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Slash and burn

The link between land use and climate change

Poor land management contributes to rising global temperatures. But solutions are emerging as new technologies improve farming efficiency and consumers shift towards climate-friendly diets.

In February 2017, Australia’s Liberal Prime Minister Scott Morrison addressed Parliament with a lump of coal in his hand, holding it in the air in the way a preacher might brandish the Bible. “Don’t be afraid. Don’t be scared. It won’t hurt you,” he said, taunting his political adversaries. “It’s coal.”

At the time, the opposition Labor Party was calling for more ambitious renewable energy targets and carbon-emissions cuts. Temperatures had reached record highs and the risk of bushfires was deemed “catastrophic” amid an extensive drought.

Morrison’s bullish tactics won the support of coal communities in the key swing state of Queensland, and he was re-elected in 2018. But his outburst would come back to haunt him when hundreds of bushfires ravaged Australia at an unprecedented scale in 2019-20, killing dozens of people and wiping out more than 17 million acres of land, including thousands of homes. The number of wild animals killed or injured could add up to a billion. The fires will also contribute to one of the largest annual rises in carbon concentration in the atmosphere since records began in 1958.1

Australia was not alone in making headlines last year because of the destructive power of fire: California and large swathes of the Amazon rainforest were also set ablaze. These cases differ in their individual circumstances, involving a complex web of causes and effects that cannot be easily disentangled. But climate change, coupled with unsustainable land management, is a common factor in all three disasters.

In Australia, rising temperatures have made the land hotter and drier, so infernos are now more likely. And land-use policies that pre-dated Morrison’s tenure, such as extensive wildland clearing for agriculture, may have fanned local climate conditions that made the bushfires more destructive.2

On their own, minor policy decisions about how to manage land have little impact on long-term climate trends. Taken together, though, land-use policies can intensify the effects of climate change in what scientists have dubbed a “positive feedback loop”. Poor land management disrupts ecosystems and contributes to a rise in average local temperatures, exacerbating land degradation in a self-reinforcing cycle that reverberates globally.

Earth, wind and fire

Over 70 per cent of the ice-free land on Earth is directly affected by humans, according to the Intergovernmental Panel on Climate Change’s (IPCC) special report on land use.3 Deforestation, agriculture (see Figure 1) and other forms of land management contribute about 23 per cent of global greenhouse-gas (GHG) emissions. Overall, human land use is the second-largest contributor to carbon dioxide (CO2) emissions, behind fossil fuels, and the largest contributor to other types of GHGs, such as methane and nitrous oxide.4

Conflicts over land use are becoming more prevalent due to rising global consumption. As emerging economies grow faster and catch up with the living standards of developed markets, the world’s ability to cope with rising per-capita consumption is being severely tested. A radical change in land management – backed by policies, public support and investment incentives – is required.

Figure 1: Land grab

Land grab
Source: The Essential Guide to Earth, New Scientist, 2018

However, such a shift looks difficult to achieve in an era of strongman politics. Employing similar tactics to win over his core voters as Morrison in Australia, President Donald Trump formally served notice to quit the Paris Agreement in 2019,5 despite the wildfires raging in California.

“It is really problematic that the United States is absent,” says Ken Alex, director of Project Climate at the University of California at Berkeley and a former senior policy advisor under California Governor Jerry Brown from 2011 through 2018. “Its absence is felt in terms of investments, domestically, and its lack of leadership internationally.

By not acting, the US gives cover for those who don’t want to do anything

“It gives free rein to other countries to say: ‘Well, if the US isn’t going to do anything, neither are we.’ So, you have a race to the bottom. By not acting, the US gives cover for those who don’t want to do anything. Its absence could be devastating,” Alex adds.

Another self-styled strongman, Brazil’s President Jair Bolsonaro, is easing deforestation restrictions to encourage commerce in the Amazon, where some of the country’s largest exports, such as timber, beef and soy are produced. In the first 11 months of 2019, deforestation of the Amazon was at its worst in a decade, with almost 9,000 square kilometres destroyed – a surface area 11.5 times the size of New York City, according to Brazil’s National Institute for Space Research (INPE), which uses satellite data to monitor the rainforest. Deforestation clears the way for carbon-intensive agriculture; it also removes trees that soak up more carbon from the atmosphere.

It is little wonder, then, that four years after the Paris Agreement was signed, GHG emissions have continued to rise. The world is far from meeting its stated goal of keeping the average global temperature increase to well below two degrees Celsius above pre-industrial levels, never mind the more idealistic target of about 1.5 degrees Celsius. Significant risks to human societies are already apparent, according to the IPCC6 (see Figure 2).

Figure 2: Varying degrees of land use risks

Varying degrees of land use risks
Note: We’re already in the moderate to high risk zone in all categories. GMST: Global Mean Surface Temperature. Source: IPCC Climate Change and Land report, 2019

“We can convince ourselves everything is changing, but emissions are supposed to be dropping through the floor when in reality they’re skyrocketing,” says Ed Dixon, head of environmental, social and governance (ESG) for real assets at Aviva Investors.

18 of the warmest years on record have occurred in the past two decades

Land and ocean surface temperatures are estimated to have warmed by about 0.8 degrees Celsius in 2018, and 18 of the warmest years on record have occurred in the past two decades.7 Weather conditions globally have become more extreme: unusually cold or hot weather; longer droughts in certain parts of the world; and more frequent and violent storms in others.

“Beyond their obvious social impact, these disruptions can affect productivity. They affect supply chains and cause damages to properties,” says Ben Carr, capital risk director at Aviva. “All of these things could lower GDP at the local level and at the global level, as well as feed through into financial markets.”

The hidden costs of food

Food production encapsulates the tangled connections between government policy, corporate land use, climate change and extreme weather. Agriculture is one of the key contributors to CO2 emissions – and climate change is already impeding crop yields in certain regions.

Yield losses in maize, barley and wheat have fallen by about 24 per cent, nine per cent and two per cent, respectively

Yield losses in maize, barley and wheat – three of the most important crops in Eastern and Northern Europe – have fallen by about 24 per cent, nine per cent and two per cent, respectively, in the past 35 years due to long-term variations in temperature and precipitation linked to climate change. According to research led by the University of Minnesota’s Institute on the Environment, data from about 20,000 counties and districts globally revealed sub-Saharan crops such as maize and sugarcane tended to yield less. Meanwhile, in Australia, wheat yields dropped by about nine per cent during the same period.8

Agriculture accounts for about half the Earth’s habitable land, with most of that space dedicated to grazing pasture. Managed forests, which include timberland, cover another 37 per cent.

Current farming practices often involve burning biodiverse forestland and peatland to make way for cropland, which stores less than half as much carbon. Overuse of synthetic herbicides and pesticides leads to further land degradation. Such methods also kill wildlife. Average populations of mammals, birds, fish, reptiles, and amphibians have declined by about 60 per cent in 40 years, a study by the World Wildlife Fund estimates, partly due to agricultural practices.

As demand rises – sometimes in the same regions in which crop yields are falling due to climate effects – the local response in many cases has been to increase the area carved out for agriculture, which could lead to further degradation, contributing to climate change’s positive feedback loop.

Global climate and food production risks will continue to rise in synchrony unless two things happen: a dramatic reduction in land-based GHG emissions and the creation of net CO2 sinks that remove carbon from the atmosphere. This will require more sustainable land use on the one hand, and a change in global consumption patterns on the other.

We need to look at all the methods available and to think about sustainability from an end-to-end value-chain perspective

“We need to look at all the methods available and to think about sustainability from an end-to-end value-chain perspective,” says Professor Vicky Pope at University College London’s Department of Science. She previously led the climate predictions programme at the UK Met Office Hadley Centre.

“What resources are we using in terms of water, energy, waste and pollution? What is the impact on the air, water and soil? All of those things can have a negative or a positive impact. We need to look at it in the round and how to bring it all together to create something sustainable. That’s really the change that needs to happen,” Pope adds.

A smarter crop

What would climate-friendly land use look like? According to the IPCC, positive changes would start with smarter land-management techniques, dependent on “site-specific local knowledge, matching of species with the local land, water balance, nutrient and climate conditions”.

Positive changes would start with smarter land-management techniques

New digital technologies promise to make these objectives achievable. One example of progress in precision farming is the work the Indonesia-based Center for International Forestry Research is doing with public and private entities to bring better seasonal forecasting to local farmers. They can use these forecasts to make more-efficient decisions in areas such as timing, variety of crop, how much to plant and the level of fertilisation needed.

“We’re looking at how we can use big data to try and improve land productivity so that we can increase production without further deforestation for land use, and stabilise the forest frontier,” says Louis Verchot, director of forests and environment research at the Center.

Technology has enabled the combination of renewable energy with agriculture in a symbiotic setup, helping farms cut their carbon footprint

Technology has also enabled the combination of renewable energy with agriculture in a symbiotic setup, helping farms cut their carbon footprint.9 Sometimes called “agrivoltaic systems”, these facilities can increase water-use efficiency, retain soil moisture and help crops survive peak drought and high temperatures, because the panels shield plants from harsh weather conditions. Compared to bare ground installations, the plants may help keep the solar panels cooler, improving their operational efficiency. Combining agriculture and photovoltaic systems has been shown to increase crop yields and solar energy, when compared to producing food and solar energy separately.10

Increasingly, farmers are also moving up rather than out. Vertical farming is becoming more prevalent in areas where space is at a premium, such as densely populated areas in Japan. This method brings advantages such as improved water efficiency and reduced use of pesticides, herbicides and fertilisers.

However, these benefits are counterbalanced by higher energy costs, among other issues. And current vertical farming practices are limited to certain vegetables and herbs, so the laws of supply and demand may limit their economic impact for the time being.11

Natural carbon sink

New innovations in land use could also help mitigate climate change by removing CO2 from the atmosphere. Afforestation (planting new forests) or reforestation (replenishing forests that had been destroyed) could play a valuable role.

Biomass, dead organic matter and soils also sequester carbon (the long-term process of capturing and storing atmospheric CO2). The Earth’s soils can hold up to four times the amount of carbon stored in all living plants and animals, and more than three times the amount stored in the atmosphere, according to data from Columbia University.12 Each year, soils remove about 25 per cent of the world’s fossil-fuel emissions.

Modern farming practices are stripping out carbon extremely fast

“Modern farming practices are stripping out that carbon extremely fast,” says Dieter Helm, a professor of economic policy at Oxford University, whose new book, Green and Prosperous Land: A blueprint for rescuing the British countryside, addresses land use. “The corollary of that is there is a huge opportunity to put the carbon back into the soil. Higher carbon content in the soil roughly translates to higher biodiversity, so it’s a kind of no-regret policy to focus on soil heavily.”

About half of the planet’s topsoil may have been lost in the past 150 years through erosion, compaction, loss of soil structure and nutrient degradation.13 These trends are worsening, but small changes could make a big difference in restoring the soil’s ability to capture carbon. Controlling farm equipment traffic to reduce soil compaction, returning organic matter to soils and rotating a more diverse group of crops may help reduce degradation, for example.

Other techniques can directly enhance the rate of carbon sequestration in the soil. Adding biochar, a super compost, or ground silicate minerals could increase the carbon content stored while improving crop yields, according to IPCC.14

The same area of coastal wetlands can be more efficient as a carbon sink than most terrestrial forests

Opportunities to sequester carbon also exist at the borders of land and water, in mangroves and coastal wetlands. Dorothée Herr, manager for oceans and climate change at The International Union for Conservation of Nature, has argued “the same area of coastal wetlands can be more efficient as a carbon sink than most terrestrial forests”.15

The key is to focus on regenerative agriculture, which “has applications everywhere in the world because almost every jurisdiction in the world has agriculture”, as Ken Alex puts it.

Cutting consumption

While managing existing farmland more sustainably will make a difference, it will not be enough by itself to meet the Paris Agreement targets. A sea change in global consumption patterns is also needed.

If we want to be sure we’ll no longer be contributing to climate change, we need to target net-zero carbon consumption

“The crucial point is that it’s not the carbon production we should be focused on. If we want to be sure we’ll no longer be contributing to climate change, we need to target net-zero carbon consumption,” says Helm.

Of the one billion people living in the most developed economies in North America, Europe, Japan, Australia and New Zealand, the average per-capita consumption rate of resources is estimated to be about 32 times that of those living in emerging economies, according to Jared Diamond’s recent book, Upheaval.16 Italy’s population of 60 million consumes twice as much as one billion Africans, Diamond points out.

If the average per-capita consumption of emerging nations is set to increase, then those of developed markets will need to fall accordingly. And, since one of the main drivers in the rise in GHG emissions is agriculture, any attempt to reduce it in the aggregate must include a drastic shift to a less carbon intensive – and often healthier – diet.

The simplest solution is that we avoid wasting food and secondly, reduce our meat consumption

“The simplest solution is that we avoid wasting food and, secondly, reduce our meat consumption, particularly beef and lamb, which has the added benefit of being healthier. A chunk of the land that is currently being used as grazing pastures can then be returned to woodlands,” says Eugenie Mathieu, senior responsible investment analyst at Aviva Investors.

“The beauty of reforestation is that it solves two of our most pressing problems in one go; if you don’t cut down trees – and indeed plant more of them – it’s the cheapest way to absorb excess carbon emissions and slow the catastrophic decline in biodiversity we’ve seen in recent decades,” she adds.

Raising cattle uses 20 times more land and produces 20 times more GHG emissions than growing beans.17 Meat products have larger carbon footprints per calorie than grains, as indicated in Figure 3, because of inefficiencies in transforming plant energy to animal energy. In addition, more water is required for cattle, which release methane.18

Figure 3: The carbon footprint of food products

The carbon footprint of food products
Source: Poore & Nemecek, Science, 2018

Eating less beef will not, on its own, reduce individuals’ carbon footprint if other life choices aren’t taken. Other components such as fossil-fuel consumption, transportation options and air-travel habits also count. One of the most important decisions in this respect is where to call home. There is some evidence that on a per-capita basis, city dwellers may enjoy efficiency benefits, such as public transportation, and leave a smaller carbon footprint than their rural counterparts.

However, this varies widely throughout cities worldwide. In Europe, city dwellers consume about seven per cent less carbon than their rural counterparts when other factors such as household characteristics are controlled.19 In cities like Hong Kong, however, urbanites have an average per-capita carbon footprint estimated at more than four times that of China’s.20 One of the main reasons is they tend to be wealthier. They live and work in more carbon-intensive buildings. They travel more. And they eat more meat.

Investing in land use transitions: Risks and opportunities

Transitioning to more-sustainable land use will require concerted cooperation among public and private sectors – as well as behavioural shifts among individuals – to ensure carbon emissions are reduced across the supply chain.

The world will need to produce less carbon in aggregate than the planet can absorb in a net-zero emissions scenario by about 2050

Using models based on the most current scientific evidence, the IPCC estimates the world will need to produce less carbon in aggregate than the planet can absorb in a net-zero emissions scenario by about 2050. There is room for optimism, despite the foot-dragging by governments in Australia, Brazil and the US. Last year, the UK became the first major economy to pass legislation to meet the net-zero goal by 2050, and 20 other nations have adopted net-zero targets in various forms.21

“Net zero is a positive step forward in the sense that it gives everyone much clearer signage, direction and purpose,” says Darryl Murphy, managing director for infrastructure at Aviva Investors. “What’s perhaps more important to me is that investors understand how they can help governments in their pathway towards net-zero emissions.”

Businesses are already under increasing pressure to reduce Scope 1 and Scope 2 emissions. Scope 3 emissions, which concern indirect emissions up and down the supply chain, are the most difficult to measure, but artificial intelligence (AI) and satellite imaging are opening up ways to track land use and its climate impacts.

“Ideally, we need to move to a day when companies can apply new technologies to know exactly where the commodities they’re purchasing come from,” says Mathieu. “The information is there. You can look at high-resolution satellite images, for example, to see whether specific fields in the Amazon have been deforested in the last ten years or so; it is that traceable.”

Satellite images showing the clearing of Amazon-adjacent wooded grasslands owned by the Harvard Management Company, which manages the $40 billion Harvard University Endowment, led to a public outcry last summer and the university came under pressure to divest its holdings.22 As more data becomes available, investors will need to scrutinise it to monitor the various risks.

“When you look at a company, it’s important to determine what the impact of climate change is by assessing both physical and transition risks on its enterprise value. Then you can think through what that might mean for specific equity or corporate bond exposures,” says Aviva’s Carr.

Land-use transitions required to battle climate change could also yield opportunities

Land-use transitions required to battle climate change could also yield opportunities. The Food and Land Use Coalition, an environmental consultancy, estimates a variety of businesses could thrive by creating the new value chains needed for regenerative agriculture and introducing products to support the shift to more plant-based diets. The sector could be worth an estimated $4.5 trillion a year by 2030.23

A good example is the consumer trend towards veganism, which is creating opportunities for investors in plant-based foods. In the US, sales increased by about 11 per cent to $4.5 billion in 2019, as data from the Good Food Institute and the Plant Based Foods Association shows.24

Plant-based alternatives to meat and dairy reported the most growth, at ten per cent and six per cent, respectively. Their success has prompted traditional meat producers such as Tyson Foods, the largest meat producer in the US, to invest heavily in “alternative proteins”. In 2019, the company introduced its first line of a plant-based nugget and a “blended” burger patty combining Angus beef and pea protein.25

Back to nature

Lowering the carbon footprint of global food demand, advancing more sustainable farming practices and implementing other land-management improvements are imperative to mitigate climate change risks.

A report from the Food and Land Use Coalition illustrates the stakes. In a “Better Future” scenario, around 1.5 billion hectares of forest and natural land could be restored by 2050 without impacting global food security. However, if nothing is done 400 million hectares of natural ecosystem will be lost to agricultural usage (see Figure 4).

Figure 4: Total surface land use, million hectares

Total surface land use, million hectares
*Baseline data forecast from 2000. Note: According to IIASA estimates, parts of the permanent pastures, as defined in the IPCC 2019 Special Report on Climate Change and Land, are pastures without significant contribution to total livestock production and thus are included in the land use classification ‘Nation Ecosystems Land’. The ‘Pasture’ land use classification includes only grassland utilised for agricultural production. Source: International Institute for Applied Systems Analysis (IIASA), Global Biosphere Management Model (GLOBIOM), 2019

The long-term perils of climate change represent the most important global challenge in this decade and beyond, calling on the 193 United Nations member states to work together. The solutions require a careful balance between adaptation and mitigation strategies at a local level. They also require improvements in land-use efficiency and reductions in the carbon intensity of consumer food choices. But, encouragingly, a pathway to net-zero emissions does exist – and it is lying beneath our feet.

References

  1. Grahame Madge, ‘Australian bushfires help push forecast 2020 CO₂ rise’, UK Met Office, 24 January 2020
  2. ‘Accelerating land clearing is increasing bushfires and droughts and compounding Australia’s extinction crisis: 300 scientists call for immediate action’, Ecological Society of Australia, 2019
  3. ‘Climate change and land’, IPCC, 2019
  4. ‘Global greenhouse gas emissions data’, United States Environmental Protection Agency, 2010
  5. Lisa Friedman, ‘Trump serves notice to quit Paris Climate Agreement’, The New York Times, 4 November 2019
  6. ‘Summary for Policymakers of IPCC Special Report on Global Warming of 1.5°C approved by governments’, IPCC, October 2018
  7. ‘Global climate change: Vital signs of the planet’, Earth Science Communications Team at NASA's Jet Propulsion Laboratory, California Institute of Technology, 13 December 2019
  8. ‘Climate change has likely already affected global food production’, Public Library of Science (PLOS), 31 May 2019
  9. ‘Techno–ecological synergies of solar energy for global sustainability’, Nature Sustainability, 9 July 2019
  10. ‘Techno–ecological synergies of solar energy for global sustainability’, Nature Sustainability, 9 July 2019
  11. Erik Kobayashi-Solomon, ‘Investing in vertical farming: Five take-aways’, Forbes, 5 April 2019
  12. Renee Cho, ‘Can soil help combat climate change?’, Columbia University’s Earth Institute, 21 February 2018
  13. ‘Growing better: Ten critical transitions to transform food and land use,’ The Food and Land Use Coalition, September 2019
  14. ‘Land Degradation: IPCC’, IPCC, August 2019
  15. ‘Mangroves and marshes key in the climate change battle’, The International Union for Conservation of Nature (IUCN), February 2, 2017
  16. Jared Diamond, ‘Upheaval: How Nations Cope With Crisis and Change’, Penguin Random House UK, 2019
  17. Richard Waite and Daniel Vennard, ‘Without Changing Diets, Agriculture Alone Could Produce Enough Emissions to Surpass 1.5°C of Global Warming’, World Resources Institute, 17 October 2018
  18. ‘Carbon Footprint Factsheet’, University of Michigan Center for Sustainable Systems, 2019
  19. ‘Household carbon footprint patterns by the degree of urbanisation in Europe’, IOP Publishing, 30 October 2019
  20. ‘Global Gridded Model of Carbon Footprints (GGMCF)’, Norwegian University of Science and Technology, 2018
  21. ‘Net zero: the scorecard’, The Energy and Climate Intelligence Unit, 1 January 2020
  22. Alexandra A. Chaidez, ’As the Amazon burns, students call on Harvard to divest from farmland holdings’, The Harvard Crimson, 29 August 2019
  23. ‘Growing better: Ten critical transitions to transform food and land use,’ The Food and Land Use Coalition, September 2019
  24. Monica Watrous, ‘Trend of the year: Plant-based foods’, Food Business News, 27 December 2019
  25. Jeannette Settembre, ‘Tyson, America’s biggest meat producer, is taking a bite out of the vegetarian market’, MarketWatch, 15 June 2019

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