COP28 has drawn attention to the need for innovations to help food and agriculture systems to adapt to climate change.
Climate change is expected to hit crop yields hard. Even accounting for adaptation and development, global crop yields could fall by 24% by the end of the century under a high emissions scenario (Hultgren et al. 2022). This will be especially damaging in Sub-Saharan Africa where crop yields have stagnated (Ritchie. 2022)
The Market Shaping Accelerator has been working with doctoral candidate Anne Krahn and Professor Kyle Emerick from Tufts University to investigate how climate-resilient crops could reduce the losses from climate change. We find the development and widespread adoption of crops with 1-degree greater heat tolerance could save billions of dollars of production.
We discuss the case of sorghum in this blog post. Investing in sorghum could be a high return opportunity – especially in West Africa (Kaminski et al. 2013). Over 100 million people rely on sorghum in West Africa and the Sahel (Kaminski et al. 2013).
Source: Kane et. al 2022
Sorghum yields begin to fall above 33 degrees celsius (Tack, 2017). The figure below models an 1 degree increase in that threshold.
Increasing the heat-tolerance of crops by just 1 degree could dramatically reduce the yield losses caused by climate change. We take yield-temperature functions from the literature and model an increase in their threshold turning points. We then combine that with forecasts from climate models to find the impacts of increasing turning point thresholds on yields as climate change begins to bite. The benefits would kick in early as high heat is already reducing yields (see figure below, which shows the impact of climate change on crop yields on heat tolerance and conventional varieties). The gap between heat tolerant and conventional varieties increases over time as high heat days increase.
We find the benefits of adopting improved varieties with greater heat tolerance are large. Under a conservative scenario, where uptake of the heat tolerant plateaus near 5% of the growing area, we estimate the benefits of approximately $2 billion (discounted). Under a more ambitious scenario where uptake plateaus near 10% of the growing area, we find benefits of approximately $4.6 billion (discounted).
The benefits of climate-resilient crops are linked to the scale of adoption.This is a real challenge. Some of my (Rachel Glennerster’s) research with Taveneet Suri finds traditional push funding (paying for inputs e.g. research grants) can result in crops that require costly training to generate high returns.
Advance Market Commitments can help incentivize the development and widespread adoption of heat tolerant varieties. We can reward firms for developing crops and reaching farmers. We could test the benefits of new varieties in real world conditions through RCTs and then pay firms based on uptake (measured in monitoring surveys). This could help generate investment in innovation and scale where the commercial incentives may otherwise be insufficient (in the absence of additional “pull” incentives, poor farmers may not be an attractive commercial opportunity). Our approximate estimates suggest even under a conservative adoption scenario this would generate $138 in benefits for every $1 spent.
Push funding remains vitally important especially in areas where the private sector is absent and cannot respond to AMCs. Analysis suggests that CGIAR research has a benefit-cost ratio on the order of 10:1 (Alston et al. 2021). We need a combination of push and pull investment to help adapt to the impacts of climate change. The table below summarizes the costs and benefits associated with investing in the crops and regions we investigated.
Please read the full memo here.
