Comment: Jeremy Coller, founder of FAIRR, writes that COP26’s failure to address the climate impact of farming will deepen investor concerns about the sector
The Global Methane Pledge was a breakthrough success at COP26. The deal committed over 100 countries to reduce 2020 methane emission levels 30% by 2030. The 103 countries involved, including high-emitters like Brazil and the U.S., account for 46% of global methane emissions and represent 70% of the world economy. Negotiators should rightly be congratulated on this agreement.
The Action Plan behind the pledge focuses on the oil and gas sector, with actions such as tackling venting and flaring of methane from oil and gas operations. However, the Action Plan is wafer-thin when it comes to tackling methane in the animal agriculture sector, which is the next largest contributor to methane emissions globally.
Is it possible for a 30% methane reduction through fossil fuels alone?
To get a sense of the scale, animals processed by Tyson Foods alone produce as much excrement as the entire human population of the U.S.
Cows are the new coal. Agriculture accounts for about 40% of human-generated methane emissions, the bulk coming from cows, through both digestion and manure. The latest IPCC report highlighted a 25% increase in emissions since the nineties, primarily due to increased livestock numbers.
Despite this, just 18% of livestock producers on this year’s Coller FAIRR Protein Producer Index measure even partial methane emissions. Furthermore, despite the vast scale of methane-releasing manure produced by the sector, 88% of meat and dairy firms have no or limited disclosure and commitments on manure pollution. To get a sense of the scale here: animals processed by Tyson Foods alone produce as much excrement as the entire human population of the U.S.
If we are serious about keeping global warming below 1.5C then governments, investors, food manufacturers and the farming sector must work together to find solutions to the huge amounts of methane generated by the world’s cattle herds.
One particular area of focus should be innovation in animal feed supplements which, according to the UN, can cut emissions in the sector by 20% a year. Indeed, it was encouraging this month to hear the announcement from meat giant JBS that it is to partner with Netherlands-based DSM to develop a feed additive derived from algae that it hopes will reduce methane emissions from digestion in cows. (See DSM’s Geraldine Matchett: ‘We need to go faster on cutting methane emissions from agriculture’)
This matters for the climate, because methane is a short-lived climate pollutant, meaning cutting it now gives us the most bang for our buck in the challenge of slowing climate change.
It also matters for investors because markets are increasingly see livestock as a potential stranded asset. Regulatory action on emissions and health, taxes and technology are undermining the growth prospects for industrial animal agriculture and make cows look like the new coal.
Around 60% of dishes at COP26 contained meat or dairy, with one campaigner arguing it was like ‘serving cigarettes at a lung cancer conference’
We have already seen New Zealand, Ireland and the State of California set methane reduction targets covering livestock of at least 10% by 2030, and more jurisdictions may follow after the COP26 deal.
If we are to protect the value of the sector over the long term there needs to be a clear path to a sustainable agricultural sector. But that, too often, remained an afterthought in Glasgow.
It is telling, for example, that none of the Nationally Determined Contributions (NDCs) submitted by the G20 at COP26 included clear national targets for emissions reductions in the agriculture sector. By contrast, half of G20 NDCs have targets for the energy sector. Why not agriculture?
This is something that investors are especially concerned about as it is much harder to invest in a sustainable agriculture sector if there is no agreed pathway for how to get there. Currently, investors managing over $12 trillion of assets have signed a statement organised by FAIRR to call for national climate plans to include specific targets for the agriculture sector. It is also a campaign backed by former UN secretary-general Ban Ki-moon, the architect of the 2015 Paris Agreement.
Even the catering in Glasgow betrayed the reality that organisers were not thinking proactively about the transition in the food sector. By one estimate around 60% of dishes at the canteen at COP26 contained meat or dairy, with one campaigner arguing it was like “serving cigarettes at a lung cancer conference”.
The next climate summit, COP27 in Egypt next year, must put cows alongside cars on the agenda.
You don’t have to be vegetarian to support a reduction in animal protein production. It would have an enormous impact on climate, and it must be done in a way that supports jobs and livelihoods in the agriculture sector. For example, changing land use from livestock to more climate-friendly crops and investing in agri-technology.
That is a huge challenge and must be front and centre of discussion, not an afterthought, at COP27.
Jeremy Coller is chair of the $45 trillion-backed FAIRR investor network, and chief investment officer at Coller Capital
COP26 methane emissions Global methane pledge FAIRR agriculture emissions IPCC DSM agri-technology