When it comes to reducing the impact of animal agriculture on the planet, “humanity is proving stubbornly unwilling to follow the obvious course of action,” Jeremy Coller, founder of investor network FAIRR, writes in a new report.
For global livestock production, that obvious course of action is employing nature-based solutions that “offer the greatest potential to deliver long-term benefits across multiple planetary boundaries,” according to FAIRR’s Climate and Nature-Based Interventions in Livestock report.
The piece goes on to say that investors, however, currently direct more funding to tech-based solutions that in many cases only offer “incremental benefits” and tend to be aligned with intensive livestock production practices rife with environmental and human health costs.
FAIRR’s report lays out 22 different possible interventions, both nature- and tech-based, for addressing climate and nature risks from the livestock sector. Nature-based solutions include cover cropping, biochar, bio-based inputs, and enhanced rock weathering, to name a few. Tech-based interventions include anaerobic digesters, synthetic feed additives, and genetic selection (for animals as well as crops for feed), among others.
Tech-based climate interventions currently command 55% of total public capital and 67% of private (venture and philanthropic) capital, while nature-based interventions account for 45% and 33%, respectively.
According to FAIRR, tech-based interventions are less risky than nature-based ones, and tend to deliver more immediate climate benefits. However, “reliance on these creates a lock-in with intensive livestock production practices, which will delay our ability to meet long-term climate and nature targets,” notes the report.
“Investors need to better understand the mitigation potential and business case of on-farm interventions to inform decision-making and stewardship activities.”
Hidden investor risks of factory farming
While it produces some 70% of the world’s meat supply and adds economic value, intensive animal agriculture (aka “factory farming”) comes with hidden risks for investors, FAIRR argues.
This latest report notes that intensive livestock production is responsible for up to 19.6% of global greenhouse gas emissions, occupies 75% of all agricultural land, and is “the single largest driver of deforestation and land conversion.”
Additionally, it uses up 30% of global freshwater supplies and degrades natural habitats due to antibiotics and chemical inputs.
The livestock sector is unique in that it “not only contributes to a significant share of environmental degradation but is also the most vulnerable to its impacts.”
Meanwhile, funding for solutions to these problems lags far behind other sectors. The 22 interventions detailed in FAIRR’s report collectively received $284.5 million for 2021/2022 — less than 0.1% of all public climate finance over the same time period. For example, the energy sector received $252.2 billion and transport $126.6 billion.
Nature-based solutions: ‘underfunded and under-utilized’
Despite the positive impacts across multiple planetary boundaries, nature-based interventions are underfunded and under-utilized, notes the report.
Myriad reasons exist, from the higher complexities and administrative costs of nature-based projects to the fact that many of them don’t fit seamlessly into traditional financing models.
Standard definitions for nature-based solutions tend to be more vague (e.g., “regenerative agriculture”), and timelines for returns are significantly longer.
“Nature-based interventions can deliver both climate and nature benefits but call for a paradigm shift in production, which might involve a longer transition phase and might be slow,” notes the report.
“However, the accrued benefits will be several times higher than incremental efficiency improvements to the status quo from tech-based interventions.”
While noting that there’s “no silver bullet” and that this report should be considered a jumping off point for investors, FAIRR highlights the shift from “highly productive and extractive systems” required to get more capital flowing into nature-based solutions.
“Such a shift may lead to lower production and would, therefore, require a change in current procurement and consumption patterns, specifically diversifying protein intake.”
According to the report, these supply-side shifts could work hand-in-hand with those on the demand side, where novel food tech, food loss and waste solutions and protein diversification could ensure more more success for these nature-based solutions.
