The scenarios

We have designed five new scenarios that provide a wide range of possible climate pathways to help companies explore transition risks and opportunities in the food, agriculture and forest products sectors.

>3°C Historic Trends Scenario

Climate action remains stable at current levels and the world fails to meet climate targets. This causes a substantial increase in temperature and physical risk, but low levels of transition risk due to a lack of climate action. The Historic Trends Scenario serves as a baseline for the other scenarios included.

Lack of climate action harshens the effects of extreme events on the food, agriculture and forest products sector, reducing yields and making agricultural production more costly. Agricultural land expands onto forest land to accommodate additional production needs, encroaching on valuable ecosystems.

  • The world fails to meet climate targets with policy ambition remaining at current levels
  • No change in consumer behavior or levels of innovation occur

Impact

GHG prices
Diet shifts
Agricultural innovation

<2°C Forecast Policy Scenario (IPR)

Climate action starts abruptly and late, around 2025-2030, resulting in high transition risk due to sudden implementation of Greenhouse Gas (GHG) prices, area protection regulation and a scale-up of bioenergy with carbon capture and storage (BECCS) capacity.

The food, agriculture and forest products sectors transition fast and without a clear plan. The rapid increase in carbon prices after 2025-2030 results in fast growth of production costs for emission-intensive products (e.g., inorganic fertilizers, livestock products). Area protection increases regulatory risks for companies. Agricultural producers invest in available technology to increase yields.

  • The world waits until 2025-2030 to implement decarbonization policies, but then rapidly rolls them out to limit warming
  • Moderate changes in consumer behavior and levels of innovation occur

Impact

GHG prices
Diet shifts
Agricultural innovation

<2°C Coordinated Policy Scenario

Timely policy and regulation work to curb emissions in an orderly fashion, decreasing transition risk relative to Historic Trends.

Climate policy incentivizes early action, allowing the food, agriculture and forest products sectors to transition smoothly. Carbon pricing pushes the agricultural sector to use available technology to mitigate methane and nitrous oxide emissions. Deforestation declines steadily as more areas are protected and carbon pricing makes land clearing progressively more costly.

  • The world implements coordinated global policies to reach less than 2°C of warming
  • Moderate changes in consumer behavior and levels of innovation occur

Impact

GHG prices
Diet shifts
Agricultural innovation

1.5°C Societal Transformation Scenario

Strong, coordinated and prompt global policy action, as well as market responses (e.g., diet shifts and lower food waste), result in widespread carbon pricing and land protection. This action enables decarbonization and limits the physical impacts of climate change. This scenario has high levels of transition risk.

Timely action allows society to adapt to the transition. However, high carbon prices and ambitious area protection increase production costs and prices for emission-intensive commodities. Additionally, companies operating near protected areas are subject to legal and reputational risks. Public sector investment in alternative proteins further incentivizes a shift away from livestock products, increasing risks for livestock producers and their supply chain.

  • The world implements immediate, stringent global policies to reach 1.5°C of warming
  • High change in consumer behavior and moderate increase in the levels of innovation occur

Impact

GHG prices
Diet shifts
Agricultural innovation

1.5°C Innovation Scenario

Large demands from the energy system for Bioenergy with Carbon Capture and Storage (BECCS), coupled with greater-than-historic yield growth in agriculture and government support for R&D, enable early decarbonization and limit the physical impacts of climate change. However, this scenario has high levels of transition risk.

Productivity increases substantially as a result of innovation investment. Broader use of existing technology increases productivity in emerging and developing economies. High-income countries invest in new technologies to push the boundaries of productivity and maximize input efficiency. As a result, a higher share of land can be used for natural regrowth and restoration without increasing land use competition.

  • The world implements immediate, stringent global policies to reach 1.5°C of warming with a focus on R&D and innovation
  • Moderate changes in consumer behavior combined with a major increase in innovation levels lead to 1.5°C of warming

Impact

GHG prices
Diet shifts
Agricultural innovation

GHG prices

Trajectories range from $4 to $153 per ton CO2e by 2050

Diets

The change in demand for livestock products ranges from -12% to +18% by 2050

Yield-enhancing technologies

Under a tech-driven scenario, global average growth in crop yields will be over 1% p.a., while historic trends are <1% p.a.

Underlying these scenarios are a set of ten key drivers that represent the scenario narratives and create the variation in scenario outputs when they are fed into the model.

For our 1.5°C pathways,  all the climate transition drivers specified in the table must meet or outperform the trajectories described below. This scenario is not possible without concerted, unified, global action to decrease greenhouse gas emissions.