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Anecdotal evidence suggests that in some countries around the world the recession is having an impact on the levels of carbon dioxide – a gas that plays a key role in contributing to atmospheric warming – and other greenhouse gases being emitted into the atmosphere.

In the European Union (EU), for example, a 1.5% reduction in greenhouse gas emissions has been reported for 2008 (compared to the previous year) for all 27 members of the EU, by the European Environment Agency (EEA). In addition a 1.3% reduction in the EU 15 has been reported – the 15 wealthiest and oldest members of the EU. This reduction has been attributed to lower carbon dioxide emissions from fossil fuel combustion in the energy, industry and transport sectors which has occurred as a result of the economic recession.

traffic

Similarly, a study in the UK has concluded that there has been a 31% decline in traffic on motorways over the past two years. This story is likely to be similar in other developed countries that have been affected by the recession and where car ownership and use is high. The fall in traffic in the UK is thought to be due to falling numbers of people travelling during morning and evening rush hours as unemployment rises. In addition people who have been fortunate enough to remain employed have made cost-savings by working at home, sharing lifts with other people and using public transport.

The United Nations Environment Programme also argued that 2008 was the first year when new investments in renewable energies were greater than investments in fossil-fuelled technologies.

Whilst these changes may bring some temporary respite for the environment, evidence suggests that as the economic crisis wanes old patterns will be re-established. However, if the recession has provided ample opportunity and motivation for investment in renewable energy in order to replace fossil-fuel based energy use then the recession may well have provided just one, although not insignificant, silver lining.

Smallholder farmers are the mainstay of agricultural production in the developing world. It is estimated that over 2 billion people in the developing world depend on smallholder farms for their livelhoods.

However, smallholders face several barriers and challenges both for domestic production and production for export. Access to credit is just one of these and has long been a key barrier to production for smallholders, undermining smallholders’ abilities to invest in their farms and production, often leading to declining levels of productivity. In cocoa and coffee production – an important source of foreign exchange and income for many developing country governments and farmers –  a lack of access to credit (or at considerable expense) has meant that farmers have been unable to invest in new trees and have relied on older trees which have declining yields and, therefore, diminishing returns.

The UN has argued that access to credit and financial services is ever more important in the context of the financial crisis and declining levels of remittances, which serve as an important safety net for much of the world’s poor.

In April this year, the first ever meeting of G8 Agricultural Ministers took place. Kanayo Nwanze President of the International Fund for Agricultural Development (IFAD) said at the meeting that:

“Protecting and increasing the access of poor rural people to financial services is even more vital now…the well-being of 2 billion poor people who depend on smallholder farms in developing countries hinges on it…that is why we are encouraging ministers to return home and make sure that in all countries, rich and poor, we work together to keep agriculture at the top of their national agendas”.

IFAD argues that private sector involvement in agriculture is more important than ever, particularly with regard to the provision of services such as finance and marketing. 

For many large businesses who source from smallholders in the developing world, sustainability concerns (related in particular to climate change) are driving projects to ensure that smallholder production is economically, socially and environmentally sustainable. An example of this growing trend is the shift of two major confectionery brands – Mars and Cadbury’s – to using certification (in these cases, Rainforest Alliance and Fairtrade) as a means to bring about sustainable production. As part of these transformations, support services are also provided to the smallholders involved, a gap that developing world governments have often been unable to fill. For example Cadbury’s is implementing farmer education programmes that explore best cocoa management practices leading to improved quality cocoa and increased yields and offering enterprise loans to start up farming or small businesses. Several examples  have shown that investing in services for smallholders can be a win-win for businesses.

Let’s hope these trends continue and the recession provides ample evidence of the importance of private sector investment in agriculture.

to letAs the recession appears to continue unabated, it becomes clear that in any given situation there will always be winners and losers. And the recession is no exception.

As new building developments stand empty and construction sites remain unfinished it becomes evident that the recession has paused the purchase and development of new residential and commercial space. In the U.S. some states are removing or reducing impact fees – charged by municipalities nationwide to pay for the additional services that come with increased development, such as schools, sewer lines and roads – to try and bolster development in these financial trying times (Boston.com).

Whilst the financial crisis has halted development and expansion for the vast majority, others are using this ‘construction pause’ as an opportunity. Some retailers have been able to benefit from falling land and property prices and the quicker processing of planning applications, to expand their operations into both new land and deserted ex-retail space.

Seemingly unaffected by decreased access to credit, large retailers are snapping up land and new developments. With retailers like Woolworths and Zavvi going bust, new sites are constantly emerging and this pattern is likely to continue as long as the recession does. For example, earlier this month Sainsbury’s announced that it would seek to raise additional capital worth £445m as a direct response to the opportunities currently available to develop new space. This investment will enable Sainsbury’s to open an additional 15% gross space, equating to 2.5m sq ft of additional selling area, over the next two years.

Morrisons also announced in March 2008 that it had identified up to 100 new locations which could accommodate one of its stores and would therefore add a further one million square feet on top of what was initially set out within its ‘Optimisation Plan’ (IDG).

Whilst on the surface this may seem like a simple trend of expansion, for supermarkets in particular, expanding retail space is an important factor in gaining market share and cornering markets, particularly to anticipate increased sales when the recession ends. This spatial expansion has ramifications for the smaller or independent stores who may no longer have the same options in terms of their own expansion into new retail space and may be crowded out by chains of supermarkets that come to dominate the high street.

The recession serves to amplify strengths and weaknesses – almost a process of natural selection – as the strongest and largest (in terms of size and financial strength) are better able to hold their position and even better it, whilst the smaller and weaker retailers are likely to struggle, at best maintaining their position, at worst, folding. To reiterate then, there are always winners and losers but closely monitoring this trend and what it may mean for suppliers and producers, particularly in the developing world, may reveal a great deal about supply chain dynamics and the impact these dynamics have on producers, either positive or negative. This could ultimately help better inform policy.

Meat eating and its connection to climate change has suddenly come to dominate the media, with the likes of celebrities Paul McCartney, Kevin Spacey and Chris Martin (Coldplay) urging people to have one meat free day a week (Reuters, Bloomberg). As mentioned in a previous post, animal protein production (particularly large-scale) is a bigger contributor to greenhouse gas emissions globally than the transport sector – it is responsible for 18% of greenhouse gases (this includes both gases emitted from livestock and land use change). Greenpeace estimates every kilo (2.2 pounds) of beef eaten represents about the same greenhouse-gas emissions as flying 100 kilometers (62 miles).

meat free mondays

Unfortunately the types of gases livestock release (Methane, Nitrous Oxide) have far more powerful global warming power and potential than the typically demonised CO2 (nitrous oxide, for example, has 296 the global warming potential of CO2). This direct impact on climate change is exacerbated by the loss of forests to accommodate this growing industry, particularly in tropical zones such as Brazil and South America, that have significant potential to store carbon and help slow the current alarming rate of climate change. To add to the severity of the situation, production of meat is estimated to double from 2006 to 2050 (FAO, 2006), driven by growing demand in low and middle income countries as incomes rise.

Whilst climate change is evidently a serious issue, its consequences for society, particularly in the developing world, is of particular concern. Research suggests that the developing world is most vulnerable to climate change and its effects will be most strongly felt in the developing world. For example, whilst changes in the climate may be positive for agriculture in the developed world, the developing world is likely to see significant reductions in yields, due to decreases in rainfall and increases in temperature: ‘Results from a case study in Mali ..indicate that climate change could reduce forage yields by as much as 16 to 25% by 2050 and crop yields with a reduction from 9% to 17% for sorghum. In contrast pastures in cold areas are expected to benefit from rising temperatures’ (FAO, 2006).

I previously asked how the recession might impact demand for meat – suggesting that the recession could both reduce the amount of meat being bought (as a relatively expensive protein source and consumption being strongly correlated with income) and reduce the quality and types of meat being purchased. Some anecdotal trends suggest that this has been happening, particularly in the US. One industry expert argues that people are eating less beef, pork and poultry and that per capita consumption in the US is the lowest its been since 1982. In addition, people have been buying cheaper cuts of meat. This fall in consumption may give sustainable development a temporary reprieve from the negative impacts of animal protein production, but there are equity issues to bear in mind.

There are important differences in regards to global patterns of meat consumption. Whilst 100 million people go hungry and could benefit vastly (both in regards to physical and mental capacity, particularly children) from an introduction of more meat and dairy products into their diets, 1 billion people are either overweight or clinically obese and are far more prone to suffering from cardio-vascular disease, diabetes mellitus and some cancers because of excessive meat consumption. In India people consume 5kg per year of meat on average whilst in the US people consume 123 kg of meat, on average, per year.

The recession is likely to undo some of the economic growth and associated income gains in the developing world, potentially reducing any increases in animal protein consumption that are much needed. Meanwhile, for a vast majority in the developed world, the recession and any reductions in consumption may bring much needed health advantages and be benefical for the environment and society. Let’s hope the recession instills deep-seated changes in regard to how much animal protein consumption is necessary and ethical in the developed world. Maybe, just maybe, the recession has added fuel to Paul McCartney’s fire.

One thing that can be said for the recession is its ability to be thought-provoking. Having read an article about rising demand for meat and leather and its damaging impact on the Amazon and on its significant contribution to greenhouse gases (GHG) and climate change, I pondered how the recession might either exacerbate or alleviate deforestation through its impact on meat demand.

cattle-ranching-brazil-one

There are several things that could happen:

  • Total demand for meat decreases as it’s a relatively expensive form of protein. This trend is supported by other changes in consumption, for example the increase in sales of eggs, which offer a cheaper protein source.
  • Demand for more expensive or ‘niche’ meat decreases (for example organic, or free-range meat, which may have less negative impacts on the environment, because it is less intensively farmed), whilst overall demand for meat remains static (picture meat on this graph).
  • Demand from the developed world drops for beef from international origins decreases, as ‘local’ produce becomes more important. These farming systems may have less direct impact on the rainforest, but their environmental impacts remains unknown and they will still contribute to GHG emissions.

In the first scenario – where total demand for meat drops, this may be a positive for the environment. In the second scenario, the impacts on the environment are likely to be negative. In the third scenario, the impact on the environment is uncertain.

To complicate matters further is the impact changing demand will have on the livelihoods of those who rely on meat production and for those who already have limited incomes to afford meat, the recession may shift consumption to wildmeat or bushmeat (much of which is illegally hunted and can contain endangered species) as a cheaper alternative.

What the recession has certainly shown us is just how interconnected income, consumption and sustainable development really is.

I recently posted a piece, admittedly riddled mainly with questions, about how the recession would impact wildlife trade, land use, conservation and the balance between legal and illegal trade. Although a relatively small case-study in the global scheme of things, Argyll in Scotland, has demonstrated just what could happen as the economic going gets tough:

One unexpected consequence of the recession is that the needs for cheap meat and money-making are combining to bring DIY wildlife crime gangs to Scotland to poach Roe, Red, Fallow and Sika deer. There is already a lively black market for cuts of meat from these animals (Strathclyde Police).

Other anecdotal trends do suggests that this rise in poaching is not necessarily confined to Argyll and may be having more serious effects in terms of undermining sustainability, elsewhere. The Born Free Foundation has argued that ‘rising food prices, another rash of crop failures, wide-ranging impacts of the global recession, will lead to a rise in the ‘bushmeat’ trade in Kenya’. This is thought to be detrimental to conservation because a portion of the bush meat contains endangered species. A survey in 2004 revealed that 40% of meat being sold as beef or goat in certain Nairobi butcheries was either wholly or partially bushmeat – it would be useful to update this research and understand the extent to which the recession is impacting illegal wildlife trade.

Wildlife_Works_Ltd_Rukinga

Source: Wildlife Works Ltd

Whilst on the surface it may seem that trade in illegal bushmeat is only damaging to the wildlife it affects, Born Free’s Senior Wildlife Consultant argues that “this is not just about saving individual animals, important as that is.  It is about preserving functioning eco-systems that bring benefits to every person on the planet.  The ecosystem services provided by Africa’s forests and savannahs include rainfall, carbon storage and stabilizing the global climate, so we all have an interest in preventing a few profiteers from destroying these globally important ecosystems for personal gain.”

Illegal hunting and trade of wildlife, removes the economic connection between habitat (or land) and wildlife, undermining economic incentives to conserve habitats and, as a result, environmental sustainability – not just in the specific country concerned, but globally.

Africa’s deforestation rate is four times faster than the world average and is of particular concern for climate change because of its important role as a carbon sink.

Though the relationship between the economic crisis and deforestation isn’t on the surface an obvious one, the drivers of deforestation in Africa are only likely to become more pressing as the recession sends global shockwaves – affecting the cost of living for those who can least afford to spend more of their income on feeding themselves and their families. This is likely to exacerbate deforestation and the use of other natural resources as people seek to increase their income.

tree

Land tenure is thought to be a massive hurdle for conservation and particularly in the prevention of deforestation, with less than 2% of Africa’s forests under community control. The Guardian argues that in order for the currently negotiated Reduced Emissions from Deforestation and Degradation (REDD) credits to be effective  secure property rights are essential (REDD put simply is where you get paid for not destroying an ecosystem, providing financial incentives for conservation):

“Land tenure and forest governance are also key factors that will determine the success or failure of any REDD initiative, and the mechanisms by which payments and benefits are shared will be critical” (IIED).

The Economist argues that ‘The obvious economic explanation is that the over-exploitation of animals and plants is an example of the “tragedy of the commons”. If no one owns the wildlife or the land on which it lives, the behaviour that is individually rational—poaching, clearing land and so forth—may be collective folly. Trade ban or no trade ban, without enforceable property rights, the underlying tragedy remains’.

The logic is that, if communities have direct ownership of the land that are taking timber (or, indeed, any wildlife from) there is greater financial incentive for conservation: “Africa’s forest communities already generate millions of jobs and dollars in domestic and regional trade, and in indigenous livelihoods, but current laws keep some of these activities illegal and also undermine opportunities to improve forest management” (Rights and Resources Initiative). Resolving property rights, because of its direct link to resource use and deforestation is argued to be a first key step to addressing the causes of climate change.

However, some argue that deforestation is less an issue of property rights and more about the lack of governments’ control of access to wildlife and the land it occupies, through both social structures and formal rules. Land reforms alone are unlikely to be a panacea for deforestation – governments need to support local management and enterprises so that people have direct control over the resource and more financial incentive to ensure the sustainability of it.

The recession has only served to bring the debate over conservation, deforestation and effective government solutions into even sharper focus.

Previous posts have discussed the importance of CSR and sustainable development for businesses through this period of financial turmoil. Whilst it has become clear amongst consumers that saving money and contributing to sustainable development need not be opposing aims, this has been less explored for the business realm.

Here are a just a handful of the ways in which the recession has affected businesses and sustainable development – both good and bad:

1) Travel

Travel, has been one of the first things to show shifts towards improved environmental sustainability as air and road traffic have fallen and train passengers have risen. Anecdotal trends also suggest that businesses are cutting costs by reducing travel and are replacing face-to-face meetings with virtual, online meetings. Accenture, a management consultancy, believes it has saved $8m in a year by using “telepresence” systems and has avoided journeys that would have generated 2,000 tonnes of carbon dioxide.

2) CSR Budgets

Cuts to CSR budgets have taken place – and this is perhaps unsurprising as companies work to minimise costs and maximise short-term survival and efficiency. A survey conducted late last year on behalf of Business for Social Responsibility, a global network of firms with an interest in CSR, showed that almost a third expected their spending on sustainability to fall as a result of the crisis. However, research also suggest that more ‘peripheral’ aspects of CSR i.e. those less diretly related to the business and its strategy were the aspects most likely to suffer, rather than there being a wholesale shift away from CSR spending.

3) Budgets for charity and philanthropy

Businesses are making cuts to their charitable giving as they grapple with rising costs and falling trade. Citigroup’s charitable foundation says it expects to make $63m of grants in 2009, down from $90m last year. Ford expects its philanthropic arm to shell out 40% less this year.

4) Changing priorities

A survey of 329 corporate-travel managers and business travellers published in February by the Association of Corporate Travel Executives found that only 17% of them now ranked environmental sustainability as a high priority, compared with 29% a year ago. Although on the surface this might imply a shift away from any consideration of sustainable development, it is hardly surprising that as businesses around us flounder and many ‘go under’ that environmental sustainability has not remained as high a priority as a year ago. Businesses, after all, have a duty to their shareholders to protect their bottom line. This survey does not prove that businesses have deserted their environmental ethics completely or indefinitely, or that those who have survived the worst of the recession, won’t use sustainable development as a core platform on which to build their future success.

5) Energy use

Reducing energy use and saving money is being increasingly regarded as a relatively painless way of achieving win-wins for business costs and sustainable development. Intel, the world’s largest chipmaker, says it plans to increase investment in energy efficiency this year because the $23m it has poured into green energy since 2001 cut its fuel bills by $50m over the same period.

6) Sustainable sourcing

Mars, due apparently to concerns over the future of its supply, has plans to ensure all of its Galaxy chocolate bars are Rainforest Alliance certified by 2010. Similarly, Cadbury’s Dairy Milk is set to become Fairtrade certified. This recognises the importance of ensuring that production mitigates against negative environmental externalities.

The slump – a second chance for sustainable development?

Many are regarding this ‘slump’ as a second chance to make real progress towards sustainable development. It is also seen as an opportunity to restores customers’ faith in businesses, which has taken a serious hammering in the light of recent financial events.

Although no-one would want to suggest that a lengthy recession is a positive thing, research-wise, it has allowed us to see what kind of things happen in an economic downturn and in particular, when consumers start to either feel or perceive their disposable income dropping.

For example, a recent article by the BBC discusses how consumers in the UK shopped in April 2009, as compared to April 2008. The results are pretty startling – sales of baked beans are up by 21.6%, budget lines by almost 23% and there is a depressing story for organic produce – as sales have decreased by 10.6% when compared to the previous year. The story is even worse for March 2009, when there was a 21.6% drop in organic sales.

The most obvious trends of customers replacing a higher-end product, with a similar but less expensive substitution is Champagne and sparkling wine – sparkling wine sales were up 9.9%, whilst sales of Champagne were down 9.0%.

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Falls in organic sales and increases in budget lines may bode poorly for the environment, but other trends may work in its favour. For example, unit sales of low-energy light bulbs have grown by 38.8% (although value has fallen due to price drops for the bulbs – from £1.25 to 87p). Interestingly, but perhaps not surprisingly, air traffic at Heathrow, Gatwick, Stansted, Glasgow, Edinburgh, Aberdeen and Southampton airports has fallen as passenger numbers decreased 2.3% in April compared with the same month in 2008.

And people are driving less –  London’s congestion charge was paid just under 9.5 million times in the first four months of the year, which was down 9.8% on the same period last year. Similarly the number of people crossing the Severn bridge was also down, whilst railway passengers grew slightly.

Unfortunately the overall impact of these trends (both the positive and negative, for the environment) won’t emerge until the recession has ceased, but let’s hope the positives will be permanent lifestyle changes.

A small town in Belgium, called Ghent, has become part-time vegetarian, after its inhabitants decided to abstain from eating meat one day a week, says the Guardian.

The FAO claimed, in 2006, that the livestock industry accounts for 18% of all anthropogenic greenhouse gas emissions. A pretty compelling stat considering meat eating is conventionally regarded as a benign practice, one that is seen as important for our health and a core part of the developed world’s mealtime habits. Since 1950, however, meat consumption is thought to have increased by 500%. Is our meat eating spiraling out of control?

Mini Burgers

The production of meat is a relatively inefficient energy-wise – not only is there energy loss in the consumption of food products by livestock, that we then eat (when we could eat the food product or an equivalent food product such as wheat, directly) but livestock are also thought to use up to 200 times more water per kilogram produced of meat, than it does for wheat. In addition,  livestock production has come to be associated with deforestation, particularly in areas like Brazil, which has led to the loss of an important carbon sink not to mention its biological and ecological value. With rising and volatile food prices, it seems illogical to be diverting food – particularly cereals – to feed livestock, to then feed us with a luxury food product that in many cases is eaten excessively. Meat consumption has been scientifically linked to cardiovascular disease, diabetes and some cancers in the West, where meat consumption is particularly high.

Relatively speaking meat is expensive and although an important source of protein I doubt very much our diets need to consist of a daily dose of meat. It would be interesting to see if the recession has cut down on overall sales of meat as people tighten their purse strings, or if consumers have moved away from higher quality or speciality meats, such as Organic or Free Range and downgraded for cheaper options (which unfortunately are likely to have more negative externalities for the environment).

It is important to bear in mind that there is significant variation between meat sources and that production practices vary hugely in their environmental impact. Compare, for example, meat produced in the U.S and Kenya – in the U.S,  for each calorie of meat or dairy consumed, livestock consumes on average more than 5 calories in its production. In Kenya, livestock yield more calories than they consume because they are fattened on grass and agricultural by-products that are inedible to humans. Similarly, the developed world, not only in its production practices, but also in its consumption, contributes far more to livestock-related emissions than the developing world. Compare Uganda and the U.S and Europe – in Uganda 45 kg of meat and dairy products were consumed in 2003, whilst in Europe and the U.S. this figure soared to 400kg.

Whilst vegetarianism is a goal that is perhaps unrealistic, cutting down on meat intake could have a significant impact on greenhouse gas emissions.  A one day a week ‘vegetarian’ goal is argued to be achievable and one that is gaining popular traction – let’s hope the small town in Belgium is only the beginning…..