Global investment in livestock is declining due to the climate crisis. Widespread ecosystem degradation and the declining ability of the planet to adapt to these impacts are being felt in all regions. Adverse effects of climate change on agriculture and crop production, including species loss and mass mortality, some of which are irreversible, have already occurred.
Livestock is predicted to face additional and more severe heat stress as the world warms up.
Livestock is the main source of agricultural greenhouse gas emissions through enteric fermentation, as well as manure storage and pasture deposition. The global meat and dairy industry is facing a difficult truth: increasingly severe climate impacts are signaling to investors that large-scale agriculture could become an economically targeted area. Data synthesized from an IPCC report in a recent briefing by the FAIRR network, which represents investors with $ 52 trillion in assets under management, shows that there are significant problems in the long-term sustainability of animal-based agriculture in its current form.
Why climate change is affecting global livestock
Why is climate change affecting global livestock? The IPCC warns that as temperatures rise, animals eat an average of 3 to 5% less per extra degree of warming, which is detrimental to their productivity and fertility.
Why is heat a stress factor for global livestock? Climate change has already affected livestock production, both directly through heat stress affecting animal mortality and productivity, and indirectly through effects on grasslands, species distribution and disease.
What effects have already been seen? The number of cattle in Nepal has already fallen, which is attributed to the increase in the number of hot days, while milk production in West Africa and China has also stagnated and can be attributed to increased periods of high daily temperatures.
IPCC reports and conclusions on the effects on global livestock
How were these projections made? The Intergovernmental Panel on Climate Change has published its report of Working Group II (WGII) on climate change, “Impacts, adaptation and vulnerability. ” The report highlights key risks and disruptions caused by climate change, such as floods, droughts, heat waves and biodiversity loss, and how these disruptions will increase with further temperature changes. Disorders have a particular impact on agriculture – including livestock systems – with potentially material consequences for companies and investors.
What will happen to the land currently used for cultivation? The report of Working Group II cites projections that 10% of the land area currently used for growing major crops and livestock will be unsuitable by the middle of the century. These negative effects of climate change on food production will be even more severe in scenarios exceeding 2 ° C in rising global temperatures.
What are the worst-case scenarios for global livestock? According to the most extreme IPCC scenario, in line with the temperature rise of around 4.3˚C, one third of global food production could be pushed out of the safe climate space by 2081-2100.
Economic losses for global investors in livestock
Will agriculture become another area where stranded property will become commonplace? Physical risks of climate change can create a risk of stranded funds for investors – those assets that at some point before the end of their economic life are no longer able to achieve economic return.
What harmful socio-economic consequences of climate change have already occurred in the global livestock sector? Between 1961 and 2006, yield losses due to droughts and changes in precipitation and droughts were estimated at 25%.
What is the general picture of economic losses in global livestock due to climate change? With warming of just 2 ° C, livestock numbers will be reduced by 7% to 10% by 2050, resulting in economic losses of $ 10 billion to $ 13 billion. Changes in precipitation rates in Brazil, for example, are projected to result in annual losses of up to $ 155 million.
How transparent are the most vulnerable countries for investors? Only 7 of the 60 companies analyzed at the Coller FAIRR Climate Risk Center reported climate-related financial impacts.
Ecosystems and climate change
What will global agricultural regions look like by 2100? At the higher limits of the projection of the temperature increase, up to 34% of the existing areas for plant and livestock production will be unsuitable by the end of the century.
What about water? The warmed world is straining water supplies. Including fodder production, livestock accounts for 30% of total water use in agriculture. Cattle are projected to consume 13% more water at 2.7 ° C, while at the same time water supplies will be scarcer – potentially in contrast to direct water use for humans. High-intake livestock systems can also consume more water than grazing or mixed systems.
Will global livestock be more susceptible to disease due to climate change? The IPCC notes that zoonotic diseases – diseases that can spread between humans and animals – are more susceptible to climate change than human or animal pathogens. The range of disease-carrying insects and other arthropods will expand as the climate warms, while more extreme weather events resulting from climate change will also increase the spread of the disease.
What is an example of the impact of climate change on global livestock today? Tyson Foods ’operating income in the U.S. was down $ 410 million from the previous year in the first 9 months of 2021, in part due to major weather disruptions.
Regions of greatest influence
Which areas of the world will be most affected? The Coller FAIRR Climate Risk Tool assesses the financial vulnerability of the 40 largest animal companies to climate risks in the 2 ° C scenario and finds that the companies with the highest profitability exposure to climate risk are in Africa, Asia and South America.
What is happening with regions with a lot of grassland? Livestock production systems that depend on natural grasslands for food are particularly vulnerable. Climate change has already caused visible negative changes on grasslands in North America, South Asia and Inner Mongolia.
How will higher temperatures negatively affect Caribbean livestock? These overly warm days will be especially detrimental to larger livestock – such as livestock – in the tropics and subtropics. For example, even warming from 1.5 ° C to 2 ° C will interfere with livestock’s ability to thermoregulate in the Caribbean and will cause animals to constantly experience heat stress.
How will higher temperatures negatively affect livestock in the US, UK and West Africa? These regions are projected to lose up to 17% of milk production by the end of the century.
The need for adaptation and mitigation strategies for global livestock production
Is there any hope? The latest IPCC Working Group III report released in April focuses on mitigation options, highlighting the key role that the agriculture, forestry and other land use sector (AFOLU) plays in increasing greenhouse gas emissions and potential mitigation.
What is likely to happen without changing the way Big Agriculture works? Without adjustment measures, there will be significant losses for fodder crops in the 21st century, including a decline of 2.3% per decade for maize and 3.3% per decade for soybeans. The WGII report suggests that in tropical and subtropical regions, losses in beef and dairy production could be even worse, resulting in losses of up to $ 9 billion a year for dairy and $ 31 billion a year for beef by the end of the century – about 7% and 20% of the global value of production of these products in constant dollars from 2005.
Are there any strategies in place today that help adjust and mitigate? Yes. Specialized breeding, the transition of species to increased shade, the addition of more ventilation and mixed livestock systems such as agroforestry help to improve diversity.
How expensive are adaptation and mitigation strategies really? The AFOLU sector has a high mitigation potential at a relatively low cost, with the greatest potential coming from reduced deforestation in tropical regions.
Where do plant-based alternative proteins fit? Diversification into sustainable protein production and a diet rich in plant proteins is one way to reduce key risks. Chapter 5 of the IPCC WGII report suggests that alternative sources of protein could lead to significant reductions in land use for pasture and crop-based feed. Chapter 12 of the WGIII report lists plant-based alternatives and cell farming as possible transformative mitigation options with multiple common benefits for animal welfare, soil conservation, reduced risk of zoonoses, pesticides, and antibiotic use. Alternative proteins could account for 64% of the global protein market by 2060.
However, large beef-producing countries such as Argentina, South Africa and Brazil have opposed the inclusion of a reference to plant-based diets in the IPCC report, favoring promoting the adoption of a “balanced diet” as a demand-side measure.
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