Address multicrisis by mainstreaming sustainable food finance

The 77th Session of the United Nations General Assembly took place this month in the midst of a storm of converging crises, driven in part by skewed incentives in food, energy, and finance. Worsening climate disruption is reducing access to fresh water, threatening food supplies, and intensifying vulnerability across a diverse range of countries and communities.

Russia’s invasion of Ukraine has worsened global food insecurity and a global cost-of-living crisis. All of this is colliding with a worsening sovereign debt crisis, which makes it harder for governments to respond to the needs of their people. This dangerous situation is so far-reaching, the Global Crisis Response Group on Food, Energy, and Finance, finds:

  • Globally, 60% of workers have lower real incomes than before the COVID-19 pandemic.
  • 4.1 billion people lack social protection.
  • “[B]etween 1.6 billion and 1.7 billion people live in [94] countries severely exposed to at least one of the three transmission channels of the crisis, namely, rising food prices, rising energy prices and tightening finances.”
  • “1.2 billion people live in countries exposed to a ‘perfect storm’ of all three dimensions at once.”

A new report from the UN Food and Agriculture Organization (FAO) “Tracking progress on food and agriculture-related SDG indicators 2022” finds food waste has increased, more than 800 million are actively dealing with hunger, and the impacts of the pandemic, climate, and conflict, are putting progress on the SDGs at risk. Severe food insecurity increased significantly from 10.9 percent of the global population in 2020 to 11.7 percent in 2021.

To save lives and drive the urgently needed systems change, we will need multidimensional metrics and data systems to make the higher value of sustainable choices obvious. To prevent widespread destabilization, we need to see unprecedented action to bring early warning systems to people and nations at all levels of income, regardless of geography or lack of past technological capability.

Can we address emergency food shortages and price crises, while also advancing systems transformation in line with long-term resilience imperatives?

A scientific report on achieving net-zero emissions in global food systems, published earlier this month by Nature, found:

“Our results show that the implementation of major mitigation actions for intensifying FSs based on existing low emission and carbon sequestration practices have the potential to reduce FSs emissions beyond net-zero by 2050 while increasing food production.”

Meanwhile, a breakthrough report from the UN Climate Change High-Level Champions finds unaddressed nature and climate risk could cost major food and agriculture companies 26% of their total value. On the other hand:

“Early movers can mitigate risk of value loss across food and agriculture and pursue a share of the USD$4.5 trillion opportunity that will accompany a land use transition that is as profound as the energy transition.”

The tools for making this happen are coming into focus and being put to work. Mobilizing national public finance and mainstream financial resources will require actions to create additional fiscal space—access funds already in public budgets that can be realigned and deployed to catalyze change.

The Inflation Reduction Act that recently became law in the United States uses a “whole of government” approach to reduce costs to government and taxpayers, and eliminate inefficiencies in everyday economic incentives and in public spending, to free up capital to invest in solutions. This “fiscal space” model sets a standard many other nations can follow.

The UN Climate Change process is now actively exploring the promise of “non-market” cooperative approaches under Article 6.8 of the Paris Agreement. These can include pollution pricing, sustainable impact bonds, investments in nature, and other resilience-building interventions that restructure incentives and create fiscal space.

Climate-smart debt relief can, and should, play a role in some of the most effective and efficient international cooperative efforts aligned with Article 6.8. Investing scarce resources in business as usual, while prices are historically high and supplies are strained, makes little sense. Food security measures should leverage the resources available now to reduce system-level threats in the future.

The Good Food Finance Network is responding to the need for multi-dimensional performance metrics and coordinated action between scales and across sectors, through the work of Catalyst Groups on Metrics, Data Systems, and Value Chains. Catalyst Groups focused on Investors and on Public Finance are working to address cooperative approaches to scaling up and mainstreaming good food finance interventions.

The tools are being put in place to make the needed transformational investments possible. Data systems are being developed to clearly reveal the higher overall value of those transformational investments. Cooperative and co-investment strategies are being designed to connect major funding flows with action opportunities across value chains, at even the smallest scales.

As the policy and investment instruments take shape, and begin to exert pressure, we should see a shift away from practices that degrade natural systems, harm the climate, and undermine human health and security. To get there, we will need careful and continued attention to shift incentives, to unlock the opportunity inherent in health-building, sustainable food systems aligned with climate resilience and risk reduction.

Published by GFFN Secretariat

The Good Food Finance Network Secretariat is comprised of the convening core partner organizations’ dedicated team members, who share responsibility for coordinating the Network and its activities. The convening core partners are EAT, FAIRR, Food Systems for the Future, UNEP, and WBCSD.

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