Climate Change’s Impact on Global Agriculture and Food Security

In this week’s Cents of Security, I sit down with Patrick Brown, Head of Climate Analytics at Interactive Brokers, to discuss:
-How rising CO₂, temperature shifts, and precipitation patterns affect crop yields
-Why corn faces a “double whammy”
-Adaptation strategies and tech innovations shaping the future of farming
-The role of prediction markets in climate analytics

Mary MacNamara  

Hello everybody and welcome to the Cents of Security Podcast. Today we’re here with Interactive Brokers, Patrick Brown. He’s Head of Climate Analytics to discuss climate and crop yields among other things. So welcome Patrick. How are you?

Patrick Brown  

I’m great. Thanks for having me on.

Mary MacNamara  

So, since you’re new to the podcast, I think you’ve done one before with Cassidy. Can you share how you got started and your role? It’s a bit unique.

Patrick Brown  

So, I’ve always been really interested in the weather and also the weather’s impact on society. So, when I was a kid, I had a weather newsletter and weather stations on my roof and things like that. And so, I only applied to undergrad universities that had meteorology as a major. And so I came to climate science through meteorology.

And so yeah, my PhD is in Physical Climate Science. So, I was a professor for a little bit, and I was at the Breakthrough Institute where I was a commentator on climate science and science, the production of knowledge generally. I came to the attention of Thomas [Petterfy] and he recruited me and convinced me to come to Interactive Brokers and be Head of Climate Analytics.

And a lot of what we’re doing here is looking at climate prediction markets. And so, I think that’s a really innovative way to get around some of the problems, I think with knowledge production in the climate space. So, we, maybe we’ll talk about that later. But we have climate prediction markets, for example, on crop yields.

And I think that the, that’s clarifying compared to some of the messaging that you see in the media on what on what we expect crop yields, for example, to do in the future.

Mary MacNamara  

Absolutely. So, let’s start off, can you remind us of the broad facts about climate change and what exactly are we talking about and what’s driving it?

Patrick Brown  

Since the Industrial Revolution, humans discovered. Fossil fuels, coal, oil, and natural gas. And we’ve been running basically our society on them. So, energy in particular, we burn these fossil fuels and it emits CO₂ into the atmosphere. And CO₂ is what we call a greenhouse gas.

So, all that means is that it basically lets in more energy than escapes. And so it causes energy to build up in the climate system, and that manifests itself as temperature increases. So, we’ve seen temperature increases of about 1.5 degrees Celsius or 2.7 degrees Fahrenheit since the Industrial Revolution.

And yeah, that’s mostly caused by CO₂, but also methane and nitrous oxide, which interestingly are emitted from our agricultural system. As well, so that we believe that basically all of the warming, since the industrial revolution is human caused. It’s not this, idea of the climate is changing anyway, and how much humans contribute is uncertain, really.

We think it’s the warming because the natural causes of warming or cooling have not been active over that time period. So, on the, on these timescales we’re usually talking about volcanic eruptions and changes in solar output, those should have not caused the warming that we’ve seen, or if anything should have caused a slight cooling.

Basically, humans are responsible for a 100% of that climate change. And it’s about, if you think about overland, it’s about four degrees Fahrenheit over land. We may expect another four degrees by 2100 overland, this four degrees Fahrenheit. And so that’s, to put that in perspective, that it’s about the difference between Boston and Philadelphia in terms of a climate.

Mary MacNamara  

Okay so how has Fossil fueled industrialization impacted human’s ability to produce and distribute food overall?

Patrick Brown  

Yeah, so this is not usually the way that the question is framed. It’s usually we jump right into how is climate change, like negatively impacting crop yields. But I think it’s valuable to take a step back and take this broader perspective of, what is the net effect of fossil fuel industrialization on the food system.

And when you ask the question that way it’s basically, it’s been overwhelmingly positive. So, we’ve, seen like the main measure of food production tends to be crop yields. So, crop yields are either mass or volume per unit area per year, how much you’re getting out of the soil in terms of, food that, that we can eat.

And those have, since 1961, when we have good global data, those have increased by, depending on the crop like 150% to 250%. So huge increases in the amount of food that we can produce on any u nit of land. And that’s been critical because population has increased by 2.7 times over that time period.

So, if we were not able to get all this additional food out of the land that would have led to starvation and famines which is what Paul Ehrlich predicted in 1968 in The Population Bomb. But that didn’t happen because largely because of, what you might call fossil fueled industrialization.

So, we have, more mechanization, more tractors that replaced human labor and animal labor. We have irrigation. So critical to this would be these chemical inputs of fertilizers and pesticides and herbicides for weeds.

And then also you think about, the shipping system moving both the inputs around as well as the outputs that these on net at least historically have been extremely beneficial to the amount of calories and food available to people. But nevertheless, climate change impacts on the agricultural sector are one of the sectors that we’re most concerned about in terms of in terms of impacts on society.

Mary MacNamara  

So, what effect does rising Atmospheric CO₂ have on crop growth and quality?

Patrick Brown  

Yeah, so the, so as I mentioned, one of the. Main drivers of climate change are this increase in CO₂. And so, we like to decompose that into the effect from CO₂ itself as well as the downstream effects on temperature and precipitation. So, CO₂ itself has increased from 280 parts per million to 420 parts per million.

And if you think about, if you remember your photosynthesis equation from high school, that’s CO₂ plus water plus sunlight is what plants then use to make carbohydrates, and then they release oxygen as a byproduct. But so, CO₂ is part of that, right? So, increasing CO₂ in the atmosphere makes it so that the rate of photosynthesis can increase.

Also, the efficiency of photosynthesis can increase. So, plants don’t have to open their stoma as much and they don’t have to release as much water when they’re doing photosynthesis. So those are both good things for plants and for yields. And it depends a lot on whether it’s a, what’s called a C3 crop or C3 plant, or a C4 carbon fixation plant. So, wheat, rice and soybeans are C3 crops, and those benefit a lot from increased CO₂ in the atmosphere where corn is a C4 crop. that does not benefit nearly as much from CO₂ in the atmosphere. So basically, the increased CO₂ is good but it’s a lot better for some crops than for others.

And there is a detrimental impact of increased. CO₂ does decrease nutrients in several crops. So nutrients like iron and protein part of that is like a dilution effect that you’re getting more yields, but constant. Nutrients. So, it’s like per gram of food you’re getting, reduction in nutrients.

So that’s something to keep an eye on as well. But it’s, it doesn’t overwhelm the positive benefit of CO₂ increasing yields.

Mary MacNamara  

At some point I would love to do a podcast. I don’t know how much people will be interested in the whole invasive herbs, weeds, and how they’re affected too as a secondary crop, but we’ll get to that at some point maybe in the future. Okay so how do increasing global temperatures affect crop yields and farming conditions?

Patrick Brown  

So, with the increasing greenhouse gases, you can basically think of all temperatures are warmer than they would be otherwise. So, you have this universal move of increasing temperatures. And so, then the outcome depends on whether or not the crop you’re talking about is basically below its optimum level of temperature or at or above its optimum level of temperature.

So, if it’s in a, already in a hot location and it’s at. Basically, at its optimum or above, its optimum. Then warming is going to cause a decrease in yields. And so, corn is the quintessential example of that. The corn tends to be grown at low latitudes where it’s already hot. And so, warming, further harms those yields of corn.

And I also just mentioned that corn does not get the benefit from increasing CO₂ concentration nearly as much as other crops because it’s a C4 crop. And so that those, that’s a double whammy on, on corn. But then wheat is the other end of the spectrum where it gets this enhanced, yield due to increased CO₂ and it tends to be grown at locations where it’s below its optimum temperature. So, we actually think that temperature plus CO₂ has had a net benefit on wheat. But overall, it just depends on the depends on the crop and depends on the location.

Mary MacNamara  

So what impact, does shifting precipitation patterns have on agricultural productivity?

Patrick Brown  

Yeah, so we’re moving from less to more complicated. Where’s increased CO2 has more or less a universally positive benefit on crops temperature, temperature is universally warming, but it does not have a universal impact on crops because it depends on if the crop is above or below its optimum.

And then precipitation becomes even more complicated because it’s not a universal change. So, we think on average as it gets warmer, precipitation increases by something like. 2% per degree Celsius. So, we may have seen about a 2% increase in, in global average, annual average precipitation but the spatial pattern of that is complicated.

So, some locations show a decrease. Other locations show an increase. And then it also depends on the season. Where we expect precipitation to change. So, it’s almost like too complicated to just, say in one word that there’s a single impact. I would just say overall. It’s good that precipitation increases with warming as far as crops are concerned.

A negative impact is that we also expect the distribution to be more variable so that you even if precipitation in a given location doesn’t change in terms of the annual average it might be that you get more precipitation in short downbursts, and then a longer time waiting between those events.

It’s a small signal. It’s difficult to detect when you actually look at observations, but that’s the theoretical expectation. And so that’s not good for crops, right? We’d like to have a much more kind of uniform precipitation pattern. But yeah, overall, it’s, the signal there is not.

Very strong. And so, it’s you put that into very sophisticated models that then try to incorporate all three of these things together and see what the net impact is.

Mary MacNamara  

That’s fascinating. So, taking these three factors together, the CO₂ levels, the temperature rise and precipitation changes. What’s the net effect of climate change on crops?

Patrick Brown  

It basically comes down to the crops that are C4 and in low latitudes where it’s already hot. Those are. The most vulnerable. And so that’s corn essentially. And then the other major crops that, that we look at that most studies have looked at because they account for. Together account for most of the calories consumed by people are wheat, soybeans and rice.

And so those, the wheat I already mentioned basically has a net positive impact from climate change. And then soybeans and rice are very dependent on the location. And it’s. Kind of nets out to, we don’t know, basically zero. So, it’s like we’re most concerned about corn, least concerned about wheat.

Not so sure about rice and soybeans. But I think it’s important also to just remember here that what I mentioned at the beginning is that yields have dramatically increased over time. And we’re talking about okay, like a net effect of climate change on. Corn might be, something like 10, 15% decrease in yields due to climate change.

But that’s much smaller than the background increases in yields that, that have been occurring just because of technological and economic advances. Just to give you, one example of a number. This is a prominence estimate from the IPCC that they said for corn between 1961 and 2020 yields have increased by 196%, so almost 200%.

And they calculated that without climate change, they would have increased 215%. So we’re not talking about that corn yields are decreasing because of climate change. We’re talking about climate change being a drag on yield increases.

Mary MacNamara  

What specific steps can the food system take to adapt to the challenges posed by climate change? What are they doing?

Patrick Brown  

In this field if you’ll excuse the pun, adaptation has this kind of very specific definition where if you’re talking about adaptation to climate change, it’s specifically strategies or changes in response to climate change, like either previous climate change or anticipated climate change.

So, it doesn’t include general kind of technological innovation or. Something like if you get a tractor and it increases yields, but it would’ve increased yields regardless of climate change, that’s not considered adaptation. So that’s important to keep in mind. A lot of times when you come across reports about the impact, the effects of adaptation.

Specifically, what you can do to adapt to the new climate independent of these other technologies would be, if you, if your farm location is fixed, for example, you can change the crop that you’re planting there to be more optimal for the local kind of changing climate. You can change the crop variety or cultivar they’re called.

Different subspecies of wheats, work differently with different climates. That the crop could also follow the ideal climate. So, it can follow it in space, it can, move up in latitude or it can move up in, in altitude to follow a, an ideal temperature. Or it can also move in the time of the year.

So, if it’s, getting warmer, then you can, shift, you can plant earlier in the year in some locations. This is actually a big benefit where it opens up the possibility of. Of double cropping where it was not necessarily possible before where you’re getting to harvest out of a year because the growing season is essentially longer.

And so those themselves we think have, roughly like a 15% type impact on on yields. But it’s really some of these other things. The, basically the access to technology that really make a big difference on yields.

Mary MacNamara  

So looking ahead, how can the food system continue to increase output?

You’ve mentioned this through technology and so forth, despite the pressures of a changing climate

Patrick Brown  

There are at least three important pressures to keep in mind. So one is that is the changing climate aspect. Another is increasing. Continued increased demand of food. So, we’re at about 8.2 billion people right now, and we think we’ll probably peak this century above 10 billion.

So, you’re talking about, still like a 25% increase in population. So that means we need to feed more people. So that’s a pressure. Another pressure is. The pressure to decarbonize the agricultural system. So, use less fossil fueled machines, use less nitrogen fertilizer that, has as a byproduct, CO₂, if it’s made from natural gas and contributes to nitrous oxide greenhouse gas emissions.

So, you have multiple, things that you’re trying to balance at the same time. But I think it’s important when you’re, when we’re thinking about these pressures to look, look at yields across space today. And you’ll find these huge differences between high income and low-income countries, and that’s referred to as the yield gap.

And so the yield gap concept is that if farmers in low-income countries had access to all of the inputs that farmers in high income countries have, so irrigation and tractors and. Fertilizers and pesticides how much would the yields be in low income countries? And it’s just, huge.

It’s like it’s, on the order of 10 times larger than the effect of climate change. So that means that you can really ameliorate the impacts of climate change by. Allowing farmers in low-income countries to have access to what farmers in high income countries have. And so that means that can really address this problem more directly by that type of by focusing on that type of thing. Just irrigation, mechanization and the chemical inputs. But also in the long run, we don’t expect technological innovation to stop either. So, there’s a lot of things on the horizon in terms of.

Gene editing, for example with CRISPR that we’ve always been manipulating the genetics of crops, but through conventional breeding where the same way that we can create miniature poodles and things like that, right? Is so we’re breeding for crops that have higher yields and are more drought tolerant.

But with CRISPR you can do that much quicker, much more, specifically, rather than relying on random mutations. There’s also precision agriculture. You have GPS guided mechanization where it is, very precise and based on the weather forecast that you’re doing irrigation and applying your fertilizers and things like that, which is also great for reducing greenhouse gas emissions because you’re just much more efficient with, with your application things like vertical farms are interesting in the long term where kind of pilot projects show you can get like a hundred times the yields if you’re, per footprint of that thing and all, also, you’re being much more efficient with resources where recycling water, it doesn’t require pesticides because it’s a controlled environment.

So that’s a long-term, more futuristic scenario. But, overall, I think it’s it’s just important to keep the climate change impact in proportion to what some of these other things some of these other, some of these other impacts which potentially have much higher leverage on yields going forward.

Mary MacNamara  

Ah, I found this fascinating. So, you mentioned sharing technology or sharing methods with, developing nations and so forth. And you have a great article out there on Traders’ Insight on crop yields. I think it was written in May. So, I’m going to add that to the show notes because I think in that one, you reference Kenya and what their attainable outputs could be. And there’s a nice chart in there to take a look at.

Patrick Brown  

It’s not easy to solve these, I’ll just say because, multilateral development banks have been, trying to for a long time. And you have situations where for example, land tenure is really precarious in low-income countries where there’s no formal, document that says that you own the land is much through, much more through informal processes. And so that makes it impossible to finance say a tractor, right? Because the bank would want to use your land as the collateral and if you like, technically don’t own the land that you’re farming or there’s no documentation of that, then you can’t get a loan.

So it’s these are big problems. I’m not trying to trivialize them, but. I’m just pointing out that that is direct on the ground policy type things that can be addressed, that can drastically change yields and much more directly than trying to change yields through energy policy, which is going to be much more diffused and much more long term and much more indirect.

Mary MacNamara  

So is there an overall organization. That it, it’s like trying to work these things out like the UN or some other organization or is there a developed nation that’s taking a lead on this to, to answer or try to find answers for some of those questions?

Patrick Brown  

I know the UN focuses a lot on this UN FAO, and the World Bank focuses a lot on this as well. Some have been quite critical of the World Bank for moving way too many of its resources towards exclusively climate change mitigation as opposed to focusing on what its original mission was, which just human development.

But yeah, so this is not a new, area that I’m surfacing here. Of course, world hunger and global food security is, top of mind for a lot of international organizations. But yeah I would say that they should continue down the pathways that they’ve been on, that, have to do directly with increasing access to these technologies that we have in high income countries.

If the goal is to reduce food insecurity.

Mary MacNamara  

Interesting. Patrick Brown, Head of Climate Analytics at Interactive Brokers. I have really enjoyed this conversation, and I hope our listeners have too, and I look forward to more in-depth conversations about all of these topics. Just thank you so much for joining us today.

Patrick Brown  

Yeah. Thanks a lot.