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1、June 2023The agricultural transition:Building a sustainable futureSustainable farming is necessary for decarbonization.But to get the world to net zero,the agriculture sector must take action along the entire value chain.Contents2Executive summary7Momentum for decarbonization in agriculture10A revis
2、ed perspective on 1.5 pathways27Achieving progress at scale21Changing how we farm31Conclusion33Appendix12Tackling food wasteAddressing land use with nature-based solutionsShifting what we eatInnovating to drive further progressMeasures to effect change13141619Executive summaryIn 2020,we released our
3、 report Agriculture and climate change,which identified key actions the agricultural industry could take to support decarbonization.1 For this report,our research has focused on how decarbonization measures have evolved,as well as on the key barriers to their adoption and the actions industry player
4、s and investors can take to support their uptake.At the same time,conversations about sustainable transitions have increasingly focused on agricultures effects on nature and society beyond climate change.For example,agricultural land covers half of all habitable land and is responsible for 70 percen
5、t of freshwater with drawals.2 In addition,food systems are the primary driver of biodiversity loss around the world,and these systems have growing effects on biosphere integrity,human health,and food access.3 While climate change remains the focus of this report,decarbonization and the actions to a
6、chieve it cannot be considered separately from their broader impacts on nature and society.Trade-offs and other benefits associated with decarbonization actions are highlighted throughout the report.Jose A.Bernat Bacete/Getty Images2The agricultural transition:Building a sustainable futureExhibit E1
7、Levers to abate forecast agriculture production and LULUCF emissions in 2050,GtCOe(GWP AR6 100Y)Note:In sum,levers achieve emissions reductions slightly beyond 2050 compliance with the 1.5 pathway,leaving room to account for overlap in reductions potential and failure to meet targets.1Land use,land-
8、use change,and forestry.2Metric gigatons of carbon dioxide equivalent.3Global warming potential,as outlined in the 100-year scenario of the Intergovernmental Panel on Climate Changes Sixth Assessment Report.Action in a handful of areas can allow global food and agriculture systems to decarbonize on
9、track with a 1.5 pathway.Diet shift away from animalproteinSustainable food production2.31.26.73.4Uncertain14.4Forecast“do nothing”emissionsReduction in food loss andfood wasteLand conservation andnatural carbon sinksNext-horizon technologiesEmissions compliant with1.5 scenarioExpansion and adoption
10、 of practices and technologies that can reduce emissions while meeting food demandsEmissions reductions from switching to alternative protein sources,away from ruminants,while meeting caloric needsFuture technology to support accelerated decarbonization and ofset shortfallsActions to reduce food los
11、s and food waste throughout the value chainEforts to conserve existing land resources(eg,forests)and expand nature-based solutions(eg,peatland restoration)Remaining emissions in compliance with 1.5 pathway3.1Achieving a 1.5 pathway will require actions that extend beyond the farm throughout the valu
12、e chain.Chief among these actions are reducing food loss and waste,adopting dietary shifts,and adapting how we use arable land,all of which are critical to decarbonization and will help the industry meet global food needs while maintaining the livelihoods of farmers(Exhibit E1).Tackling food waste.A
13、pproximately 30 percent of the worlds food is lost or wasted every year.4 Food loss and waste not only contribute an estimated 8 to 10 percent of global anthropogenic emissions5 but also drive food insecurity and overproduction,the latter of which contributes in turn to nature degradation.It is esti
14、mated that food waste could be reduced by approximately 23 percent by 2050,which would account for approximately 0.7 metric gigatons(Gt)of CO equivalent(COe).6 To achieve these reductions,we will need to better connect supply chains,improve preservation,adapt purchasing habits,and make more producti
15、ve use of food loss or waste,creating opportunities for industrials across the value chain.Shifting what we eat.Dietary shifts are already opening new markets and creating value for farmers and industrials.Producers and consumers can avoid releasing a substantial amount 3The agricultural transition:
16、Building a sustainable futureof emissions by turning to alternative protein sources,including plant-based products and precision-fermented and cellular products that are nearly identical to animal protein products.For example,classic plant-based options emit 12 percent of the total greenhouse gases(
17、GHG)emitted by cattle and have a lesser ratio of methane per kilogram of product.7 Dietary shifts away from animal proteins could save nearly 640 million hectares of land,which could in turn be reforested or become a locus for other nature-based solutions.8 Of course,in the case of alternative prote
18、in sources,trade-offs,including human health,food access,and farmer equity,are especially important and must be adequately considered as part of any transition.Addressing land use with nature-based solutions.Agricultural land covers approximately 4.9 billion hectares,or 38 percent of the worlds terr
19、estrial area,and is estimated to account for approximately 80 percent of global land-use change as land is cleared or converted for cropland,feed production,or grazing land.9 Given this enormous land-use footprint,nature-based solutions,including conservation and restoration solutions,have the poten
20、tial to abate 6.7 GtCOe in 2050approximately 80 percent of the total abatement potential.10 The largest levers for achieving this potential concern improved forestry practices,especially forest restoration.Notably,adoption of many nature-based solutions will likely require increased land-use intensi
21、fication to meet global food demand and adequate incentives for farmers to limit future land conversion.Changing how we farm,the focus of this report,is critical to a successful transition.Building on our previous work,we have defined 28 measures that can support decarbonization on the farm while cr
22、eating value for the industry and farmers(Exhibit E2).Together,these measures have an annual emission-reduction potential of approximately 2.2 GtCOe.Many of these measures can be implemented at little to no cost to the farmer and have benefits beyond emissions reductions,including yield and biodiver
23、sity uplift.Twenty-eight measures can support decarbonization on the farm while creating value for the industry and farmers.4The agricultural transition:Building a sustainable futureExhibit E2aEstimated cost of greenhouse-gas(GHG)abatement,$/tCO2e1(GWP AR6 100Y2)Note:The width of each bar on the hor
24、izontal axis refects GHG mitigation potential for each lever;the vertical axis displays the average abatement cost($/tCO2e)for each lever;the total abatement potential is less than the full width of the marginal abatement cost curve(MACC)due to the potential for interaction between some levers.1Metr
25、ic tons of carbon dioxide equivalent.2Global warming potential,as outlined in the 100-year scenario of the Intergovernmental Panel on Climate Changes Sixth Assessment Report.A marginal abatement cost curve(MACC)shows the relative costs of identifed decarbonization measures.200$,0002004008
26、00Animal proteinCropsRiceEnergyTechnical GHG mitigation potential,millions of tCOe1(GWP AR6 100Y2)Increase concentrate-to-forage ratio306Biologicals177Direct seeding of rice159Reduced overapplication of fertilizer146Expanded adoption of technologies that increase livestock production135Heat stress m
27、anagement84Electrifcation of on-farm machinery72Hydrogen power for on-farm machinery 71Conversion to hybrid and electric fshing vessels5Incorporation of cover crops10Sulfate fertilization of rice22Nitrogen inhibitors on pastures34Conversion from food to drip or sprinkler irrigation116Improved animal
28、 health and disease treatments0GHG-focused breeding and genetic selection0Feed grain processing for digestibility1Shift to a higher-fat diet188Advanced feed additives99Large-scale anaerobic manure digestion311Small-scale anaerobic manure digestion1,000+Enhanced efciency fertilizers904Low-or no-tilla
29、ge123Biochar as a fertilizer0Improved rice paddy water management59Nitrogen inhibitors on crop felds37Variable-rate fertilization64Improved rice straw management23Improved fuel efciency in fshing vehicles22+222503626252523232424216151
30、45The agricultural transition:Building a sustainable futureExhibit E2bGHG emissions,%reduction(vs 2050“do nothing”emissions)GHG emissions,amount of reduction in metric gigatons(Gt)of COe(vs 2050“do nothing”emissions)Animal proteinCropsRiceEnergyA marginal abatement cost curve(MACC)shows the relative
31、 costs of identifed decarbonization measures.(continued)233659151.10.60.40.2Although a 1.5 pathway exists and can create value for farmers and the broader industry,meaningful barriers are preventing the adoption of decarbonization solutions at scale.Farmers are central to the sustainability transiti
32、on,but they do not yet have sufficient incentives to adopt new methods and technologies.Emissions tracing and other actions require new,innovative solutions to facilitate decarbonization.And there is much room to grow in helping farmers overcome challenges in scaling their operations and maintaining
33、 profitability.The findings in this report can guide food and agriculture organizations as they transition to increased sustainability.Each intervention should be tailored to its specific context,but broadly speaking,change requires the following:financial incentives to spur farmer action,whether th
34、rough carbon markets,green premiums,subsidies,rebates,or other green-financing mechanisms ecosystem collaboration and improved tracking and traceability to bring solutions to market and support monetization of on-farm practice changes and purchaser decision making research and investment to bend the
35、 cost curve to reduce adoption costs for existing solutions and support the development and scale-up of new technologiesThe food and agriculture value chain has a chance to create a more sustainable ecosystem that feeds a growing planet while maintaining the livelihoods of farmers.With tailored and
36、concentrated action,industry players,policy makers,and investors can accelerate the path to this future while enabling their own growth.6The agricultural transition:Building a sustainable futureMomentum for decarbonization in agriculture alexis84/Getty Images7The agricultural transition:Building a s
37、ustainable futureSignificant progress has been made in decarbonizing industries and sectors across the world,but unless greenhouse-gas(GHG)emissions are steeply reduced in the coming decades,global temperatures will rise 2.0C or higher above preindustrial levels during the next century,according to
38、the 2022 Sixth Assessment Report of the Intergovernmental Panel on Climate Change(IPCC).11 Four of the nine planetary boundaries,including land-system change and species extinction,are already in or beyond the zone of uncertainty as defined by the Stockholm Resilience Center.12 Furthermore,the agric
39、ulture industry alone accounts for nearly a quarter of global emissions.13 In response,consumers,investors,policy makers,and nongovernmental organizations(NGOs)are increasingly demanding affordable,sustainable products that meet the worlds nutritional needs.These demands are creating momentum and op
40、portunity for food and agriculture industrial companies,start-ups,and investors to meet these needs in a climate-resilient,profitable manner.Consumers are directing investor interest as they become more conscious of the environmental impacts of their food,especially in the West.According to a 2021 s
41、urvey of consumers,approx-imately 30 percent of European and US consumers plan to spend more on environmentally friendly products.14 Further,many consumers are shifting their diets to incorporate plant-based dairy and meat alternatives,and“flexitarian”diets are on the rise.Investors are taking notic
42、e,and food and agriculture companies are benefiting from shifts in investment flows.Despite continued decreases in overall venture capital(VC)investments,agtech investments saw modest growth between the second and third quarters of 2022.15 At the same time,policy makers and NGOs across the globe are
43、 supporting transparent tracking and other measures to accelerate a more sustainable future.In March 2022,the US Securities and Exchange Commission proposed rule changes related to emissions disclosures,including Scope 3 emissions,which could increase scrutiny on sourcing and encourage organizations
44、 to provide consumers with additional visibility.Other policies support the adoption of low-carbon and nature-positive farming practices.For example,the Inflation Reduction Act in the United States has assigned$40 billion for advancing regenerative agriculture practices such as cover cropping and ag
45、roforestry,with additional funding for sustainable solutions from the US Department of Agriculture(USDA).16 And NGOs are supporting organizations in setting targets and ensuring robust tracking of these goals(see sidebar“Forest,land,and agriculture guidance from the Science Based Targets initiative”
46、).Forest,land,and agriculture guidance from the Science Based Targets initiativeScience Based Targets,a leading organization for climate targets,recently launched its forest,land,and agriculture(FLAG)guidance to expand coverage and support organizations in setting science-based targets related to em
47、issions.1 Developed in collaboration with private organizations across the food and agriculture value chain,the guidance accounts for land-use-change emissions,land-management emissions,and carbon removals.1“FLAG Science Based Target Setting Guidance launch,”Science Based Targets,September 28,2022.8
48、The agricultural transition:Building a sustainable futurePlayers in food and agriculture systems need to keep multiple primary goals in mind to deliver affordable food at scale while limiting their impact on the planet(Exhibit 1).However,taking action toward any one of these goals can be a complex b
49、alancing act:momentum on decarbon-ization and nature-positive action cannot be considered separately from humanitarian needs or feeding the planet.Today,many food and agriculture players are focused on the trade-offs involved in implementing new decarbonization measures.On the one hand,many solution
50、s that reduce GHG emissions can negatively affect productivity and food security.On the other hand,decarbonization actions can also accelerate progress toward other goals.For example,farmers who implement decarbonization practices can improve soil health and increase water retention,resulting in hig
51、her yields while restoring the biosphere.With this in mind,decarbonization solutions need to be considered in the context of their broader impact.Exhibit 1Raising livestock in feedlots reduces greenhouse-gas intensity but may have negative efects on soil and aquatic health.Industrialized agriculture
52、 may increase food availability in some countries,but technology and fnancing are not universally available.Conserving forest land avoids carbon loss but would limit the amount of arable land and constrain food production.Validation and verifcation requirements are likely limiting for smallholder fa
53、rmers(eg,protocols or technology needs).Nature-positive practices and input use may reduce yield and yield stability.Desired or demanded nature-positive practices may be more expensive or difcult to verify for smallholder farmers.In many situations,players must negotiate trade-ofs between the four m
54、ain goals of the agriculture system.McKinsey&CompanyProductivity andfood securityNature-positiveNet zeroInclusivityand health69The agricultural transition:Building a sustainable futureA revised perspective on 1.5 pathwaysMany organizations,such as the IPCC and the World Wide Fund for Natu
55、re,17 and numerous scholars have published perspectives on and pathways to 1.5.This report is intended to provide our current perspective on the agriculture sector,which is seen as particularly difficult to abate.A wide variety of emissions sources are associated with agriculture;however,three major
56、 sources combined account for nearly 74 percent of the total,making them excellent targets for action(Exhibit 2):Aleksei Savin/Getty Images10The agricultural transition:Building a sustainable futureExhibit 2Projected greenhouse-gas emissions from agriculture production,Global emissions,GtCO2e1(GWP A
57、R6 100Y2),by emissions sourceNote:Figures may not sum,because of rounding.1Metric gigatons of carbon dioxide equivalent.2Global warming potential,as outlined in the 100-year scenario of the Intergovernmental Panel on Climate Changes Sixth Assessment Report.Source:Food and Agriculture Organization of
58、 the United Nations;Intergovernmental Panel on Climate Changes Sixth Assessment Report(IPCC AR6);Pierre Friedlingstein et al.,“Global carbon budget 2020,”Earth System Science Data,December 2020,Volume 12,Number 4The top three emissions sources in agriculture account for three-quarters of its total e
59、missions.Land-use changeEnteric fermentationEnergy use in agricultureManure left on pastureSynthetic fertilizersRice cultivationManure managementOther on-farm emissionsTotal5.92.71.00.80.60.70.712.90.51.52020Incremental emissions to 20505.93.21.41.00.80.70.50.914.4 Land-use change refers to emission
60、s associated with land conversion for agriculture.The most common source of these emissions is deforestation,and the majority of land is used to feed and raise livestock:grazing lands account for 26 percent of the planets ice-free land,and another 33 percent is used to produce livestock feed.18 Ente
61、ric fermentation refers to the methane emitted by cattle,sheep,goats,and other ruminants during the digestion process.This methane significantly increases the emissions footprint of ruminants relative to other protein sources.Energy use in agriculture refers to the on-farm emissions associated with
62、energy production,primarily fuel combustion and electricity generation.To address these emissions sources,we identified interventions to achieve net-zero emissions and sized them against the baseline of agricultural emissions developed by the Food and Agriculture Organization of the United Nations(F
63、AO),using the tier-one methods of the IPCC guidelines for national GHG inventories(additional detail can be found in the appendix).Although the impact of interventions such as land-use change,on-farm practices,and dietary shifts will likely vary based on incentives and policy shifts,each will be imp
64、ortant to consider to create sustainable agricultural systems,regardless of warming scenario.11The agricultural transition:Building a sustainable futureMeasures to effect changeTo remain on a 1.5 pathway,agriculture will have to cut its overall emissions from 14.4 metric gigatons(Gt)of CO equivalent
65、(COe)to 3.1 GtCOe by 2050almost 80 percent(Exhibit 3).Luckily,there are a number of solutions that can help drive meaningful progress toward decarbon ization and sustainability,such as reducing food loss and food waste,shifting diets(primarily away from animal protein),and implementing nature-based
66、solutions.Further innovation and commercialization of next-horizon technologies can provide additional reductions beyond what is estimated.ozgurcankaya/Getty Images12The agricultural transition:Building a sustainable futureExhibit 3Web Exhibit of Levers to abate forecast agriculture production and L
67、ULUCF emissions in 2050,GtCOe(GWP AR6 100Y)Note:In sum,levers achieve emissions reductions slightly beyond 2050 compliance with the 1.5 pathway,leaving room to account for overlap in reductions potential and failure to meet targets.1Land use,land-use change,and forestry.2Metric gigatons of carbon di
68、oxide equivalent.3Global warming potential,as outlined in the 100-year scenario of the Intergovernmental Panel on Climate Changes Sixth Assessment Report.Action in a handful of areas can allow global food and agriculture systems to decarbonize on track with a 1.5 pathway.McKinsey&CompanyDiet shift a
69、way from animalproteinSustainable food production2.31.26.73.4Uncertain14.4Forecast“do nothing”emissionsReduction in food loss andfood wasteLand conservation andnatural carbon sinksNext-horizon technologiesEmissions compliant with1.5 scenarioExpansion and adoption of practices and technologies that c
70、an reduce emissions while meeting food demandsEmissions reductions from switching to alternative protein sources,away from ruminants,while meeting caloric needsFuture technology to support accelerated decarbonization and ofset shortfallsActions to reduce food loss and food waste throughout the value
71、 chainEforts to conserve existing land resources(eg,forests)and expand nature-based solutions(eg,peatland restoration)Remaining emissions in compliance with 1.5 pathway3.1Decarbonizing the worlds food and agriculture systems will change the way we farm and augment progress in the final area for acti
72、onand the focus of this reportsustainable food production.Our estimates indicate that action in these areas could reduce emissions sufficiently to achieve a 1.5 pathway,with some overshoot to account for potential overlap.Tackling food wasteApproximately 30 percent of the worlds food is lost or wast
73、ed every year.19 The FAO estimates that around 14 percent of food is lost during upstream production,20 and the UN Environment Programmes 2021 Food Waste Index Report estimates that a further 17 percent of food was wasted downstream in retail,food service,and households.21 Food loss and waste not on
74、ly contribute an estimated 8 to 10 percent of global anthropogenic emissions22 but also drive food insecurity and overproduction.13The agricultural transition:Building a sustainable futureOn a percentage basis,food loss is highest in lower-income regions where supply chains are less developed and pr
75、eservation systems are less robust.For example,loss rates in Western Africa are as high as 24.8 percent versus 6.5 percent in Western Europe.23 That said,food loss can also be high in developed economies,driven by price volatility,high consumer standards,and production surplus.Food waste rates durin
76、g consumption and distribution tend to be higher in high-income geographies:around 29 percent in North America versus 5 percent in South and Southeast Asia,for example.24 Globally,the majority of food waste occurs in households as a result of overbuying,consumers psychological distance from the wast
77、e they create,and other factors.25It is estimated that food waste could be reduced by approximately 23 percent by 2050,which would lead to an emissions reduction of approximately 0.7 GtCOe.26 In addition,food loss reductions of 17 percent could be achieved by 2030,27 which could contribute an additi
78、onal 0.5 GtCOe to emissions reductions.28 Reducing food loss and waste carries benefits beyond climate change as well.For example,reducing them by a combined 50 percent overall by 2050 would prevent agricultural conversion of land the size of Argentina and reduce freshwater use by approximately 13 p
79、ercent.29 Achieving these reductions will require action across the value chain to better connect supply chains,improve preservation,adapt purchasing habits,and make more productive use of food loss or waste.Organizations are mobilizing to address both food loss and food waste.For example,the UNs Su
80、stainable Development Goal 12.3 is to“halve per capita global food waste at the retail and consumer levels”by 2030.30 And the 123 Pledge was introduced at the 2022 UN Climate Change Conference(COP27)to accelerate efforts to reduce food loss and waste.31 Addressing land use with nature-based solution
81、sInnovating how we use our limited land resources can create new opportunities to achieve net-zero goals.Current food and agriculture systems are a leading cause of land-use change.Agriculture alone is estimated to account for approximately 80 percent of global land-use change,which has a profound i
82、mpact on carbon release and also negatively affects biodiversity and ecosystems.32 The UNs International Union for Conservation of Nature(IUCN)has identified agriculture as a threat to more than 19,000 species facing a high risk of extinction,making it the single largest driver of accelerating biodi
83、versity loss.33 Altogether,nature-based solutions,including conservation and restoration solutions,have the potential to abate 6.7 GtCOe by 2050(Exhibit 4).34 Improved forestry practices account for approximately 80 percent of this potential.Restoration levers offer the greatest potential,yet the im
84、portance of protecting carbon-dense regions,such as peatlands and tropical forests,cannot be overstated.Land degradation only makes restoration efforts more difficult,and restoration tends to be more expensive than conservation.Agriculture-specific innovations to directly address land use while feed
85、ing a growing population are emerging.Farmers are thinking about how they can get more out of their land and use it for multiple purposes,such as planting trees or adding solar panels in cropland and pastures(see sidebar“Integrated farming systems”).14The agricultural transition:Building a sustainab
86、le futureExhibit 4Feasible greenhouse-gas abatement potential of restoration and avoidance levers,GtCO2/year,1 2050 Note:Figures do not sum,because of rounding.1Metric gigatons of carbon dioxide per year.Source:IPR Nature Scenario;McKinsey TRAILS SolutionRestoration and conservation are the most efe
87、ctive levers for abating land-use emissions,in addition to a number of others.Forest restorationForest conservationAgroforestryAvoided grasslandconversionCover cropsOptimal-intensity grazingand legumes in pasturePeatland restorationPeatland conservationTotal2.32.20.80.50.50.50.30.056.7Notably,many o
88、f these technologies will require limited future conversion of land,which will in turn likely require land-use intensification to meet global food demand.Farmers will need adequate incentives to limit their land use in favor of conservation and restoration.Incentives from carbon and nature markets,i
89、ndustry players,and policy makers are beginning to emerge but will need to continue to scale:Carbon and nature markets today are supporting farmers in adopting nature-based solutions such as cover cropping and no-till farming,for which they can generate and sell carbon credits.In 2021,the share of n
90、ature-based credits in voluntary markets increased by nearly 20 percentage points,with a clear price premium.35 Policy makers are also beginning to respond.For example,the USDA Conservation Reserve Program continues to pay farmers an annual rental fee to stop farming on environmentally sensitive lan
91、ds.36 In addition,the Inflation Reduction Act in the United States includes$5 billion specifically for climate-smart forestry and wildlife protections.Brazil has pledged to restore 15 million hectares of degraded pastureland,and China has pledged to increase forest stock by six billion cubic meters
92、from the 2005 level.15The agricultural transition:Building a sustainable futureIntegrated farming systemsSilvopasture and agroforestry are practices that integrate trees into pasture and cropland to meaningfully benefit environmental and production goals.For example,agroforestry can provide 45 to 65
93、 percent more benefits for biodiversity than standard agricultural landscapes,and silvopasture sequesters five to ten times as much carbon as standard pastures.1 In addition,trees can make farms more resilient by protecting crops and livestock from the sun.They also require fewer inputs and improve
94、soil health while providing farmers another revenue stream.2 Agrovoltaicsthe practice of incorporating solar panels on arable landhas the potential to sustainably increase agricultural yields,reduce water use,create additional revenue,and promote equity for small-scale farmers.3 Solar panels can pro
95、vide energy directly to farms,reducing their dependency on fossil fuels and encouraging energy independence for small-scale farmers in developing communities;excess energy can be sold to the grid.The shade provided by the panels can make farms more water efficient and provide valuable shade for live
96、stock,leading to greater productivity for both crop and animal yields.1 Jernimo Boelsums Barreto Sansevero,Renato Crouzeilles,and Pedro Zanetti Freire Santos,“Can agroforestry systems enhance biodiversity and ecosystem service provision in agricultural landscapes?A meta-analysis for the Brazilian At
97、lantic Forest,”Forest Ecology and Management,February 2019,Volume 433;“Silvopasture,”Project Drawdown,accessed May 11,2023.2“Soil health,”National Agroforestry Center,US Department of Agriculture,accessed May 11,2023.3 Chad W.Higgins,Ganti S.Murthy,and Kyle W.Proctor,“Agrivoltaics align with Green N
98、ew Deal goals while supporting investment in the US rural economy,”Sustainability,December 2020,Volume 13,Number 1.Large private-sector players are also making direct changes.For example,COP27 saw 14 agricultural commodity partners commit to act by reducing emissions from land-use change and defores
99、tation.37 Considerations for land use extend beyond the need to feed a growing population.As other industries make sustainable transitions,demand for crop inputs may grow.An estimated 40 percent of the US corn crop is used in biofuels,along with 30 percent of the soy oil produced in the United State
100、s.38 Biobased feedstocks for production of basic chemicals,which are often derived from corn and other agriculture inputs,are seeing increasing traction.Although alternative,lower-input feedstocks may support growing demand,effective cross-industry decarbonization will rely on careful consideration
101、of the land-use and food security impacts associated with adoption of these technologies.Shifting what we eatChanges in the composition of human calorie consumption by shifting diets is an opportunity to limit methane emissions from livestock.These methane emissions increase atmospheric temperature
102、approximately 80 times more than CO2 on a 20-year outlook,but methane has a shorter atmospheric lifetime than other GHGs,making it an effective target for reducing global temperatures quickly.Animal-sourced products supply 18 percent of the calories consumed by humans today,39 and that proportion co
103、ntinues to riseespecially in developing countries,where demand for animal meat is expected to grow by as much as 74 percent.40 In this high-demand environment,producers and consumers can avoid a substantial amount of emissions by turning 16The agricultural transition:Building a sustainable futureto
104、alternative protein sources,including classic plant-based products and precision-fermented and cellular products.For example,classic plant-based options emit about 5 percent of the total GHGs emitted by cattle and have a lesser ratio of methane per kilogram of product(Exhibit 5).41 In addition,alter
105、native protein sources have smaller physical footprints and consequently limit future land conversion while creating opportunities for sequestration.For example,one kilogram of beef protein requires an estimated 326 square meters of land versus four for plant-based options,12 for poultry,and only th
106、ree for cell-based.42 Dietary shifts away from animal proteins could save nearly 640 million hectares of land,which could in turn be reforested or provide a locus for other nature-based solutions.43 Exhibit 5BeefDairyPorkPoultryCell-basedMicro-organismbasedClassicvegan andvegetarianInsect-based16351
107、5252629587553637166CH42 emissionsN2O3 emissionsCO2 emissionsTotal emissionsCurrent life cycle emissions intensity,kg of CO2e/kg protein11Kilograms of CO2 equivalent per kilogram of protein.2Methane.3Nitrous oxide.Source:ClimateWorks Foundation Global Innovation Needs Assessment(GINA),Prot
108、ein Diversity;Food and Agriculture Organization GLEAM(Global Livestock Environmental Assessment Model);J.Poore and T.Nemeck,“Reducing foods environmental impacts through producers and consumers,”Science,June 2018,Volume 363,Number 6429;“Meat:The future series-Alternative proteins,”World Economic For
109、um,January 2019Conventional protein sources,especially ruminants,have signifcantly larger emissions intensities than alternatives.McKinsey&Company9117The agricultural transition:Building a sustainable futureEven modest diet changes such as“flexitarianism,”or semi-vegetarianism,can improve emissions
110、outcomes.If 50 percent of the global population reduced their daily consumption of animal-based proteins to 60 grams(about 150 calories of beef),2.2 GtCO2e could be mitigated.44 In conjunction with emission-reduction methods for conventional protein,such as anaerobic digestion,this shift could signi
111、ficantly decrease global emissions from protein production.The market for alternative proteins is no longer nascent.Market participants have found success across a broad spectrum of categories,and between 2019 and 2022,dollar sales grew by 44 percent,including 7 percent between 2021 and 2022.45 In s
112、pite of this overall growth,stakeholders must overcome a number of challenges to further enhance adoption of alternative proteins.Suc-cess ful alternative proteins have sensory profilesmost of all taste and texturethat con sumers enjoy.Palatability is particularly important given that plant-based pr
113、oducts remain more expensive than meat,due in part to high initial investments and limited availability for the production supply chain.Policies can support consumer adoption;for example,the European Unions Farm to Fork strategy aims to increase the availability of alternatives.In making these dieta
114、ry shifts,producers and consumers must first consider their impact on human health and livelihoods.In some cases,these impacts are positive.For example,research suggests that encouraging citizens to shift their diets toward alternative proteins could reduce dietary mor-tality by up to 7 percent,with
115、 the largest impact in upper-middle-income countries.46 However,research also highlights the need to consider the nutritional impacts of alternatives in addition to their environmental impacts.For example,tofu is the only plant-based alternative to traditional protein sources that has a comparable d
116、igestibility and amino acid profile.47 In addition,sufficient protein must remain available and affordable to consumers.The shift to alternatives will likely need to be led by wealthier nations,which can afford such solutions,rather than by developing nations,which may instead focus on improvements
117、in animal productivity.48Dietary shifts away from animal proteins could save nearly 640 million hectares of land,which could in turn be reforested or provide a locus for other nature-based solutions.18The agricultural transition:Building a sustainable futureInnovating to drive further progress Furth
118、er progress toward achieving sustainability goals will require additional innovations and technical solutions beyond what is commercially feasible today.We identified four thematic areas of agtech innovation:decarbonizing inputs,digital agriculture,livestock enteric emissions reductions,and novel pr
119、oduction methods.Decarbonizing inputsThis refers to interventions to reduce emissions from the production or application of inputs.For instance,agricultural inputs,such as fertilizers,pesticides,herbicides,and fungicides,generate an estimated 1,188 metric megatons(Mt)of COe in emissions across the v
120、alue chain,from production to application.49 New techniques to reduce emissions across the entire value chain focus on three main areas:reducing emissions from production,such as through the use of clean ammonia,which can mitigate approximately 99 percent of emissions from production50 reducing appl
121、ication rates of chemical inputs such as biologicals improving crop uptake and resistance,including through gene editing Digital agricultureOne of the least digitalized industries in the United States,agriculture could benefit from new tools and techniques to help leverage data or analytics in servi
122、ce of sustainable decision making.51 Digital solutions in agriculture such as the following could provide an ROI for growers and the environment alike:farm management software to improve operational efficiency carbon verification and monitoring tools to measure carbon emissions and sequestration,mon
123、itor and optimize irrigation systems,and estimate sustainability impact precision agriculture hardware to provide real-time soil measurements and reduce inputs remote-sensing technologies to monitor crop growth and reduce broad pesticide application agribusiness marketplaces to provide greater insig
124、ht into food safety and traceability farm robotics and automated and electrified machinery to reduce labor needs,optimize field operations,and reduce input usage and operating costs 19The agricultural transition:Building a sustainable futureLivestock enteric emissions reductionsNovel methods are eme
125、rging to reduce enteric emissions in livestock,particularly in grassland-based systems.Most current interventions focus on reducing emissions from cows raised in feedlots,where their feed,diet,and conditions are most controllable.However,emissions from feedlots account for a small portion of livesto
126、ck emissions,given their low prevalence and relatively efficient production mechanisms.52 New interventions can thus focus on reducing enteric emissions from livestock raised in grassland or mixed systems,where cattle might be centrally handled only once or twice a year for weighing and treatment an
127、d where their feed rations are unpredictable and uncontrollable.Potential interventions include the following:methane vaccines to suppress methanogenesis,the process that produces methane rumen-modifying microbes,which can be added to water sources or as a silage inoculant in mixed systems53 novel d
128、elivery methods,such as encapsulation technologies,to incorporate feed additives in grassland or mixed systemsNovel production systemsThe aforementioned interventions largely represent mechanisms to reduce emissions within the current agricultural production system.However,there is growing movement
129、toward novel methods that represent a fundamental change in the way we grow our food:Controlled-environment agriculture(CEA),including vertical farms,allows for controllable growing conditions and can decrease water,land,and chemical input consumption per acre.But CEA demands significantly more ener
130、gy than conventional farming systems.Land-based aquaculture can enable production closer to areas of demand and achieve up to 50 percent reductions in emissions relative to traditional open-net-pen systems if powered by renewables.54 In each of these areas,theres no shortage of innovations that have
131、 the potential to reduce emissions and change the way our food is grown.Every day,new advances in science,software,and computing push the frontier of possibilities for a new food system.20The agricultural transition:Building a sustainable futureAdapting how we farm,the focus of this report,will be c
132、ritical to a successful transition and could support estimated annual emissions reductions of 2.2 GtCO.Action will be required across farming ecosystems large and small,including all forms of crops and livestock.Today,farmers are adopting practices that decarbonize and reduce impacts on planetary bo
133、undaries while improving their bottom lines,such as optimizing fertilizer use and managing livestock heat stress.More forward-thinking farms are adopting newer technologies,such as anaerobic digestion and electrified equipment,to drive further impact.While many strategies have benefits in addition t
134、o reducing emissions and can be implemented at little to no cost to the farmer,economics remains a key barrier to at-scale adoption.Further investment,education,and development from industrials,start-ups,and financial institutions Changing how we farm evandrorigon/Getty Images21The agricultural tran
135、sition:Building a sustainable futurewill support accelerated uptake.The following chapter details measures to reduce on-farm emissions,barriers limiting adoption,and opportunities for collaboration to drive adoption.Sustainable changes in food productionThe primary focus of this report is on sustain
136、able food production,for which we have identified 28 measures that can support on-farm decarbonization in line with the 1.5 pathway described in the IPCCs Sixth Assessment Report.Altogether,on-farm decarbonization has an annual emission-reduction potential of approximately 2.2 GtCO(see“Measures for
137、supporting decarbonization and sustainability impacts:Deep dives”in appendix),with the majority of mitigation coming from the top 15 measures(Exhibit 6).Much has changed since our previous publication,including the addition of five new measures that can play an active role in reducing emissions:hydr
138、ogen power for on-farm machinery,cover crops,biologicals,livestock heat stress management,and conversion to hybrid and electric fishing vehicles.Furthermore,the science around emissions has advanced with continued aca demic research and the increased availability of technologies such as satellite im
139、agery of croplands,all of which has improved our understanding of cost position,emissions reduction,and the implementation potential of measures.To understand how the sector can achieve a 1.5 pathway,we developed a marginal abatement cost curve(MACC)to assess each measures potential and average cost
140、 to abate one metric ton of COe for global on-farm emissions(Exhibit 7).55While many strategies have benefits in addition to reducing emissions and can be implemented at little to no cost to the farmer,economics remains a key barrier to at-scale adoption.22The agricultural transition:Building a sust
141、ainable futureExhibit 6Web Exhibit of Twenty-eight measures can support on-farm decarbonization in line with a 1.5 pathway,with most of the mitigation coming from the top 15.Animal proteinCropsRiceEnergyUtilize advanced feed additives for livestock350 metric megatons of CO2 equivalent(MtCO2e),at cos
142、t of$99/tCO2e Apply nitrogen inhibitors and urease inhibitors on pasture214 MtCO2e,at cost of$35/tCO2e Electrify agricultural machinery with renewable-energy sources167 MtCO2e,at cost savings of$72/tCO2eExpand use of large-scale anaerobic digestors80 MtCO2e,at cost of$311/tCO2e Convert to use of enh
143、anced-efciency fertilizers73 MtCO2e,at cost of$904/tCO2e Apply sulfate fertilizer on rice paddies63 MtCO2e,at cost of$22/tCO2e Employ partial straw removal in rice paddies112 MtCO2e,at cost savings of$23/tCO2e Direct-seed rice104 MtCO2e,at cost savings of$159/tCO2e Improve rice paddy water managemen
144、t 97 MtCO2e,at cost savings of$59/tCO2e Reduce overapplication of fertilizer on felds131 MtCO2e,at cost savings of$146/tCO2e58 MtCO2e additional due production reductionApply nitrogen inhibitors and urease inhibitors on crop felds126 MtCO2e,at cost savings of$37/tCO2eImprove animal health monitoring
145、 and illness prevention112 MtCO2e,at zero costEmploy low-or no-till practices on crops91 MtCO2e,at cost of$123/tCO2e218 MtCO2e additional due to sequestration Convert from food to drip or sprinkler irrigation85 MtCO2e,at cost of$116/tCO2e Employ greenhouse gasfocused breeding and genetic selection i
146、n livestock production81 MtCO2e,at zero cost23The agricultural transition:Building a sustainable futureExhibit 7aEstimated cost of greenhouse-gas(GHG)abatement,$/tCO2e1(GWP AR6 100Y2)Note:The width of each bar on the horizontal axis refects GHG mitigation potential for each lever;the vertical axis d
147、isplays the average abatement cost($/tCO2e)for each lever;the total abatement potential is less than the full width of the marginal abatement cost curve(MACC)due to the potential for interaction between some levers.1Metric tons of carbon dioxide equivalent.2Global warming potential,as outlined in th
148、e 100-year scenario of the Intergovernmental Panel on Climate Changes Sixth Assessment Report.A marginal abatement cost curve(MACC)shows the relative costs of identifed decarbonization measures.200$,000200400800Animal proteinCropsRiceEnergyTechnical GHG mitigation potential,millions of tC
149、Oe1(GWP AR6 100Y2)Increase concentrate-to-forage ratio306Biologicals177Direct seeding of rice159Reduced overapplication of fertilizer146Expanded adoption of technologies that increase livestock production135Heat stress management84Electrifcation of on-farm machinery72Hydrogen power for on-farm machi
150、nery 71Conversion to hybrid and electric fshing vessels5Incorporation of cover crops10Sulfate fertilization of rice22Nitrogen inhibitors on pastures34Conversion from food to drip or sprinkler irrigation116Improved animal health and disease treatments0GHG-focused breeding and genetic selection0Feed g
151、rain processing for digestibility1Shift to a higher-fat diet188Advanced feed additives99Large-scale anaerobic manure digestion311Small-scale anaerobic manure digestion1,000+Enhanced efciency fertilizers904Low-or no-tillage123Biochar as a fertilizer0Improved rice paddy water management59Nitrogen inhi
152、bitors on crop felds37Variable-rate fertilization64Improved rice straw management23Improved fuel efciency in fshing vehicles22+222503626252523232424216151424The agricultural transition:Building a sustainable futureThe MACC excludes so
153、me measures within the agriculture value chain that can reduce upstream impact or land use because they are not directly tied to on-farm emissions.56 For example,the oppor tunity associated with green and blue hydrogen for fertilizer production or on-farm land-use practices such as agroforestry cann
154、ot be overstated(see sidebar“Fertilizer and pesticide production”).At-scale adoption of decarbonization measures is not straightforward,and many barriers exist.The economics of a given change remains at the forefront for farmers,but other external factorsincluding access to financing,grower educatio
155、n,and regulations and incentives,such as from carbon marketswill also influence adoption.For example,approximately 39 percent of surveyed farmers cited a lack of understanding as a primary reason for not participating in a carbon program.57Exhibit 7bGHG emissions,%reduction(vs 2050“do nothing”emissi
156、ons)GHG emissions,amount of reduction in metric gigatons(Gt)of COe(vs 2050“do nothing”emissions)Animal proteinCropsRiceEnergyA marginal abatement cost curve(MACC)shows the relative costs of identifed decarbonization measures.(continued)233659151.10.60.40.2Fertilizer and pesticide productionThe produ
157、ction phase of fertilizer is responsible for an estimated 39 percent of the products emissions(roughly 425 metric megatons of CO equivalent MtCOe)1 and nearly all greenhouse-gas(GHG)emissions associated with pesticides(roughly 135 MtCOe).2 Thus,there is impetus to move away from the current fossil f
158、ueldriven production processes,and blue and green hydrogen are emerging as potential solutions.In blue-hydrogen projects,traditional fossil-fuel inputs are still used,but 50 to 90 percent of the carbon is captured and stored,depending on implementation.By contrast,green hydrogen uses renewables to p
159、ower electrolysis,creating almost zero emissions.The hydrogen created in these systems can then be used to create clean ammonia for use in nitrogen fertilizers.Estimates suggest that nearly 26 metric megatons(Mt)of sustainable ammonia will be produced per year by 2030equivalent to 16 percent of the
160、total global ammonia market excluding Chinaroughly six Mt of which is expected to be applied in green fertilizers.3 Falling renewables costs,increased electrolysis capacity,supportive regulation,and acceleration of strategic industry alliances can make low-carbon hydrogen cost-competitive compared w
161、ith fossil fuelreliant gray hydrogen before 2030 and can further expedite adoption of these technologies.1 Alicia Ledo,Stefano Menegat,and Reyes Tirado,“Greenhouse gas emissions from global production and use of nitrogen synthetic fertilisers in agriculture,”Scientific Reports,August 2022,Volume 12,
162、Number 14490.2 E.Audsley et al.,“Estimation of the greenhouse gas emissions from agricultural pesticide manufacture and use,”Cranfield University,August 2009.3 Bernd Heid,Alma Sator,Maurits Waardenburg,and Markus Wilthaner,“Five charts on hydrogens role in a net-zero future,”McKinsey,October 25,2022
163、.25The agricultural transition:Building a sustainable futureChanges that address climate change interact with other goalsA number of practices have planetary and humanitarian benefits for the four goals of agriculture(nature positivity,emissions reduction,productivity and food security,and inclusivi
164、ty and health).58 For example,among other benefits,regenerative farming practices such as low-or no-tillage and cover cropping can improve nitrogen and phosphorous flows by increasing soil organic matter and reducing the need for synthetic fertilizers.Variable-rate fertilization can promote a health
165、y biosphere by limiting overapplication of fertilizer and limiting eutrophicationthe accumulation of nutrients in lakes or other bodies of waterin nearby ecosystems caused by runoff.And anaerobic digesters can support economic growth in rural communities during construction and maintenance and provi
166、de farmers with new revenue streams for energy sold.But these practices can also have negative trade-offs that stakeholders should consider as they work toward these changes.For example,feed processing for livestock protein may not be financially viable for small-scale farmers and may come at the ex
167、pense of inclusion and financial security.Shifting toward certain processed alternative proteins may have health impacts that are not yet fully understood,and reducing fertilizer use or shifting toward biologicals could affect crop yield and subsequent food security if not implemented properly.All p
168、ractices should be rec ommended in specific,regional,and population-dependent contexts and are not meant to be applied in a one-size-fits-all solution.26The agricultural transition:Building a sustainable futureAchieving progress at scaleAs the risks of climate change grow,food systems will be tasked
169、 with creating more products with fewer inputs in increasingly difficult conditions.By 2050,the worlds population is expected to reach ten billion,while the likelihood of a 15 percent shock to grain production is estimated to double by 2030 as a result of climate change.59 As the MACC shows,establis
170、hed and innovative solutions exist for agriculture to achieve a 1.5 pathway,but meaningful barriers currently limit uptake of these solutions.This presents a unique opportunity for businesses and investors to accelerate adoption and capture additional value.Key barriers to adoption and associated op
171、portunities include novel financing to provide adequate incentives for farmers,ecosystem collaboration and value chain traceability,and bending the cost curve through innovation.sinology/Getty Images27The agricultural transition:Building a sustainable futureNovel financing to provide adequate incent
172、ives for farmersThe considerable number of farmers and stakeholders across the value chain creates challenges for addressing agricultures planetary impact at scale.Roughly one in four members of the global workforce is employed by the agriculture industry.60 However,farming is by no means a central-
173、ized industry:more than 80 percent of farms are smaller than two hectares,about the size of three soccer fields,and these small farms account for 30 to 34 percent of the planets food supply.61 As a result,many farmers today are focused on near-term financial performance and may not have adequate inc
174、entives to adopt sustainable practices and technologies.For example,in the United States,only 14.5 cents per dollar spent on food went to farmers in 2021,the lowest amount in three decades,and 50 percent of farmers cite low ROI as a top reason for not participating in carbon programs.62Financial inc
175、entives for farmers to adopt sustainable technologies are emerging,such as carbon and biodiversity markets,green premiums on consumer food products,and specific project incentives,such as Californias FARMER program,which funds new electric equipment.Although these mechanisms can provide value to far
176、mers,they remain nascent.For example,as the MACC illustrates,nearly all production-side abatement opportunities could be financially viable at an average carbon price of$150 per metric ton.However,agricultural carbon credits account for just over 1 percent of credits issued.63 If this financial burd
177、en is left to the farmer,adoption is likely to be low.Lack of access to capital also limits farmers adoption of interventions with high investment needs,especially on small farms,and longer time frames of potential payoffs further limit uptake for farmers late in their careers.Thus,ecosystem players
178、 will need to develop novel financing approaches to support uptake.If implemented with care,these solutions can continue to support the livelihoods of farmers large and small while unlocking additional revenue streams.Ecosystem collaboration and value chain traceabilityAchieving at-scale adoption of
179、 decarbonization solutions and capturing the associated value will require ecosystem players to collaborate in new ways(Exhibit 8).In many cases,collaborations can involve partners from multiple stages of the value chain as well as external stakeholders,such as investors.For example,adequate practic
180、e verification will be necessary to monetize practice adoption and create novel consumer-facing products downstream.Purchasers must be able to track product traits,such as crops farmed using regenerative practices,in order to create consumer-facing products and generate green premiums.Similarly,reta
181、ilers must be able to adequately bring this transparency to consumers.Creating this transparency will require collaboration across the value chain but can support standardized consumer labeling and foster trust in carbon and biodiversity,all of which can help create additional value.Bending the cost
182、 curve through innovationWhile most opportunities are viable at an average carbon price of$150 per metric ton,practices are unlikely to be adopted at scale until costs decrease,especially in less developed regions and on smaller farms.Public investment in R&D today is increasing but not uniformly ac
183、ross geographies.For example,while inflation-adjusted public investment is decreasing in the United States,it is increasing in many other regions with large agricultural economies,such as China,the European Union,and Brazil.64 Public and private investors thus have a key role to play in accelerating
184、 progress toward a more sustainable future.Private investment in agtech,including sustainable agriculture,28The agricultural transition:Building a sustainable futureExhibit 81Consumer packaged goods.Ecosystem players will need to work together to address decarbonization issues and capture associated
185、 value.McKinsey&CompanyEquipment manufacturingSecondary processing and CPG1Aggregation,trading,and processingProductionInputs and distributionFood retailCreate novel fnancing mechanisms to support adoption of capital-intensive next-generation equipment(eg,electric vehicles and equipment for regenera
186、tive agriculture,anaerobic digestion,or drip irrigation)11Roll outand educate consumers abouttrustable products and labels to capture consumer premiums for sustainable production55Scale waste-to-value streams to address food loss and food waste emissions(eg,waste for biofuel production)44Drive adopt
187、ion of improved tracking and tracing solutions to validate farmer practices,track“sustainability traits,”and reduce food loss with supply and demand matching33Launch price-competitive alternative products and services(eg,biologicals or carbon programs)as well as education to drive adoption among pro
188、ducers22Improve crop genetics to reduce perishability and value chain loss(eg,due to bruising)66Collaboration across the value chain will be required to ensure sufcient value fows to producers;other stakeholders may be involved(eg,investors and insurance)has been growing rapidly,with nearly 20 times
189、 more capital in new ventures in 2021 than in 2012.And although the total amount of investment saw a meaningful decrease between 2021 and 2022,there are still reasons for optimism.In fact,the second quarter of 2022 alone saw more funding in agtech than any quarter prior to the fourth quarter of 2020
190、.65 Continued and accelerated investment will be required to bend the cost curve for existing solutions and support the development and adoption of new solutions.With this in mind,we developed a set of 24 sustainable-investment themes targeted at the agriculture sector(Table).Themes are divided acro
191、ss the value chain based on investment stages.Notably,some opportunities are seeing both early-and late-stage investments.For example,many farm management technologies are seeing late-stage investments,while new solutions leveraging satellite imagery are in a relatively early stage of investing.Barr
192、iers to achieving the adoption necessary to a reach a 1.5 pathway are meaningful.Progress is being made,but it will need to accelerate to provide the motivation farmers and consumers need to act.Investors and industry players across the value chain have a unique opportunity to capture value while cr
193、eating this motivation.29The agricultural transition:Building a sustainable futureTable.A number of actionable investment themes can help players capture the value associated with decarbonization across the agricultural value chain.Early-stage investment Early-and late-stage investment Late-stage in
194、vestment1.Equipment2.Inputs and distribution3.Agricultural production4.Trade,primary processing,and ingredients5.Secondary processing and consumer packaged goods6.Food retailDescriptionManufactured capital goods for agricultural productionInput creation and wholesale supply to farmsProduction of cro
195、ps and livestockStorage and wholesale trade of crops and livestockPreparation and processing for retailFood sales to end consumersInvest-ment themesDigitally enabled equipment for conventional and CEA1 production and for precision-agriculture solutionsNew distribution models for agricultural inputsT
196、ech-enabled farm management Digital disruption of agricultural commodity tradingEmergence of direct-to-consumer brandsNonchemical crop stimulants and protectionIndoor farming Premium food brands(eg,mission-driven or sustainably sourced)Irrigation equipmentNext generation of seeds Land-based aquacult
197、ureNutraceuticals and supplements,including pre-,pro-,and synbioticsAnaerobic digestion technologyTree geneticsForest and land management and technology servicesAlternative proteins,including ingredients,processing,and brandsDecarbonization of agricultural equipmentFeed additives or vaccines to impr
198、ove livestock sustainabilityMethane capture technologiesFood preservation and waste-reduction technologiesLow-impact fertilizers(eg,from green hydrogen)Food traceability and safetySustainable feed production(eg,insect farming tech)Animal health interventions1 Controlled-environment agriculture.30The
199、 agricultural transition:Building a sustainable futureConclusionAlthough the path to achieving 1.5C will not be straightforward,it can create real business value for farmers and players throughout the value chain,with additional environmental benefits beyond reducing climate change.Action will be re
200、quired beyond the farm,but there is a real opportunity to drive on-farm decarbonization while capturing business value.A more sustainable future for agriculture that feeds a growing planet while maintaining the livelihoods of farmers is feasible.And industry players,policy makers,and investors can a
201、ccelerate the path to the future while enabling their own growth.Hans Neleman/Getty Images31The agricultural transition:Building a sustainable futureOnyx Bengston is a consultant in McKinseys Denver office;Sherry Feng is a consultant in the New York office,where Vasanth Ganesan is a partner;Joshua K
202、atz is a partner in the Stamford office;Hannah Kitchel is a consultant in the Boston office;Pradeep Prabhala is a partner in the Washington,DC,office;Peter Mannion is a partner in the Dublin office;Adam Richter is a consultant in the New Jersey office;Wilson Roen is a consultant in the Chicago offic
203、e;and Jan Vlcek is a consultant in the Vancouver office.The authors wish to thank the following people for their contributions to this report:Michael Aldridge,Peter Amer,Robert Beach,Stephen Butler,Jude(Judith)Capper,N.Andy Cole,Amelia de Almeida,Albert De Vries,Stefan Frank,Pierre J.Gerber,Mathijs
204、J.H.M.Harmsen,Roger S.Hegarty,Mario Herrero,Ermias Kebreab,Michael MacLeod,Jennie Pryce,Caeli Richardson,Kendall Samuelson,Pete Smith,Philip Thornton,Mark van Nieuwland,Roel Veerkamp,and Xiaoyu(Iris)Feng.32The agricultural transition:Building a sustainable futureAppendix Justin Paget/Getty Images33T
205、he agricultural transition:Building a sustainable futureCalculating a baseline for agriculture emissionsThe marginal abatement cost curve(MACC)is tied to global values and projections of on-farm emissions.As such,it does not use other forms of emissions as its reference point,and it does not include
206、 the measures that primarily affect these other forms of emissions,such as carbon sequestration or reductions in production of inputs(feed,feedstock,and so on).Many measures have additional potential to reduce emissions beyond on-farm emissions;we highlighted this potential but did not include these
207、 measures in the MACC to ensure an accurate representation of reduc tions against the on-farm baseline.In addition,many measures have cobenefits to support goals beyond decarbonization(Table A1).And some measures are tied to yield uplift,which we have accounted for in both the costs and the greenhou
208、se-gas(GHG)impact associated with the production changes of yield uplift.The baseline created for agriculture emissions and used in the creation of the MACC was based on the Agriculture Emissions Database developed by the Food and Agriculture Organization of the United Nations(FAO),66 with several m
209、inor adjustments:Nitrous oxide and methane emissions were adapted to reflect the global warming potential(GWP100)values from the Sixth Assessment Report of the Intergovernmental Panel on Climate Change(IPCC).Because the FAO does not provide forward-looking estimates for“energy use in agriculture,”re
210、gional values for 2030 and 2050 were estimated based on the FAOs future-acreage projections.Similarly,the value for“cultivation of organic soils”was held constant from 2020 onward because the FAO does not provide forward-looking projections for this value and recently reported data show limited grow
211、th.The baseline was developed with the FAOs baseline of agricultural emissions based on the following definitions:Land-use change refers to emissions associated with land conversion for agriculture.The most common source of these emissions is deforestation.Because of uncertainty about the relative p
212、otential of restoration and conservation efforts versus future land conversion,our research assumed zero growth in this category from 2030 to 2050.Enteric fermentation refers to methane emitted during the digestion process by ruminants,such as cattle,sheep,and goats.Ruminants have a rumen,a second s
213、tomach that allows them to consume and digest cellulose plants and grains that monogastric animals,such as humans,cannot.When ruminants consume carbohydrates,methanogens in the rumen decompose them into methane in a process called methanogenesis.This methane is ultimately released into the atmospher
214、e and is considered a main source of GHG emissions.The majority of these emissions come from beef and dairy cattle.34The agricultural transition:Building a sustainable futureEnergy use in agriculture refers to on-farm energy use related to fuel combustion and electricity generation for agricultural
215、activities,including fisheries.Manure left on pasture refers to emissions,primarily nitrogen runoff,from animal waste left on grazing lands.Synthetic fertilizers refers to nitrous oxide emissions from excess use of nitrogen-based fertilizers in croplands.Although these on-farm emissions are signific
216、ant,they account for only about 59 percent of the GHG emissions associated with a metric ton of synthetic fertilizer.67 The remaining emissions occur upstream,primarily during transportation(about 3 percent)and ammonia synthesis in production(about 39 percent).68 Rice cultivation refers to the metha
217、ne emissions that result from rice paddies.These flooded fields block oxygen from penetrating the soil,forcing organic material to decompose anaer-obically and creating methane emissions.In addition,the rice straw left on the field after harvesting is typically cleared by burning,which results in si
218、gnificant CO emissions.Manure management refers to emissions during the storage and processing of manure.Methane can be emitted from its anaerobic decomposition,and nitrous oxide can be emitted during storage and processing,where it is released as ammonia and later transformed into nitrous oxide in
219、indirect emissions.Table A1.Many levers have cobenefits to support goals beyond decarbonization.Degree of impact High Low Net zeroNature-positive(Stockholm resilience boundaries)Productivity and food security(UN SDGs1)Inclusivity and health(UN SDGs1)Impact areaClimate changeLoss of biosphere integri
220、tyFresh-water consump-tionNitrogen and phos-phorous flowsLand system changeZero hungerDecent work and economic growthClean water and sanitationGood health and well-beingRiceDry direct seedingImproved rice paddy water managementSulfate fertilization of riceImproved rice straw management35The agricult
221、ural transition:Building a sustainable futureDegree of impact High Low Net zeroNature-positive(Stockholm resilience boundaries)Productivity and food security(UN SDGs1)Inclusivity and health(UN SDGs1)Impact areaClimate changeLoss of biosphere integrityFresh-water consump-tionNitrogen and phos-phorous
222、 flowsLand system changeZero hungerDecent work and economic growthClean water and sanitationGood health and well-beingFertilizer efficiencyReduced over-application of fertilizerEnhanced-efficiency fertilizersVariable-rate fertilizationNitrogen and urease inhibitors on crop fieldsBiochar as a soil am
223、endmentOther crop production managementLow-or no-tillageConversion from flood to drip or sprinkler irrigationIncorporation of cover cropsBiologicals(including biopesticides and biostimu-lants)36The agricultural transition:Building a sustainable futureDegree of impact High Low Net zeroNature-positive
224、(Stockholm resilience boundaries)Productivity and food security(UN SDGs1)Inclusivity and health(UN SDGs1)Impact areaClimate changeLoss of biosphere integrityFresh-water consump-tionNitrogen and phos-phorous flowsLand system changeZero hungerDecent work and economic growthClean water and sanitationGo
225、od health and well-beingEnergyElectrification and auto-mation of on-farm machinery and equipmentHydrogen power for on-farm machinery and equipmentLivestock productivityGreenhouse gasfocused breeding and genetic selectionImproved animal health monitoring and illness preventionTechnologies that increa
226、se livestock productionHeat stress management37The agricultural transition:Building a sustainable futureDegree of impact High Low Net zeroNature-positive(Stockholm resilience boundaries)Productivity and food security(UN SDGs1)Inclusivity and health(UN SDGs1)Impact areaClimate changeLoss of biosphere
227、 integrityFresh-water consump-tionNitrogen and phos-phorous flowsLand system changeZero hungerDecent work and economic growthClean water and sanitationGood health and well-beingLivestock feeding practicesFeed grain processing for digestibility(steam-flaking)Shift to higher-fat dietDecrease forage-to
228、-concentrate ratioAdvanced feed additivesManure managementNitrogen inhibitors and urease inhibitors on pastureLarge-scale anaerobic manure digestionSmall-scale anaerobic manure digestionAquaculture and fisheriesImproved fuel efficiency in fishing vesselsConversion to hybrid and electric fishing vehi
229、cles1 United Nations Sustainable Development Goals.38The agricultural transition:Building a sustainable futureCalculating the MACC levers emission-reduction potential and costsThe emissions abatement and cost for each mitigation lever were calculated from the bottom up,using data on applicability,ad
230、option,abatement potential,yield impacts,and related costs from sources including academic research,interviews with content experts,and industry reports.The capital costs for relevant levers were calculated using a weighted average cost of capital of 5 percent,and total cost was calculated using the
231、 levelized cost of production,which calculates the annual unit revenue needed to break even against costs.In addition,several levers were considered for the MACC but were ultimately excluded because of relatively low anticipated impact and overlap with other levers(Table A2).Table A2.Several levers
232、were considered for inclusion in the marginal abatement cost curve but were ultimately excluded.CategoryPotential measureAnimal proteinsManure managementImproved housing and bedding practicesAquaculture and fisheriesShifted fishing strategies(eg,from trawl to seine)Regeneration of fish stocksIntegra
233、tive multitrophic aquacultureIncreased penetration of aquaponicsSwitch to land-based fish farmingLivestock feed compositionAlternative protein feeds(eg,insect feed)Improved forage qualityRight-size feeding volumesOther livestock systems managementOptimization of slaughter ageAssisted reproductive te
234、chnologiesCropsOther crop production managementImproved equipment maintenanceIntegrated pest managementExpanded acreage under irrigationCrop breeding for improved productivity and sequestrationSale of biomass to biochar productionDecarbonization of pesticide production and useAgroforestryControlled
235、environment agricultureFertilizer managementLow-carbon fertilizer manufacturing(eg,green hydrogenbased production)Microbial fertilizer or biofertilizerDigestate as soil amendment39The agricultural transition:Building a sustainable futureThe following detailed lever deep dives include description,dis
236、cussion,calculation methodology,and sources.CategoryPotential measureFood systemsWaste reductionShelf-life tracking and managementSoftware tracking for produceRiceSelectionOptimal rice varietal selectionEnergyEnergy efficiencyReplace HPS lighting with LEDs in greenhousesPenetration of lightweight eq
237、uipmentIncreased heating efficiency and managementEmission-reduction potential,million tCO2e1 A B C104Baseline applicable emissions,million tCO2e,1 2050 A634Source:FAOSTAT 2022;McKinsey analysisLever implementation cost savings,$/tCO2e1(159)Source:Minh D Ngo et al.,The current adoption of dry-direct
238、 seeding rice(DDSR)in Thailand and lessons learned for Mekong River Delta of Vietnam,CGIAR CCFAS(Climate Change,Agriculture and Food Security)working paper,Number 273,June 2019Incremental lever implementation,%B40Source:Mathijs Harmsen,“Non-CO2 greenhouse gas mitigation in the 21st century,”Utrecht
239、University,June 21,2019Direct seeding of riceGreenhouse-gas reduction factor,2%CO2e CSource:A.Bhatia et al.,“Dry direct-seeding of rice for mitigating greenhouse gas emission:Field experimentation and simulation,”Paddy and Water Environment,December 2012,Volume 11;Chris van Kessel et al.,“Modeling m
240、ethane and nitrous oxide emissions from direct-seeded rice systems,”Journal of Geophysical Research:Biogeosciences,October 2015,Volume 120;Debashis Chakraborty et al.,“A global analysis of alternative tillage and crop establishment practices for economically and environmentally efficient rice produc
241、tion,”Scientific Reports,August 2017,Volume 7,Number 9342;Kehui Cui et al.,“Dry direct-seeded rice as an alternative to transplanted-flooded rice in Central China,”Agronomy for Sustainable Development,July 2014,Volume 35;Priyanka Gautam et al.,“Management of direct seeded rice for enhanced resource-
242、use efficiency,”Plant Knowledge Journal,2013,Volume 2,Number 3;R.Kartikawati et al.,“The opportunity of direct seeding to mitigate greenhouse gas emission from paddy rice field,”IOP Conference Series:Earth and Environmental Science,2019,Volume 393;Virender Kumar and Jagdish K.Ladha,“Chapter six-Dire
243、ct seeding of rice:Recent developments and future research needs,”Advances in Agronomy,2011,Volume 111 401Reduced methane emissions due to less flooding required when using a direct seeding technique rather than transferring seedlings into flooded paddies40The agricultural transition:Building a sust
244、ainable futureEmission-reduction potential,million tCO2e1 A B C97Baseline applicable emissions,million tCO2e,1 2050 A634Source:FAOSTAT 2022;McKinsey analysisLever implementation cost savings,$/tCO2e1(59)Source:Bas A.M.Bouman et al.,“Adoption and economics of alternate wetting and drying water manage
245、ment for irrigated lowland rice,”Field Crops Research,January 2015,Volume 170Incremental lever implementation,%B35Source:Wina H.J.Crijns-Graus,Mirjam Harmelink,and Chris Hendriks,“Marginal GHG-abatement curves for agriculture,”Ecofys,April 2004;Mathijs Harmsen,“Non-CO2 greenhouse gas mitigation in t
246、he 21st century,”Utrecht University,June 21,2019Improved rice paddy water managementGreenhouse-gas reduction factor,2%CO2e CSource:Daniela Carrijo,Bruce Linquist,and Henry Perry,“Single midseason drainage events decrease global warming potential without sacrificing grain yield in flooded rice system
247、s,”Field Crops Research,February 2022,Volume 276,Number 108312;Nimlesh Balaine et al.,“Water management to mitigate the global warming potential of rice systems:A global meta-analysis,”Field Crops Research,March 2019,Volume 234;Salvatore Calabrese,Rodolfo Souza,and Jun Yin,“Optimal drainage timing f
248、or mitigating methane emissions from rice paddy fields,”Geoderma,July 2021,Volume 394,Number 114986;X.Z.Du et al.,“Effects of irrigation regime and rice variety on greenhouse gas emissions and grain yields from paddy fields in central China,”Agricultural Water Management,May 2021,Volume 250,Number 1
249、06830442Reduced methane emissions due to less flooding required when using improved water managementEmission-reduction potential,million tCO2e1 A B C63Baseline applicable emissions,million tCO2e,1 2050 A634Source:FAOSTAT 2022;McKinsey analysisLever implementation cost,$/tCO2e122Source:International
250、Fertilizer Association;SunSirs;World BankIncremental lever implementation,%B25Source:IHS MarkitSulfate fertilization of riceGreenhouse-gas reduction factor,2%CO2e CSource:Arti Bhatia et al.,“Plummeting global warming potential by chemicals interventions in irrigated rice:A lab to field assessment,”A
251、griculture,Ecosystems&Environment,October 2021,Volume 319,Number 107545;Maria Arlene Adviento-Borbe et al.,“Fertilizer management practices and greenhouse gas emissions from rice systems:A quantitative review and analysis,”Field Crops Research,August 2012,Volume 135403Sulfate fertilizers or sulfate
252、amendments reduce emissions from rice production by affecting methane-producing organismsNote:Operating expenditure costs are based on the difference in price for ammonium sulfate($200/metric ton t using 21%nitrogen N in the product=$952/t N basis)verses urea($300/t using 46%N in product=$652/t);thu
253、s,an extra$300/t is calculated for an application of 119 kg N ha1 per rice crop.41The agricultural transition:Building a sustainable futureEmission-reduction potential,million tCO2e1 A B C112Baseline applicable emissions,million tCO2e,1 2050 A634Source:FAOSTAT 2022;McKinsey analysisLever implementat
254、ion cost savings,$/tCO2e1(23)Source:Constancio A.Asis et al.,“Cost-effectiveness analysis of farmers rice straw management practices considering CH4 and N2O emissions,”Journal of Environmental Management,December 2016,Volume 183;Constancio A.Asis et al.,“Economic analysis of rice straw management al
255、ternatives and understanding farmers choices,”Cost-Benefit Studies of Natural Resource Management in Southeast Asia,2015Incremental lever implementation,%B40Source:Mathijs Harmsen,“Non-CO2 greenhouse gas mitigation in the 21st century,”Utrecht University,June 21,2019 Improved rice straw managementGr
256、eenhouse-gas reduction factor,2%CO2e CSource:Ma.Carmelita Alberto et al.,“How does burning of rice straw affect CH4 and N2O emissions?A comparative experiment of different on-field straw management practices,”Agriculture,Ecosystems&Environment,February 2017,Volume 239;Anlei Chen et al.,“Mitigating e
257、ffects of ex situ application of rice straw on CH4 and N2O emissions from paddy-upland coexisting system,”Scientific Reports,November 2016,Volume 6,Number 37402444Removing rice straw from fields prevents the breakdown of the organic matter and subsequently reduces methane releaseEmission-reduction p
258、otential,million tCO2e1 A B C131Baseline applicable emissions,million tCO2e,1 2050 AAdditional emission-reduction potential from reductions in production,million tCO2e177358Source:FAOSTAT 2022;McKinsey analysisSource:Alicia Ledo,Stefano Menegat,and Reyes Tirado,“Greenhouse gas emissions from global
259、production and use of nitrogen synthetic fertilisers in agriculture,”Scientific Reports,August 2022,Volume 12,Number 14490;assuming 3.8 kg emissions per kg of nitrogen,based on global production emissions;assuming proportional reduction in emissions is equivalent to reduction in fertilizer use Lever
260、 implementation cost savings,$/tCO2e1(146)Source:Alicia Ledo,Stefano Menegat,and Reyes Tirado,“Greenhouse gas emissions from global production and use of nitrogen synthetic fertilisers in agriculture,”Scientific Reports,August 2022,Volume 12,Number 14490;assuming 3.8 kg emissions per kg of nitrogen,
261、based on global production emissions;assuming proportional reduction in emissions is equivalent to reduction in fertilizer use Incremental lever implementation,%B100Source:Mathijs Harmsen,“Non-CO2 greenhouse gas mitigation in the 21st century,”Utrecht University,June 21,2019 Reduced overapplication
262、of fertilizerGreenhouse-gas reduction factor,2%CO2e CSource:Reducing emissions from fertilizer use,International Fertilizer Association and SystemIQ,September 2022175Limiting application of nitrogen to exact levels reduces nitrogen lost to the atmosphere via nitrogen emissions42The agricultural tran
263、sition:Building a sustainable futureEmission-reduction potential,million tCO2e1 A B C73Baseline applicable emissions,million tCO2e,1 2050 AAdditional emission-reduction potential from reductions in production,million tCO2e177319Source:FAOSTAT 2022;McKinsey analysisSource:Alicia Ledo,Stefano Menegat,
264、and Reyes Tirado,“Greenhouse gas emissions from global production and use of nitrogen synthetic fertilisers in agriculture,”Scientific Reports,August 2022,Volume 12,Number 14490;assuming 3.8 kg emissions per kg of nitrogen,based on global production emissions;assuming proportional reduction in emiss
265、ions is equivalent to reduction in fertilizer use Lever implementation cost,$/tCO2e1904Source:Chad M.Hutchinson et al.,“Controlled-release fertilizers for commercial potato production in Florida,”University of Florida Institute of Food and Agricultural Sciences,updated November 2021;Reducing emissio
266、ns from fertilizer use,International Fertilizer Association and SystemIQ,September 2022;conversion takes$/hectare(ha)value and assumes 65%of cropland is treated with synthetic fertilizer for specific countries in scope,then applies the adoption rate for ha/tCO2e1 conversion Incremental lever impleme
267、ntation,%B30Source:Expert interviews;McKinsey analysisSpecialty fertilizersGreenhouse-gas reduction factor,2%CO2e CSource:McKinsey analysis356Conversion from traditional synthetic fertilizers to enhanced-efficiency fertilizers(EEFs)to reduce nitrous oxide emissionsEmission-reduction potential,millio
268、n tCO2e1 A B C35Baseline applicable emissions,million tCO2e,1 2050 AAdditional emission-reduction potential from reductions in production,million tCO2e177315Source:FAOSTAT 2022;McKinsey analysisSource:Alicia Ledo,Stefano Menegat,and Reyes Tirado,“Greenhouse gas emissions from global production and u
269、se of nitrogen synthetic fertilisers in agriculture,”Scientific Reports,August 2022,Volume 12,Number 14490;assuming 3.8 kg emissions per kg of nitrogen,based on global production emissions;assuming proportional reduction in emissions is equivalent to reduction in fertilizer use Lever implementation
270、cost savings,$/tCO2e1(64)Source:J.Bates et al.,“Sectoral emission reduction potentials and economic costs for climate change SERPEC-CC.Agriculture:Methane and nitrous oxide,”Ecofys,October 2009 quote of 20/hectare(ha)for“maintenance costs,”which is$27/ha using 2009 currency conversion rates;conversi
271、on takes$/ha value and assumes 65%of cropland is treated with synthetic fertilizer for specific countries in scope,then applies the adoption rate for ha/tCO2e1 conversion;Vera Eory et al.,“Cost-effectiveness of greenhouse gas mitigation measures for agriculture,”OECD Food,Agriculture and Fisheries P
272、apers,August 2015Incremental lever implementation,%B30Source:McKinsey analysisVariable rate fertilization Greenhouse-gas reduction factor,2%CO2e CSource:Median value of 15%gathered from Vera Eory et al.,“Cost-effectiveness of greenhouse gas mitigation measures for agriculture,”OECD Food,Agriculture
273、and Fisheries Papers,August 2015;McKinsey analysis157Applying different rates of nitrogen fertilizer to distinct areas of crops based on crop need rather than a flat rate across all fields,reducing excess fertilizer use and subsequent nitrogen emissions43The agricultural transition:Building a sustai
274、nable futureEmission-reduction potential,million tCO2e1 A B C126Baseline applicable emissions,million tCO2e,1 2050 A987Source:FAOSTAT 2022;McKinsey analysisLever implementation cost savings,$/tCO2e1(37)Source:Jana E Compton et al.,“How inhibiting nitrification affects nitrogen cycle and reduces envi
275、ronmental impacts of anthropogenic nitrogen input,”Global Change Biology,March 2015,Volume 21,Number 3;assuming a weighted average basket of the 3 commodities,averaging to$772/hectare(ha)of value given:corn(5.75 metric tons t/ha;$138/t),soy(2.78 t/ha;$330/t),and wheat(3.47 t/ha;$178/t)Incremental le
276、ver implementation,%B50Source:McKinsey Global Farmers Survey Nitrogen and urease inhibitors on crop fieldsGreenhouse-gas reduction factor,2%CO2e CSource:Diego Abalos et al.,“A review and meta-analysis of mitigation measures for nitrous oxide emissions from crop residues,”Science of the Total Environ
277、ment,July 2022,Volume 828,Number 154388258Nitrification inhibitors(NIs)help soil retain nitrogen,reducing leaching of nitrate and related emissions,and are often used in conjunction with urease inhibitors to limit ammonia runoff Note:When used with synthetic fertilizers or manure,NIs lead to 3050%di
278、rect nitrous oxide(N2O)reductionshowever,this is highly variable and lower in grassland,and indirect N2O emissions from increased ammonium(NH4)can lead to a 15%increase in emissions,offsetting some impact.There is also a 9%yield increase impact on average,but this differs by crop(for more,see detail
279、s in lever cobenefits section).Emission-reduction potential,million tCO2e1 A B C11Baseline applicable emissions,million tCO2e,1 2050 AAdditional emission-reduction potential from reductions in production,million tCO2e1Additional emission-reduction potential from sequestration,million tCO2e177362,000
280、Source:FAOSTAT 2022;McKinsey analysisSource:Alicia Ledo,Stefano Menegat,and Reyes Tirado,“Greenhouse gas emissions from global production and use of nitrogen synthetic fertilisers in agriculture,”Scientific Reports,August 2022,Volume 12,Number 14490;assuming 3.8 kg emissions per kg of nitrogen,based
281、 on global production emissions;assuming proportional reduction in emissions is equivalent to reduction in fertilizer use Source:Alicia Ledo,Stefano Menegat,and Reyes Tirado,“Greenhouse gas emissions from global production and use of nitrogen synthetic fertilisers in agriculture,”Scientific Reports,
282、August 2022,Volume 12,Number 14490;assuming 3.8 kg emissions per kg of nitrogen,based on global production emissions;assuming proportional reduction in emissions is equivalent to reduction in fertilizer use Lever implementation cost,$/tCO2e10Source:Ghulam Haider et al.,“Mineral nitrogen captured in
283、field-aged biochar is plant-available,”Scientific Reports,August 2020,Volume 10,Number 13816;Nanthi Bolan et al.,“How biochar works,and when it doesnt:A review of mechanisms controlling soil and plant responses to biochar,”GCB Bioenergy,November 2021,Volume 13,Number 11Incremental lever implementati
284、on,%B5Biochar as a soil amendmentGreenhouse-gas reduction factor,2%CO2e CSource:Ghulam Haider et al.,“Mineral nitrogen captured in field-aged biochar is plant-available,”Scientific Reports,August 2020,Volume 10,Number 13816;Nanthi Bolan et al.,“How biochar works,and when it doesnt:A review of mechan
285、isms controlling soil and plant responses to biochar,”GCB Bioenergy,November 2021,Volume 13,Number 11319Biochar application to agricultural soil reduces nitrous oxide(N2O)and methane(CH4)emissions Note:The Intergovernmental Panel on Climate Change(IPCC)projects 2030 capacity to be between 2 million
286、metric tons(t)and 7 million t of CO2e sequestered;1.0 t of biochar sequesters 2.35 t of CO2,so this suggests that the biochar supply should be 0.85 million t to 3.0 million t.At an application rate of 1050 t/hectare(ha),this ranges from 17,000298,000 ha of applied cropland.With 1.4 billion ha of cro
287、pland across the globe,65%of which is treated with synthetic fertilizer,this is at most 0.03%of cropland.To 2050,the IPCC assumes a 2735%CAGR in biochar;2050 sequestration opportunity is thus 3002,000 million t,and using the same assumptions,this ranges from 0.39.0%of cropland.44The agricultural tra
288、nsition:Building a sustainable futureEmission-reduction potential,million tCO2e1 A B C91Baseline applicable emissions,million tCO2e,1 2050 AAdditional emission-reduction potential from reductions in production,million tCO2e1887218Source:FAOSTAT 2022;McKinsey analysisSource:McKinsey Nature AnalyticsS
289、ource:McKinsey Nature AnalyticsLever implementation cost,$/tCO2e1123Source:McKinsey Nature AnalyticsIncremental lever implementation,%B40Low-or no-tillageGreenhouse-gas reduction factor,2%CO2e CSource:Robert Beach et al.,“Structural change as a key component for agricultural non-CO2 mitigation effor
290、ts,”Nature Communications,March 2018,Volume 9,Number 1060 2710Decrease emissions from on-farm energy use via reduced fuel consumption(in tillage),and from reduced need for synthetic fertilizer application and the resulting denitrification emissionsEmission-reduction potential,million tCO2e1 A B C85B
291、aseline applicable emissions,million tCO2e,1 2050 A321Source:FAOSTAT 2022;McKinsey analysisSource:McKinsey Nature AnalyticsLever implementation cost,$/tCO2e1116Source:McKinsey analysisIncremental lever implementation,%B65Conversion from flood to drip or sprinkler irrigationGreenhouse-gas reduction f
292、actor,2%CO2e CSource:Jia Deng et al.,“Changes in irrigation practices likely mitigate nitrous oxide emissions from California cropland,”Global Biogeochemical Cycles,September 2018,Volume 32,Number 10;Mohsin Hafeez,Tamara M.Jackson,and Shahbaz Khan,“A comparative analysis of water application and ene
293、rgy consumption at the irrigated field level,”Agricultural Water Management,October 2010,Volume 97,Number 104211Conversion from flood irrigation to drip or sprinkler irrigation can reduce CO2 emissions from irrigation energy use as well as nitrous oxide(N2O)emissions from the denitrification of synt
294、hetic nitrogen45The agricultural transition:Building a sustainable futureEmission-reduction potential,million tCO2e1 A B C17Baseline applicable emissions,million tCO2e,1 2050 AAdditional emission-reduction potential from reductions in production,million tCO2e1Additional emission-reduction potential
295、from sequestration,million tCO2e1773856Source:FAOSTAT 2022;McKinsey analysisSource:McKinsey Nature AnalyticsSource:Rob Myers,Sami Tellatin,and Alan Weber,“Cover crop economics:Opportunities to improve your bottom line in row crops,”Sustainable Agriculture Research and Education(SARE),2019;assuming 3
296、.8 kg of emissions per kg of nitrogen(N)or a 1.75 kg decrease in emissions per kg of fertilizer Source:Rob Myers,Sami Tellatin,and Alan Weber,“Cover crop economics:Opportunities to improve your bottom line in row crops,”Sustainable Agriculture Research and Education(SARE),2019;assuming 3.8 kg of emi
297、ssions per kg of nitrogen(N)or a 1.75 kg decrease in emissions per kg of fertilizer;McKinsey Nature AnalyticsLever implementation cost,$/tCO2e110Source:Sustainable Agriculture Research and Education(SARE)and Conservation Technology Information Center(CTIC)National Cover Crop Surveys,201216;McKinsey
298、analysisIncremental lever implementation,%B15Incorporation of cover cropsGreenhouse-gas reduction factor,2%CO2e CSource:FAOSTAT;Rob Myers,Sami Tellatin,and Alan Weber,“Cover crop economics:Opportunities to improve your bottom line in row crops,”Sustainable Agriculture Research and Education(SARE),20
299、191512Decrease in emissions due to reduced need for fertilizer when cover crops are usedEmission-reduction potential,million tCO2e1 A B C24Baseline applicable emissions,million tCO2e,1 2050 AAdditional emission-reduction potential from reductions in fertilizer production,million tCO2e177311Source:FA
300、OSTAT 2022;McKinsey analysisSource:Gil Gullickson,“Companies are flooding farmers with numerous biostimulant products,”Successful Farming,December 3,2021;assuming 3.8 kg of emissions per kg of nitrogen(N)or a 1.75 kg decrease in emissions per kg of fertilizerLever implementation cost savings,$/tCO2e
301、1(177)Source:Gil Gullickson,“Companies are flooding farmers with numerous biostimulant products,”Successful Farming,December 3,2021 Incremental lever implementation,%B15Source:McKinsey analysisBiologicalsGreenhouse-gas reduction factor,2%CO2e CSource:Andrea Colantoni and Sara Rajabi Hamedani,“Plant
302、biostimulants and mitigation of greenhouse gas emission in crop production,”B,accessed January 9,2023 2413Optimization of crop yields and plant health through application of natural products,such as microbes,insects,or plant extracts rather than fertilizer,thus reducing emissions associated with fer
303、tilizer useNote:The price of biologicals is likely to increase as the market matures and proves efficacy.46The agricultural transition:Building a sustainable futureEmission-reduction potential,million tCO2e1 A B C167Baseline applicable emissions,million tCO2e,1 2050 A547Source:FAOSTAT 2022;McKinsey
304、analysisLever implementation cost savings,$/tCO2e1(72)Source:Vivid Economics,a McKinsey company;McKinsey Center for Future Mobility;McKinsey analysisIncremental lever implementation,%B30Source:Vivid Economics,a McKinsey company;McKinsey Center for Future Mobility;McKinsey analysisElectrification of
305、on-farm machinery and equipment Greenhouse-gas reduction factor,2%CO2e C10014Decreased emissions from on-farm machinery due to replacing fossil fuelburning internal-combustion engine(ICE)vehicles and machinery with battery electric vehicles(BEVs)Note:BEVs release no emissions,assuming electricity is
306、 sourced from renewable energy.Example capital expenditure differences between BEVs and ICEs:$13,564(2025)and$11,535(2050),per a 5099 horsepower tractor;example operating expenditure differences between BEVs and ICEs:$4,943(2025)and$6,494(2050),annually for a 5099 horsepower tractor.Emission-reducti
307、on potential,million tCO2e1 A B C46Baseline applicable emissions,million tCO2e,1 2050 A547Source:FAOSTAT 2022;McKinsey analysisLever implementation cost savings,$/tCO2e1(71)Source:Vivid Economics,a McKinsey company;McKinsey Center for Future Mobility;McKinsey analysisIncremental lever implementation
308、,%B10Source:Vivid Economics,a McKinsey company;McKinsey analysisHydrogen power for on-farm machinery and equipment Greenhouse-gas reduction factor,2%CO2e C10015Decreased emissions from on-farm machinery due to replacing fossil fuelburning internal-combustion engine(ICE)vehicles and machinery with fu
309、el cell electric vehicles(FCEVs)Note:FCEVs release no emissions,assuming electricity is sourced from renewable energy.Example capital expenditure differences between FCEVs and ICEs:$70,887(2025)and$23,756(2050),per a 5099 horsepower tractor;example operating expenditure differences between FCEVs and
310、 ICEs:$2,581(2025)and$6,273(2050),annually for a 5099 horsepower tractor.47The agricultural transition:Building a sustainable futureEmission-reduction potential,million tCO2e1 A B C112Baseline applicable emissions,million tCO2e,1 2050 A4,599Source:FAOSTAT 2022;McKinsey analysisLever implementation c
311、ost,$/tCO2e10Source:Study to model the impact of controlling endemic cattle diseases and conditions on national cattle productivity,agricultural performance and greenhouse gas emissions,ADAS and the Department for Environment,Food&Rural Affairs(Defra),February 2015Incremental lever implementation,%B
312、30Source:Study to model the impact of controlling endemic cattle diseases and conditions on national cattle productivity,agricultural performance and greenhouse gas emissions,ADAS and the Department for Environment,Food&Rural Affairs(Defra),February 2015Improved animal health and disease treatmentsG
313、reenhouse-gas reduction factor,2%CO2e CSource:Adegbola Adesogan et al.,“Mitigation of greenhouse gas emissions in livestock production,”Food and Agriculture Organization(FAO),2013;Giuliano Cecchi et al.,“Assessing the greenhouse gas mitigation effect of removing bovine trypanosomiasis in Eastern Afr
314、ica,”Sustainability,2018,Volume 10,Number 5;M.MacLeod et al.,“The greenhouse gas abatement potential of productivity improving measures applied to cattle systems in a developing region,”Animal,2018,Volume 12,Number 4;Options for low emission development in the Bangladesh dairy sector,FAO,2017;Option
315、s for low-emission development in the Kenya dairy sector,FAO,2017;Study to model the impact of controlling endemic cattle diseases and conditions on national cattle productivity,agricultural performance and greenhouse gas emissions,ADAS and the Department for Environment,Food&Rural Affairs(Defra),Fe
316、bruary 2015;Supporting low emissions development in the Ethiopian dairy cattle sector,FAO,2017816Expanded use of animal health solutions could reduce livestock system emissions through improved productivity and reduced losses and mortalityNote:A 50%move toward“healthy animal status”is assumed as an
317、optimistic scenario in the ADAS research.The 8%greenhouse-gas reduction factor is an estimate which accounts for a 9%yield improvement for applicable portions of the livestock herd.Emission-reduction potential,million tCO2e1 A B C81Baseline applicable emissions,million tCO2e,1 2050 A3,181Source:FAOS
318、TAT 2022;McKinsey analysisLever implementation cost,$/tCO2e10Source:FAOSTAT;OECDIncremental lever implementation,%B25Source:MarketsandMarkets 2021 dataGreenhouse gas and productivity-focused breeding for livestock Greenhouse-gas reduction factor,2%CO2e CSource:Abacus Bio;Kath Donoghue et al.,“Genomi
319、c estimated breeding values for methane production in Australian beef cattle,”21st Biennial Conference of the Association for the Advancement of Animal Breeding and Genetics,September 2015;MarketsAndMarkets 2021 data;M.N.Aldridge et al.,“Selective breeding as a mitigation tool for methane emissions
320、from dairy cattle,”Animal,December 2021,Volume 15;Peter Amer et al.,“The potential impact of breeding strategies to reduce methane output from beef cattle,”Animal Production Science,December 2018,Volume 59,Number 91017Increased share of animals in production systems with some genetic selection targe
321、ting reduced direct methane(CH4)production per animal,as well as continued selection for productivity improvements(in line with Food and Agriculture Organization FAO expected yield gains)Note:For reduction factor,the weighted average across species(by weight of emissions)is used,where applicable.Pet
322、er Amer of AbacusBio was consulted for numerous data points related to this lever,including reduction factor,relative strength of breeding systems,and yield impact.48The agricultural transition:Building a sustainable futureEmission-reduction potential,million tCO2e1 A B C80Baseline applicable emissi
323、ons,million tCO2e,1 2050 A3,168Source:FAOSTAT 2022;McKinsey analysisLever implementation cost savings,$/tCO2e1(135)Source:Tara Felix,“Ionophores:A technology to improve cattle efficiency,”Penn State Extension,updated February 2017Incremental lever implementation,%B20Source:Eloize Jaqueline Askel et
324、al.,“Growth performance and safety of meat from cattle feedlot finished with monensin in the ration,”Semina:Cincias Agrrias,March 2018,Volume 39,Number 2;Greenhouse gas mitigation options and costs for agricultural land and animal production within the United States,ICF International,February 2013Te
325、chnologies that increase livestock production efficiencies Greenhouse-gas reduction factor,2%CO2e CSource:Amelia K Almeida,Annette Cowie,and Roger S Hegarty,“Meta-analysis quantifying the potential of dietary additives and rumen modifiers for methane mitigation in ruminant production systems,”Animal
326、 Nutrition,December 2021,Volume 7,Number 4;Karen Beauchemin et al.,An evaluation of evidence for efficacy and applicability of methane inhibiting feed additives for livestock,Global Research Alliance,November 2021;Mathijs Harmsen,“Non-CO2 greenhouse gas mitigation in the 21st century,”Utrecht Univer
327、sity,June 21,2019618Incorporating ionophores in animal feed improves productivity per animal and reduces the amount of methane released per animal Note:Interviews with Dr.Amelia de Almeida(University of New England)and Dr.Ermias Kebreab(UC Davis)contributed to the determination of the incremental le
328、ver implementation percentage.The 6%greenhouse-gas reduction factor is a combined estimate which accounts for a 4%reduction in emissions for enteric fermentation and a 6%yield improvement for applicable portions of the livestock herd.Emission-reduction potential,million tCO2e1 A B C57Baseline applic
329、able emissions,million tCO2e,1 2050 A3,168Source:FAOSTAT 2022;McKinsey analysisLever implementation cost savings,$/tCO2e1(84)Source:Elizabeth J.Bigler et al.,“Impacts of shade on cattle well-being in the beef supply chain,”Journal of Animal Science,February 2021,Volume 99,Number 2;Perano et al.,“Eco
330、nomic Returns for Different Cooling Systems for Dairy Cattle,”Animal Environment and Welfare,October 2017;“Practice:717-Livestock shade structure,”USDA Natural Resources Conservation Service,December 2013;“Livestock shade structure,”Natural Resources Conservation Service(NRCS)Florida,September 2008I
331、ncremental lever implementation,%B35Heat stress managementGreenhouse-gas reduction factor,2%CO2e CSource:Mario Herrero et al.,“Impacts of heat stress on global cattle production during the 21st century:A modelling study,”The Lancet Planetary Health,March 2022,Volume 6,Number 3519Reducing heat stress
332、 experienced by animals to improve productivity per animal and to lower animal mortality,improving methane per yield and net methane emissionsNote:An interview with Philip Thornton of CCFAS-CGIAR contributed to the determination of the incremental lever implementation percentage.The 6%greenhouse-gas
333、 reduction factor is an estimate which accounts for a 6%yield improvement for applicable portions of the livestock herd.49The agricultural transition:Building a sustainable futureEmission-reduction potential,million tCO2e1 A B C31Baseline applicable emissions,million tCO2e,1 2050 A1,888Source:FAOSTAT 2022;McKinsey analysisLever implementation cost,$/tCO2e11Source:G.E.Erickson,T.J.Klopfenstein,and