Global Innovation Needs Assessments

Protein diversity
November 1, 2021

Funded by:

The findings and views expressed across this project do not necessarily reflect the views of ClimateWorks Foundation, theGovernment of the United Kingdom, or Mission Innovation.

The G l oba l In n o v at io n N e ed s As s es sm en t s

The Global Innovation Needs Assessments (GINAs) is a first-of-its-kind platform for assessing
the case for low-carbon innovation. The GINAs take a systemwide perspective, explicitly modelingthe impact of innovations across the global economy. Uniquely, the analysis quantifies the economic
benefits of low-carbon innovation and identifies the levels of public investment—from research anddevelopment to commercialization—needed to unlock these benefits. The analysis is divided into threephases: Phase 1, global energy and land use; Phase 2, global industry; and Phase 3, regional deep
dives. This protein diversity report is part of Phase 1’s investigation of innovative technologies in theenergy and land systems.
The analyses do not assess all relevant technologies, nor do they evaluate all relevant factors
for policy judgments. Instead, the work is intended to provide a novel evidence base to better
inform policy decisions. The Phase 1 analysis looks across a broad range of climate
mitigation technologies in energy and land use, including demand response to protein diversification,
to model the economic value of related innovation investment. Later phases expand the research. As
with adoption of all technologies, including some controversial ones described in this report, there arerisks and potential downsides. Technology investment is ultimately a policy judgment. This analysis
provides no policy recommendations for that investment.
Phases of the Global Innovation Needs Assessments

The Global Innovation Needs Assessments project is funded by the ClimateWorks Foundationand the UK Foreign, Commonwealth & Development Office. Analysis was conducted by Vivid
Economics. Thank you to the UK Department for Business, Energy and Industrial Strategy (BEIS)
analysts and the Mission Innovation Secretariat, which were consulted on aspects of the work, and for
BEIS support for the 2017–2019 Energy Innovation Needs Assessments, which developed themethodological approach taken here.
The findings and views expressed here do not reflect the view of ClimateWorks, the Government of
the United Kingdom, or Mission Innovation.

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Phase 1 GINA outputs
The suite of reports across innovation areas methodological annexes and a synthesis report for GINAs
are available on the GINA website at https://www.climateworks.org/report/ginas/.
The suite of outputs for Phase 1 of the Global Innovation Needs Assessments

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Executive Summary
Diversifying global protein production while reducing animal-source foods would make food andagriculture decarbonization far more affordable. Five key technologies, or product categories,
comprise most of the alternative protein market:
•
•
•
•
•

Classic plant-based products: This wide range of protein-rich foods, including legumes, tofu,
jackfruit, and tempeh, have distinct sensory profiles from animal-source foods.
Plant-based products: These primarily plant-based products have sensory profiles
approximating those of conventional animal-source foods.
Precision fermented products: Produced by micro-organisms, these products are composedof complex organic molecules that can mimic the sensory and nutritional profile of key
components of conventional protein-rich foods.
Cellular agricultural products: These lab-grown alternatives, which are identical toconventional animal protein products, have great potential for disruption but are not yet
commercially available.
Insect-based products: These replacements made from mealworms or crickets offer
relatively high nutrition but a relatively inadequate sensory profile and therefore have greater
potential as animal feed than as food for humans.

A shift away from livestock products driven by innovation in the diversified protein sector
could yield US$5.5 trillion in climate mitigation benefits by 2050. The development of innovative
alternative protein products will decrease emissions of all major greenhouse gases (GHGs). These
avoided emissions include methane from enteric fermentation (i.e., fermentation occurring in thedigestive systems of animals) and animal waste management and CO2 emissions from avoided
fertilizer use and deforestation. Other benefits, including restored natural habitats, improved
biodiversity outcomes, contributions to nutrition through food security, and reduced risk of pandemics
and anti-microbial resistance, only strengthen the case for innovation.
Unleashing the potential of the protein transition could deliver major socioeconomic benefits.
Rapid deployment of alternative proteins for human consumption is expected to increase gross value
added (GVA) by the sector by 10.9% per year, reaching US$1.1trillion in 2050. An additional US$12
billion in GVA is possible if feed additives are adopted. By 2050, the market is expected to support 9.8
million jobs. In terms of social benefits, average crop prices could be more than 12% lower globally by
2050 in a high-innovation scenario, compared with a 1.5⁰C future with slower uptake of diversified
protein. Price reductions will enhance access to nutritious, protein-rich diets, thereby improving
nutritional outcomes. In terms of ecological benefits, alternative proteins will produce the same total
calories as traditional proteins but do so using 640 million fewer hectares, thus freeing land for natureand making both biodiversity and deforestation targets easier to meet.
To unlock the full benefits of alternative proteins, global public spending on RD&D and oncommercialization needs to increase to at least US$4.4 billion and US$5.7 billion per year,
respectively. Additional enabling factors would also speed adoption. Targeted public efforts are
required to accelerate diet shifts to alternative proteins, which will result in substantial socioeconomicand environmental benefits. Public support should be focused on creating an environment in which theprivate sector can invest with greater confidence and at a lower cost. Cost, affordability, regulatory,
and consumer acceptance barriers add extra risks to investor decisions, which can prevent theinvestment landscape from reaching its full potential. Regulatory and consumer acceptance barriers
are particularly salient for some protein sources. For proteins that are closer to commercial viability,
cost and affordability barriers can prevent full market uptake. Though the public sector needs toensure that it does not crowd out private investment, it has a role to play in ensuring technologies havesufficient access to finance to scale at the required pace to achieve climate targets.

Public benefits(i.e.,

Protein diversity

Annual average 2021–50, undiscounted: US$260 billion
Cumulative 2021–50, undiscounted: US$8 trillion
Cumulative 2021–50, discounted at 5% per year: US$3 trillion

4decarbonization
cost savings)
Business
opportunities

2035: US$177 billion GVA, 2.2 million direct jobs
2050: US$218 billion GVA, 2.3 million direct jobs

Co-benefits

Net reduction in land required for agriculture by 640 MHa, opportunities fornature conservation and habitat restoration, reduction in biodiversity loss
and depletion of fish stocks, reduced water and air pollution, reduced
average food price, improved food security

Public spending
requiredCommercialization, annual average 2021–30: US$5.7 billion
RD&D, annual average 2021–50: US$4.4 billion

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1. Adoption of alternative proteins
Current role in the food system
The livestock industry has expanded due to explicit subsidies, unpriced negative externalities,
a growing population, and rapid economic development in recent decades. Population growth
and rising incomes shape food consumption patterns and drive demand for food. Livestock products
have played a crucial role in the food system because they are a main source of protein and several
micro-nutrients, which are required for balanced nutrition. Because livestock products are often more
expensive than other food products, diets shift to livestock products when household incomes increase(SUSFANS 2016). Most of the world’s recent population growth has taken place in developing
countries, where the need for increasing protein consumption and economic growth is greatest (FAO
2003). As a result, the demand for livestock products has grown significantly. Although expanding
access to animal products globally has had some health and social benefits in developing countries, it
has also created significant environmental damage (Xu et al. 2021). In particular, the expansion of the
livestock industry is a major contributor of global GHG emissions.
The livestock industry is responsible for more than 70% of the land-use sector's emissions. 1
The industry emits more than 8 Gt CO2-equivalent (CO2-eq) per year in the form of CO2, N2O, and CH4(FAO 2017). As shown in Figure 1, activities across the value chain are responsible for emissions,
including feed production, conversion of forest to pastureland for grazing and feed production, entericfermentation (ruminant digestive processes), and manure management.

1

In 2010, according to the Intergovernmental Panel on Climate Change (IPCC), in 2010 Agriculture, Forestry and Other Land
Use (AFOLU) emissions were 10–12 Gt CO2-eq per year. In that same year, the Food and Agriculture Global Livestock
Environmental Assessment Model (FAO 2017) estimated that the livestock industry was responsible for 8.1 Gt CO2-eq per
year. The reported 70% is obtained as a ratio of the two estimates (the actual value is 73.6%).

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Figure 1. Total emissions from the livestock industry amount to more than 8 Gt CO2-eq.

Note: Values are calculated using global emissions in 2017 reported by FAO (2017).
Source: Vivid Economics.

Innovations in alternative proteins offer the potential to reduce meat consumption, limiting theadverse impacts of the food system. A transition to alternative proteins could support global efforts
to reduce GHG emissions, stop deforestation, and help alleviate malnutrition. A wide range of products
exists in the alternative animal protein market, which can be divided into the five broad categories
summarized in Table 1. 2

2
Blue foods—farmed and wild-caught fish and seafood and their plant-based, precision fermented alternatives—are also part of the potential
to diversify protein. However, they were not a part of this analysis. Novel blue foods have very low emissions profiles and can help toalleviate pressure on marine and terrestrial ecosystems. Conventional blue foods typically have much lower emissions than their terrestrial
counterparts, but their harvest has been associated with massive pressure on marine ecosystems and biodiversity. Farmed fish also impact
ecosystems because they can be hotspots for diseases, can contribute to marine pollution, and can threaten wild gene pools.

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Table 1. Five categories of products exist in the alternative protein market
Category of alternative
proteins
Classic plantbased

Feedstock/substituteDescription

Tofu, seitan,
mushrooms, orjackfruit

A wide range of products, including legumes,
tofu, jackfruit, and tempeh, have been on themarket for some time as alternative proteins.

Precisionfermented

Feedstocks vary,
but glucose iscommon, especiallyfor fermentation
yeast

Precision fermentation uses microbes to
produce organic molecules to be used as
ingredients to improve the taste, structure, or
nutrient content of alternative meats anddairy.

Plant-based

Plant protein
concentrates
extracted fromplants such as peas
and algae

Production of plant-based products involves
protein manipulation through fermentation or
the use of genetically modified organisms.a

Insect-based

Insects such as
mealworms orcrickets

Products are made from high-protein insects.

Cellularagriculture

Feedstocks vary,
but glucose iscommonThese meats, commonly known as cell-based,slaughter-free, lab-grown, cultivated, or clean,
are produced with a variety of mechanisms toculture and grow animal cells.

aWhole biomass fermentation is included in this category because germane product and technological characteristics are
similar.
Source: Vivid Economics.

Although the market for plant-based meat substitutes accounts for only 1% of the global
protein market, sales grew by 38% between 2018 and 2020. An increased awareness of the healthand environmental benefits of alternative proteins has driven fast market growth (CORDIS 2020). In
the last two years, the plant-based market grew by 49% in Europe and 43% in the United States,
leading to a global market that stands at some US$60 billion (The Good Food Institute 2020). 3
Alternative milk is the most popular product among consumers, with a household penetration rate that
ranges from 30% to 50% in key markets (ING Think 2021). However, plant-based meat is the fastestgrowing category. In the United States, for instance, the plant-based meat market has grown 72% in
the last two years. Approximately 18% of US households have purchased plant-based meat. Of these,
63% repeat purchases (CORDIS 2020).
Fut u re rol e an d d ep l oym ent pot ent i al
By 2050, the demand for livestock products is expected to grow significantly due to anincreasing population with higher incomes. The main drivers for food demand are population and

3This estimate of the market value of classic plant-based and novel plant-based meat products includes meat and dairy
replacements.

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economic growth. Under a central pathway of socioeconomic development, 2 food demand is expected
to grow between 62% and 98% between 2005 and 2050; during that period, livestock products are
expected to increase between 61% and 242% (Valin et.al 2014). The relative greater growth of
livestock products is because diets tend to shift to livestock products as incomes rise. Although
livestock products can contribute to improved health outcomes in developing countries, the expansionof the livestock industry is not consistent with decarbonization pathways, and there is some evidence
that the protein requirements of developed countries' populations are already dramatically exceeded.
Sustainable agricultural systems are essential for meeting future food demand, and alternative
proteins will play a major role in these systems. Under a high innovation scenario, the alternative
proteins market is expected to continue to grow rapidly by 2050, when novel plant-based, precisionfermented, and cellular agriculture could account for more than half of the total protein market (Figure
3). 3 Modeling by Vivid Economics suggests that sales of these alternative proteins could increase to
US$1.1 trillion by 2040, with traditional meat products declining to less than half of the total market.
Adoption of alternative proteins will be characterized by a mix of products. The timeline for the
uptake of each product will depend on several characteristics, including consumer preferences andability to overcome market barriers (explained in the following section). With robust innovation support,
including appropriate emissions pricing and public sector investment, the alternative protein market willaccount for a majority of the global protein market by 2050, implying the following:
•
•

•
•

Classic plant-based products will sustain market share.
The market share of plant-based proteins will grow steadily in the short term, accounting
for some 15% of the protein market by 2030. Between 2030 and 2050, it will continue togrow, but at a slower rate as the segment matures and as other alternatives achieve priceparity with conventional meats.
The expansion of novel plant-based products will result in substitution of a third of cow
milk proteins by precision-fermented proteins by 2030.
Cellular agriculture products will be commercially available in the next few years and will
be competitive with traditional livestock on a price basis by the early 2030s.

The “Middle of the Road” Shared Socioeconomic Pathway (SSP2) accounts for a 42% increase in population and a growth of
more than double in average incomes.
3
Research estimates a compound annual growth rate of between 7% and 15%.
2

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9Figure 2. Effects of alternative proteins innovation on livestock and crop production.

Livestock production(Mt DM/yr)

6,000

400

4,000
200

0

2,000

2020

2025

2030

2035

2040

2045

2050

Crop production(Mt DM/yr)

8,000

600

0

Livestock production - Low innovation

Livestock production - High Innovation

Crop production - Low innovation

Crop production - High Innovation

Source: Vivid Economics.

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10Figure 3. Decline of animal source foods (including dairy) in the high-innovation scenario inalternative proteins.

Production (Mt/yr)

700

600

Precisionfermented

500

Plant-based

400

300

Cellularagriculture

200

100

Conventional
protein

0
2020
2025
2030
2035
2040
Marginal cost ofNovel plant-based Cell-based
The market for
cultured meatproducts reachcultured meat
meat substitutes iscost parity withreaches cost parity production
larger than theapproaching cost
traditional meat.
with traditional
traditional meatof sugar, energy,meat.
market following aand water.
By 2030, therapid increase in
uptake of plantthe uptake ofbased products
cultured meat.
By 2050, thecould save overalternative proteins
800 Mt CO2
eq/year intransition could
emissions throughsave more thanenteric
5Gt CO2 eq/year.
fermentation.

Source: Vivid Economics, supported by projections developed by Tubb and Seba (2019).

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2. Innovation opportunities
Costs and deployment barriers
Growth of classic plant-based products is hindered by their taste and texture as well as bycultural preferences. Classic plant-based products represent an important source of protein andmicro-nutrients, but the fact that their taste profile is dissimilar to meat products limits their capacity to
substitute for meat. The market for classic plant-based products is relatively mature, with growth
expected to continue at roughly its historical pace.
Commercialization of insect-based products is affected by the products’ taste and by culturalpreferences. The scalable potential of insect-based products is hindered by consumer acceptance,
especially in Western countries. Although insect-based food is high in protein, it has significant
consumer acceptance barriers. Consumers cite safety, taste, and emotional factors, such as disgustand neophobia, as sources of concern (Wendin and Nyberg 2021).
Uptake of plant-based meats is affected by developing supply chains and subsidized
incumbents, which can increase production costs. On average, plant-based meats remain more
expensive than animal-based alternatives. Plant-based burgers from Beyond Meat, for example, arecurrently about triple the cost of beef burgers (VOX 2020). Similarly, plant-based milk is about 2.5
times more expensive than cow milk (Settembre 2019). Price is commonly mentioned as the main
deterrent to buying plant-based food. That price reflects high investment needs and an undeveloped
supply chain, which limits the amount, type, and quality of inputs. It is expected to become increasinglycompetitive with the price of conventional alternatives as plant-based products begin to benefit from
economies of scale and the learning associated with commercial deployment. Adoption anddeployment of plant-based products is, therefore, expected to increase as supply chains become
increasingly robust and prices fall.
Cellular agriculture products are not yet commercially available due to high investment andproduction costs. One of the major challenges of commercializing cellular agriculture is efficiently
scaling up cell manufacturing. There are billions of cells in a bite of a cultured-meat burger, meaning
the industry will have to create far more new cells than for cellular agriculture than for any otherapplication of tissue engineering and precision fermentation currently known (Bellani et al. 2020). At
current levels of cell-culture productivity, the industry would need anywhere from 220 million liters to
440 million liters of fermentation capacity. By comparison, the pharma industry, which uses similar cellmanufacturing techniques, has an estimated cell-culture capacity of between 10 million liters and 20
million liters. The capital that will be required for the cellular agriculture sector to scale will be
substantial, especially given that the available cell-manufacturing technology is not yet designed forcellular agriculture.
Ke y inn ov at io n sDevelopment of innovative food-processing technologies could lead to significant cost
reductions for plant-based, precision-fermented, and cellular agriculture products. To date,innovation in biotechnology has significantly reduced production costs, and it is expected to continue
to do so in line with advances in bioprocessing and ingredient optimization. Efficient grain-processing
and the screening of new protein sources could further reduce the production costs of plant-based
products. Developments in biomass fermentation at scale could make commercialization of cellular
agriculture viable.
Once plant-based and cellular agriculture products become price-competitive with traditional
livestock products, investment in commercialization will continue to reduce production costs.
Commercialization of plant-based and cellular agriculture could lead to further cost reductions due tolearning-by-doing technological improvements. In recent years, prices of plant-based food havesignificantly decreased thanks to greater demand that supports larger and increasingly robust
distribution channels and production facilities, unlocking economies of scale.

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12Enhancing the sensory profiles of alternative proteins to mimic livestock products is currently
among the top research priorities. Between 2018 and 2020, sales of plant-based burgers increased
more than 500%. This increase was not due to a surge in vegan and vegetarian consumers, but rather
to the growing number of meat-eating consumers considering plant-based products as a substitute forconventional meat. Scientists are, therefore, working to make the sensory profies of cellular agriculture
as similar as possible to those of traditional meat. Researchers from Tufts University (Science News2019), for example, have been exploring the addition of the iron-carrying protein myoglobin to improve
the growth, texture, and color of bovine muscle grown from cells. If a reasonable similarity is achieved,
a big market awaits.
Innovation in fermentation and food processing could increase the nutritional value ofalternative proteins, potentially making them healthier than traditional livestock products. The
nutritional composition of plant-based and cellular agriculture products can be controlled by adjusting
the ingredients and components used in production. Screening of new protein sources could lead tohigher protein values in plant-based products. Similarly, extraction of fat composites used in thegrowth medium for cellular agriculture production could help make the products healthier (Chriki and
Hocquette 2020). Improving the nutritional value of alternative proteins could make the products morecompelling to consumers, especially in developing countries, where nutrient deficiencies may becommon.
Table 2. Barriers to and innovations in alternative proteins

Type of meat replacement

Development
stage

Scalablepotential

Priceparitywithanimalsource
foodsClassic
plant-based

Already produced
at scale

Limited byconsumer tastes
and preferences

Alreadycheaper

Unlikeanimalsource foods

Precisionfermented

Early stage ofcommercialization

High once
becomes pricecompetitive withother proteins

Expectedby 2025

Identical toanimalsource foods

Plant-based

Early stage ofcommercialization;sold in restaurants
and grocery stores

High, increasingly
popular among
consumers

Expectedby 2025

Very close to
animalsource foods

Insectbased

Early stage ofcommercialization;sold in somecountries

Potential limited tolivestock feed due
to persistentconsumerpreferences-

Unlikeanimalsource foods

Prototype stage

High once
becomes pricecompetitive withother proteins; notyet produced at
scale

Expectedby early
2030s

Identical toanimalsource foods

Cellularagriculture

Sensory
profileSource: Vivid Economics.

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3. Benefits of innovation
Climate benefits

Achieving net-zero targets will require significant reductions in emissions from both theenergy and the agricultural sectors, with any remaining hard-to-abate emissions offset bycarbon removals in the short and medium terms. Carbon sequestration in forests and peatlands
and other nature-based solutions is not sufficient to offset current emissions from the agricultural
sector. Moreover, the land sector is being called on to offer negative emissions to offset persistentemissions from the energy sector. Simply put, technical innovation in the agricultural sector is
critical to achieving climate targets.
By reducing emissions from agriculture and enhancing carbon sequestration of the land use
sector, innovative agricultural technologies can reduce the overall cost of mitigation.
Innovative agricultural technologies can both reduce emissions in the land use sector and makeland-based offset strategies less expensive, reducing the need for ambition in the energy system tostay within the emissions budget associated with a given climate target. This climate benefit, or net
reduction in costs across the energy and land systems resulting from aggressive RD&D andcommercialization of agricultural innovations, is what this work attempts to estimate. (Other benefitsof agricultural innovations, such as positive impacts on health and biodiversity, are analyzed in a
separate report.)
In the context of this report, the climate benefit is calculated as the difference in the total systemcosts of a high-innovation scenario and those of a low-innovation scenario, whereby•

System costs are all capital, operating, and fuel costs within the global energy system•

Low-innovation scenario represents market-driven progress in the absence of public
sector support•

High-innovation scenario represents progress driven in part by government support of
RD&D and deployment (i.e., commercialization) that accelerates cost reductions.

Uptake of animal-source food substitutes could yield US$5.5 trillion in climate mitigation
benefits by 2050. Development of innovative alternative protein products will decrease emissions
across the board:•••

Methane emissions from enteric fermentation and animal waste management will more thanhalve between 2020 and 2050. This reduction in emissions is linked to the reduction indemand for traditional livestock products, particularly ruminant meat.
Nitrous oxide emissions from fertilizer use stabilize as the decline in feed demand iscompensated by an increase in demand for food crops.
Carbon emissions from land use change decline rapidly and remain close to zero after 2035.
The reduction in demand for livestock products results in a decrease in the amount of land
dedicated to agricultural production (both cropland for feed production and pastureland forlivestock production). This land can be allocated to restoration projects and to managed
regrowth of natural vegetation, increasing levels of carbon sequestration.

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The shift away from conventional livestock products is associated with a substantial reduction
in methane emissions. Methane is an 84 times more powerful driver of climate change than carbon
dioxide over a 20-year period, and it has been responsible for 40% of warming since the industrial
revolution (Tubb and Seba 2019; CCA Coalition 2021). Agriculture currently contributes 42% of total
anthropogenic methane emissions, and mitigation of livestock emissions, particularly from entericfermentation, is key to meeting global climate targets. High carbon prices (central scenario) alone will
not substantially reduce methane emissions unless they are coupled with a shift in demand (highambition scenario). Innovation could facilitate this shift by providing substitutes for livestock products,
particularly emission-intensive ones like ruminant meat.
Figure 4. Additional greenhouse gas mitigation from innovations to diversify protein. 4

Source:Vivid Economics.

Human health and nature benefits
A switch to alternative proteins results in additional benefits for biodiversity and human health.
Vivid Economics estimates that average crop prices are 10% lower globally by 2050 in a high-ambition
scenario, compared with a 1.5⁰C future with slower uptake of diversified proteins. Lower prices mean
protein-rich diets are affordable for more consumers, reducing malnutrition. Moreover, diversified
proteins can produce the same total calories as traditional proteins but do so using 640 million fewer
hectares, making both biodiversity and deforestation targets easier to meet. Under the high-innovation
scenario, soybean production, which is heavily used for feed production and is often linked todeforestation of the Amazon rainforest, would halve by 2050, reducing both deforestation risk andpastureland, thereby allowing for the restoration of natural ecosystems, including biodiverse andcarbon-dense forest area.
These benefits are explored in more detail in a separate report, the Co-benefits of Agricultural
Innovation.

Estimates represent the additional emissions reductions from innovation in a world that has committed to limiting global climatechange. Because the low ambition scenario already achieves a 1.5oC temperature target, the quantitative estimates presented
in this brief are conservative, and likely understate the contribution that these technologies can make toward mitigating climatechange. For example, because conventional meat production is a major driver of deforestation, there could be substantial
avoided deforestation benefits associated with diversified proteins if the innovation were taken today without other climate
policies in place. In this modelling, these benefits are instead attributed to the policies, such as carbon pricing, that are taken up
in the central scenario, understating the potential scale of impact. This is done to avoid the double counting issues that would
arise when comparing multiple innovations in the GINA portfolio without the central scenario.

4

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Private benefits of innovation: Business
opportunities
Expansion of alternative proteins will disrupt not only just the livestock industry but also theentire value chain associated with meat production. Expansion of alternative proteins will
significantly reduce livestock numbers, in turn reducing feed-production demand as well as meat
processing, packaging, and distribution. This expansion will require new processing systems forprotein extraction and manipulation. Biotechnologies, including genetic engineering, metabolicengineering, and synthetic biology, will make the meat industry capital-intensive.

Innovation disruption in the meat value chain
Feed alternatives
Production of a large fraction of conventional animal feed is based on crops, which are cultivatedwith the support of agrochemicals and equipment and processed through milling and pelleting. The
use of novel protein products as a protein source for livestock will reduce the demand for feed
grains, freeing cropland for other purposes and reducing the use of agrochemicals.
Plant-based products
The emergence of novel plant-based products, specifically plant-based proteins, will disrupt themeat production value chain, starting with feed crop cultivation. Rather than growing feed crops
intended for livestock consumption, farmers will grow crops that are in demand for protein
extraction. Certain high-protein plants, like soy and peas, are already being cultivated; others are
yet to be developed through plant genomics. Biotechnologies will be key for developing new protein
sources as well as for improving protein extraction from existing crops. Finally, meat processing will
rely not on slaughtering and rendering but on the manufacturing of plant-based proteins.
Precision-fermented and cellular agriculture
These technologies will yield an entirely new value chain that involves animal cell extraction, cellproliferation, and tissue maturation. Live animals will continue to be raised, not for massslaughtering but as cell banks for the meat cultivation process. However, given that each animal isleft unharmed by cell extraction, a much smaller livestock population will be necessary to
successfully support cultivated meat laboratories. Such a population reduction would likely haveripple effects throughout the value chain, reducing the demand for animal feed and thus for crop
cultivation. Biotechnologies will be again at the core of food processing because meat products will
be made from cell proliferation in bioreactors.
The transition to alternative protein products could deliver more than US$740 billion in GVA by
2040 and up to US$1.1 trillion by 2050. The GVA from alternative protein products currently stands
at US$29 billion, with plant-based milk being the main contributor. With rapid deployment of plantbased products, cellular agriculture, and alternative dairy, GVA is expected to grow by 10.9% per year,
reaching US$1,100 billion in 2050. Of this increase, plant-based options account for 24%; cellular
agriculture, 56%, and plant-based dairy, 20%. In terms of the sectors involved in the value chain, onethird could be associated with the provision of key materials (plant-based protein/protein cells) andtwo-thirds with the operation and maintenance of processing equipment and fermentation labs. 5 An
additional US$12 billion in GVA could be delivered if feed additives are promoted.
By 2040, the alternative protein market could support 8 million jobs, some of them requiring
highly skilled workers with specific technical expertise. The impact of alternative proteins on
employment is quite uncertain because production processes are still in development. Conventionalfarming employment will continue to be demanded to supply the key ingredients, as will manufacturing

5

The analysis is limited to the impact that these technologies have on protein extraction and processing.

Protein diversity

16

jobs to produce food-lab equipment such as bioreactors. Similarly, engineering and science roles will
be required to manipulate ingredients and produce final products. Using the average sector laborproductivity (GVA/job) of the subsectors involved in the value chain, and assuming improvements inlabor productivity, it is estimated that the alternative protein market could create more than 8 million
jobs globally by 2040, and up to 9.5 million by 2050.
Figure 5. Economic benefits of diversified proteins.

Source: Vivid Economics.

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17

4. The case for supporting innovation
Government support for RD&D and commercialization of meat replacements is not sufficient tolimit global warming to 1.5⁰C, but it is critical and could unlock the substantial benefits ofinnovation. When complemented by suitable enabling and integrating policies, public support for
innovation can meaningfully help meet the challenge of climate change.

Investment need and public support
PUBLIC SPENDING ON INNOVATION
Private investment in RD&D and deployment has increased significantly in recent years, but
further support will be needed to accelerate the transition to sustainable food systems. In 2020,
total investment in alternative solutions reached US$3.1 billion, nearly three times that in 2019 (TheGood Food Institute 2021a). Plant-based products attracted roughly 60% of total investment; cellular
agriculture received US$360 million, six times the investment in 2019. Although investment has
increased significantly, current levels are below those justified by the scale of economic, social, andenvironmental benefits. Greater investment will more rapidly lower production costs of alternative
proteins, supporting their commercialization.
To unlock the full benefits of alternative proteins, global public spending on RD&D andcommercialization needs to increase to US$4.4 billion and US$5.7 billion per year, respectively.
By way of comparison, public spending on RD&D and commercialization amounted to only US$55
million and US$30 million, respectively, in 2020 (The Good Food Institute 2021a). Because privateorganizations do not account for the positive externalities of alternative proteins (including emission
and pollution reductions, improved biodiversity outcomes, and knowledge spillovers), spending in
RD&D and commercialization is expected to be below the optimal level. The public sector has a keyrole in filling this gap. Although some governments have already deployed funding schemes to help
deliver the protein transition (The Good Food Institute 2021b; Protein Industries Canada 2021), public
support needs to be expanded globally. 6

OTHER FORMS OF GOVERNMENT SUPPORT
Further public support is needed in the form of enabling policies and R&D funding. To ensure
the preferences of a wide pool of consumers are met, investment should be distributed across alltechnologies. Facilitating funding is particularly relevant for technologies that are not yet close enoughto commercialization for private sector investment. Moreover, it is fundamental to enabling a policy
environment that ensures the suitability of the global ecosystem for agriculture. This policy
environment may encompass support for intellectual property rights, raising awareness of the newtechnologies’ benefits, or facilitating the creation of legal standards that are appropriate for the newtechnologies. Policy setting in adjacent sectors like education, science, and technology should becoordinated with agriculture innovation priorities.
Policy actions are required to create an environment in which the private sector can invest withgreater confidence and at a lower cost. The aforementioned barriers add risk, preventing theinvestment landscape from reaching its full potential. The policy agenda should prioritize regulatory
and consumer acceptance barriers to certain alternative protein sources because these barriers
prevent market creation. Once these barriers are overcome, cost and affordability barriers should be
addressed to ensure that supply is competitive enough to attract as much demand as possible.

6

The United Kingdom, through the program Transforming Food Production, has a £90 million budget for creating resilient,
efficient, and sustainable food production systems. Similarly, Canada has committed to investing some £88 million over five
years to leverage industry match-funding through collaborative projects.

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Governments have a wide set of policy options for addressing market barriers:
•

•

•

7

Behavioral barriers: Governments can enhance consumer acceptance of alternative
products by providing information about their health and environmental benefits. Researchshows that Gen Z and Millennials, who currently represent more than 60% of the global
population, are concerned about climate change and animal welfare and thus are more likely
than older generations to shift their diet to include alternative proteins (Britain Thinks 2019).
Regulatory barriers: The regulatory environment is crucial to protein alternatives like insectbased products, whose commercialization is currently contingent on country-specific laws.
Public support should focus on deploying jurisdictional mechanisms to facilitate the safe
manufacturing and distribution of these products.
Economic barriers: Investment in R&D and commercialization has the potential tosignificantly reduce production costs, but it can take time. Governments can accelerate priceparity of alternative proteins and traditional livestock products by
o Lowering alternative-protein product prices using public economic instruments suchas subsidies, as is the case for traditional meat and dairy products (Ho 2021;
Greenpeace 2019).
o Setting stringent climate change policies and regulations. In 2021, 64 carbon-pricing
initiatives, which increase the production cost of emission-intensive products, were
implemented around the world (Carbon Pricing Dashboard). However, none of themcurrently cover livestock products. 7 If included, the costs of livestock products to
consumers would move closer to the costs of alternative protein products, making thelatter more competitive.

Beginning in 2025, New Zealand is expecting to price emissions from agriculture at the farm level.

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Table 3. Magnitude of barriers to food consumption for the four types of novel, protein-richproducts
Economicbarriers

Behavioral barriers

Regulatory
barriers

Precisionfermented

MediumLow

Low

Plant-basedmeat

MediumLow

Low

Insect-based

MediumHigh

High

CellularagricultureHigh

MediumLow

Protein source

Source: Vivid Economics.

Protein diversity

20References
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