Growing Returns

Selected tag(s): climate risk

EU must act to protect farms and food production from climate risk

Farms like the German wheat field depicted must manage climate change risks.

Wheat field near Oberaudorf in Bavaria, Germany by Uwe Schwarzbach.

At the same time as farmers were protesting in European capitals to demand more certainty for their future, the European Environment Agency published a report highlighting serious climate risk to food security. The European Climate Risk Assessment identified 36 major climate risks for Europe related to food, ecosystems, health, infrastructure, the economy and finance. The assessment mapped the direct and cascading effects of these risks and the hotspot areas for the most serious impacts. 

The stark conclusion for food is that “climate impacts on food production (particularly in southern Europe) can cascade to rural and coastal livelihoods, land use, the health of socially vulnerable populations and the wider economy.” The report also warns that while climate-driven food shortages are unlikely because production decreases in some areas may be offset by robust production in other areas, food price increases and volatility are likely.  

For Europe overall, drought, heat and overly wet conditions will hurt regional production. Southern Europe already faces critical levels of climate risk. Successive years of prolonged drought and excessive heat have resulted in crop failures and reduced yields to the tune of 60% reductions for corn yields in some southern European countries.  

EU policymakers and farmers’ business partners must act urgently to support EU farmers in building resilience to climate risk and adopting climate-friendly farming solutions. This is essential to keep the agriculture sector profitable and productive in a climate-changed world.  Read More »

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First-of-its-kind insurance report confronts climate risk

As many of us are witnessing across the globe this summer, the impacts of climate change are already upon us: the increasing severity of wildfires, more frequent and widespread extreme heat events, and the looming risk of floods and sea level rise even during a drought.

This is especially true for California, where wildfires fueled by a historic drought have already scorched three times as much land as they did in the same period of last year’s record-breaking season.

These climate impacts are not evenly distributed. They fall disproportionately on people with lower incomes, people of color, older adults, children and people with chronic health conditions.

wildfire

Building community resilience to fire and heat is an immediate imperative. Read more: Heat, fire, smoke and blackouts: How to live with our new reality.

As the destruction wrought by climate change continues to accelerate, state leaders and the insurance industry are exploring ways to make communities more resilient, especially the residents who are most vulnerable to climate impacts. Read More »

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What does the executive order on climate-related risk mean for agricultural finance?

The recent federal executive order on climate-related financial risk institutes a whole-of-government approach to assessing and mitigating climate-related financial risk, with the goal of bolstering the resilience of financial institutions and the communities they serve.

As a sector dependent on natural resources and predictable weather conditions, agriculture is particularly vulnerable to climate change. Maintaining U.S. agriculture’s position as a global leader long into the future will require the sector to address climate risk head-on, and soon, with innovative financial solutions that move beyond managing risk and move toward financing resilience.

Here are some of the implications of the executive order for agricultural finance institutions, and opportunities for these institutions for support a more resilient and prosperous food system. Read More »

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Farm Credit CEOs discuss emerging opportunities to finance resilient agriculture

Climate change is already impacting farmers, both through extreme weather events and more variability in temperature, rainfall and pests. At the same time, farmers and the broader agricultural system can provide climate solutions and build resilience to reduce climate-related risk.

This dual opportunity has implications for the entire agricultural system, including the agricultural lenders who finance farms. Read More »

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Federal Reserve warns of financial risks from climate change. Agricultural banks must act fast.

Climate change poses a multitude of financial risks and financial leaders are increasingly calling for the measurement, disclosure and mitigation of these risks.

The Federal Reserve recently highlighted climate change in its annual financial stability report, warning that climate-driven weather events could cause price instability and other significant financial system vulnerabilities. The Fed’s report adds momentum to a growing wave of attention being paid to climate-related financial risk. Read More »

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Financial leaders release climate risk report calling for agricultural resilience

A report released today by a subcommittee of the U.S. Commodity Futures Trading Commission, Managing Climate Risk in the U.S. Financial System, examines the threat that increasingly extreme and volatile weather poses to the stability of financial markets, including U.S. agricultural markets. Representatives from EDF served on the 35-member panel.

The report found climate risks pose a wide range of threats to U.S. agriculture — including heat stress on farmworkers, livestock and crops, soil and water quality degradation, more frequent supply chain disruptions and productivity declines. Read More »

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