Balancing the Environmental Costs of Cannabis
Economic development comes with a massive environmental cost.
Since 1980, heavy industrial activity has caused the doubling of CO2 emissions. As scientists warn of the lasting negative impacts this will have on the planet, nearly every industry is committing to sustainable practices to try to counteract this effect.
Today’s infographic comes from The Green Organic Dutchman, and it demonstrates that while the business of cannabis isn’t always eco-friendly, there are several tried-and-tested ways to reduce its massive footprint.
A HEFTY PRICE TO PAY
Energy is the second-highest cost driver in cannabis cultivation after labor.
There are two main culprits – lighting and HVAC systems (heating, ventilation, and air conditioning). Combined, they make up a whopping 89% of energy use in cannabis cultivation operations.
Last year, legal cannabis cultivation was responsible for consuming 1.1 million MWh of electricity, and producing 472,000 tons of CO2 emissions. That’s enough to power 92,500 homes, and produce the same emissions as 92,660 cars per year. As legal cannabis production scales, this will only escalate.
Much of this data can be attributed to how the plant is grown.
|Growing method||Power consumption (kWh/g)||Carbon intensity (lbs CO2e/g)|
Indoor cultivation is roughly 18 times more energy-intensive than outdoor cultivation, and produces 25 times the carbon emissions. On the other hand, outdoor production produces lower overall yield per square foot. Since it’s difficult to control the environment, impurities can also end up in the final product.
That’s why many companies opt for a hybrid approach instead – balancing the benefits of precise control, with the use of natural light to lower production costs.
A GAME PLAN FOR SUSTAINABILITY
Many licensed producers are adopting a suite of strategies to relieve this environmental footprint.
- Renewable energy
Diversifying the energy sources for cannabis cultivation can reduce carbon emissions. Solar and wind are top choices among cultivators.
- LED lighting
LED light bulbs are more than 60% more efficient than other types. They also produce barely any heat, lowering ventilation requirements.
- Water efficiency
A single cannabis plant can use up to 23 liters of water per day. Water can be recycled and re-used through innovative techniques such as reverse osmosis.
The plastic packaging often associated with cannabis products is a considerable contributor of waste. There are several alternatives, such as paper, glass, and tin. Each of these have their own benefits and drawbacks, depending on what they are used for.
Maximizing energy-efficiency has a domino effect not only on the planet, but on reduced operating costs. These savings can then be passed on to the buyer, which could prove to be a strong competitive advantage as the cannabis industry matures.
Stay tuned for part 6 of this series, where we’ll delve into the scientific evidence for medical cannabis compounds.
An Investing Megatrend: How Climate Change and Resource Scarcity are Shaping the Future
Learn how climate change and resource scarcity are affecting our most basic needs, and how investors can take advantage of this growing megatrend.
If you’ve ever played with dominos, you’re familiar with their cascading effects. Gently nudge one piece, and the force will ripple throughout the rest.
This process of cause and effect works much the same way in society and business: as global forces take hold, their effects are deeply intertwined with the financial markets.
The Climate Megatrend
Today’s infographic comes from BlackRock, and it explains how one such megatrend, climate change and resource scarcity, will be a long-term opportunity for investors.
Earth in the Hot Seat
In 2018, global CO2 emissions rose 1.7% to the highest level since 2013. These rising emissions have intensified the effects of climate change, with 2015-2018 being the four hottest years ever recorded. Society and the economy are starting to feel its negative consequences:
- Extreme weather events have become more frequent. In particular, floods and other hydrological events have quadrupled since 1980.
- In hotter, wetter conditions, infectious diseases spread more easily—between 2004-2017, total tick-borne illnesses increased by 163%.
- The global insured losses from natural catastrophes was $79 billion in 2018.
- Extreme weather effects, and the health impact of burning fossil fuels, cost the U.S. economy at least $240 billion in 2018.
It’s clear that climate change is having an immediate, serious impact on the world.
Many see climate change as a long-dated future risk, however, our research findings show that compared to the 1980’s, there are measurable GDP impacts in the market today
-Brian Deese, Global Head of Sustainable Investing at BlackRock
In addition to these issues, climate change is contributing to another problem: it’s becoming harder to feed the global population.
Over 7 Billion Mouths to Feed
Climate change significantly threatens global food security. As glaciers melt, the world’s freshwater supply—including what’s available for food production—melts with it. This is a significant problem, considering that between 2,000-5,000 liters of fresh water are needed to produce one person’s daily food intake.
As an added hurdle to food production, supply and demand are pulling in opposite directions.
The share of total employment in agriculture has dropped significantly over time. Even worse, among the food that is able to be harvested, roughly 30% is lost or wasted globally.
On top of limited resources, the world will have to contend with forces driving up food demand.
- Population growth: By 2050, the global population will grow by about two billion.
- More calorie-rich diets: As emerging economies grow their wealth, their populations seek richer foods like meat and dairy products.
How can society combat these pressing issues?
A Greener, More Plentiful Future
As society works to slow climate change and produce more with less, a myriad of investment opportunities will emerge.
- Renewable energies are becoming increasingly competitive.
- Electric & fuel cell vehicles are growing in market share.
- Products made from recycled materials are appealing to environmentally-conscious consumers.
- Agricultural machinery counters the declining workforce and increases productivity.
- Precision agriculture leverages real-time environmental data to help farmers make decisions.
Climate change and resource scarcity will be a driving force behind the actions of consumers, companies, and governments for years to come.
By staying attuned to this megatrend, investors will be able to spot long-term opportunities.
Our Impact on Climate Change and Global Land Use in 5 Charts
We highlight the five most important takeaways from the IPCC’s recent 1,400+ page report on climate change and land use.
Our Impact on Climate Change and Land Use in 5 Charts
As the world population approaches the eight billion mark, it’s becoming clear that we’re impacting the planet in unprecedented ways.
Humans have made such dramatic changes to Earth’s systems, from climate to geology, that many are suggesting we’ve entered into a new epoch – the Anthropocene.
To better understand the challenges of this era of wide-sweeping human impact on the planet, the Intergovernmental Panel on Climate Change (IPCC) has produced a massive report covering land use and climate change.
According to the IPCC, the situation is looking more dire by the year. Below are a few of the key insights buried within the 1,400+ pages of the massive report.
Shifting Global Land Use
The scale of land use and loss of biodiversity are unprecedented in human history.
According to the report, roughly two-thirds of the world’s ice-free land is now devoted to human uses. Ecosystems, both forested and unforested, only account for about 16% of land today. Part of the reason for this dwindling supply of natural habitat is the rapid increase of agricultural activity around the world.
Since the dawn of the 20th century, global land use has shifted dramatically:
Not only has land use changed, but so has farming itself. In many parts of the world, increased yields will primarily come from existing agricultural land. For example, wheat yields are projected to increase 11% by the year 2026, despite the growing area only increasing by 1.8%. Rice production exhibits a similar trend, with 93% of the projected increase expected to come from increased yields rather than from area expansion. In some cases, intensive farming practices can degrade soil more than 100x faster than the time it takes for new soil to form, leaving fertilizers to pick up the slack.
One of the most dramatic changes highlighted in the report is the nearly eight-fold increase in the use of nitrogen-based fertilizers since the early 1960s. These types of fertilizers are having serious downstream effects on aquatic ecosystems, in some cases creating “dead zones” such as the one in the Gulf of Mexico.
In addition to the negative impacts outlined above, the simple act of feeding ourselves also accounts for one-third of our global greenhouse gas footprint.
Things are Heating Up
The past half-decade is likely to become the warmest five-year stretch in recorded history, underscoring the rapid pace of climate change. On a global scale, even a small increase in temperature can have a big impact on climate and our ecosystems.
For example, air can hold approximately 7% more moisture for every 1ºC increase, leading to an uptick in extreme rainfall events. These events can trigger landslides, increase the rate of soil erosion, and damage crops – just one example of how climate change can cause a chain reaction.
For the billions of people who live in “drylands”, climate change is serving up a completely different scenario:
“Heatwaves are projected to increase in frequency, intensity and duration in most parts of the world and drought frequency and intensity is projected to increase in some regions that are already drought prone.”
— IPCC report on Climate Change and Land, 2019
This is particularly worrisome as 90% of people in these arid or semiarid regions live in developing economies that are still very reliant on agriculture.
In addition to water scarcity, the IPCC has identified a number of other categories, including soil erosion and permafrost degradation. In all seven categories, our current global temperature puts us firmly in the moderate to high risk zone. These risks predict events with widespread societal impact, such as regional “food shocks” and millions of additional people exposed to wildfires.
This IPCC report makes one thing clear. In addition to tackling emissions in our cities and transportation networks, we’ll need to substantially change the way we use our land and rethink our entire agricultural system if we’re serious about mitigating the impact of climate change.
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