NATURAL CAPITAL
Increasing efficiency and reducing waste. Reducing food waste involves some of the same issues encountered in increasing energy efficiency: even where the saving potential is huge, many barriers, including transactions costs, prevent efficiency-increasing investments from being made. The problem has been recognized for decades, but limited progress has been made. In both agriculture-dependent and OECD countries, up to one-third of food is lost or wasted. The reasons for this waste— and the solutions to the problem—vary with the settings (Foresight 2011). In agriculture-dependent countries, where food accounts for a large share of household expenditure (46 percent in Pakistan), there is little household waste, despite lack of refrigeration at home. But 15–30 percent of food produced is lost before it reaches markets, because of postharvest losses caused by poor storage and inefficient transport systems. The problem is compounded by food quality and food safety issues, which may preclude poor farmers from participating in value chains (Gómez and others 2011). For low-income countries, the following strategies could reduce food waste: • Diffusing existing knowledge and technology in storage and investing in transport infrastructure. • Investing in new technologies to reduce postharvest waste. • Using information and communication technology to improve market information, helping match supply and demand in local markets. • Investing in capacity building, infrastructure, and regulatory improvements in food quality and food safety. OECD countries have developed efficient supply chains from farm to market, with low spoilage rates and effective transport systems. But about one-third of food supplied is nevertheless wasted through losses in supermarkets (food thrown away because it is not sold by the sell-by date), losses in homes (food discarded before it is used), and plate waste (food that is served but not consumed). Because food accounts for a relatively small
proportion of household expenditure in OECD countries (11 percent in Germany, 7 percent in the United States), there is little price incentive to avoid waste. However, new technologies, such as enhanced sensor technologies to monitor the edibility of food, could help reduce wastage. The main challenge is changing consumer behavior. Harnessing technology. Technological innovation plays a key role in green growth strategies for agriculture. It can be used to increase input efficiency, as is the case in irrigation water management, where advances in the use of remote sensing technologies permit estimation of crop evapo-transpiration (the sum of evaporation and plant transpiration to the atmosphere) on farmers’ fields and facilitate improvement of water accounting at the regional and basin-wide levels. China is adopting this approach with its Xinjiang Turpan Water Conservation Program, in an arid part of the country (World Bank 2010c). This program monitors basin-wide evapo-transpiration with remote sensing and supports a combination of engineering, agronomic, and irrigation management measures to increase agricultural productivity measured in terms of evapo-transpiration. Innovation includes developing agricultural products that feature improved characteristics, such as being drought resistant, requiring less fertilizer, and being resistant to common pests and diseases (which reduces the need for pesticides)—as India is doing with better backyard chickens (box 5.5). Innovation can also be used to increase access to weather and climate information services for farmers, which improves resilience, increases efficiency, and raises income. In Florida, a timing tool helps farmers reduce the quantity of fungicide they use, reducing the harmful effects on the ecosystem and saving them money (Pavan and others 2010). But in many developing countries and transition economies, investment and expenditure in the classic public goods of weather and climate information generation and services is far too low (World Bank 2008a). A 2010 study by NetHope in Kenya indicates that farmers gain access to information through a
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