GLOBAL POLICY REPORT

Executive Summary
The Economicsof the Food System
Transformation

﻿The Economics of the Food System Transformation

EXECUTIVE SUMMARY

The Food System
Economics Commission

The Food System Economics Commission is anindependent economic commission composed of: Ottmar
Edenhofer (Co-chair, Potsdam Institute for Climate Impact
Research, PIK); Ravi Kanbur (Co-chair, Cornell University);
Vera Songwe (Co-chair, Africa Growth Initiative at
Brookings); Francesco Branca (World Health Organization);
Simon Dietz (London School of Economics); Shenggen Fan(China Agricultural University); Jessica Fanzo (Columbia
Climate School); Jayati Ghosh (University of Massachusetts
Amherst); Naoko Ishii (University of Tokyo); Rachel Kyte
(Tufts University); Hermann Lotze-Campen (Potsdam
Institute for Climate Impact Research, PIK); Wanjira Mathai,Susan Chomba and James Wangu (World Resources
Institute Africa); Stella Nordhagen (Global Alliance for
Improved Nutrition); Rachel Nugent ( RTI International;
University of Washington); Jo Swinnen (International Food
Policy Research Institute and CGIAR); Maximo Torero, David
Laborde Debouquet and Panagiotis Karfakis (Food andAgriculture Organization of the United Nations); Juergen
Voegele and Geeta Sethi (World Bank); Paul Winters (Notre
Dame University). Barbara Harriss-White’s (University of
Oxford) invaluable contribution as a Commissioner until the
middle of 2023 is gratefully acknowledged.
The Food System Economics Commission was convened
by Gunhild Stordalen (EAT), Jeremy Oppenheim (Food andLand Use Coalition, FOLU) and Johan Rockström (Potsdam
Institute for Climate Impact Research, PIK).
This report was authored by Caterina Ruggeri Laderchi,
Hermann Lotze-Campen, Fabrice DeClerck, Benjamin
Bodirsky, Quitterie Collignon, Michael Crawford, Simon
Dietz, Lukas Fesenfeld, Claudia Hunecke, Debbora Leip,
Steven Lord, Sarah Lowder, Sebastian Nagenborg, Toby
Pilditch, Alexander Popp and Isabella Wedl. Jacob Leslie
produced the graphics and laid out the report.
Gina Campbell provided invaluable help by editing the draft
and Cassandra Rigg helped with the copyediting.
Special thanks go to Iain Shepherd and to the rest of theSecretariat: Madelaine Bereza, Alison Eddy, Eirik Nergård,Marius Weschke and Carolina Yang.
Our gratitude also goes to past members of the Secretariat:

Franziska Gaupp and Joe Robertson served as Directorsof the Secretariat at different times; and Yvonne G. AlbinAmiot, Juliana Gaertner, Sanna O’Connor-Morberg, IlonaOtto, Andrea Oyuela and Talia Smith.
Many people have contributed ideas, suggestions andguidance at different times during the scoping and the workof the Commission. We would like to thank in particular
Channing Arndt, Lauren Baker, Andrea Cattaneo, Koen
Deconinck, Henry Dimbleby, Marcelo Furtado, Joe Glauber,Corinna Hawkes, Olav Kjørven, Tim Lang, David Nabarro,
Michael Obersteiner, Kelly Parsons, Janez Potocnik,
Katherine Stodulka, Keith Wiebe, Jenn Yates
and Simon Zadek.
The report builds on an extensive set of background papers,
commissioned or produced by the Food System Economics
Commission Secretariat. The contribution of the authors
to the meetings of the Commission is gratefully
acknowledged. The full set of papers is available atfoodsystemeconomics.org.
The Commission’s activities and this publication are fundedby the Wellcome Trust, IKEA Foundation, Quadrature
Climate Foundation, Norwegian Climate and Forest Initiative(NICFI), and The Rockefeller Foundation.
The opinions, findings, and conclusions or
recommendations expressed in this material do notnecessarily reflect the view of the donors or theconvening organizations.
How to cite this report:
Ruggeri Laderchi, C., Lotze-Campen, H., DeClerck, F.,
Bodirsky, B.L., Collignon, Q., Crawford, M., Dietz, S.,
Fesenfeld, L., Hunecke, C., Leip, D., Lord, S., Lowder, S.,
Nagenborg, S., Pilditch, T., Popp, A., Wedl, I., Branca, F.,
Fan, S., Fanzo, J., Ghosh, J., Harriss-White, B., Ishii, N., Kyte,
R., Mathai, W., Chomba, S., Nordhagen, S., Nugent, R.,
Swinnen, J., Torero, M., Laborde Debouquet, D., Karfakis,
P., Voegele, J., Sethi, G., Winters, P., Edenhofer, O., Kanbur,
R., & Songwe, V. (2024). The Economics of the Food System
Transformation. Food System Economics Commission,
Global Policy Report.
3

The Economics ofthe Food System
Transformation

The Economics of the Food System Transformation

A transformation of food systems isurgently needed, possible, and offers
enormous economic benefits
Our food systems — the way we produce,
market, and consume food — are part of thepolitical, social, economic, ecological, and cultural
fabric of our communities. They have achieved
something of a miracle, keeping pace with decadesof population growth while decreasing some formsof malnutrition, reducing poverty and increasing life
expectancy. But progress has been uneven aroundthe world. And the recent evolution of food systems
has fuelled – and continues to inflame – some of thegreatest and gravest challenges facing humanity,
notably persistent hunger, undernutrition, theobesity epidemic, loss of biodiversity, environmental
damage and climate change. The economic valueof this human suffering and planetary harm iswell above 10 trillion USD1 a year, more than foodsystems contribute to global GDP. In short, our foodsystems are destroying more value than they create.2
Ignoring the consequences of today’s foodsystems locks the world onto a course that escalates
their negative effects disastrously. Yet in many policy
discussions, such as those around climate change,
food systems have long been ignored. Concerns forfood affordability and the livelihoods of hundredsof millions who depend on food systems, thepower of large-scale players, and divergent views
among stakeholders about what sustainable foodsystems look like have all contributed to make foodsystems something of an exception. Today there isan opportunity for policymakers to raise the levelof ambition. Transforming food systems worldwide
provides a uniquely powerful means of addressing
the global climate, nature and health emergencies
while offering a better life to hundreds of millions
of people.

1

This report identifies the elements of what atransformation from today’s food systems to an
inclusive, health-enhancing and environmentally
sustainable global food system entails. It shows thatsuch a transformation is not only biophysically andtechnically feasible; it offers immense economic
benefits to societies across the world. The net
benefits of achieving a food system transformation
are worth 5 to 10 trillion USD a year, equivalent tobetween 4 and 8 percent of global GDP in 2020.
Combined with transitions taking place outside therealm of food, notably to low-emission energy, afood system transformation can ensure that global
warming stays well below 1.5 degrees C at the end of
this century.3
The economic and planetary case fortransforming our food systems is compelling. But
negotiating change across a multitude of diverse
stakeholders with unequal power and varying
prospects from the transformation is an enormous
challenge. The report confronts this challenge headon, highlighting practical ways to dismantle barriers
to change and develop achievable transformation
strategies. Evidence shows that embracing equity
and inclusion is key to making a transformation
politically viable and thus essential for success.
The report summarizes the findings of afour-year investigation by the Food System
Economics Commission (FSEC), an independent
commission expressly created to assess options
for comprehensive food system transformation.
FSEC findings are based on rigorous economic
modeling, in-depth literature reviews, and casestudies. All background research is available atfoodsystemeconomics.org.

Unless otherwise specified all figures are in USD Purchasing Power Parity (PPP) 2020.

2 It is not possible, either conceptually or analytically, to separate the production of non-food agricultural items from food items. In this report“food systems” is used as a short-hand for agri-food systems.
3 The food system transformation addresses both direct emissions of greenhouse gases (such as e.g. methane from ruminant entericfermentation and nitrous oxide from crop production) and indirect ones (through land-use change).

5

Executive Summary

The costs of current foodsystems are far larger than theircontribution to global prosperity
Food systems form a nexus linking some of
the greatest triumphs and challenges of our times.
Thanks to human ingenuity, determination andtechnical progress, they feed a world populationthat has doubled since the 1970s. And yet theunaccounted costs of the burdens they place on
people and the planet are currently estimated at
15 trillion USD a year, equivalent to 12 percent of
GDP in 2020. This finding is in line with other recent
estimates in the literature. These unaccounted
costs comprise:→ Health costs, which FSEC estimates to be at least
11 trillion USD. The economic costs of ill healthdue to food systems are measured through their
negative effects on labor productivity. Those are
driven by the prevalence of non-communicablediseases, including diabetes, hypertension, andcancer which can be attributed to food. A large
share of this burden is born by people living withobesity, currently estimated at 770 million people.
FSEC’s health costs also include a lower boundfigure for the productivity costs of undernutrition,
currently affecting 735 million people.
→ Environmental costs are estimated at 3 trillion
USD a year and reflect the negative impacts oftoday’s food systems on ecosystems and climate,including the impacts of current agriculturalland use and food production practices. These
practices are responsible for a third of global
greenhouse gas emissions, including emissions
arising from deforestation, and result in the net
loss of over 6 million hectares of natural forest
each year. Environmental costs also reflect thecosts of biodiversity loss and environmental
damage arising from nitrogen surplus, whichleaches into waterways and pollutes the air.

4

6

→ Finally, food systems are a source of structural
poverty through the costs of food, but also
through the low incomes of many who workin food production. The incidence of poverty
tends to be higher in agriculture than in the othersegments of food systems.

The global food system is on anunsustainable trajectory andcurrent policy commitments are
not strong enough to divert it
Even if countries follow through on all thepolicy commitments made in their Nationally
Determined Contributions (NDCs), they will not
succeed in shifting the global food system from its
unsustainable trajectory. It will still be responsible
for about one third of future global emissions if
current trends in the overall economy prevail to2050. These emissions will contribute to an increasein global mean temperature of 2.7 degree C by theend of the century,4 compared to pre-industrial
periods. But the negative impacts of the current
trajectory go well beyond climate.
The continuation of current trends to 2050, modeled
through the Current Trends pathway (CT), has
further striking features:→ Food insecurity and undernutrition continue toplague humanity, still leaving 640 million people,
including 121 million children, underweight in
2050, particularly in India, Southeast Asia, and
Sub-Saharan Africa.
→ The global adoption of diets high in fats, sugar,
salt and ultra-processed foods would increase
the number of obese people worldwide by 70
percent to an estimated 1.5 billion in 2050, or 15
percent of the expected global population. Notethat the direct medical costs of treating the healthconsequences of overweight and obesity havebeen estimated by others to rise from 600 billion
USD today to almost 3 trillion by 2030 already.

Under current trends warming at the end of the century also coincides with “peak warming”.

The Economics of the Food System Transformation→ Per capita food waste increases by 16 percent
compared to today, reaching 76 kg of dry matterper capita in 2050.
→ Food production in many countries becomesincreasingly vulnerable to climate change andenvironmental degradation, with the likelihoodof extreme events dramatically increasing.
Rising food prices due to climate or other shocks
heighten poverty and hunger, stretching thebudgets of the poor and middle classes. This
leads to social tensions and the imposition of
measures to limit trade.
→ Deforestation will erode a further 71 million
hectares of natural forests between 2020 and
2050, an area equivalent to 1.3 times the size ofFrance. This has far-reaching implications forcarbon emissions and biodiversity loss.
→ Nitrogen surplus from agriculture and naturalland also increases from 245 Mt to about 300 Mt a
year, polluting water, destroying biodiversity andundermining public health.

Transforming food systems would
provide economic benefits equivalent
to at least 5 trillion USD a year
		FSEC has assessed one specific sciencebased transformation pathway for food system
which brings huge benefits for both people andplanet. This pathway is called the Food System
Transformation (FST). Estimates of those benefits,measured as reductions in the unaccounted costsof food systems outlined above, amount to at least5 trillion USD per year. When the full effects of a
global food system transformation on incomes arefactored in, estimates of its benefits rise to
10 trillion USD per year (Box ES.1). The FST offers
a future where:→ Undernutrition is eliminated by 2050, andcumulatively 174 million lives are saved frompremature death due to diet-related chronic
disease, compared to CT. This fall in diet-related
chronic disease accounts for 55 percent of the

reduction in the food system’s hidden costs
associated with the FST (see figure ES.1). Whenaccounting for the impacts of changing diets on
both consumption and (indirectly) on land use,changing diets accounts for 70 percent of thebenefits of transforming food systems.
→ Farmers in the global food system — around 400
million people — enjoy a sufficient income fromtheir work thanks to productivity growth andtargeted support policies.
→ An additional 1.4 billion hectares of land isprotected, while a further 200 million hectares areafforested and open to planet-friendly economic
uses such as the production of timber for housing.
→ A shift to environmentally sustainable production
in agriculture reverses biodiversity loss, reduces
demand for irrigation water and almost halves
nitrogen surplus from agriculture and natural land
(i.e. land that has not been altered or developed
for human purposes).
→ The food system becomes a net carbon sinkby 2040. As part of a larger sustainability
transformation which includes the energy sector,
this helps to ensure that global warming is limited
to well below the 1.5 degree C Paris Climate target
by the end of the century, with peak warming
barely exceeding 1.5 degree C.
→ Processes of structural transformation are
accelerated, meaning that agriculture becomesless labor-intensive than under CT. About 75
million more on-farm jobs are reallocated to othersegments of food systems or other sectors than
expected under CT.
This alternative future plays out differently in
different parts of the world. A shift to healthy
diets entails notably higher consumption of fruits,
vegetables and nuts in South and South-East Asiaand of legumes in China. Meanwhile, consumption ofanimal-sourced food decreases drastically in highand middle-income regions.
7

Executive Summary

FIGURE ES.1

Reduction in hidden costs compared to Current Trends
Trillion USD PPP 2020

0

2020

2025

2030

2035

2040

2045

2050

Trillion USD/year

-1
-2
-3
-4
Poverty
The diﬀerence in poverty
hidden costs between
CT and FST is minimal androughly constantat 4 billion USD throughout
the period-5-6Greenhouse Gas Emissions
Nitrogen Emission

Land Use Change

Dietary Intake

The Northern Hemisphere sees the largest increasein land conservation over CT, while one half of the
projected additional afforestation happens in Brazil.
And food waste is reduced most in some European
countries, the USA, and China.

At 200–500 billion USD a year,
estimated costs of global food systemtransformation are low compared toits economic benefits
Implementing the FST pathway worldwide
will need investments and transfers averaging 500
billion USD each year between now and 2050. Of thisamount, about 200 billion USD covers investments
in rural infrastructure (including roads, irrigation
expansion, access to energy), the protection andrestoration of forests, the reduction of food loss
and waste, support for the dietary shift andagricultural research and development. All thesecosts are additional to spending already expectedin these areas.
The remainder of the transformation costs
cover the safety net support needed to keep food8

Povertyaffordable for the poorest, especially in the earlier
phases of the food system transformation. Under
the FST, agricultural commodity prices increase byroughly 30 percent by 2050, which may significantly
increase the prices consumers pay for food. Foodprice rises will be somewhat offset by rising incomes
and changing consumption patterns. However,
the risk of food becoming less affordable for thepoorest needs to be addressed head on withtransfer programs. The initial estimate of FSEC
is that this might require up to 300 billion USD ayear, based on spending patterns of the poor in
low income countries. This estimate needs to berefined depending on local circumstances, including
national programs’ ambition and how they are
scaled up over time, the specific income groups
expected to benefit, local household vulnerability to
price increases and the availability of resources andcapacity needed to operate transfer programs.
Given strained post-COVID budgets andrecent geo-political shocks, financing the costs oftransforming food systems will be a difficult hurdle
for low- and middle-income countries to overcome.

Executive Summary

It risks putting the benefits beyond their reach, eventhough these far outweigh the costs. Yet at a global
level, the costs of the food system transformation
are equivalent to only 0.2–0.4 percent of global
GDP, and clearly affordable compared to theglobal benefits. New resources, such as thosecurrently under discussion as part of the MultilateralDevelopment Banks reform agenda, could support
these efforts.

Five broad priorities can guide national
food system transformation strategies
Global food system change will in reality
take place at national and local levels. There isno universal recipe for what each transformation
should look like, but five broad priorities can guidenational and local strategies everywhere. Bundlingpolicies into coherent strategies to pursue thesepriorities maximizes the likelihood of impact:
Shifting consumption patterns towards
healthy diets. A global shift towards healthy dietsis the biggest source of benefits in the FSEC FST
pathway. Changing what people choose to eat is
not easy but policies that have been shown to work
include: regulating the marketing of unhealthy foods
to children; front-of-pack nutritional guidance;
targeting public food procurement on healthy
options; taxing sugar-sweetened beverages andunhealthy foods; and reformulating packaged
food. These policies can be applied at scale, butmore work is needed to find new ways to shiftconsumption patterns and improve access tohealthy food, as well as more research on which
policies work best and why.
Resetting incentives: Repurposing government
support for agriculture. Most agricultural support
from governments benefits larger producers andmuch is linked to harmful environmental, climate,and health effects. Reforming agricultural support
to make sure it incentivizes choices in line withthe goals of the food system transformation could
lower food systems’ hidden costs. For example,
repurposed subsidies could help to improveaccess to healthy diets and make them more
10

affordable. However, subsidy repurposing might
displace production to less efficient countries
thereby increasing environmental impacts. This
calls for investments to improve productivity andcontain environmental impacts, possibly throughinternational redistribution.
Resetting incentives: Targeting revenue
from new taxes to support the food systemtransformation. Transforming food systems into
net carbon sinks and reducing nitrogen pollution
are two important sources of benefits. Taxing
carbon and nitrogen pollution to help achieve theseoutcomes is in line with recommendations fromexpert bodies including the IPCC and OECD. But new
taxes must be designed to suit the local context.
Targeting resulting revenues towards direct andprogressive benefits for poorer households thatmight otherwise struggle to afford food can ensure
its outcomes are inclusive and help to win politicalsupport for a food system transformation.
Innovating to increase labor productivity andworkers’ livelihood opportunities, especiallyfor poorer workers in food systems.
An unprecedented number of new food systemtechnologies is being developed. Currently
this comes largely from the private sector.
National and international public institutions
can do a lot to speed up the development anddiffusion of innovations that meet the needs ofpoorer producers and remove barriers to theiradoption. Priority areas for public research andinnovation include: improving plant breeding inlow- and middle-income countries; supporting
environmentally sustainable, biodiversity-friendly,
and low-emission farming systems by, for instance,
tailoring public procurement and extension services;and developing digital technologies useful to small
farmers, such as information systems based onremote-sensing, in-field sensors and market
access apps.

The Economics of the Food System Transformation

Scaling-up safety nets to keep food affordable
for the poorest. Developing and strengthening
safety nets is key to making food systemtransformations inclusive and politically feasible.
Experience with cash transfers during the COVID
pandemic has redefined what is possible, in termsof making efficient digital payments and targetingvulnerable populations. Countries might decideto start by targeting limited transfer resources onchildren, whose nutritional needs are critically linked
to their lifetime achievements, while mobilizing
more resources and putting in place morecomprehensive safety nets.

Failure to address head on the tensions
surrounding food system transformation
will hold back change
Transforming food systems brings huge benefits
but it also gives rise to unavoidable tensions among
potential winners and losers. Managing thesetensions calls for new ways of implementing policies.
Unless they are addressed, these tensions will stymie
change. Issues likely to require management include:

nature-based agricultural practices such asagroforestry can do the same. The shift towards
healthy diets is also likely to create new jobs: theILO expects some 15 million additional jobs fromthis source in Latin America alone. But for thesenew developments to absorb at scale labor shiftingfrom obsolete forms of food production they
will need well-targeted investment in productive
infrastructure, skills and more equitable access tofinance – notably for women farmers.
Policy siloes. Numerous government ministries
and departments influence food systems. They
often pursue disparate, overlapping, and sometimes
contradictory policy goals, and their decisions are
rarely informed by the views of other stakeholders.
While most governments now recognize the urgent
need to reform food systems, to ensure successthey need to convene more participatory forms offood system governance, develop clear, long-term
strategies with transparent accountability, andcoordinate their implementation of policies.

Fears of food price rises. Increasing hunger andworsening food insecurity caused by rising foodprices can lead to social unrest, especially whenpolitically powerful populations are affected.
For good reason, the price of food is consideredby governments and opposition parties as animportant barometer of their prospects for reelection or election. Concerns about the futureaffordability of food can paralyse food system
reforms, as well as resulting in disruptive policy
responses such as export bans. Putting in place
effective safety nets, as proposed by FSEC above, iscrucial to lifting this barrier to change.

Global inequalities. While the food systemtransformation is a clear win at the global level,
there are tensions surrounding the distributionof its benefits and costs. The required dietaryshift will reconfigure production patterns, likely
concentrating many of the costs in some producer
countries. Richer producer countries are equipped
to contain and mitigate adjustment costs but they
are clearly unaffordable for many low-income
countries. Food system reforms need to beprioritized for climate finance, in global public healthinterventions and agreements, and on the agendas
of multilateral development banks to be sure of
progress at the necessary scale and speed.

Fears of job losses. Transforming food systems
can accelerate the reallocation of jobs away fromfood production. Localized impacts can be severe
when transforming food systems affects the main
sources of livelihoods. Developing downstream
segments of the food system can help create jobs
for farm workers displaced by food system change,
particularly in low-income countries. Deploying

Entrenched vested interests. Food systems
are characterized by marked asymmetries in
power, information, and accountability. Powerfulcorporations often use their influence overpolicymaking to delay or dilute reforms perceived asa threat to shareholder value. FSEC highlights three
ways to assert the public interest in food system
reform based on successful examples of generating
11

Executive Summarychange. First, emphasize the intended publicbenefits, such as better child health and lives savedby healthier diets, to build constituencies for reform.
Second, form broad-based, multi-stakeholder
coalitions to challenge corporate power. Coalitions
were instrumental in persuading governments
across Latin America to raise taxes on sugary
beverages despite corporate lobbying against them.
Finally, when using new taxes to change incentives,link the tax revenue directly to interventions which
command broad support. For example, Bolivia
finances its healthy school meal programs from a
tax on hydrocarbons, converting natural capital into
human capital.
Daunting as the challenges of transforming foodsystems may be, there are reasons to be hopeful.
Over recent years transforming food systems has
risen in visibility as a policy priority. From citizen
movements to farmers to businesses, new groups
and coalitions are innovating to make food systems
more sustainable. New technologies and businessmodels are expanding the scope of what is possible.
The COP28 UAE declaration on Sustainable
Agriculture, Resilient Food Systems, and Climate
Action signed by over 150 countries signals a newambition to seize the opportunities offered bytransforming food systems.
Addressing squarely the concerns that shapepolicymakers’ vision of what is possible offers apathway to reap large benefits for people andplanet.

12

Executive Summary

BOX ES.1

Modelling the Food System Transformation
To understand the food system transformation in ascientifically rigorous way, FSEC explored food system
pathways generated using the modeling framework MAgPIE(Model of Agricultural Production and its Impact on theEnvironment, Dietrich et al. 2019). MAgPIE projects how
the agriculture and food sector may change over time
given a consistent set of socio-economic assumptions andbiogeophysical constraints. Its modelling capabilities areextended through coupling it with specialized models of
public health (Springmann et al. 2018), the energy system(Baumstark et al. 2021), and the climate system (Meinshausen
et al. 2020). FSEC uses the resulting pathways to produce
economic valuations of the gross and net economic benefitsof the food system transformations that they capture.
This report focuses on two such pathways. “Current Trends”(CT), represents a continuation of the trends that characterize
food systems today. The “Food System Transformation”(FST), characterizes a global effort to transform current
food systems into a global system that produces healthy,
nutritious food without sacrificing a livable environment,
meets the needs of those working in agriculture and lifts up
the world’s poor and hungry. A third pathway, elaborated in
Chapter 3, embeds the FST within a more general sustainabletransformation that is largely external to the food system.
This includes more optimistic assumptions for future GDP and
population growth as well as the ongoing energy transition.
The Current Trends (CT) Pathway
The Current Trends pathway projects a future extrapolated
from past trends and the present. Absent deep structuralchanges in the world economy, global GDP expands byover 100 percent by 2050, yet this prosperity is unevenly
distributed. Poverty rates decline, but entrenched structural
disparities ensure that a considerable portion of the global
population remains impoverished. Food production scales
to meet the needs of that global population, expected toreach 9.5 billion by 2050, but 640 million people remain
undernourished. At the same time, the increasing prevalenceof unhealthy diets in richer countries contributes to a surge inobesity, affecting nearly 1.5 billion people in 2050. Regarding
climate change mitigation, nations adhere to their current
Nationally Determined Contributions (NDCs), increasing
managed forestry by 230 million hectares to reach 560
million hectares globally. Yet, inadequate international
cooperation hampers further progress toward the 1.5 degree
climate goal, and earlier powerful ambitions to meet the Parisclimate targets lose momentum. Agricultural expansion andoverexploitation of natural resources further degrade natural
ecosystems and the biodiversity they foster.

14

The Food System Transformation (FST) Pathway
The Food System Transformation pathway projects analternative future, defined by worldwide commitment
to achieving an inclusive, health-enhancing, andenvironmentally sustainable food system. Over the next
thirty years, all countries gradually transition away from diets
dominated by empty calories and animal-sourced proteins,and instead increase their consumption of vegetables, fruits,nuts, legumes, and whole grains. Resolute action eliminates
hunger by 2050, sparing 640 million people the pain of going
to bed hungry, or not knowing what their children will eat thenext morning. Enormous swathes of natural ecosystems areprotected from development, and ambitious re/afforestation
programs begin to expand managed forests by 2.5 million
hectares each year from today to 2050. These efforts, together
with technological progress reducing agricultural pollutants,
ensures the land-use sector becomes a net carbon sink by2040. Campaigns to fight poverty in the agricultural sector
are successful, ensuring living wages for the almost 400
million people who work in it. Simultaneously, the transition
away from expensive and wasteful diets, coupled withredistribution of carbon taxes, guarantees that food remains
affordable.
The gross and net economic benefits of thefood system transformation
FSEC uses two distinct but complementary methods to assess
the economics of transforming food systems: an aggregate
top-down approach and a detailed bottom-up approach. The
top-down approach (Dietz, 2023) calculates the aggregatedimpacts of the FST in terms of health, environment, andincome, expressing changes in social welfare in monetary
terms. The bottom-up approach (Lord 2023) quantifies thehidden costs avoided by the FST, including those related tohealth, environment, and poverty. The bottom-up approach
estimates the value that present or future economies may
lose from poor health or environmental pollutants like
GHG emissions or nitrogen surplus. While both methods
are grounded in welfare economics, the top-down method
aims for a holistic measure of societal well-being, while thebottom-up approach focuses on tangible, itemized costs.
Together, they provide a comprehensive understanding of theeconomic impacts of food system transformation on a global
scale.
For a full list of references, please visit foodystemeconomics.org.

The Economics of the Food System Transformation

TABLE ES.1

Packages of measures modelled by FSEC
Operational Goal

Diets
Consumption ofhealthy diets by all

Food system measures• Eradication of undernutrition• Stabilization of obesity• Convergence towards healthy diets• Halving food waste• Trade liberalization• Wage increases in agriculture• Capital substitution

Livelihoods
Strong livelihoods
throughout the
food system

Biosphere
Protection of intact
land and restorationof degraded land

Production
Environmentally
sustainable production
throughout the
food system

External
Sustainabletransformations
external to thefood system• Slower population
growth• Equitable humandevelopment• Sustainable energy
transition• Increase in bioplastics• More timber construction• Reducing emissions fromdeforestation and forest degradation(REDD+)• Land conservation• Peatland rewetting• Water conservation• Biodiversity oﬀset• Nitrogen eﬀiciency• Longer crop rotations• More landscape habitats• Emission mitigation from rice cultivation• Livestock management• Manure management• Soil carbon management

15

Executive Summary

Background Papers
All background papers are available at foodsystemeconomics.org

A
Acker e.V. (2022). Vegetable Gardening as a HandsOn Approach of Education for Sustainable Development – from an Educational Program to System
Change.

Bacca, E., Soergel, B., Springmann, M., Dietrich, J.P.,
Popp, A., Kumar Gosh, R., & Lotze-Campen, H. (2023).
A healthy, sustainable, and Inclusive Food Systemtransformation for India.

Ambikapathi, R., Schneider, K.R., Davis, B., Herrero,
M., Winters, P., & Fanzo, J.C. (2022). Global food systems transitions have enabled affordable diets but
had less favourable outcomes for nutrition, environmental health, inclusion and equity. Nature Food, 3,
764-779. https://doi.org/10.1038/s43016-022-00588-7

DeClerck, F., Koziell, I., Benton, T., Garibaldi, L.A.,
Kremen, C., Maron, M., Rumbaitis del Rio, C., Sidh, A.,
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