Climate Change and the Future of Food
Part 1 - Risks to the Agriculture Sector
In this report, we expand on the known risks of climate change to the agriculture sector by examining the failings of major climate models to analyse extreme weather events and to address the immediacy of the significant impacts. Unavoidable, imminent effects of high-impact extreme weather events due to climate change will trigger shocks to the global food system and may lead to significant financial losses. Our report shows the failings of major climate scenarios to include these effects and how financial institutions must seek greater resilience of agricultural systems.
Major climate scenarios project a small percentage increase in short-term average frequency and intensity of extreme events. This does not capture the potential for high-impact extreme weather events to trigger shocks to the global food system. Low probability but high-impact impacts on crop production could compromise the resilience of existing systems.
Changes in precipitation and temperature extremes in this decade will amplify existing risks to both food-exporting and food-importing countries. As the impacts of climate change intensify beyond the next decade, yield losses will approach severe and widespread levels.
There is a critical role for financial institutions in encouraging greater resilience of agricultural systems, especially in emerging markets. Firms that can make the necessary investments to mitigate the risks will fare better than those lacking access to capital.
This is the first in a two-part report exploring risks and opportunities for the global agricultural sector from climate change, funded by Imperial College Business School’s long-term research partnership with Standard Chartered. The second report on nature-based solutions will be released in October 2021.
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