Which Foods Have the Greatest Environmental Impact?

The quantity of greenhouse gases (GHGs) generated by our food can vary considerably across the global food supply chain.

In fact, the difference between specific food types can vary by orders of magnitude, meaning what we eat could be a significant factor impacting GHG emissions on the environment.

Today’s modified chart from Our World in Data relies on data from the largest meta-analysis of food systems in history. The study, published in Science was led by Joseph Poore and Thomas Nemecek to highlight the carbon footprint across different food types across the world.

The Foods With the Highest Carbon Footprint

Worldwide, there are approximately 13.7 billion metric tons of carbon dioxide equivalents (CO2e) emitted through the food supply chain per year.

Across a database extending through 119 countries and 38,000 commercial farms, the study found that, unsurprisingly, beef and other animal products have an outsize effect on emissions.

For example, one kilogram (kg) of beef results in 60 kg of GHG emissions—nearly 2.5x the closest food type, lamb and mutton. In contrast, the same weight of apples produce less than one kilogram of GHG emissions.

When it comes to plant-based foods, chocolate is among the highest GHG emitters. One kilogram of chocolate produces 19 kg of GHGs. On average, emissions from plant-based foods are 10 to 50 times lower than animal-based types.

Bottom line, it is clear that the spectrum of emissions differs significantly across each food type.

Food Supply Chain Stages

The food supply chain is complex and nuanced as it moves across each stage of the cycle.

Although the steps behind the supply chain for individual foods can vary considerably, each typically has seven stages:

1. Land Use Change
2. Farm
3. Animal Feed
4. Processing
5. Transport
6. Retail
7. Packaging

Across all foods, the land use and farm stages of the supply chain account for 80% of GHG emissions. In beef production, for example, there are three key contributing factors to the carbon footprint at these stages: animal feed, land conversion, and methane production from cows. In the U.S., beef production accounts for 40% of total livestock-related land use domestically.

On the other end of the spectrum is transportation. This stage of the supply chain makes up 10% of total GHG emissions on average. When it comes to beef, the proportion of GHGs that transportation emits is even smaller, at just 0.5% of total emissions.

Contrary to popular belief, sourcing food locally may not help GHG emissions in a very significant way, especially in the case of foods with a large carbon footprint.

The Rise of Plant-Based Alternatives

Amid a growing market share of plant-based alternatives in markets around the world, the future of the food supply chain could undergo a significant transition.

For investors, this shift is already evident. Beyond Meat, a leading provider of meat substitutes, was one of the best performing stocks of 2019—gaining 202% after its IPO in May 2019.

As rising awareness about the environment becomes more prevalent, is it possible that growing meat consumption could be a thing of the past?

Top Risks in 2020: Dominated by Environmental Factors

Environmental concerns are a frequent talking point drawn upon by politicians and scientists alike, and for good reason. Irrespective of economic or social status, climate change has the potential to affect us all.

While public urgency surrounding climate action has been growing, it can be difficult to comprehend the potential extent of economic disruption that environmental risks pose.

Front and Center

Today’s chart uses data from the World Economic Forum’s annual Global Risks Report, which surveyed 800 leaders from business, government, and non-profits to showcase the most prominent economic risks the world faces.

According to the data in the report, here are the top five risks to the global economy, in terms of their likelihood and potential impact:

With more emphasis being placed on environmental risks, how much do we need to worry?

According to the World Economic Forum, more than we can imagine. The report asserts that, among many other things, natural disasters are becoming more intense and more frequent.

While it can be difficult to extrapolate precisely how environmental risks could cascade into trouble for the global economy and financial system, here are some interesting examples of how they are already affecting institutional investors and the insurance industry.

The Stranded Assets Dilemma

If the world is to stick to its 2°C global warming threshold, as outlined in the Paris Agreement, a significant amount of oil, gas, and coal reserves would need to be left untouched. These assets would become “stranded”, forfeiting roughly $1-4 trillion from the world economy.

Growing awareness of this risk has led to a change in sentiment. Many institutional investors have become wary of their portfolio exposures, and in some cases, have begun divesting from the sector entirely.

The financial case for fossil fuel divestment is strong. Fossil fuel companies once led the economy and world stock markets. They now lag.

– Institute for Energy Economics and Financial Analysis

The last couple of years have been a game-changer for the industry’s future prospects. For example, 2018 was a milestone year in fossil fuel divestment:

• Nearly 1,000 institutional investors representing $6.24 trillion in assets have pledged to divest from fossil fuels, up from just $52 billion four years ago;
• Ireland became the first country to commit to fossil fuel divestment. At the time of announcement, its sovereign development fund had $10.4 billion in assets;
• New York City became the largest (but not the first) city to commit to fossil fuel divestment. Its pension funds, totaling $189 billion at the time of announcement, aim to divest over a 5-year period.

A Tough Road Ahead

In a recent survey, actuaries ranked climate change as their top risk for 2019, ahead of damages from cyberattacks, financial instability, and terrorism—drawing strong parallels with the results of this year’s Global Risk Report.

These growing concerns are well-founded. 2017 was the costliest year on record for natural disasters, with $344 billion in global economic losses. This daunting figure translated to a record year for insured losses, totalling $140 billion.

Although insured losses over 2019 have fallen back in line with the average over the past 10 years, Munich RE believes that long-term environmental effects are already being felt:

• Recent studies have shown that over the long term, the environmental conditions for bushfires in Australia have become more favorable;
• Despite a decrease in U.S. wildfire losses compared to previous years, there is a rising long-term trend for forest area burned in the U.S.;
• An increase in hailstorms, as a result of climate change, has been shown to contribute to growing losses across the globe.

The Ball Is In Our Court

It’s clear that the environmental issues we face are beginning to have a larger real impact. Despite growing awareness and preliminary actions such as fossil fuel divestment, the Global Risk Report stresses that there is much more work to be done to mitigate risks.

How companies and governments choose to respond over the next decade will be a focal point of many discussions to come.