It’s Food, Agriculture, and Water Day at COP28. Food systems are essential to the health and livelihoods of global communities. They are also heavily affected by climate change and account for about 30 percent of global human-caused emissions. These emissions could grow as demand for food increases with population. Agricultural land is forecast to increase by about 10 percent by 2030, putting pressure on ecosystems and potentially driving deforestation.
Climate change also impacts water systems and use patterns, and it is here that people often feel the effects of climate change most acutely. Climate change is expected to increase drought severity and area of impact, as well as drought duration (by up to 80 percent by 2050 in some regions).
A transformation of food, land use, and water systems is required to achieve net-zero emissions while also restoring nature, improving livelihoods, and boosting climate resilience.
News and announcements
Food and land use
- Incorporating food systems in national climate plans: More than 130 countries signed the COP28 UAE Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action, committing to adapting and transforming food systems and including food and land use targets in their Nationally Determined Contributions (NDCs) and National Adaptation Plans (NAPs) by 2025. Actions targeting sustainable food production, food waste reduction, diet shifts, and improved land management could reduce emissions and deliver nature and health co-benefits. Separately, several countries (including the United Arab Emirates and the United Kingdom) agreed to include an integrated approach to food and water management in their NDCs and NAPs. Agriculture is responsible for 70 percent of freshwater withdrawals, and so taking an integrated approach is fundamental to minimize negative impacts to water systems while ensuring food security.
- Making food systems work for front-line communities: A broad coalition of 200 farmers’ groups, frontline communities, businesses, philanthropic organizations, and cities signed the Non-State Actors Call to Action for Transforming Food Systems for People, Nature, and Climate. This is intended to complement the Emirates Declaration, supporting its implementation and reinforcing the role of governments in transforming food systems. The signatories, including C40 Cities, the World Farmers’ Organisation, Nestlé, the World Wildlife Fund, and the Bezos Earth Fund also committed to actions such as supporting frontline food system actors and respecting the rights of indigenous peoples when making food system investments.
- Accelerating regenerative agriculture: Leading food and agriculture organizations committed to partnering with 3.6 million farmers to accelerate the transformation of over 160 million hectares (three times the land area of Spain) to regenerative landscapes, with an initial investment of $2.2 billion. Regenerative agriculture involves practices such as cover cropping, crop rotation, and reduced use of chemicals to foster more resilient agricultural systems. Research in the EU has shown that a 20 percent increase in the number of farmers using these techniques would lower emissions by 6 percent while boosting soil health and farmer incomes.
- Supporting smallholder farmers through capital and research: National governments, the World Bank, and the Gates Foundation committed a total of $890 million to CGIAR (Consultative Group on International Agricultural Research), a publicly funded network. The funding will be used to support smallholder farmers through research on technologies and techniques which build resilient and sustainable food systems, like new crop varieties and land management techniques. The International Food Policy Research Institute estimates that transforming food systems to align with nature, development, and climate goals will require $350 billion in annual investment by 2030.
- Improving transparency within dairy production: The Dairy Methane Alliance was launched by six large food companies, including Kraft, Heinz, and Nestlé, in partnership with the Environmental Defense Fund. The signatories have committed to disclose emissions from dairy production and to launch a public action plan by 2024 to reduce methane emissions in their supply chains. The companies represent over $200 billion in global sales. Livestock agriculture is responsible for over 30 percent of global anthropogenic methane emissions (see our Dec 5th briefing for more details).
- Preserving freshwater ecosystems: More than 30 countries (including Zambia, Liberia, Canada, the United Kingdom and Norway) signed up to the Freshwater Challenge, a commitment to set targets to preserve freshwater ecosystems and include them in country NDCs and NAPs. The Challenge is a country-led initiative that aims to restore 300,000 kilometers of rivers and 350 million hectares of inland wetlands by 2030. Freshwater ecosystems are vital for our environment, society, and economy but remain under huge pressure; for example, monitored freshwater populations have declined by an average of 83 percent since 1970. Conserving freshwater ecosystems, as well as better water and land management, can help restore ecosystems and provide co-benefits like improved flood control.
- Funding water security: The United Arab Emirates pledged to provide $150 million of its IMF-allocated Special Drawing Rights in new funding for water security solutions in vulnerable communities. Today, the United Kingdom also announced a partnership (including £40 million of funding) with the World Bank for the Just Transitions for Water Security programme, aimed at providing technical assistance to low-income and climate-vulnerable countries in managing their water resources.
- Improving urban water resilience: The Urban Water Catalyst Initiative (UWCI) was launched in the run-up to COP28 at the UN 2023 Water Conference. It aims to help water utilities ensure access to safe and climate-resilient water and improve sanitation services in urban areas for all in the face of climate change. Today, a quarter or more of the water in urban water systems is lost through leaks and other factors and 650 million city residents will face water scarcity in 2050. A detailed working session of the UWCI at COP28 outlined a clear approach for multi-level action to tackle these issues and implement solutions to ensure urban water resilience.
McKinsey at COP: Insights from our events
How are nature-based solutions revolutionizing farming practices? McKinsey’s Charlie Dixon joined leaders to discuss how to harness nature-based solutions for agribusinesses in Latin American and the Caribbean. Panelists discussed innovative climate finance and how farmers and investors can collaborate on solutions:
- Farmers need to be engaged in the transition. Often, farmers are in the position of taking on big financial risks and potentially debt, uncertain of how the future will look. Risk sharing between investors and farmers can help alleviate the financial burdens on all stakeholders.
- Demonstration is a powerful tool. Proven cases of successful transitions can build confidence among investors and farmers as best practices are developed.
- Better data on the benefits of the transition are needed. Data sets are still unclear on the financial and environmental benefits that result from these activities. There needs to be better data to aid in making a stronger case for stakeholders (both farmers and investors).
How can agribusiness achieve a net-zero transition while safeguarding planetary boundaries?
McKinsey’s Nelson Ferreira hosted a panel discussion with Darci Vetter (PepsiCo), Julie Greene (Olam Agril), and Michael Wironen (The Nature Conservancy) on the risks the agribusiness industry faces if the world exceeds planetary boundaries, such as land system change, water scarcity, and climate change. With many planetary boundaries already in danger, urgent action is needed to make sustainable agriculture more nature positive.
- De-risking farming. Many farmers are highly leveraged and have small margins. Improving farmer income is crucial. Farmers have one to two chances a year to make money. De-risking is essential to allow them to experiment.
- Scaling up resilient agriculture practices. Nelson highlighted that “research, innovation, and investment are needed to see increased productivity while simultaneously minimizing land footprint.” Innovations discussed included double cropping and the use of climate-smart crops.
Where will carbon come from in the future?
McKinsey’s Tom Brennan and Nicolas Denis led a panel discussion with Paula Kovarsky (Raizen), Jens Wolf (Enviva), and Pat Gruber (Gevo), outlining the importance of biomass for energy and material transition, and highlighting the innovations that are radically transforming the way these sectors will use land and biomass. Key takeaways included:
- We can optimize the biomass that already exists. We need to get more from the biomass we have by gathering and monetizing biological waste and residues (such as food waste, used cooking oil, and agriculture residues); get more biomass from our existing cropping systems through greater productivity; and put more land sustainably in play.
- Further biomass can be sustainably mobilized. This will provide additional ecosystem services by putting degraded land to work, storing carbon.
- Technology breakthroughs are unlocking more effective use of biomass. There are many fossil applications that need to be replaced. The good news is that use of biomass is versatile: “The future world of biomass will be different from its past […] The future is about higher interoperability, improved yields (doubling and tripling of yield in some cases), and optimization of energy use toward the hardest-to-abate applications. We’re going to have carbon in the future—but the question is, where is it going to come from: biomass, not fossil fuels?”
- Improved visibility across the supply chain will help address sustainability concerns. As more solutions arise to provide more visibility on various aspects of biomass sustainability, there will be no place for bad practices to hide. This will allow us to deliver solutions with low CI scores and clearly demonstrated ecosystem services.
Key questions for leaders:
- Could my organization publicly commit to the food declaration? What would we need to change to align with it?
- In what ways is our organization reliant on fresh water? What risks could we face if there is further deterioration in freshwater ecosystems? What can we do to support the restoration of fresh water through our operations?
- How can my organization support the full value chain (including farmers and other landholders) in the shift toward sustainable food, land use, and water systems?
Chart of the day
Source: “The agricultural transition: Building a sustainable future,” McKinsey, June 27, 2023
More from McKinsey
- Striking the balance: Catalyzing a sustainable land-use transition
- The agricultural transition: Building a sustainable future
- What climate-smart agriculture means for smallholder farmers