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Adoption of Climate Technologies in the Agrifood Sector. Methodology. Directions in Investment. FAO Investment Centre

The food production and supply chain consumes about 30 percent of total end-use energy globally, and contributes to over 20 percent of total annual greenhouse gas (GHG) emissions (excluding emissions or sinks from land use change). A growing worldwide population, changing diets and growing economic development will all serve to increase competition for land, water and energy resources – which already face problems of environmental degradation and, in some cases, scarcity. To address these challenges, agrifood systems at every scale, from the small family farm to the vertically integrated corporate farm level, will have to become more efficient by using less land, water, fertilizers, energy and other inputs to produce more food more sustainably, and with greater resilience to weather pattern changes and extreme events. Technology adoption is bound to play an important part in this adjustment process. There are significant regional variations in the ability to respond to these challenges. In particular, countries that face food insecurity naturally put concerns over GHG emission reductions or other environmental issues in second place. Still, in specific situations technology adoption can help reduce a country’s environmental footprint and go hand in hand with both improved food security and rural development. The goal of this document is therefore to provide guidance in assessing options for GHG emission reductions and decoupling the agrifood industry from its dependency on fossil fuels in a context where various goals are important: increased crop productivity, efficient use of water, improved livelihoods for the rural poor, and sustainable development. As a contribution to quickly expanding literature on the subject, the present document provides a practical methodology to enable a country or funding agency to assess and monitor the market penetration of sustainable climate technologies and practices in agrifood chains. Market penetration is defined as a measure of the adoption of an agrifood technology or practice in a specific market. The guidelines are useful not only to estimate the current market penetration, but also – and more importantly – to assess the potential for further adoption and to reduce GHG emissions efficiently. The methodology therefore takes into consideration important features of each technology including: market potential, technical and non-technical barriers to adoption and unit cost in terms of US dollars per tonnes of carbon dioxide equivalent (USD/tCO2eq). The result is a characterisation of a set of technologies and practices which can lead to identification of “best bet” options to reduce emissions from the agrifood sector on the basis of local conditions. Moreover, the results include a discussion of policy areas that may need reform, and specifically what can be the drivers to promote adoption of such best bet technology options.