- Date: 01 January 2019
- Author: Jason Clay, SVP Markets, Exec Director of the Markets Institute
The Markets Institute at WWF identifies global issues, trends, and tools around the most pressing challenges of our time. Each year we release a list of what we see as the top emerging industry developments that may not be apparent to help stakeholders stay ahead of the curve, and to help us all shift faster.
The lists are identified through research, interviews, data analysis, and discussions with our Thought Leader Group. Here are the top issues, trends, and tools to keep an eye on in 2019:
Normalization of hate and racism
There is an increase in the acceptance of hate and racism globally, but most notably of all in the US. When those in power are guilty of such actions it empowers everyone with similar feelings to speak out openly and, all too often, aggressively. This polarizes societies. Historically such episodes have been more frequent during periods of economic uncertainty. As groups blame others for their plight, if they have power, they will use existing institutions to enforce their views. However, at least in the US, it is now likely that this will become a flashpoint, as those preaching hate are in the minority, and issues will boil over if sparked.
Animal protein is the new coal
There is some evidence that animal protein is becoming the new coal. Several donors, NGOs, and researchers are attacking animal protein from a variety of perspectives including animal welfare, environmental impacts, and human health. The EAT/Lancet Report will further polarize the issue as many around the world will look at the research behind the report as biased and selected to push a particular type of diet without understanding why people eat what they do much less the role different proteins, nutrients and minerals play in diets as well as the tradeoffs. But mostly people don’t like to be told what to eat, especially not by the privileged.
EU will act on global deforestation
The EU will begin to act against deforestation at a governmental and trade level. There are a few issues that will likely inform this discussion before all is said and done. For many in the global South, EU countries have deforested for millennia—there is very little old-growth forest left—so this move will be seen as hypocrisy at best or at worst the global South will be “paying for” the GHG emissions of the global North. Taking illegal deforestation off the table is simple and WTO compliant. Taking all deforestation out of trade is more problematic. It is difficult to understand how such a trade policy would be WTO compliant given that the PPM (production, processing, and manufacturing) mechanism does not allow countries to discriminate against products based on how they are produced. The issue is likely to be even more complicated because many EU countries have forests and other natural habitat that might become suitable for food production as climate change shifts things North.
Wealth & conspicuous consumption
Wealth has probably been around for as long as people. Prized possessions have been found in burials after tens of thousands of years. However, as societies evolved and became more sedentary—as well as differentiated and stratified—wealth became associated with different groups. Today, as global incomes are rising, most people can have more wealth than previous generations. What is happening now, however, is that wealth and conspicuous consumption are coming together—people are what they have. This is leading to consumption that drives others who see it to consume more. We need to find meaning in our lives other than the acquisition of things.
Economic growth as THE issue
You manage what you measure. Economic growth has become the single indicator of global prosperity. But, despite strong economic growth for some time, far too many still live in poverty. The management model doesn’t seem to be working, and the price is to clear—depletion of natural resources, the stubborn maintenance of malnutrition, and the wealth gap widening in most countries. The planet and the poor cannot afford too many more decades like the last ones. We need to delink prosperity from economic growth, or, put another way, have prosperity that doesn’t leave so many behind? As long as economic growth measures only productivity, output, and profit—with no accounting for natural resources, poverty, malnourishment, and human rights, or everyone’s ability to achieve their potential—then we are measuring the wrong things.
Declining political influence of the West
There has been a noticeable decline in the roles played by both the US and the EU politically as well as economically. In part this is due to specific leaders, but it is also part of a backlash against global systems and undue influence of so few at the expense of others. There are far more bi-lateral negotiations now than global ones about politics, security, trade, and even environmental issues. This will continue, especially through South to South negotiations.
Shift of ag biotech to the Mississippi
While the undisputed global tech leader is still Silicon Valley and the Bay Area more generally, there is currently a lot of investment in the US Midwest, especially in the Mississippi River Valley in cities such as St. Louis, Memphis, and Kansas City. However, these regions have a long way to go to catch up with the work, particularly in genetics, at UC-Davis and UC-Berkeley, and no less so then global leader Beijing Genomic Institute in China.
Freshwater grows scarcer
There are already a couple of dozen countries experiencing chronic freshwater shortages. This is likely to worsen with more people, more demands on water sources, unpredictable impact of climate change and weather variability on water availability. We are going to have to get better at recharging aquifers as well as capturing and storing freshwater from homes and cities to the country level as well. We are going to have to cut the total water used to produce food (which should be relatively easy as so much irrigation water is wasted), as well as be more efficient in personal and industrial water use. As water scarcity mounts, the value will go up, and this will drive efficiency.
Global conversations about diet get uglier
Nobody likes to be told what they should eat. Global conversations about diet have become galvanized around the idea of healthy parameters for both people and planet, especially in countries where food security is not perceived to be an issue. There is an increasing chasm in the discussions between the "haves" vs. the "have nots" in the global food system. As the science evolves, we need to ensure that both issues are addressed—how those without access to food and nutrition can get it, as well as determining the more sustainable and affordable nutrient sources for people and the planet. Changes in food values are shifting the debate's focus from production to consumption.
In retrospect, many see the migrations out of the Middle East and North Africa into Europe as the first mass migrations that resulted from climate change. For others, it was smallholders in Central America who were forced to flee their farms because they no longer produced enough coffee or corn to feed their families. Climate-induced migration has already begun, and it will continue in virtually every part of the planet, though it may often be attributed to other causes. We will need to address displacement and food security while we are addressing climate change.
Green bonds for reforestation
Green bonds are instruments recognized by organizations from the World Bank to private financial entities, corporations, pension funds, and governments as a tool that can be issued to finance projects or activities that have a positive impact on climate or the environment. Most green bonds are structurally identical to more conventional bonds, but they are distinguished by the green uses they are put to, e.g. green infrastructure, renewable energy, rehabilitation of degraded land for farming, reforestation, regenerative agricultural practices, etc. They also have generally the same ratings as the entities that issue them.
Fake news goes mainstream
The old adage, trust but verify, has never been truer. It is hard to trust anything that is heard firsthand without first verifying it, but verification is also getting harder. Presumably, freedom of speech and freedom of the press gives one the right to speak or publish without fear of being censored, but it does not abdicate the responsibility of knowing that what you are printing holds true. When the untruths and distortions affect elections, public policies, institutions, health, and safety or target specific groups for persecution we know this tool has been weaponized. As global as we have become, most people get their information from family and friends who all get it from the internet and social media. In the past the media had fact checkers. Social media use algorithms, but they are not working.
Machine learning and AI—tools to separate signal from noise, smoke from fire
There is considerable evidence that machine learning can be applied to many different parts of the economy and greatly improve overall management, and they will start to take the food system by storm—from producers to consumers. Two question questions come up very quickly: 1) Who owns the data; 2) will some of the poorest producers and rural laborers benefit from machine learning or be displaced by it? It’s a pity that one of the global trends isn’t increased public spending for education in farming and rural communities. If that happened more people would have other options and not as many would be forced to make their living from farming.
It's time to work more collaboratively in making tech help us all learn more quickly about how reducing impacts in ag. Smartphones to train farmers, get them access to finance, collect and share data, reduce waste, and share farm equipment. Farmers can now time their delivery to process plants to reduce waste and obtain higher prices. We need to adapt or create similar tools and learning systems for carbon management and measurement, risk management, traceability, and transparency along the entire value chain, not just where it is easiest.
Emissions incentives for producers
In 2018, awareness about the role of agriculture, forestry, and land use in climate change began to pick up steam. How will conversations on food systems and land use as both contributors to and solutions for the climate crisis continue to evolve? How will the impacts of extreme weather and climate change on agriculture affect our ability to feed everyone in a world of increasing nationalism and protectionism? One thing is for sure, we need more carrots and fewer sticks if we are to find voluntary ways to reduce GHG emissions and sequester carbon in the food system. Low cost food comes at a high price to both producers and the planet.
China’s Belt and Road Initiative
China’s Belt and Road Initiative is a food and resource security strategy dressed up as a global development program. It’s clear China is using development assistance to line up access to a supply of farmland and natural resources for decades to come. In addition to the infrastructure, China is using 99-year leases on land to farm where farming has never happened (e.g. the grasslands of Inner Asia). While this is smart for China, is it smart for the countries and the businesses that are the beneficiaries of this global strategy? Only time will tell—but it is certainly worth watching as this strategy unfolds.
Stay tuned for what else we see this year, and help us keep an eye on the horizon.
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