Climate and Nature

Climate change is accelerating the global food crisis, we must act now to protect the most vulnerable

A man carrying bags of harvested crops through a field, illustrating how climate change can impact crop yields

Climate change can seriously impact crop yields and food security. Image: Unsplash/Phoenix Han

Himanshu Gupta
Chief Executive Officer, ClimateAi
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Climate and Nature

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  • Climate change threatens food production worldwide, contributing to food price inflation, with those in low-income and developing countries hardest hit.
  • Extreme weather, fueled by climate change, causes short-term disruptions in crop growing and long-term changes in regional growing conditions.
  • Global efforts are needed to ensure resilient adaptation and recovery, because, by the time you finish reading this article, nearly 500 more people will have become food insecure.

As the CEO of the world’s largest sovereign wealth fund, Norway’s $1.3 trillion oil fund, Nicolai Tangen recently noted in an FT interview that climate change is fueling stubborn inflation. And Tangen expects it to worsen in the future.

Global agri-commodities prices have skyrocketed worldwide, however, the true costs aren’t distributed evenly — those in low-income and developing countries have been hit the hardest and are suffering the most. As inflation, supply chain disruptions and Russia's invasion of Ukraine war put pressure on the often unseen mechanisms powering the global food system, governments and international organizations must step up and protect the 193 million food-insecure people around the world.

Growing up in India in a low-income multigenerational family of 13, I saw first-hand how global market shifts like these determine whether or not food makes it to the table. Our family bought 2.5 litres of milk a day, and when the price would rise from 12 rupees ($0.15) to 14 rupees, my grandmother would add water to make it last longer because we could not afford to spend more.

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On average, in India, households spend nearly 30% of their income on food, compared to American households, which spend less than 10%. Meanwhile, Kenyan households spend more than 50%, according to the USDA. Rising food prices might mean coffee costs an extra dollar where I now live, California, but it's a matter of lives and livelihoods for the families of smallholder coffee farmers in Brazil, Colombia and West Africa.

The world cannot ignore the human cost of these converging crises, especially with worsening climate change looming on the horizon.

Climate change threatens food production at large. Agri-commodities are produced and traded on a massive scale, though production is concentrated in key geographies. Extreme weather during critical periods of the growing season causes far-reaching disruptions and climate change increases the frequency and severity of extreme weather events.


How is the World Economic Forum fighting the climate crisis?

In the short-term, food prices rise, and families are forced to cut funding for education, electricity and other basic necessities. Over the longer term, growing regions of key commodities will shift, threatening growers’ livelihoods and entire communities. These trends can lead to civil unrest, especially in emerging economies.

Against the common notion, many of these long-term shifts have already occurred. Consider the coffee supply chain: high heat risk during coffee beans’ ripening season has explained their poor yields and quality causing volatility in the coffee markets. In the example below, the long-term volatility shifts, known as tipping points for heat risk for coffee, have already occurred in most of the coffee-growing regions in Brazil.

Climate change tipping point for heat stress in coffee.
Climate change tipping point for heat stress in coffee. Image: ClimateAi

In fact, if you point at any agricultural region of the world, you will see at least one extreme weather risk impacting the crops grown there and that the shifts have already occurred or will occur in the near-term horizon.

The good news is that solutions to build resilience in the global food system already exist, from technological solutions to policy solutions implemented by some of the governments in developing economies.

Primarily, global organizations, such as the Food and Agriculture Organization of the United Nations and the World Bank, must stress test global food supply chains the same way banks conduct financial stress tests on their balance sheets. Regulators often require that banks, insurers and asset managers run regular scenario analyses of what will happen under adverse economic circumstances. There's no reason why food ministers across the world shouldn't have the same tools as traders with commodities funds.

For players in the food system, these tools and models involve defining a shock scenario in different nodes in the supply chain — from political tensions in geographic locations to freight prices to terrorist attacks at distribution centres to retailer worker shortages. Adding in the compounded risk of climate change can show the weak points and aid preparation and capacity building. With their global power, these organizations should unlock financing for resilience measures for those in the most at-risk situations, such as more efficient irrigation systems and climate-resilient seeds.

Much of the adaptation financing from the Green Climate Fund can finance small seed companies in developing countries. They can develop seed varieties resistant to the climate shocks a location is experiencing and countries can work with them to deploy them quickly to growers, enabling higher yields and profits for at-risk growers.

The governments of these low-income countries must also consider interventions to boost the resilience of their citizens. The government of Malawi, for example, tweaked the buying period for the country’s strategic grain reserve. It bought more grain from maize farmers during the lean season (harvesting season) to prop up the prices to benefit smallholder farmers and released it during the peak season to take financial advantage of fluctuating global grain prices.

Beyond that, governments need to abandon the idea that food protectionism will save them from food shortages. Instead, they can use forecasting tools to figure out where they can source from in the short term and what can they grow in the changing climate within their borders in the long term. Protectionism is a threat to globalisation and the global food system at large and cooperation is necessary in the face of the climate change crisis.

We haven’t seen a crisis of this proportion since World War Two. We need global efforts at the same scale to ensure just, resilient adaptation and recovery because, by the time you finish reading this article, nearly 500 more people will have become food insecure.

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