Goodbye to old principles, hello to a circular and inclusive agricultural sector

Do we as an agricultural sector have the courage to break through old principles and habits and to work towards a circular and sustainable sector?

‘In my view, a development towards a circular sector is the only realistic option for the agricultural sector in order to achieve the goals of the Paris Agreement on climate change. To this end, we need to answer questions such as: What are the true costs and benefits of food? And isn’t it now high time to introduce a CO₂, material or meat tax? At Wageningen Economic Research, we focus on five research strategies, by means of which we continue to challenge policy makers and the business world with new insights.

The facts

It is a fact that the current commitments to climate measures will result in an increase of the average temperature on Earth of 2.4 to 2.7 degrees Celsius if all countries adhere to the agreed targets. A more realistic prospect is that not all countries will do this, and that the temperature increase will exceed 3 degrees Celsius. This would be disastrous for food security in the world, as this temperature increase would lead to an irrevocable and significant loss of productivity and useable agricultural land. The ambition of the Paris Agreement is to limit the temperature increase to a maximum of 1.5 degrees. Much greater efforts are required to achieve that.

“Agriculture and forestry play  a central role in the achievement of the ambitions of the Paris Agreement.”

Hans van Meijl, Research Coordinator, Bioeconomy and Food Nexus

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Agriculture and forestry, jointly accounting for a quarter of greenhouse gas emissions, are not only able to reduce their own emissions but are also the only sector able to create negative emissions (removing greenhouse gases from the air).

The challenge

An important challenge in this regard is how we can make that transition without jeopardising the world’s food security? Reforestation and the production of biomass for energy are necessary in order to stabilise the climate. These are at the expense of agricultural land. The measures can be compensated by increasing productivity, by reusing products and raw materials (circularity), by producing proteins in the sea and by eating less meat and more fruit and vegetables, for example. But how do we achieve this?

Take action

These aims require policymakers to take control of the situation. An efficient market mechanism is insufficient to be able to make the transition to a sustainable economy and at the same time to ensure a fair allocation of food, work and income in the world. The production factor labour is heavily taxed. A shift from taxes on labour to taxes on material use, capital and emissions encourages a circular character through the reuse of materials, leads to reduced income inequality and discourages polluting forms of production. Tax-related measures such as a CO₂ tax, a meat tax or a higher VAT rate for non-sustainable products may be essential, although the agricultural industry indicated during the debate that it saw no benefits to taxes, instead giving preference to positive stimuli such as providing information.

The business world also needs to take action. The trend towards circular and biobased policies is irreversible and it is now time to create a new competitive advantage  on the basis of this movement. Various companies, including Cosun and Unilever, are aware of this, and view sustainability and a circular policy as core values for their companies that need to be included in all important decisions. This is a great stimulus for circular thinking: how can we reuse everything that we as a company use? In addition, companies must economise as much as possible on non-renewable resources and opt for biobased alternatives. During the debate, those present came to a surprising agreement. Insight into the actual costs and benefits of materials used and of food and the translation of these into the price is essential for chains that are genuinely more sustainable. However, entirely sustainable chairs are a utopian dream. In order to achieve the objectives of the Paris Agreement, we need to also look honestly at chains that are unable to achieve these objectives. What do we do with them?

From my perspective of applied science, it is also essential that we test and sharpen policy and strategies on the basis of facts and with new and substantiated insights. The challenge lies in integrating climate-related and social developments into our proven agricultural and food models. To this end, we concentrate on five topics, namely:

• monitoring and accounting (which factors are at play?)
• risk management (what will we face?)
• scenario analysis (what will our actions mean?)
• stimulating change (promoting the right behaviour)
• stakeholder interaction through social innovation (creating socially-accepted renewal)

Time for swift action

It’s time to break the cycle and to think of new strategies to switch from the current linear agricultural system to a circular system. This is not optional; it is essential if we want to achieve the objectives of the climate agreement and at the same time guarantee food security.’