, which are the largest contributors to the sector’s GHG emissions, are anticipated to climb to 625 Mt CO₂ eq by 2030, for example.
Reducing these emissions will not be cheap. According to McKinsey & Company, reaching net-zero goals by 2050 will require some USD$840 billion in annual investment. It will also depend on farmers’ ability to realize the potential of soil carbon sequestration so that they can monetize emission reductions.
Approximately ~1,500 Mt CO2 eq is stored in the top 30cm of agriculture soils in Canada and the U.S.—equivalent to more than twice the annual emissions from both countries’ agriculture sectors. This pool of stored carbon represents a significant removal of GHGs from the atmosphere, and there is further potential to be unlocked from the sector’s agriculture soils.
Monetizing this potential will require a strong demand pull from voluntary carbon markets that have yet to mature. Key enablers to these market conditions include a rising price on carbon, policy certainty through industry-specific offset protocols, and expertise from companies that support farmers in GHG calculations and carbon credit generation and monitoring.
Advancing food system security
A low-carbon world requires more than just a revolution in how we produce and consume energy, but also in our food systems.
In early 2023, the BMO Climate Institute will release an in-depth analysis of opportunities to reduce GHG emissions while enhancing security and resilience of food systems. Decision-useful insights on the potential impacts of climate change to key agriculture regions will be reported, along with the financing strategies required to crowd-in private capital.
Canadian and U.S. policy makers are currently drafting their next five-year agriculture strategies, and we see tremendous opportunity for North American producers to become global leaders in climate-aligned agricultural systems and exporters of low carbon and sustainable food products.
Susan McGeachie – Head, BMO Climate Institute
As head of the BMO Climate Institute, Susan leads BMO’s effort in bridging climate policy and science with business strategy and finance to unlock solutions for both clients and the bank. She brings to this role over 20 years of experience identifying, evaluating, and managing climate change-related risks and strategic positioning opportunities. Following her years in ESG research and analytics, she held leadership positions in management and engineering consulting firms. Susan is an adjunct professor at the University of Toronto where she teaches a graduate course in climate finance, and a member of the Canadian Climate Governance Experts panel. In 2021 Susan was named one of twenty-six Canadian Climate Champions by the Canada Climate Law Initiative and the British High Commission. In 2014 she was named to the Clean 16 lists of practitioners in recognition of her contributions to sustainable capitalism.
George Sutherland – Senior Advisor, Climate Analytics, BMO Climate Institute
George leads climate resilience and climate justice work streams in BMO’s Climate Institute, working at the intersection of climate science, policy, and finance to understand and manage the opportunities and risks associated with the physical impacts of climate change and the change required to build resilience into businesses and value chains. George holds a M.Sc. in climate science and has more than a decade of experience leading innovative programs in diverse sectors to understand the impacts of climate change on environmental, social, and economic systems across Canada.
Alma Cortes Selva – Senior Advisor, Economic Modelling, BMO Climate Institute
Alma leads the Climate Institute’s economic analysis of low and zero emissions technologies and sector decarbonization roadmaps, as well as the cost-benefit of investments in resilience. She holds a PhD in agricultural economics and has over a decade of experience as an economist assessing the financial impact of fiscal policies in Nicaragua with the Ministry of Finance, evaluating and recommending fiscal incentives for renewable energy and data mining with a US-based public research institution and, most recently, analyzing the impact of climate change on the financial system and credit risk with Moody’s Analytics.
Katie Shuter – Advisor, Decarbonization and Cleantech, BMO Climate Institute
Katie leads the Climate Institute’s analysis of decarbonization roadmaps and cleantech to provide insights on mature and emerging climate solutions. She holds a dual MBA/MGA from the University of Toronto and brings to her role five years of experience in climate tech, business and policy. Prior to joining BMO, Katie worked for Natural Resources Canada where she assessed the financial and transition risk of carbon capture investments, as well as for Sustainable Development Technology Canada as a cleantech analyst. She began her climate career at a social policy thinktank with a focus on sustainable agriculture and Indigenous reconciliation before transitioning to the public and private sectors.