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Transforming Agri-Food Sectors to Mitigate Climate Change: The Role of Green Finance

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  • Nicoletta Batini

Abstract

Globally, food systems have become heavily industrialized and are currently threatening both environmental sustainability and human health. Feeding a growing world while remaining within safe social-ecological planetary boundaries, as dictated by the UN Social Development Goals and the Paris Climate Agreement, is feasible but requires a paradigmatic shift in agricultural value chains and their financing: a “Great Food Transformation.” Tracing today’s agri-food main global developmental and financial trends, this paper proposes a set of financially-oriented public policies to accelerate this transition with a focus on advanced and large emerging market economies. Suggested measures include public lending, insurance and guarantee schemes to aid the transition; financial training schemes; changes to prudential regulation to account for financial risks of non-sustainable farming; alongside a bolder approach to ESG investment of public funds and steps to expand green and sustainable bond markets. Weltweit sind die Nahrungsmittelerzeugungssysteme stark industrialisiert und bedrohen derzeit sowohl die ökologische Nachhaltigkeit als auch die menschliche Gesundheit. Es ist machbar, eine wachsende Welt sozial und ökologisch sicher zu ernähren, wie es die sozialen Entwicklungsziele der Vereinten Nationen und das Pariser Klimaabkommen vorschreiben. Dies erfordert jedoch einen paradigmatischen Wandel in den Wertschöpfungsketten der Landwirtschaft und ihrer Finanzierung: eine „große Transformation der Nahrungsmittelerzeugung“. In diesem Papier werden die wichtigsten globalen Entwicklungs- und Finanztrends der Nahrungsmittelindustrie nachgezeichnet und eine Reihe finanzpolitischer Maßnahmen vorgeschlagen, um diesen Übergang zu beschleunigen. Vorgeschlagene Maßnahmen umfassen öffentliche Darlehens-, Versicherungs- und Bürgschaftssysteme zur Unterstützung des Übergangs, finanzielle Ausbildungsprogramme und Änderungen der Aufsichtsvorschriften zur Berücksichtigung der finanziellen Risiken einer nicht nachhaltigen Landwirtschaft. Daneben wird ein mutiger Ansatz für die ESG-Investition öffentlicher Mittel und Maßnahmen zum Ausbau grüner und nachhaltiger Anleihemärkte gefordert.

Suggested Citation

  • Nicoletta Batini, 2019. "Transforming Agri-Food Sectors to Mitigate Climate Change: The Role of Green Finance," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 88(3), pages 7-42.
    • Handle: RePEc:diw:diwvjh:88-3-2
    DOI: 10.3790/vjh.88.3.7
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    References listed on IDEAS

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    1. Nicoletta Batini, 2019. "Macroeconomic Gains from Reforming the Agri-Food Sector: The Case of France," IMF Working Papers 2019/041, International Monetary Fund.
    2. Trienekens, Jacques & Zuurbier, Peter, 2008. "Quality and safety standards in the food industry, developments and challenges," International Journal of Production Economics, Elsevier, vol. 113(1), pages 107-122, May.
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    4. Jason Konefal & Michael Mascarenhas & Maki Hatanaka, 2005. "Governance in the Global Agro-food System: Backlighting the Role of Transnational Supermarket Chains," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 22(3), pages 291-302, September.
    5. Batini, Nicoletta & Melina, Giovanni & Villa, Stefania, 2019. "Fiscal buffers, private debt, and recession: The good, the bad and the ugly," Journal of Macroeconomics, Elsevier, vol. 62(C).
    6. Shawn A. Cole & Wentao Xiong, 2017. "Agricultural Insurance and Economic Development," Annual Review of Economics, Annual Reviews, vol. 9(1), pages 235-262, September.
    7. Faye Duchin, 2005. "Sustainable Consumption of Food: A Framework for Analyzing Scenarios about Changes in Diets," Journal of Industrial Ecology, Yale University, vol. 9(1‐2), pages 99-114, January.
    8. David Tilman & Michael Clark, 2014. "Global diets link environmental sustainability and human health," Nature, Nature, vol. 515(7528), pages 518-522, November.
    9. Peter Scarborough & Paul Appleby & Anja Mizdrak & Adam Briggs & Ruth Travis & Kathryn Bradbury & Timothy Key, 2014. "Dietary greenhouse gas emissions of meat-eaters, fish-eaters, vegetarians and vegans in the UK," Climatic Change, Springer, vol. 125(2), pages 179-192, July.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Why Sustainable Food Systems are Needed in a post-COVID World
      by IMFBlog in iMFdirect on 2020-07-14 13:00:20

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    2. Anna Murawska & Elżbieta Goryńska-Goldmann, 2023. "Greenhouse Gas Emissions in the Agricultural and Industrial Sectors—Change Trends, Economic Conditions, and Country Classification: Evidence from the European Union," Agriculture, MDPI, vol. 13(7), pages 1-25, July.

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    More about this item

    Keywords

    green finance; agri-food; land use; sustainability; diets; green bonds; Paris Climate Agreement; Great Food Transformation;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F6 - International Economics - - Economic Impacts of Globalization
    • G3 - Financial Economics - - Corporate Finance and Governance
    • H8 - Public Economics - - Miscellaneous Issues
    • I0 - Health, Education, and Welfare - - General
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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