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January 30, 2024

Editor’s note: bad food and farming policies cost trillions of dollars

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The Food System Economics Commission says inefficient policies are ‘leading to hidden health and environmental costs upwards of $10tn per year’ (Photo: Scott Eells/Bloomberg)

The latest edition of our Sustainable Views newsletter

Dear reader,

The focus of the ESG pushback in various countries is the putative cost of change to make economic and industrial systems more sustainable. A report published yesterday by a group of economists calls for policymakers and investors to make decisions based on future benefits rather than immediate costs. 

The Food System Economics Commission argues that transforming global food systems to become “inclusive, health-enhancing and environmentally sustainable” could create $5tn-$10tn of economic benefits every year, and accuses today’s food and farming systems of destroying more value than they create. “Inefficient and fragmented policies [are] leading to hidden health and environmental costs upwards of $10tn per year,” says the report.

It prescribes an overhaul of food system policies, investment in innovation and changes to enable people to eat healthier and more environmentally sustainable diets, insisting the costs of such a transformation are small compared with the benefits. 

That may be so, but this is not the first time such arguments have been made. 

The UK government-commissioned “National food strategy” written by Henry Dimbleby, co-founder of the restaurant chain Leon, was widely praised, but virtually all of its recommendations — including salt and sugar taxes and better access to fruit and vegetables — were ignored by the government. 

During a press briefing to launch the food systems report, Cornell University economics professor Ravi Kanbur insisted politicians should take any resistance to proposals to reform food and farming systems “head on”.  

In answer to my question as to how this can work in practice, Kanbur suggested people are more likely to support taxes aimed at changing the system if they can see a direct personal benefit. The report cites how Bolivia finances its healthy school meal programmes from a tax on hydrocarbons, “converting natural capital into human capital”. The formation of “broad-based, multi-stakeholder coalitions” can also help get support for change, argue the economists.

However, as the reactions of the French and other governments to the farm protests in Europe show, few politicians seem willing, at the moment, to defend progressive policies in the face of strong opposition or to think deeply about how they could do things differently. 

Dimbleby’s announcement yesterday that he was launching Bramble Partners, a UK-based firm that will invest in companies working to change the food system for the better, suggests he isn’t planning to wait for governments to get their act together. “We want to help UK entrepreneurs deliver what politicians have not yet been able to,” he says, describing the global food system as “disastrous both for our bodies and our planet”.

In other news, James examines what is happening in Australia and how the country, traditionally considered a climate laggard, is introducing legislation that should bring it closer in line with leaders in the field, such as the EU. Australia’s biggest companies will be subject to mandatory climate disclosure reporting from July 2024 as Canberra pursues a “high ambition” approach to sustainable finance, he writes.

We also take a look at a report that reveals which countries are backing the EU’s Carbon Border Adjustment Mechanism, and report on Reclaim Finance’s call for a standardisation of climate transition plans to reduce the risk of corporate greenwashing. 

Until tomorrow,

Philippa

Philippa Nuttall is the deputy editor of Sustainable Views 

A service from the Financial Times