Agriculture and land use change account for ~21% (~10 gigatons CO2e) of global GHG emissions,49 largely from livestock husbandry, crop burning, and deforestation. Taking all factors into account, cows (beef and dairy) and lamb have the highest emissions per kilogram produced.50 And wastage plays a huge role: Though some 700 million people worldwide are chronically undernourished,51 an estimated 17% of total food production—931 million metric tons—is wasted.52 Wastage alone accounts for roughly 6% of total global GHG emissions.53
Reimagining agriculture and land use could transform the system from being one of the largest sources of emissions to a net carbon sink—and feed the world more efficiently. Getting there will likely require widespread implementation of farming techniques designed to capture and sequester carbon in soil. So-called regenerative practices, including no-till, use of cover crops, and rotating livestock and crop types, are likely to become more mainstream, although questions remain about the techniques’ scalability and efficiency.54 Additional changes to land use, including agroforestry and improving the productivity of existing agricultural land (and thus averting additional deforestation) could also help capture and keep carbon in the soil.55 On-farm systems, such as anaerobic digesters, can help address powerful-but-short-lived methane emissions. At the same time, the balance of food production—and, accordingly, global diets—would almost certainly have to shift to be more plant-based; meat and dairy substitutes, whether cell-based or plant-derived, could play a significant role.56
The transition to a low-carbon food and land use system will likely entail:
• Deploying and scaling regenerative farming techniques and reducing and optimizing fertilizer use. Yields from regenerative agriculture can match or exceed those of conventional farming in some circumstances, but more widespread deployment of data analytics, advanced AI, precision planting, and other smart farming technologies may help offset any potential reductions.57 Feed additives and on-site anaerobic digesters can help reduce and capture potent methane emissions.
• Advancing meat substitutes and alternatives to other carbon-intensive foods,58 collaborating with startups to develop and refine new products. Extensive marketing and modified government guidelines are likely to be important to shift consumer attitudes.
• Reducing food waste through supply chain efficiencies and transparency, improved monitoring via IoT and other technologies, and revised standards. Working across the entire food value chain, from farm to fork, to deploy digital solutions to track fresh food holds tremendous potential to cut spoilage.59
Negative emissions system
Every credible analysis of achieving net zero by 2050, including the Intergovernmental Panel on Climate Change’s benchmark 2018 report on limiting warming to 1.5°C, factors in significant carbon removal.60 But to date, carbon capture, utilization, and storage (CCUS) efforts remain limited, costly, and fragmented. Currently, there are only ~20 large-scale CCUS facilities globally, built to capture emissions from existing gas processing plants, fertilizer facilities, and the like, with a combined capacity to capture and store around 40 million tons of CO2 annually (total annual global CO2 emissions exceed 30 billion tons61). Nature-based solutions such as afforestation and reforestation are relatively inexpensive (US$5–50 per metric ton of CO262) but suffer from uncertain accounting, a limited supply of viable projects, larger physical footprints, potential impermanence, and misaligned incentives between donors, NGOs, and land managers and local communities. Bioenergy with carbon capture and storage (BECCS) technology has already shown potential but requires significant amounts of land (to grow biofuel feedstock), some of which might be diverted from food production, carbon-storing forests, or other uses.63 And emerging direct-air-capture technology is expensive (US$135–345 per metric ton of CO2),64 energy-intensive, and unproven at scale. For buyers, the costs of nearly all of these options exceed so-called “avoidance offsets” that aim to forestall some emitting activity.65
CCUS will likely emerge as a cornerstone of the low-carbon economy, employing multiple approaches at scale and enabled by a well-functioning, transparent, and liquid carbon-credit markets. Widespread adoption of regenerative agriculture, agroforestry, and aquaculture could turn those activities into significant carbon sinks. Reforestation and afforestation could expand, aided by enhanced planting and monitoring techniques (drone planting, satellite-based and AI-enabled tracking), and offering significant co-benefits. Technical solutions could also be deployed at scale, with captured CO2 both repurposed for other uses and stored permanently. The International Energy Agency’s Sustainable Development Scenario envisions global capacity for carbon removal, by 2050, exceeding 1 gigaton of CO2 per year using BECCS and direct-air-capture technologies.66 Much of that captured CO2 would be transported through an extensive network of pipelines—perhaps more than 100,000 kilometers’ worth—in the United States by 2050.67
The transition to a robust carbon capture system will likely entail:
• Creating a policy and regulatory framework that supports and incentivizes the creation of a sustainable and viable market for CCUS, including establishing scaled carbon trading markets built on standardized, transparent credits and in which carbon prices incorporate the full breadth of externalities associated with GHG emissions.
• Widespread ecosystem restoration, employing techniques designed to maximize long-term carbon capture and create co-benefits for local communities.
• Significant infrastructure and facilities build-out and modification. This includes retrofitting existing emissions-producing facilities with CCUS, especially in the developing world where decommissioning of fossil fuel–based plants is less economically feasible in the near term. Dedicated transportation and storage infrastructure would also be needed, including repurposing existing oil and natural gas pipelines, identifying geologically suitable storage locations, and securing siting permits.
• Rapid and catalytic investment and R&D in carbon capture solutions and technologies for hard-to-abate processes. Venture capital and innovation funding would be needed to develop solutions and reduce costs. Expanded availability of renewable energy is key to maximizing the impact of CCUS technologies.
Financial services: Funding the transition to a low-carbon economy
The success of the transition to a low-carbon economy hinges in large measure on the ability to mobilize capital at the requisite speed and scale. The financial services industry has already begun to play an important enabling role in addressing climate change. More than 500 investors with over US$50 trillion in assets have joined Climate Action 100+, an effort to push companies to do more to address climate change through direct engagement and via support for shareholder proposals.68 A growing array of institutional investors and insurers are pulling back or divesting completely from fossil fuel positions.69 Climate finance flows exceeded US$600 billion in 2019.70
These initial moves are likely just a small fraction of the opportunity for the financial services industry. Globally, reaching net zero by 2050 will demand perhaps US$30–60 trillion of additional capital investment.71 Much of that could flow to the rapid buildout of proven low-emission technologies and infrastructure.72 But investors will also likely direct major capital infusions toward advancing, piloting, and deploying still-nascent solutions such as carbon direct air capture.
Players across the financial services industry today have a tremendous opportunity to support a variety of sectors that appear poised for rapid growth; indeed, several top banks and asset managers are already directing billions of dollars toward restructuring high-emitting companies to help them transition. Insurance companies are ramping up resilience and risk-service capabilities to anticipate and adapt to the effects of climate change on infrastructure, property, and equipment. On a larger scale, new financial markets to efficiently price carbon impact are emerging and will likely be mainstream relatively soon. The challenge: Given the uncertainty surrounding many low-emissions technologies and business models, finding ways to de-risk capital flows will likely require the cooperation of multiple financial players as well as government.73
Government: Addressing market failures, accelerating adoption, and ensuring a just transition
Governments at all levels, around the world, will play an instrumental part in the shift to a low-carbon future. The climate crisis can be understood as among “the greatest market failure(s) the world has ever seen,”74 and addressing such failures has long been a critical public sector role. Setting clean energy standards, emissions targets, carbon prices, and other regulatory and policy mechanisms will be essential to aligning market signals and properly accounting for the wide range of externalities associated with emissions-intensive activities. Funding early-stage research also often falls to the public-sector. At the same time, agencies can signal leadership by visibly shifting their own operations to a more sustainable footing. In many countries, too, the public sector represents the largest purchaser of goods and services,75 and governments can drive demand by adopting renewable energy, low-emissions vehicles, and building efficiency improvements.
But that two-pronged approach focused on regulation and operations is likely to give way to a broader effort to combat climate change by serving as a catalyst for the low-carbon transition. As a catalyst, governments will play an important role as an ecosystem architect, proactively building and nurturing the cross-cutting networks of public sector agencies, businesses, academics, NGOs, and citizens needed to collaboratively develop and rapidly scale innovative solutions. And because the impacts of both climate change and the transition will be deeply unequal and hit the most vulnerable communities hardest, governments should serve as the ultimate guarantor that the shift to a low-carbon future will be equitable and just.
Technology: Creating the tools needed for low-carbon approaches
The technology sector has a critical role to play in providing the digital infrastructure and solutions to enable a decarbonized economy. Nearly all of today’s powerful technologies—big data analytics, advanced AI, IoT, edge computing, blockchain and distributed ledgers, cloud, and more—have applications in the transition to and operation of emerging low-carbon systems.
In energy, smart grids that can incorporate a range of connected devices, from electric vehicles and rooftop solar systems to refrigerators and water heaters, and dynamically balance loads and usage are expected to be a key piece of a power sector increasingly dominated by renewables. In mobility, applications to optimize vehicle charging and battery life can help make electric powertrain ubiquitous across a wide range of use cases, and integrated mobility-as-a-service platforms can make it easier to get from A to B without a private car. In manufacturing, a range of smart factory and supply chain solutions can reduce waste and boost efficiency through widespread sensor deployments and advanced analytics. In agriculture, high-resolution GPS, IoT sensors, and data analytics can let farms produce more with less, even as technology enables better supply chain visibility of foodstuffs, decreasing spoilage. In carbon capture, cloud-based digital platforms will be key to allowing producers of carbon credits to seamlessly trade with buyers using standardized, blockchained carbon tokens.
Technology companies will need to rapidly develop and deploy these and many more such open-source solutions to achieve net-zero goals, working with a range of players across nearly every industry, in government, in academia, and in nonprofits. And companies have an opportunity to catalyze the transition via their own actions to reduce emissions. By sourcing renewable power, developing more efficient AI and data centers, shifting to more sustainable hardware sourcing and manufacturing processes in semiconductors and elsewhere, and building more durable products, tech companies can help create the market demand for the transformation of other low-carbon systems.